Difference between revisions of "Baraholka (Kazakhstan)"

In Kazakhstan, ''Baraholka'' refers to a series of bazaars located along the Northern Ring road in the outskirts of Almaty. Almaty’s ''Baraholka'' gained notoriety in the late 1990s as a regional hub for informal trading. The ''Baraholka'' was one of many open-air markets that mushroomed across the former Soviet Union: others include Moscow’s Cherkizovskii rynok (''Cherkizon''), the ''Hippodrome'' in Tashkent, Uzbekistan, and ''Dordoi'' in Bishkek, Kyrgyzstan. The dismantlement of Soviet institutions and supply chains left millions of former Soviet citizens unemployed and devoid of retail outlets. Desperate to make a living, many of them began trading anything they could find – from pots and pans from local factories to Japanese cell phones.  In Kazakhstan, ethnic Kazakhs, Dungans and Uighurs revived relations with their kinsmen in Xinjiang, in northwestern China, and began shuttling goods by car across the border to Almaty’s ''Baraholka'' where they would resell them at a premium to other traders. These traders, who came from all parts of the former Soviet Union, Turkey and Korea, resold goods purchased from the ''Baraholka'' in their local markets at a mark-up. For most of the 1990s, this system of informal purchasing, transporting and reselling of goods by individuals defined the supply chains.  Almaty’s proximity to China, and connection to rail, road and air networks, made it a central location for a wholesale trading hub.  In Almaty’s ''Baraholka'', the volume of trading activity was such that traders did not need storage facilities – they worked side by side out of wooden crates.

In Kazakhstan, ''Baraholka'' refers to a series of bazaars located along the Northern Ring road in the outskirts of Almaty. Almaty’s ''Baraholka'' gained notoriety in the late 1990s as a regional hub for informal trading. The ''Baraholka'' was one of many open-air markets that mushroomed across the former Soviet Union: others include Moscow’s Cherkizovskii rynok (''Cherkizon''), the ''Hippodrome'' in Tashkent, Uzbekistan, and ''Dordoi'' in Bishkek, Kyrgyzstan. The dismantlement of Soviet institutions and supply chains left millions of former Soviet citizens unemployed and devoid of retail outlets. Desperate to make a living, many of them began trading anything they could find – from pots and pans from local factories to Japanese cell phones.  In Kazakhstan, ethnic Kazakhs, Dungans and Uighurs revived relations with their kinsmen in Xinjiang, in northwestern China, and began shuttling goods by car across the border to Almaty’s ''Baraholka'' where they would resell them at a premium to other traders. These traders, who came from all parts of the former Soviet Union, Turkey and Korea, resold goods purchased from the ''Baraholka'' in their local markets at a mark-up. For most of the 1990s, this system of informal purchasing, transporting and reselling of goods by individuals defined the supply chains.  Almaty’s proximity to China, and connection to rail, road and air networks, made it a central location for a wholesale trading hub.  In Almaty’s ''Baraholka'', the volume of trading activity was such that traders did not need storage facilities – they worked side by side out of wooden crates.

[[File:Photograph of men outside a Baraholka.jpeg|250px|thumb|left|Photograph showing a group of men around an exit of a Baraholka.]]

[[File:Photograph of men outside a Baraholka.jpeg|250px|thumb|left|Photograph showing a group of men around an exit of a Baraholka.]]

