The ferghana.ru website informs that the Neutralny Turkmenistan (Neutral Turkmenistan) daily of January 18 published an article regarding president Gurbanguly Berdymukhammedov’s recent decree on home loans, that amends the previous law introduced by the late Saparmurat Niyazov. The author of the article reminds:

The Turkmen leader has signed a special decree just before the New Year which gives the Turkmen people new opportunities to buy flats in the new elite multi-storey apartment blocks that are currently built in Ashgabat. As of 1 January 2008, the “Presidentbank” has extended the real estate loan repayment term […] from 15 to 30 years.

The annual interest rate is not to exceed 1 percent and it will be possible to start repaying the loan after as long as 5 years of its granting. The required down-payment percentage has been lowered from 30 to 10 percent of the total property cost.

Great news! Maybe I should consider buying a flat in Ashgabat;)))

But still a few questions arise. First of all, how will Turkmenistan’s economy survive this and where is the government going to get the money for the loans from? Such loans would be impossible in a market economy, because no bank would agree to offer a loan on such terms.

I am also wondering about another aspect of this issue. The decree was issued before the New Year and has already been covered by the Turkmen media. So why is the news repeated again? Isn’t it somehow linked with the rising prices on petrol and food described in Abdulgamid’s posts? The news about price rises must have triggered a strong backlash in the Turkmen society (which is quite understandable), and the authorities probably want to temper the reaction by reminding about the decree on home loans. It turns out that even in a totalitarian country the government has to take the public opinion into account.

However it is also possible, that the true reason behind the new president’s decree was the same as in Niyazov’s time. As described by the Institute for War and Peace Reporting in November 2006:

The multistorey apartment blocks that have been built are lying empty, since not many people can afford such expensive housing. So the regime wants to get them occupied, and is devising various mechanisms to that end […].