An exhibition of Tajik industrial goods that took place at the UzExpoCenter exhibition hall in Tashkent this month was a response to an analogous event in April organized for Uzbek exporters looking to expand their market in Tajikistan.
There was particular excitement at the stand for Italian denim company Carrera, which has a factory in Tajikistan. Visitors were especially struck by the low prices for men’s jeans — at $12 apiece, they would compete well in the Uzbek market.
The company representative at the Carrera stand explained that all their denim goods are manufactured with Tajik cotton. Around 90 percent of their Tajik output, which ranges from jeans to shirts and jackets, is at the moment sent to Italy and then exported onward to markets in Western Europe.
EurasiaNet.org notes that prior to this year, Uzbekistan and Tajikistan for the best part of two decades had engaged in a low-level cold war. Thus, the sense of novelty about the goodwill exchange is strong.
A member of the Tajik delegation, Dushanbe-based entrepreneur Abdumavlon Abdulloyev, told EurasiaNet.org that he last visited Uzbekistan in 1985, when he was 33 years old.
Abdulloyev’s company processes cotton and produces a wide range of clothes, from overalls for manual laborers to school uniforms. For him, as for many Tajik manufacturers, the prospect of gaining a foothold in Uzbekistan’s populous and geographically convenient market is appealing.
His Uzbek partner, Jamallidin Yakubov, however, was slightly more circumspect and said that although the countries may be growing closer on a diplomatic level, lots of details need to be addressed to boost imports and exports.
Slapping punishing tariffs on imports was the late President Islam Karimov’s notion of how to keep external competition at bay. His successor, Shavkat Mirziyoyev, has embarked on a radically different approach to trade and is seeking to simplify life for exporters and importers alike.
As long as Karimov was in power, it would have been inconceivable to stage any such fairs. Fazliddin Abdiyev, a 23-year-old shoe manufacturer form Tajikistan, told EurasiaNet.org that not only was he visiting Uzbekistan for the first time, but that the idea of traveling to Tashkent had never even crossed his mind before. Abdiyev said he is dipping his toe into the Uzbek market to see what the competition is like.
“We produce quality wares with Turkish equipment. Our military-style boots should find demand among Uzbek businesses. They are really in with young people right now,” Abdiyev said.
Meanwhile, economist Yuliy Yusupov noted that even though the barrier for bilateral trade is coming down, administrative obstacles, including the visa regime and import tariffs, remain in place. Earlier this month, Uzbekistan lifted visa requirements for Tajik citizens visiting the country for a single day, but longer stays still require completing onerous paperwork and an $18 visa fee.
“One key problem of the Tajik economy is the excessively high rate of the Tajik currency, on account of all the remittances from migrants. The somoni is depreciating more slowly than inflation is increasing, and that means the real exchange rate is increasing. In real terms, Tajik goods are getting more expensive, and imports getting cheaper,” Yusupov told EurasiaNet.org.
Tajik journalist Muzaffar Yunusov, for his part, said that the high tariff wall has fueled a robust trade in contraband goods. Black marketeers take meat, potatoes and cigarettes from Tajikistan across the border. Flowers, tomatoes and fuel go the other way.
Bilateral trade between Uzbekistan and Tajikistan rose by 17.8 percent year-on-year in 2016 to $197 million, according to Uzbek government figures. The figure for the first nine months of this year is already $178.2 million, indicating that this year will be significantly better than last.
