The political, social and economic and cultural events of paramount importance evidence the fundamental reforms implemented throughout the country on the initiative of President of Turkmenistan Gurbanguly Berdymuhamedov. These events stand as a motive force of the vivifying process that is defined as the epoch of new revival in Turkmenistan.

The intense international interest in Turkmenistan that puts forward the initiatives designed to change the economic map of the region testifies to the scale and significance of the on-going processes in the country. That is vividly evidenced by the projects on construction of the Uzen-Gyzylgaya-Bereket-Etrek-Gorgan trunk railway, which is to be an important link of the North-South transport and communications corridor, establishment of the Avaza national tourism zone on the Caspian Sea coast – a future large centre of international tourism industry and health resort, the opening of the UN Regional Centre for Preventive Diplomacy and a lot of other events proving Turkmenistan’s high international prestige, the rapidly developed dialogue with international community.

Having gained the remarkable achievement in all fields Turkmenistan came to those important events. The measures Turkmenistan takes to intensify social and economic development, to establish the legislative basis, to ensure macroeconomic and political stability, the favourable investment climate and the effective strategy of realizing the profound natural potential conditioned the high rate of social and economic development.

The 2008 State Budget of Turkmenistan – an effective financial instrument of implementing the large-scale reforms, was adopted at the regular session of the Mejlis of Turkmenistan on the third convocation on December 14, 2007.

The crucial decisions of President of Turkmenistan Gurbanguly Berdymuhamedov aimed at achieving the strategic goals of national development, the parameters of Turkmenistan’s social and economic growth in 2008 set forth in the long-term national development programme and other sectoral development programme underlay the State Budget of Turkmenistan.

The State Budget prioritizes the following goals and tasks:

-modernization of national economy through the industrial innovative approaches, developing transport infrastructure and service business, maintaining the high economic growth rates, achieving the high living standards;

-introduction of the advanced methods of administration of national property;

-development in the centralized order of new industries with the progressive technologies oriented to processing raw materials through attracting foreign investors; maximum employment of the existing industrial capacities through creating in the sectors of national economy the necessary conditions for effective production management, high-quality product promotion to world market;

-wide application of the progressive forms of economic relations in the agricultural sector, development of virgin lands, increase of the level of crop yield, achievement of food security;

-creation of new jobs through expanding the activity in the non-governmental sector as well;

-further development of education, science, healthcare, culture, improvement of the quality of services provided in these spheres;

The preliminary results of Turkmenistan’s social and economic development in 2007, the predictive performances of the ministries, departments, khyakimliks and other government bodies were taken into account when defining the key trends of Turkmenistan’s social and economic development. The document specifies the shot-term priority tasks and sets forth the main parameters of social and economic development.

President Gurbanguly Berdymuhamedov’s policy aimed at strengthening Turkmenistan’s position in the world arena, developing national economy and increasing its sustainability, enhancing the concord in the society and increasing the income of population. That is evidenced by the steadily high rates of economic growth, increased volumes of the foreign trade turnover, financial stability and Turkmenistan’s active integration in the world division of labour.

The combination of liberalization of economy and the measures of government control serves as an important factor enabling Turkmenistan to restructure economy, to maintain sustainable economic growth and to pursue the strong socially orientated policy.

Government control in the strategic sectors of national economy enabled to develop the processing industries through reallocating the national resources created in the extractive industries. The reform in the human potential development related fields remains a priority. These include the large-sale reforms in education, healthcare, social services.

In 2007 the state of Turkmenistan’s economy is characterized by the high growth rates in almost all sectors. The expected rate of growth in 2007 makes up 120 percent as compared to 2006. The considerable exceeds of the programme production indices is expected in industry, agriculture, construction, transport and communications.

The cost structure of total output of products with the large share of the value added – 68.5 percent testifies to the relatively high effectiveness of Turkmenistan’s economy. In 2007, the real GDP growth rate made up 112.1 percent as compared to 2006.

The intensive investment activity of Turkmen as well as foreign investors, the increase in productive efficiency through improving implementation of the existing industrial potential, supplying the export-oriented branches of the processing industry with high-tech equipment, efficiently using the natural resources, macroeconomic and political stability, the favourable foreign-economic situation promote achieving the high rates of growth in total output of products. That will enable Turkmenistan to approximate the GDP structure to the criteria of the industrialized countries.

The country’s consistent development enabled to ensure further improvement of the living standards and to take the measures aimed at strengthening the social policy. With that end in view the legislative and statutory acts on labour protection and remuneration of labour, salaries, employment, pensions and social security are improved. The labour market infrastructure, social insurance and social security system were established and are improved in Turkmenistan.

In 2008, Turkmenistan’s economic policy will be aimed at achieving the strategic goal – to conform to the level of the highly developed countries by the indicators of social and economic development and the high standards of living.

The reforms initiated by President of Turkmenistan Gurbanguly Berdymuhamedov and the measures set forth in the national development programme will enable to diversify national economy and further increase in the exports of goods with the high share of the value added. The strategy stipulates for intensive development of the fuel and energy sector, petrochemical industry, agriculture, transport and other sectors of national economy.

National economy will be restructured through developing the processing industries that will enable

-to use the country’s resource potential more effectively and through it to ensure the economic growth;

-to implement the qualitative reforms in national economy through intensively developing the processing sector in different industries;

The key principles of the President’s economic strategy include the multivariant outlets for energy resources. The extensive network of energy routes was established and effectively operates in the country, the network will be expanded through constructing the transnational gas pipelines: Turkmenistan-China, Turkmenistan-Afghanistan-Pakistan-India, Turkmenistan-Iran, the Caspian and the Trans-Caspian gas pipelines

President Gurbanguly Berdymuhamedov’s initiatives on domestic manufacture of the energy facilities consuming the renewable energy sources (solar, wind, geothermal waters, etc) have prospects.

