By shutting its border with Kyrgyzstan, Uzbekistan has imposed a “catastrophic” de facto embargo, stimulating a shadow economy in the beleaguered Central Asian state, say researchers at a Bishkek-based think tank.
The Central Asian Free Market Institute (CAFMI) found a 75 percent drop in trade at southern Kyrgyzstan’s largest market since Tashkent unilaterally closed the border following the upheaval that unseated the Kyrgyz president last April.
The closure has also pushed up food prices -- which have risen more in Kyrgyzstan this year than anywhere else according to the World Bank -- since Uzbekistan traditionally was a major supplier of fruits and vegetables to Kyrgyzstan.
But the 1100-kilometer border is open for smuggling, entrenching corruption as the arbiter of economic activity. In interviews with 109 illegal smugglers, the researchers found that many of them ferry cheap Chinese consumer goods to Uzbekistan and fruits and vegetables back to Kyrgyzstan, paying border officials bribes along the way. (At the prices they found, it’s not a stretch to imagine drugs, weapons and even militants are also getting across.)
Along the entire […] border there are illegal paths by which goods transit from Kyrgyzstan into Uzbekistan and vice versa. At the moment, traders are forced to pay bribes to border guards along paths that bypass the border. Payment to the border guards is 200 som [$4] for every person crossing and 300 som [$6] for goods weighing up to 80 kg. […]
Closure of the border contributes to the growth of smuggling and the black market. This situation only encourages the spread of corruption and the decline of security in the region.
Kyrgyzstan is a transit hub for inexpensive goods from China and has long depended on re-exporting those goods to other countries in the former Soviet Union. The new Customs Union of Russia, Belarus and Kazakhstan has severely impeded this lucrative re-export business, but goods bound for those countries mostly traveled through northern Kyrgyzstan. For the battered southern provinces struggling to recover from last summer’s ethnic violence, the closure of the Uzbek border has done the most harm, undercutting the area’s economy and the fragile peace, the report says.