Associated Press
November 4

Across Uzbekistan, the country's colorful markets with their abundance of low-cost imports are in turmoil as tax inspectors with the help of police attempt to enforce tight new laws aimed at keeping foreign goods out.

In the capital Tashkent, the Chorsu bazaar is officially closed. Yet at least half of the stalls are full of colorful fabrics, shoes and other goods from vendors who come despite the risk of losing everything if the tax police stage a raid.

The sellers say they take the risk of illegally operating their stands in defiance of the new laws because they have no other jobs, and desperate buyers say they can't afford to shop in regular stores.

"Everything is cheaper at the bazaar," said Yulya Sufyanova, who was trying on slippers at the Chorsu bazaar. "Where will poor people go if bazaars are closed?"

Market vendors and police have clashed repeatedly over the past few months after the government instituted higher taxes and tighter customs laws on imported goods.

Police beat up several protesters at the Chorsu market in September and jailed four people, and authorities closed some markets to avoid further unrest, making once-bustling Uzbek bazaars more reminiscent of empty Soviet-era stores.

Under the new laws, the customs duty on goods imported by shuttle traders was initially increased to 90 percent. That duty was reduced to 70 percent last month, but traders say it's still far too high.

Other rules mandate that all merchants produce a customs declaration for goods and carry out all transactions through banks, a dramatic change for this cash-focused economy in which few people have bank accounts at all. The government says the laws are to regulate trade, prevent tax evasion and protect consumers from smuggled and low-quality goods.

"We are establishing civilized rules of the game," Economics Minister Rustam Azimov told journalists.

But traders say the higher taxes will force them to set prices that would be unaffordable for the impoverished population, where the average monthly wage is 15,000 som (US$13.60), according to Uzbek government figures. The traders also allege being abused and humiliated by inspectors.

"They insolently take away our goods and then demand a bribe to get them back," said Larisa Kim, a vendor from the virtually empty Parkent market who was trying to sell several sweaters. "The government is trying to solve its problems at our expense."

The Central Asian nation has been putting off market reforms since the Soviet collapse in 1991, keeping its crumbling economy afloat by restrictions and tight state control. Local industry has never recovered from the breakup of ties with Russia, and the domestic consumer market heavily depends on foreign goods.

Independent economists say by erecting obstacles for imports, the government is trying to prop up the som ahead of the planned lifting of currency exchange restrictions. The som's value vis-a-vis the U.S. dollar has already risen due to the closure of the markets, the center of a thriving black-market currency exchange where the rate has been more than 35 percent higher than the official one.

Ordinary shoppers are blind to the benefits the government has promised - protection from shoddy goods and a sinking som.

"We have no other job and we have to feed our children," said one of the illegally operating vendors, who declined to give her name because of fears of official harassment.

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