Although 90% of the land is occupied by the Kara-Kum desert, agriculture is important to the Turkmen economy. Substantial quantities of cotton (the country is the world's 10th-largest producer) are also produced under ecologically ruinous schemes established during the Soviet era. Grain, fruit and vegetables are widely grown and livestock breeding is an important source of employment.
The other mainstay of the economy and its best prospect for the future is an abundance of oil and natural gas deposits, the scale of which rivals anything in the Persian and Mexican Gulfs. New pipelines are planned to supplement the sole existing one, which transports the products via Russia. Other commercially viable reserves include bromine, iodine salts and various other minerals.
Most of Turkmenistan's industry is devoted to processing the country's principal raw materials: textiles are a key export industry and much of the extracted oil is refined within the country. Oil and gas account for 85% of Turkmenistan's export income (under long-term contracts, 80% of the gas goes to the Ukraine while 60% of the oil is bought by Italy).
As one of the poorest republics of the former Soviet Union, Turkmenistan suffered considerable economic disruption and hardship after its demise in 1991 (GDP declined by 10% per year between 1993 and 1998); the increasing inability of many of its former trade partners to pay for its products has also caused serious difficulties. The government responded by seeking out new markets.
In 1992, Turkmenistan joined the IMF and the World Bank, then the European Bank for Reconstruction and Development (as a 'Country of Operation') and the Islamic Development Bank. The following year a new national currency, the Manat, was introduced.
In 1996, the government introduced an economic reform programme aimed at controlling persistent inflation and promoting foreign investment, especially in the oil and gas sector. This has met with some success; inflation is now 10.7% (2005), while annual GDP growth is 9.6% (2005).
The government has also concentrated resources in developing Turkmenistan's previously poor infrastructure, especially the road network. Some aspects of the reform programme have been delayed, including land reform in which the major role was to be assumed by the private sector.
Turkmenistan is a member of the Economic Co-operation Organisation, which brings together the former republics of the southern Soviet Union with Romania, Bulgaria, Albania, Greece and Turkey.