Problems with Sales and Financial Losses
Rahat Kadyrbekova, the owner of one of the workshops in Bishkek, shares: "At the moment, five to six models are at the border. We have missed the current season, and at this pace, we won't even be able to prepare for the next spring. Most of the goods that were supposed to arrive in October remain unsold. This leads to bankruptcies of Kyrgyz entrepreneurs who cannot recover their investments. And obligations for salaries, taxes, and rent have not been canceled. As a result, workshops are closing."She emphasizes that government assistance is urgently needed; otherwise, the number of bankrupt enterprises will increase, and it will be extremely difficult to restore them.
Clients from Russia are Moving to Uzbekistan
Despite the fact that Kyrgyz producers' products are highly valued in Russia, representatives of one of the largest marketplaces, Wildberries, have already visited Kyrgyzstan but have not yet proposed any concrete solutions.Aigul Kulbodieva, who has been working on this platform for a long time, confirms that the current crisis is leading to a loss of market share.
“The office is empty. Russian partners no longer want to work with us due to problems at the border. Many clients have redirected their orders to Uzbekistan and other countries,” she says.
According to her, having all the necessary documents does not guarantee the passage of goods. “I have all the documents in order: there is a 'Honest Sign', declaration, and so on. However, the marketplace requires finding a recipient in Russia. Where can I find one? Moreover, a 20% VAT has been added, which significantly increases prices. We are seeking help from the government. The millions invested and loans, while cargo services continue to rise in cost,” she adds.
Over 2000 Workshops Have Already Closed. What Steps Should Be Taken Next?
According to market players, problems began three months ago, but the government's response has been minimal, and meetings with officials have not yet yielded results.Jasur Parpiev, an entrepreneur, says: “The problem did not arise suddenly. The sewing industry is currently in a critical state. We are at a dead end. According to our data, over 2000 workshops have already closed. If each of them employed 15-20 people, then already 40,000 people are left without jobs. Immediate action is needed; time is running out. If the situation does not change within one or two months, the number of closed workshops will increase manifold, and more than 100,000 people will be left without jobs.”
He also emphasizes that workers, hoping for stability, took out loans for cars and housing, and now cannot meet their financial obligations. “An entire industry, which ranks third in exports in the country, has found itself in this position! Russia is urging us to work legally, but with their requirements, we need help in finding solutions. We do not see the government reaching out to us and offering assistance, which is needed right now,” he asserts.
Kyrgyzstan is at Risk of Losing Profitability
Entrepreneurs note a systematic lack of support and a sharp increase in costs.“The agricultural sector has its responsible parties for loans and regulation. In our sector, we are left alone,” explains Jasur Parpiev. “The sector needs preferential loans. The cost of cargo services has skyrocketed—four to five times. If a kilogram used to cost 50 soms, now it costs 250. No one regulates this. We will not be able to compete with other countries.”
He concludes: “It is now clear that working capital is insufficient even for a month. So many workshops have closed in a short period—this is a worrying signal. The government needs to support this industry; otherwise, it will be on the brink of survival.”
Other entrepreneurs agree with his opinion and increasingly hear from clients that “Bishkek is becoming unprofitable” and that “Uzbekistan and China could become new partners,” which creates terrible prospects for tens of thousands of citizens, according to representatives of the light industry.
