No Foreign Traders, Please

Foreign nationals are to be banned from selling goods wholesale at markets in Kyrgyzstan, although some will be allowed to continue in the retail sector under a quota system to limit numbers. Although the measure has been praised in some quarters, others fear it runs counter to the principle of an open economy.



The ban, introduced by a government decree signed on January 12, comes into force on April 1. In addition to the blanket prohibition on wholesale trading, the retail trade quota means that only 10 per cent of people working in that sector can be foreign nationals or others without Kyrgyz citizenship.



According to official data, there are 3,200 foreign entrepreneurs working in Kyrgyzstan, although unofficial figures put the number closer to 10,000. Most are citizens of neighbouring China, who take advantage of low customs tariffs to import cheap goods to sell at Kyrgyzstan’s large wholesale markets.



Member of parliament Temir Sariev supports the new rules. “The government has to regulate all areas of the economy. The trade sector is in need of this, including the ban on foreigners in wholesale trade,” he said.



Baatyr Syrgabayev, an advisor at the foreign ministry’s international economic relations department, agreed, adding, “Every state has the right to protect the interests of its citizens, and that includes business and trade.”



Syrgabayev does not believe the ban will affect Kyrgyzstan’s political and economic relationships with key trading partners.



Economic expert Jyldyz Sarybayeva welcomed the government’s move in response to the large influx of foreigners, especially from Uzbekistan and China, to the Kyrgyz trade sector. She believes it will help build up local commercial activity and rejuvenate small and medium-sized businesses.



By contrast, the director of the Bishkek Centre for Economic Analysis, Sapar Orozbakov, does not believe foreign nationals are an obstacle to local traders. “After all, both groups are operating in a competitive environment,” he said.



“Kyrgyzstan promotes itself as an open country with an open economy that welcomes any investor. It is therefore unwise to put limits on foreign nationals working in trade,” he said.



Other commentators such as member of parliament Avaz Momunkulov are worried that the ban may simply increase the level of corruption in the customs and migration services.



“Foreign traders will be able to import their goods just as before, by coming to an arrangement with customs and migration officers. If we really want to restrict imports of foreign-made goods, we should raise import tariffs. That would be effective, and would stimulate the growth of domestic manufacturing,” he said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)