While informal trading contracted over time in Southern and Eastern Europe as the implementation of privatisation reforms and transition policies allowed for formal trading mechanisms to materialise, weak state capacity, corrupted privatisation efforts and an unsuccessful transition policy led to the proliferation of ''baraholkas''. Beginning in the early 2000s, well-connected entrepreneurs formed limited liability partnerships (Tovarishchestvo s Ogranichennoi Otvetstvennost’iu, or TOO) and utilised abandoned shipping containers to assemble open-air trading centers (''torgovye tsentry'') in the area that had become known as ''Baraholka''. In Almaty’s ''Baraholka'', the bazaars were constructed on land that that was reportedly acquired illegally in the 1990s. Between 2004 and 2012, the number of registered bazaars in Almaty oblast increased from 66 to 85, while the number of individual trade spaces grew from 8,480 to 18,880 (Agency of Statistics of Kazakhstan 2014<ref>Agency of Statistics of Kazakhstan. 2014. ‘Kolichestvo Torgovykh Rynkov.’ http://stat.gov.kz/faces/wcnav_externalId/homeNumbersDomesticTrade?_afrLoop=19971894701203543#%40%3F_afrLoop%3D19971894701203543%26_adf.ctrl-state%3D1dj2ihdn3w_96</ref>). By the late 2000s, Almaty’s ''Baraholka'' contained between 25 and 35 independently owned bazaars. An informal system of commerce was effectively institutionalised throughout Kazakhstan as a result of the construction of TOO-owned bazaars, and the state’s failure to modernise trade processes, streamline customs procedures and strengthen public institutions for small and medium sized enterprises. Almaty’s ''Baraholka'' is the poster child of this system.

While informal trading contracted over time in Southern and Eastern Europe as the implementation of privatisation reforms and transition policies allowed for formal trading mechanisms to materialise, weak state capacity, corrupted privatisation efforts and an unsuccessful transition policy led to the proliferation of ''baraholkas''. Beginning in the early 2000s, well-connected entrepreneurs formed limited liability partnerships (Tovarishchestvo s Ogranichennoi Otvetstvennost’iu, or TOO) and utilised abandoned shipping containers to assemble open-air trading centers (''torgovye tsentry'') in the area that had become known as ''Baraholka''. In Almaty’s ''Baraholka'', the bazaars were constructed on land that that was reportedly acquired illegally in the 1990s. Between 2004 and 2012, the number of registered bazaars in Almaty oblast increased from 66 to 85, while the number of individual trade spaces grew from 8,480 to 18,880 (Agency of Statistics of Kazakhstan 2014<ref>Agency of Statistics of Kazakhstan. 2014. ‘Kolichestvo Torgovykh Rynkov.’ http://stat.gov.kz/faces/wcnav_externalId/homeNumbersDomesticTrade?_afrLoop=19971894701203543#%40%3F_afrLoop%3D19971894701203543%26_adf.ctrl-state%3D1dj2ihdn3w_96</ref>). By the late 2000s, Almaty’s ''Baraholka'' contained between 25 and 35 independently owned bazaars. An informal system of commerce was effectively institutionalised throughout Kazakhstan as a result of the construction of TOO-owned bazaars, and the state’s failure to modernise trade processes, streamline customs procedures and strengthen public institutions for small and medium sized enterprises. Almaty’s ''Baraholka'' is the poster child of this system.

Quantifying the ''Baraholka''’s impact on Almaty’s economy is challenged by methodological discrepancies: differing definitions of which bazaars are part of the ''Baraholka'', limited self-reported statistics and the high level of undocumented migrant workers. In 2012, the World Bank estimated that the ''Baraholka'' contained 15,450 trade spaces, directly and indirectly employing 250,000 people, or  5.1 per cent of local employment (Kaminski and Mitra 2012: 57<ref>Kaminski, B. and Mitra, S. 2012. Borderless Bazaars and Regional Integration in Central Asia: Emerging Patterns of Trade and Cross-Border Cooperation. Washington, DC: The World Bank.</ref>). In 2013, the Chamber of Entrepreneurs of Kazakhstan (PPK) reported, in a private report given to the author, that the ''Baraholka'' contained only 20,000 traders and 11,000 trading spaces across thirty-five markets, and yet in an interview with the author, the PPK highlighted that trading alone constitutes 70 per cent of Almaty’s economy.

