Uzbekistan: Shuttle Traders Curbed

Uzbekistan has clamped down sharply on the itinerant merchants who roam neighboring countries to bring home sorely needed imports. The so-called shuttle traders fear that new taxes and regulations will drive them out of business and harm the Uzbek economy.

A new decree last month forced them to pay hefty customs fees. On food and industrial goods the duty was set at 50 and 90 per cent of the products' value, respectively.

The traders reeled in shock. Guli S from Tashkent said it was a blatant attempt to shut down the shuttle business. "The introduction of these custom fees is robbery pure and simple," he said. He scoffed at government claims that the regulations were intended to help traders.

The merchants sprang up in Uzbekistan at the end of the 1980s, when Perestroika in the former Soviet Union opened the way for overseas travel. Under the Soviet system of regional interdependency, no one republic was allowed to manufacture an entire product. In the case of a refrigerator, for example, some components might be produced in Ukraine, others in Russia and the whole thing assembled maybe somewhere in the Caucasus.

Uzbekistan was left with hardly any capacity for manufacturing consumer goods. And after independence, imports from the old Soviet zone dried up. The way was open for shuttle traders to fill the gap and they jumped at the opportunity enthusiastically.

Back then, the main places of "pilgrimage" for Uzbek merchants were Turkey, China, the United Arab Emirates and Malaysia. When Soviet Union collapsed, state factories and enterprises closed down, the trade was for many the only means of survival.

Now the business seems to have been dealt a crippling blow. The government explained away the new regulations as a step to end the import of poor quality goods and to protect local manufacturers whose products, officials say, can now rival imports.

According to the deputy head of the methodology department of the state tax committee, Rustam Bakhromov, the introduction of the customs fees will also make things easier for individual traders. "Until June 1 this year, anyone who imported goods into Uzbekistan paid the authorities three types of different fees, the total sum of which was around 140 per cent of the cost of the goods," he said.

The shuttle traders ridiculed this explanation. They say the new restrictions will not only drive some people out of business but will deprive the budget of revenue.

A decade after independence, the Uzbek market has a great hunger for imports. And the more demand has risen the more the government has tightening up on the shuttle trade.

An economist from the leading research institute in Tashkent said that although in recent years the authorities have passed many decrees to create favourable conditions for small and middle-sized businesses, they have in some ways made life harder for traders.

"One recent obstacle was the restriction on movement of citizens within the republic, especially in Tashkent. It brought a slowdown in the distribution of imported goods from one region to another," the economist said.

Ulpatkhon Ergasheva, another trader, confirmed this, saying that fear of arrest for unauthorised visits to Tashkent has scared regional merchants away from bringing in goods. "Now it is safer for our colleagues in the provinces to go abroad to Kazakstan or Kyrgyzstan for goods rather than to the capital of their own country," she said.

Ergasheva went on, "Paying a 50 per cent and 90 per cent customs fees will increase the price of imported goods. Before the new rules people had enough trouble affording even the cheapest imports. These items will now be beyond their reach."

The traders complained they were never consulted about the new laws in advance. "The first time we learn about them is usually in the press," said Sheykina.

Guly S thinks that government officials are deliberately trying to shut down the shuttle trade. "When we are forced to close down," he said, "our businesses will be handed over to firms and companies registered in the names of the children, wives and other relatives of officials."

Bobomurod Abdullaev is an independent journalist in Uzbekistan