BISHKEK (TCA) — Business associations of Kyrgyzstan on October 20 urged domestic cargo carriers to refrain from crossing the Kyrgyz-Kazakh border in order not to increase the queues at checkpoints.
A working group including representatives of both countries is now developing measures to resolve the issue, including crossing the state border by cargo vehicles, said the statement signed by the American Chamber of Commerce in the Kyrgyz Republic, Chamber of Commerce and Industry, JIA business association, Association of Domestic Producers, Union of Entrepreneurs of Kyrgyzstan, Association of Light Industry Enterprises, and Association of Suppliers.
Problems on the border with Kazakhstan continue from October 10. According to the official version of Kazakhstan, this is a consequence of the fight against gray imports from Kyrgyzstan. On October 18, Kyrgyz Prime Minister Sapar Isakov visited Astana, where he managed to agree on a priority in checking people with personal baggage, regular buses with passengers, cars and empty trucks.
The problem with the transportation of trucks loaded with products remains unresolved. Firstly, it is necessary to develop and adopt a roadmap to outline the ways of implementing the new agreement. This bureaucratic step restrains the solution of the problem. It is clear that the agreement will not completely solve the transit problems and the exporters of Kyrgyzstan need just wait for the political decision of Kazakh President Nazarbayev.
The tightening of border control was followed by other restrictions. Kazakhstan has offered to limit the export of coal to Kyrgyzstan. At the same time, a sudden shortage of cement has occurred in Kyrgyzstan, which had previously come from the neighboring country.
Calculating losses
Kyrgyz Ombudsman Kubat Otorbayev suggested the Kyrgyz Government to create a commission to compensate losses to businessmen and farmers affected by the situation on the Kyrgyz-Kazakh border. The commission should include representatives of state bodies and business communities, he said.
This force majeure situation has nothing to do with the business entities themselves and their obligations to partners. The Government should resolve the consequences of the force majeure situation, calculating losses and developing mechanisms for reimbursing them, Otorbayev said.
“Citizens, businessmen, entrepreneurs and farmers should not become victims of interstate relations,” he concluded.
Small and medium-sized businesses bear the greatest losses from border restrictions. Entrepreneurs working with agricultural products complained they cannot carry perishable goods across the border. It is also difficult to sell them in the domestic market. Entrepreneurs also cannot bring building materials from Russia to Kyrgyzstan through Kazakhstan and fulfill their obligations on time.
The garment industry incurs heavy losses. According to the heads of the sewing shops in Bishkek, customers in Russia do not risk ordering clothes from Kyrgyzstan, because there is no guarantee that the goods will arrive on time.
According to the owner of an online store in Bishkek, which deals with the delivery of clothing from Kyrgyzstan to Kazakhstan, Belarus and Russia, she has lost 17 wholesale customers in a week, and profits decreased by 30-40 percent.
More than 5,000 Kyrgyz sewing enterprises supply wholesale clothing to all regions of Russia, as well as to Kazakhstan and Belarus. Up to 100% of the export of sewing products of Kyrgyzstan falls on Eurasian Economic Union (EEU) countries. In 2016, Kyrgyzstan exported sewing products worth $95.5 million, 7% of the total export.
Expert opinion
If Kazakhstan does not pass some of the cargo from Kyrgyzstan, it does not mean that it violates regulations of the Eurasian Economic Union, expert Azamat Akeneev believes.
The fact that Kyrgyzstan is an EEU member country does not mean that it is possible to cross the border freely. The border control remains and Kazakhstan has the right to carry out roadside checks and return any goods that do not comply with the EEU technical regulations.
Therefore, local exporters should carefully prepare their cargo for shipment, and government agencies should improve training of local entrepreneurs on the EEU requirements.
It is necessary to open a separate corridor for trucks with perishable products.
The situation could have been more serious if Kyrgyzstan had not joined the EEU. Then, Kazakhstan could completely close the borders but the EEU rules do not allow this.
Opinions differ
On October 17, the Economy Ministry of Kyrgyzstan submitted a letter to the EEU’s Eurasian Economic Commission (EEC) Chairman Tigran Sargsyan asking to notify Kazakhstan of compliance with the provisions of the EEU Treaty and to consider this issue at the next EEC meeting.
Kyrgyzstan’s Government considers that the additional control introduced by Kazakhstan at all checkpoints contradicts the main principles and objectives of the EEU Treaty and jeopardizes the achievement of the goals of the Eurasian economic integration.
Minister of National Economy of Kazakhstan Timur Suleimenov asked not to politicize the situation on the Kazakh-Kyrgyz border, Tengrinews.kz reported.
Commenting on Kyrgyzstan’s appeal to the Eurasian Economic Commission, he said that the charges are not grounded. In his opinion, Kazakhstan operates within the framework of the domestic legislation and at the same time complies with all the EEU obligations.
Any party has the right to apply to the EEC, but it should be taken into account that the decision is taken solely by consensus. That is, if one of the parties does not agree with the proposed solutions, they are not accepted.
Each sixth vehicle from Kyrgyzstan crossed the border of Kazakhstan with violations, said Minister for Investment and Development of Kazakhstan Zhenis Kasymbek, the KazTAG reported. Kyrgyz carriers often had no freight invoices and there was an excess of weight parameters.
According to Kazakhstan’s Talap Center for Applied Research, due to Kyrgyz smuggling, Kazakhstan loses about $160 million a year and there is a need to strengthen the control of access of imported goods to the domestic market.
Both Kazakhstan and Kyrgyzstan are interested in a sooner resolution of border issues, as the problems on the Kazakh-Kyrgyz border harm both countries.
