WMRC Daily Analysis
November 5

Tax inspectors and police are putting into force strict new legislation that aims to keep foreign goods out of Uzbek street markets. As a result, several markets, including the main Chorzu bazaar in the Uzbek capital Tashkent, have been officially closed down. Earlier this year, the government instituted higher taxes and tighter customs laws on imported goods to keep out foreign competition for Uzbek goods. All traders now have to produce a customs declaration for goods and carry out all transactions through banks - highly improbable in a cash economy. Since then, stall owners and police have clashed repeatedly (see Uzbekistan: 2 August 2002: Farmers, Merchants Angry at Government Intervention) and there is a genuine risk that popular opposition to the new rules will cause sporadic unrest, particularly in border areas where small-scale trade with other Central Asian countries is most widespread.

The government, it appears, is making clumsy attempts at bolstering the value of the Uzbek currency - the som - ahead of the planned lifting of currency exchange restrictions at the end of the year. Currency liberalisation is a pre-condition for the IMF returning to Uzbekistan.

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