Working in Turkmenistan

The Turkmenistan style of business

To understand the characteristic features of Turkmenistan businessmen and officials, it is necessary to consider Turkmen history. For instance, the impact of the old Soviet administrative style on Turkmen trade and industry is still very strong. Business styles are changing as many people gain work experience in other parts of the world or are running their own businesses. However, the further you move away from the Ashgabat into the Welayats (regions) and from the state-owned industries, the more likely you are to find that the older traditions still apply. There also tends to be a difference in business style between the older generation and the young, as younger people are able to travel more widely or to receive management and business training.

If you are going to work in Turkmenistan, be prepared to encounter bureaucracy at all levels and in all spheres. As in any bureaucracy, “officials” have the opportunity to influence both the speed and success of certain procedures connected to your business practice. This can lead to bureaucratic procrastination as a decision to be taken by an official body must pass through several levels of approval, and it can be difficult to track the status of the decision.

The Turkmenistan business environment is generally formal. Business questions are rarely discussed over the phone but are handled during face-to-face meetings. Even a meeting to discuss straightforward business issues can be called “negotiations”. These meetings are characterised by a whole series of formalities - the ceremonial exchange of business cards, greeting speeches, tea with biscuits, sometimes vodka. They are usually conducted with a very serious and almost ceremonial tone, and the meetings generally take more time in Turkmenistan than in western Europe, so do not try to arrange too many in one day, and give yourself some flexibility to run over the allotted time.

The other problem with these meetings is that they can be unproductive in a practical sense. Turkmenistan businessmen, particularly the older ones, can be sceptical of new or innovative ideas and it can take time to persuade them to accept a new approach. There is also the tradition that Turkmenistan businessmen consider negotiations an occasion for intrigue and manoeuvring. Contrary to western business practice, where a decision can be made to benefit all parties, the assumption of most Turkmenistan businessmen is that one cannot achieve success in negotiations without putting the other party at a disadvantage. They are a proud people and there is a strong desire to avoid any loss of face.

The ‘old boy network functions in Turkmenistan just as it does in any other country in Europe. It can be very difficult to do business successfully in Turkmenistan at the present time without good relations with high-ranking officials, upon whose goodwill many issues relating to the business environment continue to depend. Experts will find it helpful to make contacts in the administration at either national, regional or local level, depending on what is appropriate to the nature of their project.

From time to time you may become subject to unforeseen extra costs, such as commissions, rush fees, or expensed. This is sensitive area and, whilst in some instances you will be able to avoid such unofficial charges, in certain cases you will have no choice if you want to obtain what you are looking for. You will have to use your own judgement as to the urgency of the situation.

Business etiquette

To prepare you for personal contact with the people you will be working with, you may find the following worth adhering to:

• If you want to write to a Turkmenistan associate, do not rely on the postal service but use Fax or telex. If you want to send materials or documents to them, use an express mail or courier service so that you can be sure they will arrive swiftly.
• Since it is not customary in Turkmenistan to discuss serious questions by telephone, it is advisable to write a letter or discuss these issues during a face-to-face meeting.
• Prepare two-sided business cards with one side printed in English, or your native language and the reverse side printed in Russian. There is a ritual exchange of business cards at any business meeting.
• Do not be surprised if the partner you meet with does not take notes. This is customary and is one of the reasons for making sure you leave a business card so that they at least have your contact details.
• It is worth preparing some small gifts to hand out to your business contacts e.g. pens, hey rings, solar calculators or any similar tokens which your company has produced for clients and guests. These souvenirs tend to be a traditional part of the first greeting and are in part expected from you.
• You might try to agree an agenda for the meeting in advance so that you have a greater chance of the meeting running to time.
• If you are not a Turkmen or Russian speaker you are advised to hire a good interpreter.
• Make sure that you use the polite form when addressing a business associate rather like the ‘tu’ and ‘vous’ in French.
• Do not surprised if the person you are meeting arrives late or starts the meeting after the agreed time. It is still advisable for you to be on time, however.
• There is a Russian proverb which says, ‘people meet you by the way you dress, and see you off by your intellect’. People usually have high expectations of the way western business people should dress and tend to judge you immediately on the basis of this. It is best to try and dress conservatively and smartly.
• When you greet the person you are meeting with, shake hands firmly and have good eye contact. Follow all the ceremonial procedures of the meetings (exchange of business cards, greeting speeches, tea and biscuits). Tolerate smoking during the meetings since many men are heavy smokers. If you wish to smoke it is advisable to ask permission and always remember to offer them a cigarette.
• If you are asked to attend a lunch or dinner after the meeting, be aware that this is traditionally coupled with strong alcohol such as vodka or cognac. This practice is decreasing as time pressures on businessmen increase, but in provincial cities or at celebratory meetings such as the launch of a project, you should expect alcohol to be served as a matter of course. If you try and refuse, you risk offending your Turkmenistan associates, so accept a drink but be careful not to consume too much. However, do not drink if you are going to drive.
• If a Turkmenistan associate invites you to his or her home, to a restaurant or to reception, be aware that people in Turkmenistan are well informed about a wide range of non-business topics - a police man will be able to tell you about Magtymguly, for example. They will expect you to be able to reciprocate so be prepared to show your interest in and knowledge of Turkmenistan since this will please your host. Try not to focus your attention solely on the problems of Turkmenistan even if the locals do this themselves.
• In restaurants it is traditional for the man to pay. If you are a woman taking a man out to lunch or dinner, it will be easier for you if you make it clear that the company is paying. There is also a tradition that the person who invites someone to restaurant also pays the bill.

