China's Road Into Kyrgyzstan

As China's commercial presence extends into Central Asia, the caravan routes which once formed the Silk Road are again bustling with traffic.

Only the methods for delivering goods have changed on the dilapidated 300-kilometre road leading from Osh in southern Kyrgyzstan to the Irkeshtam border crossing, and on into western China. Caravans of camels carrying silk, spices and precious stones have been replaced by convoys of trucks loaded up with Chinese fridges, televisions and clothes – all destined for south Kyrgyzstan’s bustling markets.

Some of the goods will find their way into nearby Uzbekistan, where the authorities have clamped down on Chinese exports to try to protect local industry. Here the demand for cheap consumer goods has created a thriving smuggling trade to circumvent official restrictions.

With the imports have come economic and social change, as China – sealed off from Central Asia in the Soviet period – has become a regional player, and its merchants a common sight at Kyrgyz markets.

I traced the journey made by people and goods all the way from Irkeshtam, past snow-capped mountains and desolate steppes, to the giant wholesale market at Karasuu, where I also took a look at trade across the closely-guarded Kyrgyz-Uzbek border.

NEW RULES LEAVE LOCAL WORKERS OUT IN THE COLD

The border post at Irkeshtam lies at high altitude in the shadow of towering peaks of up to 7,000 meters. Not even the hardiest shrubs can take root in the bare, weather-beaten ground here.

Only a few years ago, the border was closed for 20 days each month because conditions are so harsh. Back then, the only accommodation available was the numbered trailers scattered around the settlement and occupied by drivers and porters awaiting deliveries.

Now, the transient population of Irkeshtam has swelled to some 2,000 porters, drivers and officials.

Several mud-built hostels sit along the road, with ten dormitories of five or six beds and a café in each. It’s hard to find a vacancy in these places, and I was offered a bed for the night in a storeroom which a chambermaid hastily cleared of bread.

Most drivers still prefer the basic conditions of the trailers, and many of these have also been turned into makeshift shops, selling soap, washing powder, cigarettes and alcohol.

Until recently, the steady flow of Chinese exports along the Irkeshtam-Osh road brought work to thousands of locals as loaders, long-distance truck drivers, company representatives and catering staff.

The Chinese drivers would unload their 60 or 70 ton cargo at the terminal and reload it onto several ten-ton Kyrgyz trucks to carry it to the markets in Osh and Karasuu.

But since the Kyrgyz authorities granted permission to the Chinese trucks to drive straight into the country just over a year ago, many of them now deliver goods direct from the factory to the marketplace. Meanwhile, trucks with Kyrgyz number plates cannot compete as they are still not allowed into China.

While this may be more efficient for the Chinese traders, Kyrgyz delivery drivers complain there is no longer enough work for them. Nor is there any need for the hundreds of people who used to come to Irkeshtam to help load the trucks.

I was invited into a blue trailer with the number 86 daubed on its side to talk to drivers from Osh.

One driver, Alibek, told me that his colleagues no longer look forward to the arrival of 40 to 50 Chinese trucks each day.

“This [change to the rules] means that every day, around 200 to 230 of our drivers are no longer wanted,” he said.

Demand for loaders at the Irkeshtam terminal has also dropped – there are now just two squads of 30 people each, where there were once 30 teams.

The sudden drop in employment in the area has caused anger among locals, many of whom blame Chinese drivers for depriving them of opportunities to work and support their families.

An association of over 500 truck drivers, called Aidoochu or “Driver”, has written to Osh governor Jantoro Satybaldiev calling for Chinese trucks to be banned from driving across Kyrgyzstan.

Aidoochu’s head Nadyr Toktorov told me that drivers planned to block the road to stop Chinese lorries carrying on with their journey through the country.

He warned that if the situation continues as it is, Chinese trucks will soon be the only traffic on the road - which he argued is already the case on another highway connecting the Kyrgyz capital Bishkek with the western Chinese city of Kashgar via the Torugart crossing.

His colleague Alibek Jamankulov added that trucks from southern Kyrgyzstan used to drive to the Torugart crossing, where there was plenty of loading and delivery work.

“Now that road is serviced completely by Chinese vehicles. Soon the same thing will happen here, and then everyone who makes a living off this road will be forced to look for work in Russia, or find another job,” he said.

