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Uzbek Authorities Block Imports

The authorities in Uzbekistan are imposing a wide-ranging ban on imports in a bid to support domestic production, but NBCentral Asia observers warn that artificial restrictions of this kind are unlikely to be a success. The only increase is likely to be in smuggling.

New rules which came into force this month place restrictions on various types of imported goods, although it is still not clear how extensive the ban will be. The aim is to boost domestic manufacturing to a point where goods are of high enough quality to be exported as well as satisfying the local market.

Uzbekistan already has import restrictions in place, under which anything over 25 US dollar in value is subject to high customs duties. This has acted as a dampener on the small-time traders who bring in cheap Chinese consumer goods from Kyrgyzstan, where the largest wholesale market in Central Asia is located. If a trader buys goods worth 1,000 dollars, say, it will cost him or her 450 dollars in various taxes and custom levies to bring it across the Uzbek border.

The latest measures could be the last straw for many of these traders, say NBCentral Asia observers.

“These restrictions will come as a major blow to private entrepreneurs,”said Sayora, a businesswoman from the capital Tashkent.

Consumers in Uzbekistan will also feel the pinch as imported goods such as clothes and footwear become scarce and expensive. Shoppers will not automatically switch to items made in Uzbekistan, which are not of the same quality as imports.

Feruza, a 30-year-old from Tashkent, recalls the time she bought a cotton jacket made in Uzbekistan, which lost its shape after one wash.

“I don’t mind paying more for clothes if they will last a long time,” she said. “That’s why people want to buy imported goods.”

Observers in Uzbekistan say the government’s import substitution policy is not going to work, as people will find other ways of bringing saleable goods into the country.

“The fewer goods it is legal to import to Uzbekistan, the more they will be smuggled,” said one economist.

Analysts say the best way to support local manufacturers would be to put more liberal customs regulations in place and then offer domestic producers discount fees and other benefits.

However, Viktor Ivonin, an economist from Tashkent, disagrees with such arguments and says restrictions are necessary, however unpopular they are.

“Imports are restricting the potential of the real economy,” he said.

Ivonin says import substitution will reduce the amount of foreign currency spent on buying goods abroad and give domestic producers a leg up.

(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)

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