Kazakhstan: Bazaars Strengthen Trade Integration and Wider Cooperation in Countries of Central Asia

June 29, 2010

ALMATY, June 28, 2010 – Bazaars in Central Asia play important role of cross-border trade and government policies in promoting trade and raising economic welfare of populations as well as contribute to the goal of supporting and strengthening border trade and wider cooperation in Central Asia and Kazakhstan. This is one of the main findings of the World Bank new publication "Skeins of Silk: Borderless Bazaars and Border Trade in Central Asia” presented today to Kazakhstan media.

Despite small volumes and low value-added when compared with standard international trade, cross-border trade contributes significantly to employment generation and poverty alleviation. Cross-border trade has experienced substantial growth in the last five years among contiguous Central Asian Regional Economic Cooperation (CAREC) economies, excepting Uzbekistan, and the potential for expanding cross-border trade is clearly large.

“The book uncovers the dynamic phenomenon of bazaars in propelling this trade”, said Mr. Bartlomiej Kaminski, the co-author of the book. “Bazaars play major roles in regional and national chains of production and distribution with national networks strongly integrated and overlapping across Central Asian economies. Cross-border trade, largely intermediated by bazaars, fights poverty by cheapening products and by creating employment opportunities, especially for women”.

The book examines the public policy implications of cross-border trade and actions that could be taken to foster such trade. Improvements in the business climate and elimination of harassment of traders by local officials as well as easing conditions for the movement of peoples and vehicles would help fight poverty.

“The analysis suggests several measures that would boost cross-border trade such as strengthening cross-border cooperation to facilitate the movement of local residents, motor vehicles, and goods”, said Kaminski. “Also cross-border trade would benefit from measures increasing personal allowances and duty exemptions on agricultural products. The Kazakh practice of granting duty-free access for local residents as long as imported products are limited in weight should be replicated in other CAREC countries.”

The book goes beyond trade. It considers the potential for cross-border community cooperation in a variety of activities, public services, shared infrastructure, culture that could yield rich dividends and make meaningless borders as separators of human activities. It examines the example of border cooperation in Europe through Euroregions as a model for Central Asia.

The book, authored by Bartlomiej Kaminski and Saumya Mitra, is based on research carried out by a team headed by Saumya Mitra and consisting of Bartlomiej Kaminski, Matin Kholmatov, and Gael Raballand from the World Bank, Munavara Paltasheva and Kairat Kasymbekov from Kazakhstan’s Forum of Entrepreneurs, Tokkun Kasymbekov and Shamsia Ibragimova from SOCECONIC in the Kyrgyz Republic, Shohboz Asadov and Firuz Saidov from SRC Consulting in Tajikistan, and Sher Shan of Infra-D Consulting of Pakistan.

The Russian edition of the book "Skeins of Silk: Borderless Bazaars and Border Trade in Central Asia” will be published in summer 2010.

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