Recruiting personnel

For highly-skilled specialists, the Coordinating Unit has a database of local consultants by sector. Besides, your Turkmenistan partner may have undertaken to provide you with support staff as part of the Statement of Endorsement. If this is not the case, and you have to recruit your own staff, you can place an advertisement in the local paper or rely on word of mouth, probably through your Turkmenistan partner. The CU also maintains a list of interpreters and drivers.

Consider security if you advertise in the local paper for staff. Many companies prefer to use a box number at the paper or to leave a fax number asking for CVs to be sent through first so that you can select the possible candidates and contact them yourself. This avoids having to give names and addresses until you decide exactly whom you wish to interview.

It may be difficult to find well-educated employees in Ashgabat who can speak a foreign language fluently. Remember that the work ethic and culture is different in Turkmenistan , particularly among older employees. You should therefore be prepared to train your support staff during their first weeks with you, if they have not worked for a foreign company before.

As in any country, the salary for an employee you hire locally, will be lower than for an expatriate employee. Salaries for locals used to be very low ($100 to $200 per month) but that is changing as their experience and their worth grows. The cost of living has also risen sharply in Turkmenistan and consequently employers have been forced to compensate for this.

It is therefore advisable to consult with business associates and the Coordinating Unit to find out the going rate for the type of employee you need. As a rough guideline, the monthly salary of local staff hired by western companies is fluctuating now between US$100 to 200 for support staff (secretary, driver) and US$200 to US$500 (managers) depending upon their experience, ability and position. It is worth including a probationary period on the contract and stipulating clearly when the salary will be reviewed and on what basis.

You will have to fulfil certain obligations when employing local staff and be aware of certain guidelines. Turn to business associates, your Turkmenistan partner of the consulting companies for detailed information. Here are come basic facts.

• You cannot discriminate against employees with regard to sex, race, nationality, language, social position or religious and political convictions.
• The length of a working week usually does not exceed 40 hours.
• A working week of five days is standard but a six day week is possible.
• It is illegal to pay your employees in a foreign currency - you both take a risk if you pay them in cash dollars.
• Tacis employers do not pay taxes on salary.
• A worker may not be made redundant during his annual holiday, or his period of sickness, unless the company goes into liquidation.
• Working women have the right to 100 per cent paid maternity leave of 140 days.

Telecommunications

The Turkmenistan telephone system is old and outdated and in Ashgabat, but it is being upgraded gradually. This will obviously be a lengthy process and it is still difficult to make phone calls or send faxes using some numbers in the local network. This is especially the case for inter-city calls or faxes within the CIS. You should therefore be prepared for the time that it can take to reach someone by phone or by fax. Mobile phones are on the increase.

A number of international telecommunications firms have eased this situation, however, by providing an international calling facility based on satellite lines. Some of these firms can also offer an improved service of local calls as well, but be prepared to pay a premium.

