Reclusive Turkmenistan cracks open the door

updated 4:18 a.m. ET July 13, 2009

TURKMENBASHI, Turkmenistan - Four white-marble hotels opened here in June on a spit of sand by a landlocked sea — the beginnings of what is billed as Central Asia's answer to Las Vegas, an opulent $5 billion oasis of seaside villas, casinos, an artificial island and a ski center.

The resort-to-be stands out in this arid country the size of California, where camels clop down dirt roads and bedraggled Soviet-era apartment blocks doze in the blistering desert heat. Yet Turkmenistan also sits atop the world's fifth-largest reserves of natural gas, and is rapidly emerging as a key player in global energy markets.

Its secretive, autocratic government is using some of its more than $7 billion in annual gas revenues to build the pleasure park, called Avaza. Officials say they hope to attract high-rolling foreign tourists and open up their country, long sealed off from most of the outside world.

"Coming to our country has always been a problem for foreigners," Murat Kariyev, the country's elections commission chairman, told The Associated Press. He called Avaza "the world's window on Turkmenistan."

The world's biggest consumers of energy want to do more than peek through the window at Turkmenistan — they want to barge through the door. The United States, Europe, China, Russia and Iran are all jostling for greater access to the country's mammoth natural gas fields, which could contain more than 26 trillion cubic yards (20 trillion cubic meters) of natural gas. That's enough to supply Europe with gas for the next 66 years.

Efforts to break reliance on Russia
The European Union and the United States see Turkmenistan's President Gurbanguli Berdymukhamedov, who took power 2 1/2 years ago, as a potential ally in their efforts to break reliance on Russia for natural gas.

W. Castello / AP ADVANCE FOR JULY 13: Map locates Avaza, Turkmenistan

But Russia, Turkmenistan's chief energy partner, is fighting a rearguard action to keep its near monopoly on the purchase of Turkmen gas. In 2008, Russia's state-controlled energy giant Gazprom paid Turkmenistan $7 billion for gas that Russia resold to Europe, according to Global Witness, a London-based watchdog group.

China in turn has moved boldly to challenge Russia, cutting its own energy deal, which includes a $4 billion loan. Beijing plans to begin tapping a major natural gas field in eastern Turkmenistan when a new pipeline is finished as early as this year.

Courted from all sides, sitting on vast wealth, Turkmenistan's regime faces stark choices: to open its doors or live in continued isolation, to push for reform or renew repression.

The Avaza resort on the Caspian Sea symbolizes some of these conflicts. It is designed to appeal to the sophisticated business traveler. Yet during opening ceremonies, the white marble hotels were decorated Soviet-style with gigantic pictures of President Berdymukhamedov, and a huge television screen beamed down a picture of the president's face.

Alexander Zemlianichenko / AP Fireworks burst above a portrait of Turkmen President Gurbanguli Berdymukhamedov during a concert marking the opening of the new resort on the Caspian Sea coast, near the port city of Turkmenbashi, Turkmenistan, on June 15.

Few visitors are expected at the 19-square mile complex, part of a special visa zone, until a new international airport is completed later this year. Even then, they may not see more than a restricted patch of the country or have much contact with ordinary people.

Critics say the resort is just another example of Turkmenistan's propensity for huge and impractical building programs, shown clearly under former president Saparmurat Niyazov, and could wind up a sinkhole for billions of dollars in gas revenues.

The Avaza complex is "fully in keeping with Niyazov's tradition of spending state money on grandiose construction projects," said Annette Bohr, an expert on Turkmenistan at the London-based Chatham House think tank.

Stark contrast with rural life
Most of this country's 4.9 million people live in rural areas. Those who find work are usually farmers, especially in the cotton fields, earning on average the equivalent of just $6,800 a year. By some estimates, as many as 60 percent of Turkmen are unemployed.

Alexander Zemlianichenko / AP A 40-foot, gold-leaf statue of late Turkmenistan President Saparmurat Niyazov stands on a 246-foot pedestal in the Turkmen capital of Ahgabad, in this photo taken on June 14.

Yet the center of the capital of Ashgabat gleams with sumptuous white marble government buildings, many of their darkened glass windows rumored to hide empty rooms. A 40-foot gold-leaf statue of Niyazov in a business suit stands on a 246-foot pedestal overlooking the presidential palace and central square, ringed by other towering government structures. This is where massive parades are staged.

Niyazov's figure turns to face the sun during the day, gleaming brightly in the desert sun. At night it is bathed in colored floodlights, visible for miles in every direction.

Most of the capital's citizens, meanwhile, live in dilapidated apartment blocks and ride rattletrap buses. The only hint of extravagance is the dozens of satellite television dishes sprouting from every apartment house wall.

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