The country possesses the world's fourth-largest reserves of natural gas and substantial oil resources. In 1994, the Russian government's refusal to export Turkmen gas to hard currency markets, and mounting debts of its major customers, in the former Soviet Union, for gas deliveries, contributed to a sharp fall in industrial production, and caused the budget to shift, from a surplus to a slight deficit. Half of the country's irrigated land is planted with cotton, making the country the world's ninth-largest cotton producer.
Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cotton sales to sustain its economy. In 2004, the unemployment rate was estimated to be 60%.
Between 1998 and 2002, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, the value of total exports has risen sharply because of increases in international oil and gas prices. Economic prospects in the near future are discouraging because of widespread internal poverty and the burden of foreign debt.
President Niyazov spent much of the country's revenue on extensively renovating cities, Ashgabat in particular. Corruption watchdogs voiced particular concern over the management of Turkmenistan's currency reserves, most of which are held in off-budget funds such as the Foreign Exchange Reserve Fund in the Deutsche Bank in Frankfurt, according to a report released in April 2006 by London-based non-governmental organization Global Witness.
According to the decree of the Peoples' Council of 14 August 2003, electricity, natural gas, water and salt will be subsidized for citizens up to 2030. In addition car drivers are entitled to 120 litres of free petrol a month. Drivers of buses, lorries and tractors can get 200 litres of fuel and motorcyclists and scooter riders 40 litres free. On 5 September 2006, after Turkmenistan