Local telephone calls

If you want to place a local call you can do so from a private phone in your office, flat or hotel, or on the street using a public telephone. Local calls are free. If you use a public telephone you will need to use special tokens which you can buy from a kiosk, or newspaper stand. Prices for tokens differ and change frequently because of inflation. Be prepared for many phone booths to be out of order, particularly in provincial cities.

Inter city telephone calls

You can place inter-city calls direct, or through the operator, depending upon the capacity of the local lines.

If you have problems placing direct calls e.g. you do not know whether the line you have allow you to dial inter-city, or you are not sure of the city code, call the information number. There is a different number for each city. For Ashgabat this number is 074.

NB: If you call an information number, you will have to speak Russian or Turkmen. If you not confident about this, ask a Turkmenistan colleague to call.

International calls

It is possible to place international calls directly from Ashgabat ; dial 810 followed by the country and city codes and telephone number.

• If you have difficulty getting a line, you can book an international call through the operator (079). Or you book an international call by going to the local post office.
• If you are going to stay for an extended period, you may wish to use the services of an international telecommunications firm. Most of these firms advertise extensively about the services they offer and the costs entailed. You can either install a satellite connection or subscribe to an access card system - it depends on your needs and you budget. Both options will cost considerably more than using local lines.

International country code:  [993]
The city code for Turkmen capital city of Ashgabat:  [12]

Dialing Turkmenistan from Overseas: To dial Turkmenistan from overseas, dial your country's international dialing code, then 993 (the country code for Turkmenistan), then the city code, and finally the number.

Fax

The quality of your fax is of course dependent on the telephone line, so the information on telephone services applies to sending faxes. The quality of some local lines is often not high enough to sustain a quality transmission of fax messages. Given that the fax is an accepted alternative to the postal system in Turkmenistan, it is worth investigating how you might subscribe to a more reliable service. This is easiest if you are coming to work in Ashgabat, where the new telecommunications firms have concentrated their services.

Telex

It is very expensive to install a telex machine (around US$10,000) - if you do not already have a telex machine in your office you may send telex messages from almost any post office.

Electronic mail & Internet

E-mail has developed quickly in the last two or three years and It can now be used in Ashgabat. With the help of a series of companies and firms, users can access Internet. Graphic information may also be transmitted through the network. In Ashgabat e-mail services are available with:

• CAT Ecology Club, Tel 44 12 81(Mr. Vagif Zeynalov).

Mail

As a general rule, the postal system is hardly reliable and slow. Letters posted inside Turkmenistan can take many days to be delivered and those posted from abroad can take up to a month, especially if they are not addressed in Cyrillic script. If you do use the local post, you are advised not to mail money or valuable items, only printed material. Poste restante is available in main post offices.

Express mail and courier services

The easiest, safest and quickest way of delivering letters and package to, or from, or within Turkmenistan, is through a courier or an express service. Several international companies trading in Turkmenistan organise a regular courier delivery by pouch to and from Europe. This can be expensive depending on weight and destination but delivery is practically guaranteed. On average, a delivery from Western Europe to Ashgabat will take around five days.

When you need to send a letter or package, contact one of the courier companies for a quote on price and also to find out exactly what the customs requirements are - you may need to include an explanatory letter if the package contains more than printed materials, There are a number of companies which now provide courier services for letters and packages being sent to and from Turkmenistan including:

• DHL, 16 Neutral Turkmenistan street, Tel 35 53 47.

Courier service is also a reliable alternative for inter-city mail within Turkmenistan but it can be expensive. There are a number of companies now offering registered post facilities, where they will actually take the letter to the post facilities and ensure that it is a large number of letters, the price decreases on proportion to the volume.

Renting office space

Check whether your partner should provide you with office space as part of his Statement of Endorsement. This is by far the easiest option.Office space is expensive because demand is currently very high, but the supply of good office space is limited. When considering office space to rent, the same precautions apply as for renting an apartment .The Hakim of Ashgabat has now issued a decree banning the use of private apartments as office space. If you use your apartment as an office you run the risk of paying heavy fines.

In Ashgabat, there are a number of business centres in the large hotels, and there is the Ashgabat Business Centre in Berzengee and the Imperial Business Center on Turkmenbashi Avenue.