Institute for War and Peace Reporting | Giving Voice, Driving Change

Raw Deal for Turkmen Traders

Corruption and bureaucracy make life difficult for fledgling entrepreneurs.
By the.iwpr

Turkmen entrepreneurs who are trying to work their way out of unemployment and poverty claim that their paths are often blocked by corrupt officials.

Some private traders complain that local authority officials are insisting on payment of extra taxes, or refusing to renew permits unless they’re paid bribes – and threaten to close businesses down if their demands are not met.

Officially, private enterprise is encouraged in Turkmenistan, but in practise entrepreneurs are faced with a seemingly endless list of licences and permits, and are subject to heavy taxes.

As a result, Turkmenistan’s private sector lags far behind that of neighbouring Central Asian republics. However, rising unemployment and a lack of job security in the state sector has encouraged many Turkmen workers to try to make a living in this manner.

Asghabat resident Oraz told IWPR that he used to support his family by working at one of the capital’s private markets, before it was taken over by the state and relocated to the outskirts of the city.

“We now work on the bare ground, under the burning sun, with no awnings, stalls... or customers,” he said. “No one from Ashgabat will travel this far to do their shopping when there are numerous shops in the centre of city. I think that the authorities are simply trying to crush us.”

Several such markets have been closed down or relocated to areas where they are bound to fail within weeks. As a result, many former traders are turning their backs on organised markets and setting up individual kiosks in the centre of the capital.

The kiosks can do a brisk trade in drinks, cigarettes, snacks and other small basic items such as cooking oil, and those in good positions can have an average turnover of around a thousand US dollars a month.

While they provide a valuable service to the community, such entrepreneurs again often run into trouble from the state.

Permit-holding kiosk owners pay two taxes through a simplified system based on their turnover and profit. However, some traders claim that they are often pressured to pay other levies that they are legally exempt from – such as the so-called city greenery tax. Such demands usually come from the local administrators, and are never put in writing.

Private trader Murad, who supports his parents, brother, wife and children from the money he makes, told IWPR, “People [from the city administration] visited my kiosk and threatened to close me down if I didn’t pay the greenery tax. I refused to do so, pointing out that the law excludes me from paying it.

“A few days later, they came back and demanded I tidy up the area around the kiosk at my own expense - lay cement and tiles and plant a lawn – to conform with the city’s architectural plan.

“I couldn’t afford to do this, and was forced to close my kiosk. I don’t know what my family will live on now – what are we supposed to do, beg?”

Former kiosk owner Mamed told IWPR that he had experienced similar difficulties at the hands of local authorities.

“All my documents were in order. The retail permit is valid for six months, and for this time, I earned enough from my kiosk to meet the daily needs of my entire family.

“But my problems began when I tried to renew my permit for a further six months. I was visited by local authority representatives who told me that my kiosk did not ‘fit the architectural ensemble’ of the area, and would have to be demolished.

“While my request to be given another kiosk was initially refused, the officials hinted that they might be able to help me if they were given 500 dollars. But I simply do not have this much money to spare – I would not be able to buy goods to sell, and my family would go hungry.”

After the closure of his kiosk, Memed said that he was left with no choice but to start bending the rules just to scrape by.

“Now I sell goods in the entrance of my apartment building. All the residents know me, I gave many of them goods on credit before payday, and they come and buy things from me like they used to when I had my kiosk,” he said.

“Of course I’m breaking the law - but I tried to work honestly before, and it wasn’t my fault that I failed.”

Ashgabat resident Kumysh, who lives in a large apartment building with a kiosk in the lobby, told IWPR that she was not bothered by the fact that it was operating illegally. “It’s a long way to the market, and at the kiosk you can always buy salt, matches, and vegetable oil,” she shrugged.

“Also, if you don’t have any money, you can buy things on credit as the owner of the kiosk usually lives in the same building and knows everyone. That would never happen at the state market.”

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