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EMMA of the Corrugated Galvanized Iron (CGI) Market System, Kyrgyzstan

Osh and Jalal-Abad oblasts
July, 2010

The ethnic conflicts in Kyrgyzstan in June 2010 resulted in large impacts on the regional economy. 170 shops, six markets and more than 100 cafes and other sites were damaged or destroyed in Osh alone. Furthermore, fear of reprisals has immobilized most sectors in and outside of the metropolitan areas. Transport of goods to and from the southern regions of Kyrgyzstan and other regions of the country and neighboring countries like China, Russia and Uzbekistan, has largely stopped.

The EMMA assessment in Kyrgyzstan focused on early recovery needs for four selected critical markets: wheat flour, early potatoes, corrugated galvanized iron (CGI) and cement. This report provides the findings and recommendations on CGI, which was selected because it is one of the most important building materials needed for reconstruction of homes and businesses damaged or destroyed in June. The EMMA team aimed to understand the ability of the market system to respond to the crisis and to anticipate increase in demand.

Processed and semi-processed raw materials for CGI are imported via truck from Kazakhstan and China, and ready-made CGI is also imported from China. CGI processors cut and stamp the imported corrugated metal, which often comes in rolls or flat sheets. Prior to the emergency, there were 14 processors of various capacities operating in the region. Retailers purchase finished CGI sheets directly from importers, processors and the Karasu market.

Following the crisis, the CGI market system is still functioning, but at reduced capacity. The broken linkage with Kazakh markets has diminished retailers' and producers' access to the materials necessary for their trade, which is compounded by a reduction in the number of CGI processors operating after the emergency. With reduced access to supply, stocks of finished CGI and local production may not be sufficient to meet demand from reconstruction. A spike in demand without sufficiently robust supply linkages will drive up prices, negatively affecting vulnerable populations attempting to purchase CGI. In fact, demand has been significantly diminished by the June events, driving down sales at the retail level, although stalls in market areas that were not directly affected by the violence remain in business.

This report concludes that the CGI market system is healthy enough to not warrant direct intervention from the international community. As such, direct intervention at the household and retail levels will stimulate market system function. This report recommends that NGOs dealing with shelter to identify processors and retailers able to absorb increased demand. Despite challenges that may arise in sourcing CGI domestically, it is recommended that CGI used in reconstruction be of domestic origin and purchased in the Kyrgyz market. The shelter cluster and other coordinating bodies are encouraged to provide strategic oversight and policy parameters for the purchasing of CGI for reconstruction anticipated in the coming months.

Report authors: 
Benjamin Barrows and Eugenia Gusev
Download Report (640.85 KB pdf)