Border Regimes and Trade in Central Asia. Saumya Mitra The World Bank. Brussels, March 2-3, 2009. World Bank’s involvement. Cross-border trade within the CAREC (2007) – completed Trade Corridor Performance Measurement in Central & South Asia (2006 and 2007)
Border Regimes and Trade in Central Asia
The World Bank
Brussels, March 2-3, 2009
CAREC - ongoing
The World Bank’s response
Surveys of selected border crossing points in three countries above were conducted in May and June 2007
Our work has shown that cross-border trade hinges critically on:
Governments can intervene to facilitate cross-border trade
Second example: The Chinese-Kazakh Korgas BCP
Cross-border trade benefits from two key measures:
This set of preferential arrangements has benefited the development of cross-border trade. The Korgas bazaar, often described as a "showcase of cross-border trade," has emerged as one of the most important platforms supplying southwestern parts of Kazakhstan.
But Government intervention can create obstacles to Cross Border trade
The cost of a visa alone can erect an insurmountable barrier to cross-border trade. Visa requirements or even visa-free entry if combined with large stamps (covering at times an entire page) to mark each entry and exit in the passport, constitute a barrier to engage in trading activities. Applying and obtaining a visa requires a trip to the capital or the consulate city.
Local people usually cannot drive their own vehicles in other countries, are restricted to a few kilometers into the territory of another country, or are burdened with unreasonable paperwork and high fees.
Hours of operation could be a significant barrier.
Several BCPs of Uzbekistan vis-à-vis Kazakhstan, Kyrgyzstan and Tajikistan have been closed. Examples are BCPs in Batken and Djalal Abad oblasts. Evidence suggests that such closures have had an adverse impact on local livelihoods.
Uzbekistan imposes much smaller limits on exemptions from taxes and other border charges than other central Asian Carec countries. This clearly discourages cross-border trade.
Cross-border traffic can be limited by uncertainty associated with the implementation of rules. Thus, the open border agreement between Kyrgyzstan and Uzbekistan, which went into effect on February 12, 2007, ceased to be implemented from March 2007, thereby compelling Kyrgyz and Uzbek nationals to obtain visas, but was subsequently restored so that both nationals can now travel visa-free and without stamps in passports.
There are cases of bazaars located next to BCPs being forcibly closed or being made to move 20-odd kilometers away from the border (e.g., the one near Dostuk BCP in the Ferghana valley).
Among border posts sampled in the report’s survey, border-post infrastructure has not appeared as a significant constraint to cross-border trade. But rehabilitated infrastructure will support border-trade only if accompanied by facilitating procedures.
Transport arrangements may discriminate against cross-border traders. Example of the Kulma pass BCP. But regulations can also ease border resident movements.
Wider public policy concerns
Significance of the foreign trade ‘bazaar’ transmission
An examination of the bazaar channel and its welfare effects
has important policy implication
What is ‘Euroregio’?
Model of ‘Euroregio’ usually entails cross-border cooperation:
Why is the experience with ‘Euroregio’ worth exploring?
Can Euroregio be transplanted?