20 november 2017

Central Asia news

How farmers pay for grudge between presidents of Kazakhstan and Kyrgyzstan

24.10.2017 23:58 msk

E.Alkanova

Human Rights Business Kyrgyzstan

Kyrgyz traders who tried to cross the border with Kazakhstan have been sustaining huge losses; the Kazakh government refuses to pass the produce - mostly vegetables and fruits - on and through its territory, explaining their neighbour and partner in the Eurasian Economic Union (EEA) has no means to certify its stocks according to the norms of the EEA, as well as trying to smuggle products from China into the EEA.

However, the truth is Astana retaliates back at Kyrgyz president Atambayev for his emotional attack against Kazakh people and President Nazarbayev. On 7 October, Almazbek Atambayev during his speech at the ceremony of presenting state awards accused the Kazakh authorities of "imposing their candidate" on the past presidential election in Kyrgyzstan and their policy. In response to these attacks, the Ministry of Foreign Affairs of Kazakhstan and the Prime Minister of this country Bakytzhan Sagintayev made statements in which they called Atambayev's statements "provocative" and "unacceptable."

On 18 October, prime ministers of Kazakhstan and Kyrgyzstan met and agreed that in Kazakhstan allows individuals, passenger buses, cars and empty cargo trucks cross the border from Kyrgyzstan to Kazakhstan. At the same time, Kazakh stance to deny Kyrgyz produce on or through its territory is still on.

Fergana News correspondent flew to Osh, South of Kyrgyzstan to witness consequences of "presidential emotions".

* * *

Osh, which sometimes is a name of three southern provinces of Kyrgyzstan, is the main source of agricultural products in the domestic market and used to export a large part of its harvest abroad to Kazakhstan and Russia. The border situation damaged the incomes of local producers.

The Osh city market today differs from what it had been before 2010 when the Osh tragedy claimed hundreds of lives of civilians. Most of the burned counters caused chaos scattering traders on the market.



You can find any vegetables and fruits along the road. Prices are pretty symbolic; you can buy two kilogrammes of fresh grapes for one US dollar. Local sellers say that there are countless trucks with tons of fruit in the car park have been standing for almost a week - refraining to go to the border with Kazakhstan. The author counted about fifty truck only on one of the sites. Traders sell grapes directly from the salon of their cars.

One of the saleswomen, Baktygul Borumbaeva, who has been working in the local wholesale market for 20 years, says that recently one harvest from Osh and Batken regions has not been enough to meet the needs of buyers from Kazakhstan. Therefore almost half of its assortment - lemon, pomegranate and tangerines - brought from Tajikistan.

"My earnings consist of brokerage between Kazakh and Tajik traders. In addition to local fruits, I also deliver Tajik goods to the border with Kazakhstan," Borumbaeva says. Behind her lie thousands of kilogrammes of grapes, which she had to send to the Kazakh border. She bought them for 37 soms per kg (one dollar at the exchange rate on 23 October was 68.5 soms), hoping to sell at 45. After the problems emerged on the border, no one buys grapes even at 25 soms per kg because of the excess of products in the city. Borumbaeva recalls that she only faced such difficulties twice for 20 years of trading - after the revolution of 2010 and now.



"After 2010, we had been recovering losses for another five years. We expected big profits this autumn - two weeks ago we have been sending up to four tons a day to the border, and today we send one car for a whole week, and all of them are at the checkpoint anyway," Borumbaeva said.


Baktygul Borumbayeva

If she sells an average of four tons of grapes at 45 soms per kilo a day, then in total comes 180,000 soms. If you subtract the cost of products, transport and other expenses from this amount, the revenue will be approximately 12,000 soms, or $ 175. Now a whole week can hardly bring her this amount of income. Moreover, the fruit business has its characteristics - the product, as a rule, quickly deteriorates; therefore, traders must hurry with sales. And most importantly - the seasonality of the business; because the money sellers earn at the end of summer and in autumn, should be enough to live for all other "dead" months.



The sellers of apples are not far from the sellers of grapes. There are hundreds of boxes of apple on the ground, and sellers talk lazily with each other - there are few buyers. One of the sellers - Alisher Egemberdiev - literally grew up among the apple trees in the parental garden in the village of Nookat, Osh region. He knows everything about the varieties of apples, how better to store and deliver them through Kazakhstan to Russia. In early October, before the tightening border control, Egemberdiev sent up to 15 tons of apples a week to Kazakhstan.


Alisher Egemberdiev

"I remember that the day before this mess on the border began, I had sent two tons of apples. Early in the morning, the produce reached the border, and our Kazakh partner, after several hours at the border, took the apples, and by the evening they had already reported that the importation is banned," the businessman said. Now he loses from three to five thousand soms a day, or $ 45- $ 70. When asked if he agrees with Kazakh authorities who say that the fruit may be infected with pests, the seller says that this is absolute nonsense.

"I have been growing a beloved and appreciated grade of apples "Excellent" almost since from birth. So it was nicknamed by the people for a reason, although its original name is "Jonathan". It is an American variety that was brought to Kyrgyzstan in the 1970s and took root with us because of the climate. Kazakhs always come here to buy this variety, and quality problems never arose," says the seller.

Hoping for the best

However, among the sellers, there are those who are waiting for the resolution of the crisis and trying to use all the opportunities to sell their produce. Entrepreneur Jyldyz Amatova lost $ 1,000 per ten days at the border. On the day of our meeting, she gathered several tons of harvest from farmers at five in the morning and sent a truck to the checkpoint Kara-Suu of the Kyrgyz-Kazakh border, as she received information that border guards allow several trucks a day. Amatova bought an air ticket to Bishkek to personally control the passage of her goods across the border.