Some of the loaders have threatened to rob the Chinese trucks.

“If we find ourselves out of jobs, with no means of subsistence, then we’ll rob the Chinese trucks. We’ll do it in the pass, in the mountains, wherever it’s easily done,” said one.

I asked Guljamal Joroeva, spokeswoman for the Osh regional government, whether the authorities were aware that some resentful locals were threatening to obstruct the Chinese traffic.

She told me that at the last meeting of the regional administration, the governor instructed police to ensure that Chinese trucks had unrestricted movement.

ROADWORKS AHEAD

Day and night, convoys of heavy trucks bump along the serpentine Irkeshtam-Osh road, which is little more than a dust track that scales dizzying heights and plunges into deep gorges.

There are no petrol stations or maintenance facilities for long stretches, and fuel is sold in canisters at the roadside.

Recently, however, a number of Chinese companies have begun to rebuild the road and develop the infrastructure, and hotels and rest points are springing up along it.

Some locals are suspicious of this foreign-led development.

A border guards officer at the Kyzyl-Suu checkpoint, who wished to remain anonymous, suggested that China was preparing for a peaceful “conquest” of Kyrgyzstan.

Right now he said, the highway was “not the Silk Road, but a path for donkeys”.

“But soon the Chinese will lay asphalt, and then nothing will stop them. Even now, you can see that over the last half-year the number of Chinese vehicles has increased significantly, while our Kyrgyz vehicles have greatly decreased in number.”

DRIVERS SUBJECT TO EXTORTION ALONG THE WAY

In place of the bandits who once robbed unsuspecting merchants along the road, the modern-day drivers are hit official and unofficial levies imposed by traffic police, customs officers and transport firms.

Those Kyrgyz drivers who have not been displaced by Chinese truckers who drive the whole route are hired on a casual basis. They told me they have to pay the freight firms in order to be assigned a job in the first place.

They receive 18,000 soms – about 490 US dollars, for transporting 15 to18 tons of cargo, but out of that they have to pay the freight company a fee of 1,000 soms, or 27 dollars.

“If you don’t, you’ll sit there forever and won’t get a load,” Alibek laughed bitterly.

Delivery company representatives at the Irkeshtam-Dorozhny customs point – where 40 firms operate with four to five employees - refused to comment on these claims. Zakir Khiyazov, a representative of the firm Al Hajji Roma, said it paid drivers 480 dollars for delivering a consignment to its destination.

“The cargo is mainly despatched by Chinese traders. We load up to six vehicles a day with cargo,” said Khiyazov.

Kyrgyz drivers said they paid 50-100 soms (1.50 to three dollars) to employees of the border, customs and control services just to be allowed to reach the loading-up site, and there are more payments on top of that.

“In total, drivers at the terminal pay an average of 1,200-1,500 soms [up to 40 dollars] just to get as far as the terminal and take receipt of a load,” said Shuhrat Jurabaev, a driver from the Karasuu area.

Once on the road, more “taxes” await the truckers.

“The traffic cops find many excuses to extort money, and if you don’t pay them, they won’t leave you alone. So it’s much easier to give them 50 soms and get home quickly,” said local driver Alisher Usmanov.

At Gulcha in the Alai district, which lies 150 km from the city of Osh, I saw two policemen hanging around outside the settlement’s main shop, flagging down passing traffic.

One of the officers stopped a Chinese truck and asked the co-driver for identification and the freight documents. The man explained that their documents had been withheld from them at an earlier checkpoint and offered to pay 50 soms to be allowed to pass. The policeman at this improvised checkpoint agreed to let them go, but demanded four times as much.

The drivers had no option but to pay up after the officers threatened to hold them up indefinitely.

When I remarked to the policemen that I understood they didn’t stop foreigners on the roads, one of them replied, “Of course we stop them, and we demand more from them than from the locals.”

Bribery on the road has become so commonplace that officials no longer even have to ask for the money. On the approaches to Osh city, I saw one Kyrgyz driver drive up to a police checkpoint. Instead of stopping, he simply slowed down, rolled down his window and tossed 50 soms at the policemen waiting by at the side of the road.