Another priority field – development of tourism and health resort industry. The Avaza National Project is a component of the national development programme.

The tasks set to the country will offer a powerful incentive to develop national economy.

The main parameters of Turkmenistan’s social and economic development in 2008 are forecasted on the basis of the favourable external conditions and activation of the internal factors of economic growth.

In 2008 the predictable total output of products will make up 221.9 trillion manat. The growth of total output of products as compared to the predictable total output of products in 2007 will make up 20 percent that is as higher as 8.1 percent than that set forth in the long-term national development programme.

Industry will have the largest share in the total output of products – 38.4 percent. In 2008 the industrial development strategy is aimed at further forming the national industrial complex, which is competitive on both domestic and foreign markets under the conditions of globalization of world economy, with the stable and sustainable product markets, well-defined and expanding specialization in the world division of labor.

In 2008, the industrial output will increase by 19.5 percent as compared to 2007. The high growth rate was dependent upon the external factors including preservation of the favourable foreign economic situation for Turkmen exports as well as the internal factors, in particular the dynamic development of all sectors of industry.

Comprehensive development of Turkmenistan’s oil and gas industry and fuel and energy sector guarantees the energy security to the country and implementation of the large-scale social and economic reforms aimed at improving the welfare of the Turkmen people. Establishment of the extensive pipeline network in the nearest future enabling to form the alternative routes of Turkmen energy exports to world market is a key component of Turkmenistan’s energy strategy, which will enable to strengthen national economy and, moreover, firmly guarantee the political stability in the region. The rates of production of electrical power, oil and gas will increase in 2008 as compared to 2007.

The chemical industry will developed through using the local raw materials to meet the increased demand of the national agricultural sector, sectors of industry as well as to expand the export opportunities. Having the profound resource and economic potential the chemical industry has every requisite to become the leading sector of national economy.

The sectors of light industry will be developed actively to comply with the import substitution strategy. In accordance with the predicted cotton yield ginned cotton production will increase as high as 2.4 times as compared to 2007. Along with developing the cotton processing sector the modern industrial potential for silk production is being formed.

The share of agriculture in the total output of products will make up 16.9 percent, the growth arte will make up 116 percent. The programme of agricultural reforms stipulates for improving the management system, the economic interrelations between the state and agricultural producers, the financing and crediting mechanism, intensification of the integration between agricultural production and processing industry.

Intensification of agricultural production aimed at increasing the technological level of the sector, developing new lands, increasing crop capacity, livestock and poultry yield will enable to increase agricultural output by 16 percent in 2008 as compared to 2007.

The national policy aimed at restructuring the investment market, expanding the investment medium will enable to preserve the high growth rates in construction industry – 120 percent, the share of which will make up 8.2 percent. The key tasks set to the construction industry include supply the national investment complex with local construction materials manufactured from the abundant local sources of raw materials. To fulfill the tasks the capacities of manufacturing competitive, import substituting products will be developed.

Development of transport infrastructure and telecommunications ensuring the life activity of popualtion and operation and development of national economy and is a key mechanism of implementing the economic reforms. In 2008 the total output in the sphere of transport and telecommunications will increase by 20.1 percent as compared to 2007. The share of transport and telecommunications in the total output will make up 5 percent.

Development of the sphere of transport and telecommunications (railways, highways, aerodromes, sea ports, pipeline transport) will enable to use the advantages of the geographical location of the country, transport infrastructure will provide an outlet of industrial products to the northwestern and southeastern sectors of world market.

The key objectives of the national budgetary policy for the year 2008 include allocation of the budgetary funds in the priority spheres of national social and economic development and important investment projects including those on development of infrastructure, financial provision of the fundamental reforms in the social and other spheres, financing the amount of salaries, improvement of the quality of the services provided in the budgetary sphere, improvement of maintenance of the budget institutions, etc.

Basing on the predicted parameters of the national social and economic development the budget revenues will make up 118.2 trillion manat with the growth of 20 percent as compared to the 2007 budget level.

In 2008, the revenues of I budget level will increase by 17.3 percent as compared to 2007. The revenues of II budget level will increase by 20.8 percent as compared to 2007. 50 percent of the volume of the revenues of II budget level is the profit of the oil and gas industry and chemical enterprises and organisations. The rate of growth of the volume of tax revenues to the 2008 State Budget will make up 125 percent that is 69.4 percent of the total volume of tax revenues of I budget level.

The total expenditure in the 2008 State Budget will make up 123.37 trillion manat, or increase by 25.7 percent as compared to 2007.

In 2008, the amount of the funds allocated in the budgetary sphere will increase by 43.5 percent as compared to 2007. Over a half of the predicted expenditures of I budget level will be allocated in the social sphere including education – 46.2 percent, healthcare – 13.5 percent, culture – 3.6 percent, social security – 27.3 percent, housing and communal services – 9.4 percent.

Salary, pensions, scholarship and benefits are the protected items of expenses in the 2008 State Budget. Gas, electrical power, water and salt will be supplied free of charge.

Thus, the 2008 State Budget will be another step towards the national social and economic development and promote improving the living standards through raising salaries, receiving the worthy education, medical aid, developing culture, sports, care for children, maternity and the elders.