Posted by: Borderless Borderguard | October 7, 2007

trade falls victim of border regulations

This year Central Asia-Caucasus Institute and Silk Road Studies Programme produced a monograph “The New Silk Roads: Transport and Trade in Greater Central Asia“.
Umarov Khojamakhmad outlines current problems, barriers and obstacles on the way to regional cooperation. He points out that there is little cooperation between Central Asian states. High border taxes, customs duties, and a number of unofficial fees make regional cooperation unattractive and unprofitable for many Tajik entrepreneurs. A special focus is made on Uzbekistan. Uzbekistan having first suggested to establish a Central Asian general market under the framework of the Organisation of Central Asian Cooperation, sets an undeclared economic blockade on Tajikistan. But not only is trade difficult with Tajikistan, it is also not easier with Kyrgyzstan due to closures of borders and transport routes. The only way for Tajikistan to deliver its exports is through the territory of Uzbekistan. Borders regulations, making it difficult, and at times impossible, for Tajikistanis to enter or pass through Uzbek territory result trade dynamics/relations of Tajikistan with other Central Asian and CIS countries.

“Future growth of Tajik imports of all products from Turkmenistan is all but guaranteed, although this could be impeded by Uzbekistan’s obstructionist policy of inhibiting transport and not allowing pipelines from other countries to cross its territory.”

Tajik economy suffers millions of losses due to inefficient and trade-non-friendly regulations. “Today hundreds of tones of fresh flowers, lemons, and fresh stone-fruits wait at inefficient border crossings, a process which can take several days.” Of course all of this has disastrous affects on the quality of goods.

Corruption is another obstacle which not only slows down trade dynamics between Central Asian states, but also any movements of people. Visa regimes introduced in countries, where the majority of population live in rural areas, it is very costly for many to travel to the capital to apply for visa, which again is not free. There are many things done not to improve or secure movement along the borders, but to make it almost impossible for many. People who have no economic means to acquire visa, or are not well informed about visa regulations, which is often the case, have to go through dangerous illegal passages in order to attend relative’s weddings or do little business. New border regulations, non-realistic for the many, are provoking people to break the laws, which they hardly know.

Umarov makes it very obvious how costly and non-profitable it may be to trade across the border:

“Goods transported out of Tajikistan by trucks are subject to a number of nonofficial fees demanded by police and criminals. The author of this report found that the following payments demanded are standard: en route through Kazakhstan between Chimkent, Karaganda, and Almaty, traffic police require each vehicle carrying less than 20 tons to pay $200, while the ecological service demands $30, with no receipt provided. En route between Jambul and Karaganda drivers are stopped at nine separate check-points at each of which vehicles must pay between $75 and $100.

Tajik vehicles must pay at least $100 at each check-point in Uzbekistan. There are four such checkpoints en route between Sari-Asiya and Charjou and eleven en route between Sari-Asiya and Cherneevka. If they refuse to pay, drivers and accompanying persons are subject to physical beating as well as the seizure of their goods and vehicle.”

Mortgage, and other border/transit regulations also led some of the industries collapse in Tajikistan.

“… Isfara Chemical Plant, which manufactures explosive materials used in the construction of mines, roads, railways, irrigation canals and other structures suffered millions of losses. Following independence, Uzbekistan outlawed the export of these explosives through its territory, which is the only possible route for exporting this product to the North. The plant used to manufacture up to 300,000 tons of explosive material prior to the break up of the USSR, and the price ranged from $745,000 to $810,000 per ton. For transiting such consignments through Uzbekistan, the Uzbek customs and railway services require more than 20 documents and even if all necessary documents are submitted, they may still refuse transit.”

“A major obstacle to the transit of Tajik goods are the “mortgage” requirements for the transport of tobacco, ethyl alcohol, wine and vodka introduced by Kazakhstan and Uzbekistan. Such arrangements do nothing to promote a liberal economy. After Uzbekistan introduced mortgage requirements, the Tajik wine industry collapsed as it relied on exporting to wineries in Kazakhstan and the Russian Federation where the wine was bottled and sold.”

The question is why do Central Asian State, which agree on everlasting friendships and suggest free-trade zones make lives of entrepreneurs [both own and neighbouring] so difficult, or their business impossible? I would like to receive some answers and comments of yours.


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