Tashkent cuts cross-border trade
By Ainagul Abdrakhmanova and Beksultan Sadyrkulov
BISHKEK - Uzbekistan has stopped vehicles using a border crossing to
Kyrgyzstan, apparently to prevent a flood of consumer goods bought by traders
at a giant market just across the frontier.
Initial indications are that Uzbek traders have adjusted to the move by taking
a longer route and combining orders for several people, or by crossing the
border illegally as some have always done.
The official explanation for the partial closure of the crossing at Karasuv
(Karasuu in Kyrgyz) is that there is not enough traffic to justify it.
Local residents and analysts view the unilateral move as a bid to stop an
outflow of hard currency from Uzbekistan's highly
controlled economy. They believe Uzbekistan is planning to construct its own,
similar trading post.
Economic crisis has exacerbated Uzbekistan's shortage of foreign currency as
demand for cotton, the country's main export commodity, has declined.
Traders are drawn to the Karasuu wholesale market just over the frontier in
Kyrgyzstan, where they can load up vehicles with cheap Chinese consumer goods.
With only pedestrians allowed to cross, the route is now unattractive.
An entrepreneur who is a frequent visitor to the market told IWPR that he had
not seen a dramatic drop in trade volumes. "For the moment at least, I haven't
seen that. Goods are being smuggled as before. Citizens of both countries
continue to cross the border illegally."
A resident of the Kyrgyz city of Osh told IWPR, "Since the border crossing has
been closed, trade between Karasuu market and the neighboring Andijan region
has fallen, as traders now have to make a detour through another crossing,
Dustlik. The smuggling goes on. ... People have started to put more planning
into their trips - traders collect several orders and only then go on a trip."
Unlike Kyrgyzstan, land-locked Uzbekistan does not have a border with China, so
goods from that country come in via Kyrgyz territory. Many of them end up being
resold at a market in the city of Andijan, just inside Uzbekistan.
The Uzbeks gave official notification that they were closing the crossing at a
meeting with Kyrgyz border officials on February 13. The deputy chairman of the
Kyrgyz border service, Cholponbek Turusbekov, expressed hope that the problem
could be resolved through negotiation, adding, "Every crossing is of strategic
importance."
Turusbekov said traffic heading for the border would be directed to Dustlik.
Uzbekistan earlier imposed restrictions on Kyrgyz citizens using the crossing,
allowing them a maximum of one trip every three months, but the restrictions
were cancelled as a result of the meeting.
Salkyn Abdukarieva, from the press office of the Kyrgyz border service, told
RFE/RL radio on March 3 that the authorities in Uzbekistan had not given any
indication whether the closure was temporary or permanent.
The 1,400 kilometer-long Uzbek-Kyrgyz frontier loops round and through the
Fergana valley, and has 14 border crossings.
Local residents and analysts interviewed by IWPR believe the Uzbek authorities
decided to close the Karasuv crossing to road traffic because they plan to
build their own wholesale market for the direct import of Chinese goods, doing
away with Kyrgyzstan's role as a transit hub.
Kyrgyzstan's Karasuu market is a 15-minute drive from the frontier and sprawls
over 15 hectares. It has an estimated daily turnover of US$500,000 and most of
the goods sold are thought to be destined for Uzbekistan. With 27 million
people, that country is a bigger market than Kyrgyzstan, which has just over
five million people.
On the busiest days, Tuesdays and Saturdays, up to 50,000 people are buying and
selling at the market.
Sanobar Shermatova, a Moscow-based Central Asia analyst, said Uzbekistan's
policy of restricting imports had enriched traders at the market by creating a
shortage of basic consumer goods across the border.
"Tashkent has done its sums, albeit belatedly," she said. "Day after day, Uzbek
citizens living in the densely populated Fergana valley have been leaving huge
sums of money in Kyrgyzstan."
Uzbek traders had no alternative to the Kyrgyz market, Shermatova said. "Now
with the construction of their own market ... the financial flows will end up
in the pockets of local [Uzbek] traders, the local administration and
bureaucrats."
Closing the border was central to plans for a new Uzbek market, she said.
Construction of the market was first mooted by Uzbek president Islam Karimov
during a visit to Andijan region last year. State television quoted him as
telling local border guards that the frequent traffic of Uzbek citizens into
Kyrgyzstan needed to stop.
"Let us open a market for our own traders here. We have containers, vehicles,
and everything needed to create such a market," he was quoted as saying.
Shortly after his visit, Karimov signed a decree reducing the value of goods
for personal consumption allowed to be brought undeclared into Uzbekistan from
$25 to $10; the limit had already been cut from $50 the previous year.
A Kyrgyz source said the numbers using the crossing had been declining since
that restriction was imposed, and the trend had continued with the border
closure.
A 23-year-old resident of Andijan, who gave his name as Bahodir, agreed that
the restrictions were linked to plans for a new market inside Uzbekistan.
"If we have a market on Uzbek territory, all the proceeds from sales and
profits will stay in Uzbekistan," he said.
A resident of Andijan who works at the central city market said construction
had started at a new site outside town. The work seems to be on hold at the
moment, probably because of funding difficulties, he said.
Professor Orozbek Moldaliev, a political analyst and regional security expert
in Kyrgyzstan, said Uzbekistan wanted to reduce the amount of goods passing
unchecked across the border, and to become a regional center of wholesale trade
itself.
But analysts and local residents argue that creating an Uzbek equivalent of the
market will not in itself stop smuggling across the border, and its success
will depend on whether people think they are better off shopping there than in
Kyrgyzstan.
"If, for whatever reason, the market cannot satisfy the demand, I assure you
the buyers will find loopholes and ways to visit the Kyrgyz market," said
Shermatova. "In reality, the border between the two countries is not a barrier
for smart people. If you have money, you can always cross over wherever you
want and carry whatever you want."
A 25-year-old resident of the Kyrgyz border village of Bazar Korgon, who gave
his name as Bazarbek, frequently visits Karasuu market and Andijan. He agreed
that people would have to be convinced that shopping at the new market was
worth it, and would do so only if prices were attractive.
Economist Ayilchy Sarybaev said Uzbekistan would struggle to benefit from its
move because Kyrgyzstan, as a member of the World Trade Organization, WTO, was
in a better position to import from China, also a member country.
"That's obvious, because Uzbekistan is not a WTO member and the cost of
importing any goods from China without going through Kyrgyzstan will be
higher," he said.
Sarybaev believes the Uzbek decision to restrict cross-border travel is
short-sighted, "Any restrictions will lead to smuggling and increase the black
economy, which is not desirable for either Kyrgyzstan or Uzbekistan."
Ainagul Abdrakhmanova is an IWPR-trained contributor and Beksultan
Sadyrkulov is a pseudonym for a journalist in Kyrgyzstan.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
