Between Border and Bazaar: Central Asia’s Informal Economy

ABSTRACT

The disintegration of the Soviet Union spurred a transnational trade in consumer goods. Bazaars, which proliferated across the former Soviet Union, including in Kazakhstan and Kyrgyzstan that is the focus of this article, became nodes in this informal trade. This article makes three arguments: (i) Soviet successor states capitalised on the new informal economy which provided employment to millions when economies were in decline. Conversely, ongoing developments, particularly in Kazakhstan, seek to modernise the bazaars that emerged after the Soviet Union. (ii) The movement of people and goods – between border and bazaar, and in case of re-exports, on to another border – are illustrative of a multi-dimensional informal economy evidenced in rent extraction, regulation of bazaars, and in trader networks. (iii) The bazaar-centred economy relies on checkpoint politics that establish border regimes, enabling mobility.

KEYWORDS:

• Informality
• bazaars
• borders
• Kazakhstan
• Kyrgyzstan
• rent

Acknowledgements

I am grateful to Kevin Hewison, Eva Hung, Tak-Wing Ngo, Philippe Rudaz, Rune Steenberg and two anonymous reviewers for JCA for expert comments; the Volkswagen Foundation for supporting fieldwork in 2016 and 2017 through the project Informal Markets in Central Asia and the Caucasus; and audience feedback at the 4th Conference of the Asian Borderlands Research Network (Hong Kong, 2014) and the workshop, Cross-Border Exchanges and the Shadow Economy (International Institute for Asian Studies, Leiden, 2015) where earlier versions of this article were presented.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1. These observations are for the period prior to Kyrgyzstan entering the Eurasian Economic Union (popularly known as the Customs Union) in August 2015 that created a single economic zone between Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Nevertheless, the observations remain an example of how states allow regulatory mechanisms to be bypassed.

2. By the time of the fieldwork, most of the first generation of traders was no longer working in the bazaar. For example, according to my tabulations, just over 50% of the people interviewed in Dordoi and Kara-Suu in 2013 had been trading for ten years or less.

3. The original kolkhoz bazaar had been along the Kara-Suu-Avtodorozhnyy border crossing with the Uzbekistan Soviet Socialist Republic, a short distance from the current bazaar.

4. This practice continues on a reduced scale on the outskirts of bazaars or on pavements with high pedestrian traffic. The sellers are often the elderly, for whom finding new avenues of work have dried up, and pensions – if they exist – have lost value.

5. This sentiment is not new. As early as 1996, it was reported that the “new Russians” – those Russians who had acquired financial stability – preferred not to purchase goods that had been informally imported by itinerant merchants (Rossikaya Gazeta, July 30, 1996, in FBIS-SOV-96-149).

6. The largest number of shuttle traders in the 1990s came not from Central Asia but from Russia. This article includes some discussion of Russian shuttle traders as their trade networks extended – and continue to do so – to the Central Asian bazaar. Russian shuttle trade of the 1990s cannot be disaggregated from Central Asia.

7. The importers interviewed between 2013 and 2016 were wholesalers – not self-importing small quantities of merchandise circa the early 1990s – who were both travelling for purchasing, and running outlets from where the goods were sold. In some instances, design was a third layer of commercial activity. Some sellers would scour the internet or fashion magazines for the latest designs, which they would take to a manufacturer in China, after which they would sell the finished produce in the bazaar. This represents a case of designer-importer-retailer collapsed into one business unit.

8. The cartographies of informal commercial networks keep changing. For example, in the early 1990s, merchants from Central Asia would visit India and Pakistan, although the popularity of imports from these two countries has decreased. Likewise, the United Arab Emirates has become a key destination for traders importing mobile phones, laptop computers and televisions (Interviews in Dordoi and Kara-Suu bazaars, June 14, 2013 and June 25, 2013).