Jyldyz Amatova

"I collected three and a half tons of grapes, despite the fact that this berry has the greatest risk of rotting on the way. Of course, I do not expect the authorities to help, so it's impossible to wait until the border opens," Amatova tells about her business. She raises four children and never took loans - she just does not trust the banks. Now she is happy that she does not have to pay interest like her numerous colleagues. With each kilogramme of sold fruits, she could earn about one and a half soms. However, due to the current situation with Kazakhstan, the season of grapes was lost, and the persimmon is next - one can only guess how this product will do, also very demanding in storage.

By the advice of Amatova, we go to the village of Aravan (located in the Osh region, five kilometres from the border with Uzbekistan), which the local people call the homeland of persimmons. Evergreen shrubs have already become covered with ripe fruits, and farmers have started harvesting.

Persimmon in Aravan grows not only in the fields but almost in every garden. Aravan resident Zahida Apa [reverent address towards a senior woman in Kyrgyzstan] grows cherries and persimmons all her life. In the yard of her house she showed about five tons of freshly picked persimmon. Earlier, she agreed with a truck driver who planned to come and pick up the first harvest, but at the last moment, the buyer cancelled the order, fearing that she could not sell the produce at the border.

"Persimmon is a very capricious fruit. Every day we check all the boxes and check if there are ripe among the fruits - if we do not remove the ripe ones in time, then the persimmon next to it will also quickly ripen and then rot," the farmer worries. She is one of many suppliers of persimmons to Russia, but the way to consumers of her goods runs through Kazakhstan.


Zahida Apa

In connection with the latest events, Zahida Apa worries she would lose this season. According to her, farmers like her have only two periods a year to earn money on exports: early in the summer is the export of cherries, and in the autumn - a persimmon. The earned money would allow living during remaining months and buy seedlings for a new season.

We can, but others not

On 19 October, Kyrgyz Ombudsman Kubat Otorbaev recommended the cabinet of ministers of the republic to create a commission to recover damages to businesspeople and farmers in connection with the situation that developed at the border with Kazakhstan. "In connection with the aggravation of bilateral diplomatic relations between the Kyrgyz Republic and Kazakhstan, businesspeople, farmers, entrepreneurs and ordinary citizens continue to incur losses. It is a force-majeure situation not related to the business entities themselves and their obligations to their partners," Otorbaev stressed.

However, Minister of Finance of Kazakhstan Bakhyt Sultanov estimates the annual direct losses of the common budget of the EEU from non-payment of duties when importing goods from China to Kyrgyzstan up to $ 300 million or about 100 billion Kazakh tenge. He named such figures on 17 October at a press conference in Astana: "The problem of "grey" imports [nongenuine customs declaration - note by Fergana News] from China has been around for a long time. [...] There are certain advances in this direction, but, unfortunately, within the framework of the EEU, we observe the growing problem since the accession of the Kyrgyz Republic. Here we see a significant flow of imports into this country due to a lower level of customs control," the minister said.


On the way to Aravan

Director of the "Talap" Kazakh Centre for Applied Research Rahim Oshakbayev agrees with the Minister of Finance, but at the same time, he asks himself why the authorities have started to speak about this problem only now. According to the expert, Kazakhstan is familiar with "grey schemes" of imports no less than Kyrgyzstan. "In 2016, US 4.1 billion "grey" of import imported through the border of Kyrgyzstan and US 4.6 billion dollars crossed the border of Kazakhstan. In ten years, the volume of "grey" import may reach $ 90 billion," the report, prepared by the TALAP Centre, says, in particular.



Oshakbayev developed five proposals to solve problems with illegal imports from China, in one of them, the expert suggests initiating tripartite consultations of the customs authorities of China, Kazakhstan and Kyrgyzstan to establish an information exchange on foreign trade.

Former Minister of Economy of Kyrgyzstan Emil Umetaliev in his interview to Fergana News said that the authorities of the two countries came to the current crisis because of different views on democracy issues. In his opinion, the crisis in relations between the two countries was predictable in early 2010, because the compromise of the creators of the EEU does not include a consensus on the basic values of the state formation of the participating countries: "There is a danger that our politicians can become hostages of geopolitical games [led] by their major promoters against this background. And we do not lead the game and it was conceived not in our interests," assumes Umetaliev.

In hopes of finding a way out of the conflict with Astana, the authorities of Kyrgyzstan complained to the World Trade Organization (WTO) and the Eurasian Economic Commission (ECE) about the strengthening of control by Kazakhstan on the Kyrgyz-Kazakh border.

Umetaliev notes that the appeal to the WTO and the EEU corresponds to the procedures of these organisations, but, as with the accession - to resolve disputable issues, concessions may be required for the sake of a third party. "The WTO is a more global arbitration, but the EEU is a narrow circle of regional dominants," the expert believes. The prohibitions and trade frictions between all the participants of the EEU have been from the very foundation of this organisation. Both Belarus and Kazakhstan went through similar squabbles.

Kyrgyzstan, according to the former minister, has sustained discrimination within the framework of the EEU from the first years, while the goods have always been the subject of bargaining and blackmail. A broad discussion of political scientists with a modern level of education at the global level

would solve such multilevel tasks and not just gatherings of propagandists of particular views.

While Kyrgyz businesspeople pay geopolitical games by their own money, there is no sense in bilateral negotiations. Working groups of both countries are trying to reach a consensus in Astana at this moment. And according to the latest information from the border service of Kyrgyzstan, as of 23 October, about 500 cargo vehicles and nearly 300 people were waiting in line at the border.

Elnura Alkanova. Photos by the author

Fergana News Agency