The impacts of the September 2022 Kyrgyz Tajik border conflict on bilateral trade

Abstract

Border conflicts in the disputing areas between Kyrgyzstan and Tajikistan are common security issues in Central Asia. These conflicts affect not only the security but also the economies of the two nations. This study examines how the last border conflict of September 2022 affected bilateral trade between Kyrgyzstan and Tajikistan. The study employs the Autoregressive Integrated Moving Average (ARIMA) method of the Interrupted Time Series Analysis (ITSA) design to estimate the effects of border conflicts on trade levels. ITSA design facilitated the assessment of the pre-conflict and post-conflict trends. The study revealed that bilateral trade was generally declining before the conflict. The post-conflict trend of trade levels showed a recovery sign, and imports reached pre-conflict levels. The applied ARIMA model estimated the conflict's immediate and longer-term effects on trade volumes. The immediate effect emphasized that total trade dropped by 59.85% per month, including exports from Kyrgyzstan to Tajikistan by 149.66% per month and imports from Tajikistan to Kyrgyzstan by 17.96% per month due to the September 2022 border conflict. The longer-term impacts stated that total trade increased by 1.67% per month, including exports rising by 0.65% per month and imports by 3.54% per month. The study concludes that the September 2022 border conflict had profound and disruptive impacts on bilateral trade between Kyrgyzstan and Tajikistan. In addition, the study suggests an innovative economic solution to prevent trade disruptions by creating free economic zones (FEZ) in the disputed areas along the Kyrgyzstan and Tajikistan borders.