ASHGABAT (Turkmenistan), Jan 30 — Turkmenistan's authoritarian leader has ordered a giant privatisation of the state-owned transport sector, state media said today, as the gas-rich nation struggles to shake off economic woes.

Gurbanguly Berdymukhamedov said the move was "designed to help strengthen the competitiveness of the national economy", boost investment and strengthen small and medium businesses, according to reports.

The majority of reclusive Turkmenistan's economy has remained state-owned following independence from the Soviet Union in 1991.

The new announcement points to pressures caused by over-reliance on oil and gas revenues in the Central Asian nation.

The president did not say whether foreign companies would be able to invest in the new entities.

Berdymukhamedov took power in 2006 after the death of Saparmurat Niyazov, who styled himself as a father of the nation and pledged that transport — along with oil, gas and other sectors — would never be privatised.

Before the privatisation drive, Berdymukhamedov reversed generous subsidies that allowed citizens to consume water, electricity and gas effectively free of charge.

The president has given the justice ministry three months to propose legislative changes to transform wholly state-owned enterprises in the transport sector into joint-stock companies.

Last week state television showed Berdymukhamedov's son presiding over the groundbreaking for a US$2.3 billion (RM9.45 billion) highway that will be built by a little-known private company.

Turkmenistan, which sits on the world's fourth largest natural gas reserves, placed 161st out of 180 countries in anti-graft watchdog Transparency International's Corruption Perceptions Index released this week. 

The country's economic future is tied to sales of gas to China, as trade with traditional partners Russia and Iran has weakened in recent years.

Rights groups say Berdymukhamedov's rule has rolled back some of Niyazov's worst authoritarian excesses but preserved a repressive system whose leadership cults have sparked comparisons with North Korea. — AFP