Quantifying the ''Baraholka''’s impact on Almaty’s economy is challenged by methodological discrepancies: differing definitions of which bazaars are part of the ''Baraholka'', limited self-reported statistics and the high level of undocumented migrant workers. In 2012, the World Bank estimated that the ''Baraholka'' contained 15,450 trade spaces, directly and indirectly employing 250,000 people, or  5.1 per cent of local employment (Kaminski and Mitra 2012: 57<ref>Kaminski, B. and Mitra, S. 2012. Borderless Bazaars and Regional Integration in Central Asia: Emerging Patterns of Trade and Cross-Border Cooperation. Washington, DC: The World Bank.</ref>). In 2013, the Chamber of Entrepreneurs of Kazakhstan (PPK) reported, in a private report given to the author, that the ''Baraholka'' contained only 20,000 traders and 11,000 trading spaces across thirty-five markets, and yet in an interview with the author, the PPK highlighted that trading alone constitutes 70 per cent of Almaty’s economy.

Beyond Almaty, ''baraholkas'' continue to fulfill an important economic role in regional supply chains, trade and employment. In 2013, it was estimated that ''baraholkas'' generated 51 per cent of total retail trade turnover and occupied 67 per cent of all retail trade spaces (Ministry of Trade 2013<ref>Kazakhstan, 2013, http://www.minplan.gov.kz/economyabout/9206/54353/</ref>). Between 2004 and 2014, according to the Agency of Statistics, while the number of registered bazaars throughout the country fell from 935 to 752, the number of trading spaces increased from 150,497 to a high of 189,177 in 2012, before falling to 174,149 in 2014. During the same ten-year period, the total square footage occupied by trade spaces grew from 4.4 million to 6.6 million cubic meters (Agency of Statistics 2014<ref>Agency of Statistics of Kazakhstan. 2014. ‘Kolichestvo Torgovykh Rynkov.’ http://stat.gov.kz/faces/wcnav_externalId/homeNumbersDomesticTrade?_afrLoop=19971894701203543#%40%3F_afrLoop%3D19971894701203543%26_adf.ctrl-state%3D1dj2ihdn3w_96</ref>). This suggests that bazaars were consolidated and expanded. By 2012, 818 registered bazaars employing 968,000 individuals operated throughout the country (Today.Kz.  2015<ref>Today.kz. 2015. ‘K mayu v Almaty polnost’yu snesut baraholku’, 3 May, http://today.kz/news/life/2015-03-03/606950-k-mau-v-almaty-polnostu-snesut-baraholku/</ref>). Furthermore, nearly 70 per cent of informal workers in Kazakhstan are employed in the market-services sector, primarily in trade and food services (Rutkowski 2011: 7<ref>Rutkowski, J. 2011. ‘Promoting Formal Employment in Kazakhstan’, The World Bank, May 15, http://www.iza.org/conference_files/InfoETE2011/rutkowski_j1928.pdf.</ref>).

Beyond Almaty, ''baraholkas'' continue to fulfill an important economic role in regional supply chains, trade and employment. In 2013, it was estimated that ''baraholkas'' generated 51 per cent of total retail trade turnover and occupied 67 per cent of all retail trade spaces (Ministry of Trade 2013<ref>Kazakhstan, 2013, http://www.minplan.gov.kz/economyabout/9206/54353/</ref>). Between 2004 and 2014, according to the Agency of Statistics, while the number of registered bazaars throughout the country fell from 935 to 752, the number of trading spaces increased from 150,497 to a high of 189,177 in 2012, before falling to 174,149 in 2014. During the same ten-year period, the total square footage occupied by trade spaces grew from 4.4 million to 6.6 million cubic meters (Agency of Statistics 2014<ref>Agency of Statistics of Kazakhstan. 2014. ‘Kolichestvo Torgovykh Rynkov.’ http://stat.gov.kz/faces/wcnav_externalId/homeNumbersDomesticTrade?_afrLoop=19971894701203543#%40%3F_afrLoop%3D19971894701203543%26_adf.ctrl-state%3D1dj2ihdn3w_96</ref>). This suggests that bazaars were consolidated and expanded. By 2012, 818 registered bazaars employing 968,000 individuals operated throughout the country (Today.Kz.  2015<ref>Today.kz. 2015. ‘K mayu v Almaty polnost’yu snesut baraholku’, 3 May, http://today.kz/news/life/2015-03-03/606950-k-mau-v-almaty-polnostu-snesut-baraholku/</ref>). Furthermore, nearly 70 per cent of informal workers in Kazakhstan are employed in the market-services sector, primarily in trade and food services (Rutkowski 2011: 7<ref>Rutkowski, J. 2011. ‘Promoting Formal Employment in Kazakhstan’, The World Bank, May 15, http://www.iza.org/conference_files/InfoETE2011/rutkowski_j1928.pdf.</ref>).

