Uzbekistan: Traders Clash With Police

Monday, 21 February, 2005

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Bobomurod Abdullaev

Stallholders have clashed with police during protests against swingeing new taxes on imported goods and an official drive to regulate the capital's markets.

Critics maintain the moves - which include the imposition of 90 and 50 per cent customs duties on imports of industrial and food products respectively - are part of a government push to reduce demand for foreign currency before a visit by the International Monetary Fund, IMF, later this month.

The so-called shuttle traders - itinerant merchants who bring sorely needed goods into Uzbekistan from neighbouring countries - fear the clampdown will drive them out of business.

Seven traders were charged with disorderly conduct after an incident at the Eski Djua (Old Town) bazaar in Tashkent on September 4. Three of those arrested - including Jjakhongir Shosalimov, an activist from the prohibited opposition party Erk and member of the Independent Organisation for Human Rights in Uzbekistan, IOHRU - are serving 15-day prison sentences while the other four were fined.

The violence erupted when police began to enforce the new tax regime, which stipulates that traders must have a quality certificate and an invoice for imported materials - proof that the increased taxes have been paid - and must also have their own cash register.

Tax police angered traders when they began to confiscate goods from stalls whose owners could not meet the new requirements.

Witnesses told IWPR that the police began to beat trader Nurmat Jonjigitov when he refused to hand over his goods, dragging him into a police van. His pregnant wife Gulbakhor rushed to help him, only to be violently restrained by officers.

"Despite the fact Gulbakhor was pregnant, one of the policemen kicked her in the stomach, and when she fell down they kicked her in the head," claimed trader Sherzod B, who did not want to give his full name.

People were outraged and began to hurl rocks and bricks, smashing the windows of three police vans and injuring one officer, according to Zukhriddin Bobokalonov of the Tashkent Main Internal Affairs Department, GUVD.

The department denied reports that several traders were injured by a truncheon-wielding special police division that was later called in to deal with the disturbance.

Speaking to IWPR at the scene of the trouble, only minutes before he was arrested, Shosalimov said that the crackdown was designed to reduce the number of private traders, whom the government thinks are too reliant on foreign currency.

"With customs duties like these, shuttle traders will stop importing goods, which means they will not have to buy dollars on the black market, and this will lead the dollar rate to drop," he said.

"Additionally, the cash registers will allow their entire earnings to be accounted for, reducing turnover and thus lowering the consumer demand for dollars," he said.

Shosalimov said the measures had been taken to fulfil the conditions of a memorandum on mutual understanding signed with the IMF in January 2002. The agreement envisages a liberalisation of the country's economy, first of all in the foreign currency market.

The IMF commission is soon to visit the country to check if the memorandum has been implemented correctly. A first instalment of 100 to 300 million US dollars will be handed to the republic before the end of autumn if the reforms meet with approval.

"Although the republic needs this money, it is not as important as IMF recognition and cooperation, which will be a powerful signal to all international financial institutions that Uzbekistan is a nation with a market economy," said David Pearce, head of the local World Bank mission.

The IMF closed its Uzbekistan office in April 2001, claiming it saw no reason to stay in a country that did not want to carry out economic reforms or listen to advice.

However, when Uzbekistan allowed the US to use its Khanabad airbase during the recent military operation in Afghanistan, Washington agreed to help with economic reforms and persuaded the IMF to give the republic another chance.

Uzbek traders and consumers are already feeling the consequences of the new policies. Traders cannot work, many Tashkent markets are closed or empty, and consumers cannot find the goods they need.

Government officials estimate that more than 12,000 people trade imported goods in the capital. Their source of income is under threat, as are those of hundreds of thousands of market workers - drivers, warehouse security guards, porters, loaders and cooks.

"I fed my family exclusively by driving customers from the regions to the Tashkent markets, and now I don't know what to do," said private taxi driver Gulom from Tashkent.

Consumers are also at a loss, as the capital's markets were a source of wholesale goods for the whole country.

"My family cannot afford to buy clothes at expensive shops so we bought everything at the markets - including food products," said Elena Rashchektaeva, a nurse from Tashkent.

However, interior ministry official Bobokalonov has warned that "nothing will change" - no matter how many people are unhappy with the government's decree.

Bobomurod Abdullaev is an IWPR correspondent in Uzbekistan.