by Susanne Fehlings
Informal economy has become a topic of many recent studies concerned with Soviet and post-Soviet economy. The current debates discuss whether informality (not regulated by the state) has a negative effect on national economies or whether it is, and should be, an integral part of a liberal market system. But before discussing the pros and cons of informality it is worth to have a closer look at the representatives of informal practices, who, among others, are so-called petty traders.
In the 1990s, petty traders from post-Soviet countries profited from the absence of formal control in the aftermath of the dissolution of the Soviet Union. The first wave of individuals, who travelled to China, Turkey or India were known as “chelnoki”, [shuttle traders]. They had been employed as teachers, academics, engineers, or bureaucrats during Soviet times and were not experienced in doing business. Usually, they felt a status decline as trade, for them, was associated with “speculation”, which was morally objectionable in Soviet times and not only informal but illegal.
However, joined by a generation of young traders, some of the chelnoki established themselves permanently as “bisnesmeny”. As a rule, this went along with an adaptation to the new circumstances, which also meant an adaptation to newly emerging formal frameworks. The term “bisnesmeny” is a collective designation for a diversity of entrepreneurs, who use all kinds of practices, which are difficult to categorize as formal or informal. But “bisnesmeny” have in common that they are self-confident and perceive their activity as a “real profession”.
In March 2016, my colleague Zviad Mirtskhualva and I had the opportunity to accompany a group of Georgian businessmen (Zviadi, Hanzor and Mirza) on their business-trip to China. Zviad and Hanzor both own shops in Lilo Bazroba, Georgia, the biggest wholesale and retail market in the Caucasus. As described above, they started their business in the 1990s and have been to China many times. For Mirza, who runs a shop in Batumi, Georgia, this was his first trip. The trade volume of such petty traders is rather small (Zviad, for example, bought about 1500 pairs of shoes in China). However, there are many of them.
In Beijing, there is an area in the city center consisting of a few huge department stores, which are specialized on trade with traders from post-Soviet countries. Everything is written in Cyrillic, the Chinese shopkeepers speak Russian, and in a restaurant nearby one can order “Salat Olivier”.
We stayed about ten days in a nearby hostel. The first days, the Georgian businessmen literally run from shop to shop (pictures 4, 5, 6). Despite checking all displays and prizes themselves, they work with Chinese business partners with whom they maintain long-term relations and with whom they work on a constant base. Trust is important, as I am told by Hanzor: “We know good people, here. But there are also people you should not even talk to.” Little presents are exchanged between these partners, and the Chinese support their clients with organizing business stays, including leisure time.
The Georgian traders want to see the latest fashion, because in the marketplaces back home (in Lilo Bazroba, for example) they have to compete with other traders: “You have to feel the trend before the other do […]. Otherwise, you will have the same goods as everyone else. And then, after a while, people understand that there is a new trend and buy new stuff. But then it is too late. Again, everyone will have it” and “competition is big!”.
Thanks to WiFi, traders can connect with their family and colleagues back home in Georgia to discuss their choice and shopping. Once they have decided, they order and buy the goods from the Chinese partner, who, again, orders the goods at the factory (picture 7, 8).
Two to four days later, the factory delivers the ordered amounts of merchandize directly to cargo terminals, which are close to the stores. Here, traders count their ordered pieces and observe the packaging for the shipping process. One possible overland truck route leads via Urumqi, Almaty and through the Caspian Sea to Baku, and finally to Tbilisi. Occasionally, other strategies might be followed. One of the traders I accompanied distributed the 15 or so furs that he had bought among his co-travelers, each of whom, including myself, took a few pieces, tucked away in our luggage, through the customs without paying clearance (picture 9, 10,11, 12).
Considering this activity and taking a closer look at the concrete practices is crucial for overcoming labels like “formal” and “informal” and for understanding global flows of people, goods and ideas (“globalisation from below”) – and local markets and trade in post-Soviet Eurasia.
Click here to access the Kyrgyz version of this article on BBC Kyrgyz and here for the Uzbek version available on BBC Uzbek.
About the author:
Susanne Fehlings holds a research position at the Department of Social and Cultural Anthropology at the Goethe University Frankfurt and is the coordinator of the Volkswagen Foundation funded project “Informal Markets and Trade in Central Asia and the Caucasus” (Informalmarkets.wordpress.com).
Note: I am grateful to the Volkswagen Foundation, which is funding this research. Furthermore, I would like to thank Zviad Mirtskhulava, with whom I did a huge part of my fieldwork and who is the one who brought me in touch with the group of traders mentioned in this article.