[[File:Photograph of a man taking goods to a Baraholka.jpeg|250px|thumb|left|Photograph of a man taking products to a Baraholka.]]

[[File:Photograph of a man taking goods to a Baraholka.jpeg|250px|thumb|left|Photograph of a man taking products to a Baraholka.]]

[[File:Photograph of another man with goods in a Baraholka.jpeg|250px|thumb|right|Photograph depicting a man transporting products through a Baraholka.]]

[[File:Photograph of another man with goods in a Baraholka.jpeg|250px|thumb|right|Photograph depicting a man transporting products through a Baraholka.]]

Notwithstanding state-led efforts to modernise the ''Baraholka''’s infrastructure and eliminate open-air trade, ''baraholkas'' in general and Almaty’s ''Baraholka'' in particular will continue to exist given their importance in job creation, supply chains and in providing an affordable retail outlet for consumers. Kazakhstan’s ‘formal’ economy is not as yet conducive to small business creation. Reducing the ''Baraholkas'' requires institutional reforms to the formal sector: individuals will continue to opt for informal employment in ''Baraholka'' as long formal sector opportunities are less attractive. Despite the stigmatisation of Almaty’s ''Baraholka'', and all of Kazakhstan’s ''baraholkas'', they will endure.  

Notwithstanding state-led efforts to modernise the ''Baraholka''’s infrastructure and eliminate open-air trade, ''baraholkas'' in general and Almaty’s ''Baraholka'' in particular will continue to exist given their importance in job creation, supply chains and in providing an affordable retail outlet for consumers. Kazakhstan’s ‘formal’ economy is not as yet conducive to small business creation. Reducing the ''Baraholkas'' requires institutional reforms to the formal sector: individuals will continue to opt for informal employment in ''Baraholka'' as long formal sector opportunities are less attractive. Despite the stigmatisation of Almaty’s ''Baraholka'', and all of Kazakhstan’s ''baraholkas'', they will endure.  

# Forbes.kz. 2014. ‘Dariga Nazarbaeva uznala pro Almatinskuyu Barakholku’, 22 January, http://forbes.kz/process/businessmen/dariga_nazarbaeva_uznala_pro_almatinskuyu_baraholku

# Forbes.kz. 2014. ‘Dariga Nazarbaeva uznala pro Almatinskuyu Barakholku’, 22 January, http://forbes.kz/process/businessmen/dariga_nazarbaeva_uznala_pro_almatinskuyu_baraholku

# Kaminski, B. and Mitra, S. 2010. Skeins of Silk: Borderless Bazaars and Border Trade in Central Asia. Washington, DC: The World Bank.

# Kaminski, B. and Mitra, S. 2010. Skeins of Silk: Borderless Bazaars and Border Trade in Central Asia. Washington, DC: The World Bank.

# Spector, R. 2008. ‘Bazaar Politics: the Fate of Marketplaces in Kazakhstan’, Problems of Post-Communism, 55 (6): 42-53

# Spector, R. 2008. ‘Bazaar Politics: the Fate of Marketplaces in Kazakhstan’, Problems of Post-Communism, 55 (6): 42-53

# ‘V Almaty torgu’iushchikh na barakholke predlagaiut sdelat’ sobstvennikami novykh rynkov,’ 2014, Zakon.kz, http://www.zakon.kz/4598834-v-almaty-torgujushhikh-na-barakholke.html.

# ‘V Almaty torgu’iushchikh na barakholke predlagaiut sdelat’ sobstvennikami novykh rynkov,’ 2014, Zakon.kz, http://www.zakon.kz/4598834-v-almaty-torgujushhikh-na-barakholke.html.