For Uzbeks, everything's negotiable


Uzbekistan: In this ancient hub of commerce, businesses get creative to outfox a Soviet-era system rife with corruption.

October 17, 2004|By Robert Ruby | Robert Ruby,SUN FOREIGN STAFF

SAMARKAND, Uzbekistan -- She is the proud mother of an 18- year-old groom-to-be and was prudently looking ahead to the wedding feast set for next month, after Ramadan, when she came into Shifkal Nizamov's shop in this ancient city's largest, oldest bazaar.

She wanted teapots, many teapots, for serving the expected wedding guests.

"The final price?" she began, fingering a blue-and-white ceramic pot.

Standing next to her, a man buying a role of tape asked, "The final price?"

Standing next to him the purchaser of two light bulbs manufactured in Uzbekistan: "The final price?"

Customers posed the question in Uzbek, Russian or Tajik. The first price, as everyone expected, would be high, though not offensively so; the second price more affordable; then by convention would come the hoped-for, real, final price.

The Siyob bazaar is the crowded marketplace for fresh fruit and vegetables, spices, tea, clothing, hardware and compact discs, and it is the remnant of the trading culture nurtured by the Silk Road, the trading route extending from China and India through Central Asia into Europe. Those centuries-old trading links are reduced here to merchants with little capital and little credit struggling to sell enough inexpensive goods to pay rent and satisfy the tax collector.

Nizamov works with his wife and sister from 8 a.m. to 6 p.m. seven days a week in a shop slightly larger than a one-car garage; if all the merchandise were removed, a pickup truck could just squeeze in. Their only advertising is a small blue-and-white poster in the dusty front window above the open door saying, "Domestic Products Shop." Nizamov can't immediately recall the business' formal name; it is Ozod Joint Venture, which gives not a hint about the store.

Every product in stock is a mundane necessity. A spray bottle on a shelf toward the back was what a launderer successfully sought for his ironing. A door lock displayed on the counter was for the carpenter who specialized in hanging doors. Because the electricity sometimes flickers, Nizamov's sister sold two oil lamps in a morning.

All the cash goes into a plastic bowl behind the counter. The cash register remains untouched; the day's receipts will not be a figure calculated and printed out by a machine but a number Nizamov chooses himself, taking into account his needs and the government's voracious appetite for cash.

To help keep the government afloat, retail businesses are required to deposit their cash income in government-owned banks. Officials assign even a business the size of a garage a "cash plan," an expected harvest of cash, akin to the mandatory yields that Uzbekistan's Soviet-era government assigned collective farms.

How much of its money the business can later withdraw is limited to about a third of the amount deposited in the bank; there also are controls on how often withdrawals can be made -- all this is part of the government's longstanding program to limit inflation by physically limiting the amount of cash in circulation.

A restaurant owner in Tashkent, the capital, described one of the well-trodden paths around the rules. When the restaurant owner sells a bottle of whiskey from the shelf behind the bar, the cash goes into his pocket rather the register; then he goes to one of Tashkent's bazaars and buys another bottle of the same brand. There was a bottle on the shelf before; there is a bottle on the shelf now. But his records show no sale; without a sale, no taxes are due.

Ahmadjon Hakimov is in business on a far larger scale, thanks in part to the textile factories inherited from his father. They make T-shirts exported to Russia, Ukraine and Western Europe, and there also are ice cream plants built in partnership with investors from Singapore. His companies, the Kamteks Group, employ 2,000 people in Uzbekistan; he anticipates adding 300 more in the next year.

"If I were in another country, I could run this company two times faster and would be more successful," says Hakimov, 29, over an extravagant lunch offered as a display of both hospitality and success. "After a country's independence, it takes time to develop, to grow up."

Traffic police nod when he drives by; he extends his hand through an open car window to greet well-wishers at stoplights. Merely mention a food at lunch or inquire about a particular item, and he orders platters of it for his guests.

Hakimov expresses admiration for the free-wheeling mercantilism of Dubai, the emirate that has created a modern, Persian Gulf version of the Silk Road. It promotes itself as a commercial center in part by asking few questions about the origin, purpose or destination of the goods being traded. He also envies Turkey's mix of industry and tourism. Uzbekistan eventually will thrive but probably not for another 10 years, he says. "It won't get worse. It will work out because we're already down."

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