KYRGYZSTAN TODAY Policy briefs on - Department of Geography

cases, to improve infrastructure and services. People attend training sessions and get
organised with the help of methods that mostly come from international donors, some
methods become localised and adopted in the Kyrgyz context; 2) migrant settlers
engage in trade at the local markets, start small enterprises, and work as migrant
traders and menial labour in neighbouring countries and markets (i.e., Kazakhstan,
Russia, China, Turkey, Arab Emirates). In this case, organised groups or individuals
try to gain access to the markets, internal and external, mostly in services and light
industry production and trade, such as textile and cotton clothing, wooden furniture,
ironwork, car and van repair, hair and nails workshops, bath house services, pharmacy
and grocery trade.
Two influential NGOs have been The Public Foundation Erayim and NGO Arysh.
These civil society organizations, which grew out of the self-help housing movement
(such as the social movement of land squatters Ashar of 1989-1990s), have been effective
in training rural migrants to adjust to urban dwelling, consider social services, unite
into self-help groups and start family-run micro-enterprises. In their work, these
organisations relied on training community leaders, entrepreneurs, and social service
providers among the members of self-help groups. By creating self-help groups in the
“konushtar” (self-help housing sites), civil society organisations achieved unprecedented
results in community mobilisation, micro-finance service rendering, and facilitating the
formation of the new middle class.
Micro-credit services have been provided to rural migrants by these NGOs since
2004. The so-called “self-help groups” of internal migrants (organised by the Erayim
and Arysh NGOs) have become an instrument that gives the poor the “fishing rod”
instead of a fish in the proverb “teach them to fish instead of giving them a fish to eat.”
These self-help groups link people to mobilise and channel information. They drive
small businesses to improve living conditions, which in turn gives rise to the important
market initiatives that fuel unprecedented growth in the informal economy.
Misconceptions and misguided agendas
Research on the legalisation of small business has demonstrated that government
agencies understand very little about the small enterprises of rural migrants in Bishkek,
despite the National Programme for Legalisation of the Shadow Economy in the Kyrgyz
Republic 2007-2010 (adopted in 2007). This programme seems to be concerned mostly
with the evasion of taxes and customs duties by large businesses. Key decision-makers
must recognise the specifics of legalising small business activities, which require a
different set of policies than those of the medium and large enterprises.
It does not benefit the state or the private sector to ignore the economic potential of
migrant entrepreneurs, who represent an underestimated sector for both governmental
and private investments. When the small and medium market traders of Chinese
imported textiles, copies of designer labels, and IT equipment flooded the Dordoi, Orto-
Sai and Osh Bazar markets, they brought about new wealth to Bishkek. In addition, the
momentum captured by sewing workshops that export ready-made clothing to Russia
and Northern Kazakhstan has fuelled a long-awaited niche for export trade, opening up
new opportunities for Kyrgyzstan’s textile and wool-producing industries. The volumes
of undeclared labour and entrepreneurial activity, even just within the textile businesses
and sewing workshops, are already large and growing quickly. In an interview with
municipal officials, the number of undeclared employees in the sewing workshops of
Bishkek were estimated at over 100,000 persons with average monthly wages of USD
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