KARASUU’S GIANT BAZAAR

After a long, uncomfortable and expensive journey, drivers arrive at the markets in Karasuu or in Osh itself, where they unload their cargo.

Karasuu is Central Asia’s largest market, where goods are sold wholesale to traders who will take them to shops and local bazaars in the region. Buyers from all over Uzbekistan and Tajikistan come to stock up on goods from row upon row of stalls which stretch as far the eye can see.

Lying just three kilometres from the Uzbek border, the Karasuu market sprawls over 15 hectares, and has an estimated daily turnover of half a million dollars.

The busiest days are Tuesday and Saturday, when up to 60,000 people come from neighbouring countries to buy and sell at this bustling hub. Locals serve them hot food, tea and coffee, and many turn their homes into bed-and-breakfasts.

In recent months, the growing community of Chinese expatriates has meant that they have started to sell their goods themselves, rather than hiring locals to do it. One local policeman told me that around 5,000 Chinese salespeople now worked at the market - an increase of almost 20 per cent on last year.

Some locals welcome this new, expanding community, including the many Kyrgyz students who take jobs on stalls to earn some cash and also to practice their spoken Chinese – now commonly spoken at the market, alongside Russian, Uzbek, Tajik, Kyrgyz.

Third-year student Uulkan spends her mornings studying at Osh State University and her afternoons selling goods on a market stall run by a Chinese trader.

“Working with the Chinese is a wonderful chance to marry a respectable and wealthy man,” she confided.

Chinese traders at the Karasuu market now have their own security agency. Zamir Rahimov, a guard for the company, insists that Chinese traders have created more work for the locals.

“Let’s put it bluntly, a lot of the local population live at the expense of the Chinese salespeople,” he said. “For example, one Chinese person at the market feeds three locals - the seller, as well as the loader and the handcart porter.”

But others believe the influx of Chinese traders has harmed the local economy. Businesswoman Leila Japarova, who brings wholesale goods from the Chinese city of Urumqi to sell at Karasuu, said the number of Kyrgyz traders there has dropped as a result of competition from the Chinese.

“This is because the Chinese bring their products and sell them themselves. Naturally, they sell much cheaper than our businessmen, because it’s easier for Chinese people to get goods from their own country,” she said.

I met a young Chinese merchant who has been coming to Karasuu for many years now. He said the government in Beijing encouraged entrepreneurs and helped them promote their businesses.

“It is prestigious to be rich, and poor people are not liked [in China], although the government tries to help them as well. But there’s a lot more chance of being respected if you’re rich,” he said. “The government issues loans on soft terms to Chinese people engaged in commerce abroad, at very low interest rates.”

I asked Chinese merchants to respond to claims by some locals that they are stealing their jobs.

“A fish seeks deeper water, while a man seeks a better place,” was one of the more cryptic responses.

A Chinese merchant from the Artush, a town in the Xinjiang-Uighur region in China's west, said he and his compatriots were not pushing anybody out of the way.

“We even make their trade easier,” he said. “The local Kyrgyz people buy goods from us much cheaper than from Kyrgyz intermediary purchasers, and their merchants don’t even need to travel to China. They get the goods right here and take them off to Russia. So our presence here benefits them,” said the merchant, who spoke Kyrgyz.

Ernis and Gulmira Jainakov, a Kyrgyz couple who hold Russian citizenship, are an example of the so-called “new Kyrgyz”. They belong to the relatively wealthy 20 per cent out of the 600,000 to one million migrants who have gone to Russia and Kazakstan in search of a better life.

The Jainakovs return to their home city, Bishkek, from time to time to visit their teenage children and stock up on wholesale goods from Chinese traders at the Dordoi market, which they then sell in the Siberian city of Novosibirsk.

A Kyrgyz government decree to ban foreigners from working as market traders was interpreted by many as an attempt to attract this class of successful expatriate entrepreneurs back home. However, at the last moment, the authorities postponed the measure until January next year.

Ernis Jainakov laughed and looked bemused when I asked him what he thought of the abortive attempt to ban foreign traders from Kyrgyzstan.

“Firstly, it’s unlikely that Kyrgyz traders will return home, as there are no conditions for finding decent work. Secondly, our places here are occupied by the Chinese. What’s the difference if they go on to trade in another country? We’ll still lose out. Thirdly, it’s unlikely that the Kyrgyz authorities will give up this chance to levy fees from foreign traders,” he said, adding, “And we’re already quite well-established in Russia.”

