Africa with Mountains, Part II

Driving through the Ferghana Valley, where I now am, you ride shiny new Hyundai taxis, which take you in air conditioned comfort past rusted out crumbling factories and farms.

The New York Times ran a rather breathless article yesterday lamenting the lot of Zambian factory workers who have been put out of work by their country succumbing to the temptation of importing cheap Chinese goods. A parallel was drawn to the US, and our own addiction on cheap imports, and the conclusion seemed to be that the loss of jobs was offset by the increased spending power brought to the masses. The classic educated perspective on globalization - and the one that I usually take.

I think this may hold in Africa, which traditionally has had a minuscule manufacturing base and as such has not much to lose, but in Kyrgyzstan, the negative impact of globalization appears to be much greater. Firstly, the quantity of Chinese imports is far higher here. Lying just a short mountain pass away, Kyrgyzstan is a natural market for the workshops of Guangzhou and Shenzhen. Every refrigerator, every toilet, every packet of napkins has Chinese characters on them. Only the food appears to be domestic, and that only barely so -- last night while stuck in an airport I enjoyed a "instant" version of the Russian classic chicken and noodles dish which, aside from the wrapper, was indistinguishable from the instant ramens I've bought in China.

This relatively open trade policy is the result of the enlightened policies of Kyrgyzstan's first president, Akayev, who in an attempt to ally with the west more or less followed the path prescribed by the multi-lateral institutions. The result, in addition to the flood of cheap plastic trash and trash cans has been an almost complete decimation of Kyrgyzstan's industrial base. And this despite the country having a Soviet-bequeathed educational base which would be the envy of many developing countries.

It will be interesting to watch Kyrgyzstan's development. It will certainly be a test of the orthodox development thinking -- if liberal trade policies can't succeed here, I doubt they can anywhere. And, with time, they may: it may be the case that the soviet-era factories were so inefficient that they needed to go, and now there are signs of a rehabilitation: Hyundai, for example, recently built a factory in the Ferghana Valley for export into the Russian market.

I am still enough of a student of economics (and a reader of the Economist) to believe in the power of free trade, but my heart goes out to the citizens of Kyrgyzstan, members of that once mighty industrial empire, who have been forced to endure coming in last in the globalization race for almost 20 years.