In Tajikistan’s bustling bazaars, traders often must rely on faith alone to get them through hard times.
“In Allah we trust,” said Zafar, standing in the smoldering remains of the Korvon Bazaar, Dushanbe’s biggest wholesale market. The fabric seller had just lost $25,000 in a blaze that engulfed more than 5,000 square meters of the market late on September 5.
“I have four kids,” said Zafar. “We’ve lost everything – all we have.”
A woman sitting on a tire next to Zafar said she lost $50,000.
Three days after the incident, several merchants interviewed by EurasiaNet.org estimated that more than 1,000 vendors were ruined by the blaze, which left one person dead. Many of the affected merchants have substantial debts. Zafar, for example, borrowed $10,000 from a European bank. “And they can’t just forgive the loan, because we’ll come and get more loans and then there will be a fire again,” he said.
This is at least the fifth fire to ravage Korvon in less than a decade; many vendors suspect arson, though some blame an electrical short. The last blaze was two years ago, but it was half the size, said a Koran seller whose holy books also went up in smoke. He lost more than $8,000, he said while wiping the soot off his feet with the charred remains of colorful fabric for chakans, the baggy dresses worn by many Tajik women.
Vendors say they paid the market’s owner a one-time fee of $4,000 a square meter, plus 80 somoni a month (about $16), per square meter. But most don’t have insurance. “Nobody told us to [buy insurance],” said Jon, a fabric seller who had eight stalls in Korvon. “We didn’t think of it.”
The insurance sector in Tajikistan remains largely undeveloped, although 16 insurance companies operate in the country, including two that are state-owned, according to local observers.
“Developing the insurance market here is definitely a priority,” said Chris Miller, International Finance Corporation’s country officer in Tajikistan. Lack of adequate insurance is not only affecting local businesses. Foreign investors also struggle find insurance in Tajikistan, he said. “There is a lack of both small- and large-scale insurance.”
A state-run insurance company, Tojiksughurta, has announced it will pay compensation to vendors who insured their properties with it, according to the Asia-Plus news agency. But most small businesses have no insurance at all, said Katharina Schachtner, the general manager of Access Bank, because they don’t trust the system. “People think insurance is something you pay for, but if you need something you don’t get anything back,” she explained.
Access Bank, which offers micro-loans, has its main Tajik office across the street from the Korvon Bazaar. More than 600 of its clients, who hold over $2 million in loans, were affected by the fire.
“There’s a fire there almost every year,” said Schachtner. “And it would be cheaper [for the vendors] if they paid for insurance. But there is not much on offer.” There are too few insurance companies in Tajikistan, and those operating target bigger clients, she says. “There is nothing tailored to small business needs—the policies are either too expensive, or not suitable.”
With their investments turned to ash, no insurance and no word from the market’s owner, more than 1,000 Korvon vendors took to the streets on September 6, the day after the fire. “We marched because the owner of the market was missing,” said Jon, who, like most market sellers, didn’t give his last name for fear of reprisals. “We wanted someone to help us.”
Surrounded by police, and with security tight at government buildings, the protestors dispersed only after the mayor agreed to meet with them. “We were a lot of people. We weren’t afraid of anything,” said Zafar.
Responding to the rare public protest, Mayor Mahmadsaid Ubaidulloev promised to protect the business owners’ rights. Ubaidulloev also created a working group that includes city and government officials, as well as representatives from the National Bank, to help soften the financial blow to Korvon’s small business owners, his office said in a written statement on September 7.
The National Bank has also promised to double the credit period for affected businesses holding its loans, according to Shovkat Saidov, a spokesman in the mayor’s office. Access Bank is giving its affected clients a one-month grace period while it comes up with a “client-suitable approach.”
Of course, this won’t help Jon, and others like him, support their families today. “My wife just called and asked me to bring home diapers,” he said, standing outside his charred stalls on September 8. “But I don’t have the money because it’s all burnt.”
Miller, the International Finance Corporation representative, would like to see Tajikistan develop a micro-insurance project, an idea supported by development agencies including the World Bank and the Entrepreneurial Development Bank in The Hague. Targeting low-income clients unable to afford more mainstream insurance plans, micro-insurance would be a good fit for family businesses struggling to find financial security in Tajikistan.
Yet for many small-business owners, insurance remains a tough sell. “Insurance is only words,” said a Korvon clothes seller whose shop escaped the blaze.
“We trust in Allah,” she said when asked if the fire had made her consider insurance. “If there are fires it’s because Allah allowed it.”