LIVELY SMUGGLING TRADE TO UZBEKISTAN

It is believed that 80 per cent of the Chinese goods sold at Karasuu will smuggled into Uzbekistan, where there is high demand for cheap goods.

An army of Uzbek traders travel thousands of kilometres to Karasuu from all over their country. Selling the goods allows them to feed their families, so they continue to defy the risks of being caught - which include having their goods confiscated or being beaten and assaulted by Uzbek police and border guards.

I travelled right up to the Kyrgyz side of the frontier to investigate the smuggling trade - which the Uzbek authorities have tried to stamp out by flattening thousands of homes in the border zone through which goods could have passed.

A tangled barbed-wire fence marks the boundary between the two countries. Rubble lies scattered over the dusty earth scarred with tyre-tracks. Not far away, tractors roll past a recently constructed red-brick building.

One Uzbek woman wept as she told me her family home been torn down by the authorities.

“In exchange for our demolished home, we were given 400 square metres of land and 5.5 million sums [4,850 dollars] to build a house. But that isn’t even enough to build a shed,” she said.

This drastic action has made little difference, for as long as corrupt border guards are happy to let traders pass in exchange for a cut, Chinese goods will continue to find their way into Uzbekistan.

I actually witnessed border guards taking money from people to cross – those carrying goods paid 1,000 soms, about 80 US cents, while those without baggage paid half that amount.

Officially, the Kyrgyz authorities deny there is a problem. Baitik Babataev, deputy chief of police in Karasuu district, dismissed any suggestion that Chinese imports made their way into Uzbekistan from Kyrgyzstan.

“Do you really think that if we knew that there were smuggling routes somewhere, we wouldn’t stop such violations? It’s simply impossible in our district, at any rate,” he said.

RISING CHINESE BUSINESS PRESENCE

While Uzbekistan tries to stem the flow of imports, Kyrgyzstan is hosting new ventures that will see Chinese goods manufactured on its own soil.

In the last year, Bishkek and Bejing have established several joint ventures to build homes and factories in Osh, and four brick factories have already been constructed.

The mayor of Osh, Jumadil Isakov, told me that Chinese consumer goods will be assembled at a 48,000 square metre industrial park now under development.

“We intend to start assembling components here, a sort of technology park for assembling Chinese furniture, fridges, irons and other goods,” he said. “If the quality measures up, then we’ll sell the finished products in Russia, Turkey and other countries.”

The mayor welcomes such joint enterprises, which he said will mean more jobs and better infrastructure for the city.

But he also noted that in many of the new factories, the skilled jobs were being filled by Chinese workers, while locals were only given more menial tasks.

According to Isakov, Chinese engineers seemed reluctant to pass on their skills to Kyrgyz co-workers. “For example, the brick factory has been working here for two years now, but they don’t say how the equipment works, and do everything themselves, and they don’t teach our workers the secrets. I’m constantly asking local workers whether they can work independently, and they tell me the Chinese don’t teach them anything.”

Some local workers expressed irritation at the perception that imported Chinese labourers were prepared to put in longer hours for less money. This meant that Kyrgyz were unlikely to be employed on the new sites, they said.

“I’m not afraid of working, but I see Chinese workers in Osh working 12 hours a day with one day off a month. And they receive miserable wages. They live in unsuitable housing… and get around 100 dollars a month, but they still put up with it,” said Abakir Zairov.

Zairov is a plasterer by trade who recently returned home from a stint in Yekaterinburg in Russia, where he earned around 3,000 dollars in six months.

“I don’t think I’d be able to keep pace with that [Chinese] work tempo, and there’s no way I’d work for that money,” he said.

Nevertheless, Zairov felt that the Chinese workers were filling a vital gap in the labour market left as local tradesmen continued to flock to Russia and Kazakstan.

“We don’t have enough finishers or bricklayers of our own. They’ve all gone off to Russia or Kazakstan to work,” he said, adding that “It’s in our interests to bring in more locals, and if we pay them well, they will of course agree to work.”

Ulugbek Babakulov is an independent journalist and IWPR contributor in Bishkek.