BAKU, Azerbaijan, September 17. In the ever-changing game of international relations, global economies are on the lookout for partnerships that can deliver the goods and keep the wheels turning. Recent developments between Bahrain and Turkmenistan highlight just such a trajectory. Two states of varying stripes - Bahrain with its financial hub in the Gulf and Turkmenistan with its energy reserves - are beginning to explore opportunities that extend well beyond diplomatic niceties. Economic ties between them, with their combination of complementary strengths and shared interests, suggest significant untapped potential.
The testimonies above are backed by actions that speak louder than words, given that recently, Manama of Bahrain sent two senior delegations to Turkmenistan's Ashgabat on consecutive days. First, Bahrain’s newly appointed ambassador presented his credentials, followed by Deputy Foreign Minister Talal Abdulsalam Al Ansari’s visit for high-level talks with Foreign Minister Rashid Meredov. The regularity and order of these visits highlight a deepening commitment in bilateral relations. For both sides, the economic logic is clear: Bahrain seeks diversification beyond hydrocarbons, while Turkmenistan looks for credible investors and alternative routes to global markets.
Bahrain is a gem in the Gulf, boasting a GDP of $37.7 billion and standing tall as one of the most open economies in the region. Its central government debt exceeds 90 percent of GDP, and while oil exports remain important, the government has made diversification a national priority. The country has positioned itself as a financial services hub, benefiting from liberal taxation - corporate and income tax rates stand at 0 percent - and a relatively advanced regulatory environment.
Turkmenistan is sitting on a gold mine of natural resources, standing tall among the world’s top players in the natural gas game. Its GDP of $40.8 billion is slightly higher than Bahrain’s, but its growth trajectory averages over 7 percent annually in the last five years. Ashgabat’s primary strategy is in mobilizing foreign capital and technology to modernize its industrial base and open reliable trade corridors.
Bahrain, leveraging its capital reservoirs and robust international networks, is poised to engage as a collaborator in these specific domains.
One of the most obvious areas of convergence lies in energy and industrial processing. Bahrain’s companies and sovereign funds could play a role in Turkmenistan’s projects to extract, transport, and process hydrocarbons. Beyond upstream investments, the scope includes petrochemical production, especially in ammonia and methanol. These products are increasingly in demand globally, and Turkmenistan is already investing heavily in modern plants. For Bahrain, participation would mean securing a foothold in Central Asia’s resource-rich economy while also creating opportunities to channel production toward Gulf and Asian markets.
The foundational framework for this collaborative synergy is well-established. In 2019, Turkmenistan explicitly invited Bahraini participation in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, a multi-billion-dollar initiative that underscores the country’s ambition to serve as an energy bridge. Bahrain, in turn, could contribute financial structuring and risk-sharing mechanisms, drawing on its banking sector.
Another strategic dimension is connectivity. Turkmenistan’s geographic location makes it a natural hub linking Central Asia with the Middle East, South Asia, and beyond. The Turkmenbashi seaport on the Caspian Sea has been designed as a continental transport hub with both east-west and north-south orientations. By connecting this infrastructure with Bahrain’s advanced facilities, the two states could jointly promote a Central Asia-Gulf transport corridor.
For Bahrain, this would diversify trade flows and position the kingdom as a logistics gateway for Turkmen goods into the Gulf Cooperation Council (GCC) market. For Turkmenistan, it would reduce dependence on overland routes through Russia, Iran, and China, aligning with Ashgabat’s policy of diversifying its external economic partnerships.
The bilateral trade dynamics between Turkmenistan and Bahrain are presently characterized by a suboptimal volume of exchange. In 2023, trade turnover was approximately $17,870. Between 2018 and 2023, Bahrain's exports to Turkmenistan increased from zero to $10,500. At the same time, Turkmenistan's exports to Bahrain increased from $591 to only $7,370. The new trade corridor would facilitate trade and increase these low numbers to something more promising.
Economic complementarity transcends conventional boundaries. Agriculture is another area where the two economies intersect. Approximately 70 to 72 percent of the terrestrial expanse of Turkmenistan is designated as viable for pastoral utilization, while Bahrain relies heavily on imports. Long-term supply contracts or joint ventures in food processing could stabilize Bahrain’s food security and create export revenue for Turkmenistan.
The textile industry presents another promising sector. Ashgabat has repeatedly expressed interest in exporting textiles to Gulf markets. Bahrain’s role could be both as a buyer and as a re-exporter, leveraging its trade networks to distribute Turkmen textiles across the region.
Finance may well be the linchpin of this partnership. With Bahrain’s financial sector ranked among the most advanced in the Gulf and Turkmenistan’s financial freedom index at just 10, the gap is striking. Ashgabat’s need for modern banking services, investment vehicles, and insurance solutions could make Bahrain an indispensable partner in facilitating capital inflows and structuring joint projects.
The 2011 Memorandum of Understanding on Economic, Trade, Scientific, and Technical Cooperation already laid the institutional groundwork for a Joint Economic Committee between the two countries. Revitalizing this mechanism would give new structure and predictability to the relationship, ensuring that discussions translate into actionable projects.
Bahrain and Turkmenistan, though they come from different walks of life in terms of geography and economic systems, are standing at a crossroads that could tip the scales in a big way. For Bahrain, deepening ties with Ashgabat opens access to energy resources, agricultural supplies, and new trade corridors, while also expanding its financial sector’s reach. For Turkmenistan, Bahrain offers capital, financial expertise, and a gateway to Gulf markets that can diversify its external economic orientation.
In a global economy marked by volatility and competition for markets, Bahrain and Turkmenistan’s partnership stands out as both pragmatic and strategic. If nurtured, it could evolve into a durable pillar of cooperation between Central Asia and the Gulf, offering dividends not just in trade and investment but also in bolstering the backbone of political and economic resilience for both nations.