Byrd et al. (2006) point out that the current Central Asian countries would achieve
dramatic growth in trade and economic welfare and eventually deepen regional cooperation
if they cooperated in trading polices, border control, customs clearance, and
transportation management. However, restricted by vested interest groups within Central
Asian countries, said adjustments are very difficult to carry out. Some researchers
believe that Central Asian countries have a deeply integrated consumer market (Grafe et
al. 2005). The small price disparity among Central Asian countries is mainly the result
of cross-border trades pursuing arbitrage opportunities. In Uzbekistan, the largest market
in Central Asia, the trade barriers not only failed to protect domestic manufacturers
(merchants just shifted from legitimate trade to cross-border smuggling), but instead
promoted the development of bazaars in Chimkent (Kazakhstan) and Osh (Kyrgyzstan)
near the borders of Uzbekistan, Kazakhstan, and Kyrgyzstan. The two bazaars
consequently became large-scale wholesale centers, and Kazakhstan and Kyrgyzstan
gained a large amount of wholesale benefit.