Discrepancies in the official statistics of the two states for 10 years are estimated as more than 116 million dollars, which is one-fifth of the entire trade for all these years. According to experts, this is just a small amount of undeclared commodities.
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The bilateral trade of the two boundary states is quite insignificant as compared to the established trade relations with other countries. Thus, according to the Kyrgyz party, it has been within 36.1 million dollars a year in the last twenty years in monetary terms.
According to a Tajikistan-based economist, who did not want to be identified, the trade turnover between Tajikistan and Kyrgyzstan in 2010 to 2013 tended to grow and increased sevenfold.
Kyrgyzstan imported from Tajikistan mainly rice and petroleum, oil, lubricants. According to the economist, the significant part of the Kyrgyz supplies was re-export from China. Tajikistan supplied mainly agricultural products and electricity to Kyrgyzstan. For 3 years, Tajikistan received goods that cost 12.5 times more than the goods it exported.
But beginning in 2015, when Kyrgyzstan joined the Eurasian Economic Union, the trade was curtailed twofold.
This is related to the reinforcement of borders and the change of conditions of trade with third countries that are not members of EAEU.
“It became unprofitable for businessmen of Tajikistan to deliver Chinese goods from Kyrgyzstan, and they began to deliver them directly from China,” said the economist based in Tajikistan.
As a result, the share of Kyrgyzstan in the total trade turnover of Tajikistan fell down from 5 per cent in 2013 to 0.8 per cent in 2020.
Taking into account insignificant trade turnover, it has not had any impact on the economies of the two states. Mutual shipments are critical neither for Kyrgyzstan nor for Tajikistan.
“The trade between Kyrgyzstan and Tajikistan is rather insignificant. It takes nearly 2 per cent of all foreign trade of Tajikistan with third countries, and the same picture is in Kyrgyzstan. In average, Kyrgyzstan exports 3.5 times more than it imports to its neighbour,” said expert Denis Berdakov.
However, mutual trade has affected border regions as they are the main users of export/import. This is evidenced by the composition of trade. In the composition of export of Kyrgyzstan to Tajikistan, based on the data for January to March 2021, consumer goods amounted to over 27 per cent or 5.76 per cent in monetary terms. It points to the fact of insignificant scope of supplies, which shows that supplies are provided to border areas.
The same picture is in Tajikistan. Food products amount to 36.4 per cent in the export of Tajikistan goods, or 17.48 per cent in monetary terms.
If we look at the consolidated pattern of the Kyrgyz export, it mainly consists of re-export.
See also: Lost Connections between Kyrgyzstan and Tajikistan
“Kyrgyzstan re-exports the goods from China and Turkey, namely clothes and small appliances, mainly to Tajikistan. The export of products made in Kyrgyzstan in this trade is rather insignificant – consumer goods, mobile connection, etc.” Berdakov said.
In the same period, the export from Tajikistan to Kyrgyzstan amounted to slightly more than 2 million dollars in 55 commodities. Usually, it consisted of components for fabric and aluminium production.
“Most probably, aluminium is supplied to Osh and Bishkek for industrial purposes as it is actively used for light-duty structures. Raw materials for our clothing industry is a significant part of import, namely cotton yarn and silk cocoons. This is all what we have,” Berdakov said.
However, we should not rely on official statistics of the two states. The point is that this information has significant discrepancies. If we look at the statistics provided by official bodies of Kyrgyzstan and Tajikistan, they are inconsistent. By results of 10 years (statistics available in both countries), the difference was 116 million 412.3 thousand dollars. This is nearly one-fifth of the total volume of trade in this period.
“These data are painfully obvious. For example, the website of Kyrgyzstan provides some information, while the embassy of Tajikistan in Kyrgyzstan provides different information. According to these data, it is obvious that the states do not declare what they export from their countries,” Denis Berdakov said.
Such differences in data can be surely explained by various methods used in calculations. However, according to Berdakov, the most probable reason is that there is no precise control between the countries. Also, he is confident that the real figures of the so-called shadow export between the states is 3-4 times higher than that shown in the official statistics.
“Every day nearly 30 trucks cross the border. It means significant volumes. It is unclear how many of them are registered at the border. However, we do know what commodities can be smuggled. Petroleum, oil, lubricants are among such commodities. Thus, average price of fuel in Tajikistan is 40 per cent higher. And Tajikistan has a demand for petroleum, oil and lubricants from the neighbouring republic. However, Kyrgyzstan may not export fuel officially as we receive it under the Agreement from Russia without duties. It is meant for domestic use,” the expert said.
According to the expert based in Tajikistan, about one-third of petroleum, oil, lubricants used by the Tajikistanis have been smuggled from Kyrgyzstan.
“As soon as Kyrgyzstan closed borders not only for the citizens, but also for goods transportation, prices of petroleum, oil, lubricants in Tajikistan got much higher,” the economist said.
According to him, a part of Tajikistan exports was smuggled because of high customs duties within the EAEU. According to him, the customs duties of EAEU complicate the process of mutual trade between the two countries and reduce possibilities for cooperation.
“We need to find ways to make the process of trade turnover transparent. The most real prospect is the development of tourism, but everything depends on delimitation,” the Tajic expert said.
According to Denis Berdakov, further trade turnover development between the two countries is possible only provided that both states have changes. Thus, the new industrial policy of Kyrgyzstan will make the republic interested in the supplies of aluminium and raw materials for the clothing industry – cotton, silkworm, finished fabric, in which Tajikistan has reached good level.
“Taking into account that the trade takes place mainly in border regions, we must pay attention to the purchasing power of people residing in such areas if we want to develop export from Kyrgyzstan. In this case, Kyrgyzstan could increase supplies of agricultural products,” the expert said.
Main photo: freepik
This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project.
This publication was produced as part of the mentorship programme under the Development of New Media and Digital Journalism in Central Asia project delivered by the Institute for War and Peace Reporting (IWPR) with support from the UK Government. It does not necessarily reflect the official views of IWPR or the UK Government