Winds of debt dispel dreams of wealth: A vision of Middle Eastern riches is a mirage for the Central Asian state of Turkmenistan Hugh Pope writes from Ashgabat

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CAMELS may roam the Karakum desert scrub that laps at Ashgabat's city limits and the new Turkmen elite may cruise tree-lined avenues in four-wheel-drive saloons - but an accompanying vision of Middle Eastern riches has proved a mirage for the remote Central Asian state of Turkmenistan.

When the Soviet Union's six Muslim republics broke free three years ago, Turkmenistan seemed the best equipped to go it alone. Its leader promised 'a second Kuwait' with the world's fourth-largest reserves of gas, an ethnically stable population and a history of consensus among bearded tribal elders in tall, woolly hats.

But now Turkmenistan is struggling to meet debt payments, is losing skilled Russian labour and in places has had to issue coupons for bread. The undemanding Turkmens are also beginning to resent obvious corruption, wasteful new presidential palaces and an absurd out-of- town district of 20 multi-million-dollar hotels. Judgements among the 13 pioneering foreign missions can be harsh. 'Forget the Kuwaiti model,' said one envoy. 'Unless the Turkmens get to work they are faced with the African model: burning up resources, building white elephants and lining their pockets.'

Responsible for everything in this country of 4.4 million people is President Saparmurad Niyazov. The 54-year- old former Communist first secretary has renamed himself 'Turkmenbashy', or 'Chief of the Turkmen.'

What started as a symbol of new Turkmen nationhood has already turned into an old-style personality cult, taking him in a January referendum to 99.9 per cent support on 99.9 per cent turn-out. Mr Niyazov is President, Prime Minister and chief of the only political party. Hundreds of towns, farms and factories are now named after him and even Turkmen cargo planes carry a picture of the president staring down from the bulkhead.

'We are a little bit frozen. Gorbachev made a great mistake. He gave people freedom immediately,' said one of the few Turkmen officials ready to talk about it at all. 'But you cannot change the Soviet mentality overnight. Our children will change this mentality. We want to do it step by step. What do you have in Russia? Anarchy. At least it's safe here.'

As disturbing as the way Mr Niyazov makes even the tiniest decisions is his lack of fiscal discipline. Infant mortality was the highest and life expectancy the lowest in the former Soviet Union, but the Turkmenbashy has given priority to a dollars 89m ( pounds 56m) airport, a dollars 65m mosque and a dollars 52m Boeing-757 presidential touring jet with all the gilt trimmings.

'Given the economic difficulties that Turkmenistan has experienced, it has an urgent need for much more careful and prudent use of resources,' said Roger Robinson, representative of the International Monetary Fund in Ashgabat.

Businessmen praise the country's open-door policy for foreigners and insist that everybody gets paid - eventually. But the country is landlocked and can no longer count on Russian pipelines for key gas exports.

Since late 1993, Moscow has only allowed Turkmenistan to export to troubled states such as Ukraine, Armenia, Azerbaijan and Georgia, which now owe it more than dollars 1.5bn. Turkmenistan has managed to avert open conflict with Moscow, using bilateral military and economic deals to get round its reluctant membership of the Commonwealth of Independent States.

It has even dealt Russia into Turkmenistan's main hope for future income, a gas pipeline through Iran to Turkey. That pipeline will need several billion dollars and several years to complete, but none of the states involved has that kind of money. And the Turkmen government may not have the time to wait.

While the elite is already enjoying easy access to dollars and imports, the poor majority has seen living standards erode almost as fast as the currency has collapsed from two manats to 125 manats against the dollar in its first year in circulation.

President Niyazov has made gas, water and electricity free, to be followed by free bread next year. But he was forced to introduce bread coupons in provincial Mari earlier this month, triggering a rare demonstration that residents said was dispersed by truncheon-wielding police.

Overt domestic opposition, always marginal in this eastern society, no longer exists. The former handful of nationalist critics of Mr Niyazov have gone into exile in Moscow or decided to keep silent.

The eight government-controlled newspapers are so slavishly uniform that virtually only their front-page mastheads differ. Russian television is censored and Russian newspapers and their progressive ideas have been made prohibitively expensive.

More dangerous for Mr Niyazov are power struggles in the old Communist elite, loosely linked to allegiances among Turkmenistan's five main tribes.

Abdy Kuliev, the sacked former foreign minister, has rallied opposition in Moscow. And in the biggest purge since independence, two powerful ministers in charge of cotton and gas exports were fired on charges of corruption in August.

Ethnic Russians who once found Turkmenistan the most congenial Central Asian state are leaving. The Russian ambassador said an average monthly emigration of about 600 from the 400,000-strong ethnic Russian community this year shot up to 3,000 in August.

Economic deterioration is the key to their departure, as well as pro-Turkmen policies on language and appointments. But while such policies alienate the well-trained Russians who are the backbone of urban services, they are popular with the 70 per cent Turkmen majority.

'We know that our president is making lots of mistakes. It's natural. We have only been free for three years after 70 years in jail,' said a would-be businessman, Tacmurat Kharjiev. 'We have to support the President for now and make him great so that people will know who the Turkmens are. When we've established ourselves, then we'll fix everything up.'

(Photographs omitted)