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Afghan traders feel ethnic squeeze on fuel

in Afghan Business

Afghan traders feel ethnic squeeze on fuel

Fuel traders in Afghanistan say they are being frozen out of the import business by suppliers in Uzbekistan and Turkmenistan, whom they accuse of favoring businessmen from their own ethnic groups.

Some 70% of Afghanistan’s oil and natural gas is imported from Uzbekistan, Turkmenistan and Kazakhstan and most comes through the Hairatan crossing on the Afghan-Uzbek border. The northern trade route has become increasingly important as traffic Pakistan has got more complicated, for Afghan merchants as well as for North Atlantic Treaty Organization (NATO) forces in need of fuel supplies. On Afghanistan’s western border, locals accuse Iranian officials of blocking fuel imports during the winter.

In the north, cross-border traffic should be simpler, but Afghan traders say they find it extremely difficult to do business with Uzbekistan and Turkmenistan unless they happen to come from the right ethnic background.

The traders claim businessmen from the former Soviet republics offer cut-price fuel to Afghan importers from their particular ethnic group, but inflate the prices for buyers of other ethnicities, making imports unaffordable for them.

Mohammad Ibrahim, a Tajik trader in Balkh, told the Institute for War and Peace Reporting (IWPR) the oil import trade had been monopolized by a small number of ethnic Uzbek and Turkmen Afghans.

“These traders have developed into a fuel mafia in the region,” he alleged. “They never allow anyone to import fuel other than themselves.”

Northern Afghanistan has a substantial Uzbek population in several provinces, and a smaller Turkmen community. They speak the same Turkic languages as people over the border in Uzbekistan and Turkmenistan, respectively.

The Afghan Chamber of Commerce and Industry said it was aware of ethnic bias in the import trade.

“Our traders are treated selectively by our northern neighbors, in ethnic and linguistic terms,” Mohammad Qurban Haqjo, chief executive of the chamber of commerce, said. “They not only mistreat traders who don’t have a connection with them, they create problems for them to make them give up this business.”

Haqjo suggested that this was something more than personal favoritism; it was common for neighboring states to try to gain political influence in Afghanistan by dealing with those ethnic groups to which they felt closest.

Aref Kazemi, an economist in northern Afghanistan, said Uzbekistan and Turkmenistan both tended to give preferential treatment to their ethnic kin and political allies. He said that on several occasions he had witnessed how businessmen with Uzbek connections, or an association with the Junbesh-e Melli party, being issued visas for Uzbekistan more quickly than others.
Junbesh is a political movement founded by General Abdul Rashid Dostum, a powerful figure formerly in command of a mainly Uzbek militia in Afghanistan.

Turkmenistan tended to focus aid activities on areas dominated by ethnic Turkmen and also Uzbeks, Kazemi added.

A diplomat from Uzbekistan denied favoritism was a state policy. Sherzod Makhdumov, economic attache at the country’s consulate in Mazar-e Sharif said all trade was above-board and conducted without discrimination.

“We treat all traders who want to import or export through Uzbekistan equally, in accordance with [our] country’s laws, and regardless of ethnic, linguistic or other factors,” he said.

Turkmenistan’s consulate in Mazar-e Sharif referred questions on the matter to the country’s embassy in Kabul, which could not be reached for comment.

A major Afghan oil importer who is Uzbek by background said he had links with businesses in both Uzbekistan and Turkmenistan, but not with either government.

“Having contacts is vital,” he said. “These countries have very complex systems. Unless you know someone or have connections there, things that should take an hour will take days to get done.”

He added that it was just as crucial to forge strong relationships with Afghan officials so that they did not undermine one’s business. He said the oil import trade would become a lot fairer and more efficient if the Afghan government signed memoranda of understanding with neighboring states to govern commerce.

“The absence of such agreements has allowed neighboring countries [including] Central Asian states to treat Afghan businessmen however they want,” the trader said.

At Hairatan, mystery surrounds the question of who is involved in importing fuel. Customs chief Mohammad Aref Hamid said confusing paperwork made it all but impossible to determine who provided the financial backing. Import companies did not name their investors on official documents, and the business licenses issued by the trade ministry were of little help, he said.

“We do not know what relationships exist between these countries and the real investors,” he said.

Hamid said he believed there were six companies involved in importing fuel, with one of them holding a particularly large market share. “If a new trader enters the game, he will lose all his capital in the very first phase of doing business,” he said.

Trade Ministry spokesman Wahidullah Ghazikhel said there were plans to try to break this monopoly by increasing the state’s share of fuel imports from 3% to 20%, and issuing new import licenses to traders from diverse ethnic background. Meanwhile, a bill on competition was designed to prevent larger companies from undermining smaller rivals.

Source: http://www.atimes.com/atimes/South_Asia/NC30Df02.html

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  1. waziri
    waziri 24 April, 2012, 02:49

    This type of attitude has been seen in other import business of Afghanistan with these countries. My friend importing flour and wheat from Kazakhstan they have the same problem of favouritism. The Afghan government should check this type of discrimination, in the best interest of bushiness community of the country.

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