Making some cash on pilgrims? Why not?!
Business and Economics, Politics and Society, Uzbekistan3 Comments
Due to the current departure of pilgrims from around the world, Uzbek “businessmen” (as well as “businesswomen”) of local “black” markets decided to increase their income by simply raising the USD per Uzbek soum (UZS) exchange rate while Uzbek Hajjis to-be do their last preparations, including the financial side of it.
To get to know how “black” exchange market actors do their cynic — but business-and-no-sincerity-proven — operations one could just go to any bazaar where the above mentioned businessmen present. For future Hajjis (Hajji — a status given to those who travelled to holy places of Mekka and Medina in Saudi Arabia during certain time during a year) it’s convenient to have U.S. dollars rather than Uzbek soums simply because of the possibility to exchange the first would be much easier abroad.
Theoretically, to get the American money in their pockets they could just go to any local bank and exchange their valuable soums in to U.S. dollars. But, wait a second! We are in Uzbekistan which is a country where logically approved events have a practically proven controversies. And money exchange is one of the most significant ones in the field of economics.
So, practically only priveleged citizens can exchange their soums in to dollars in banks using an official exchange rate, which is 1761 UZS per 1 USD. No need to go into details of why — those who have a picture of how corrupted the Uzbek system is, this situation is understandable.
So, to exchange UZS in to USD one (non-priveleged) should go to the black market (located in any more or less large bazaar, square, public facility) and buy franklins and lincolns from there, for the exchange rate of 2560 UZS per 1 USD.
Getting back to the title of this post, the exchange rates at black markets has risen up when pilgrims had started approaching those so-called “businessmen.” If before it was 2450-2500 UZS per a U.S. dollar, than nowadays it’s higher, with a maximum 2600 soum rate.
Now let’s calculate: 3 000 pilgrims allowed from Uzbekistan (actually, the country’s quota is 5 000 but the government allows to only 3 000 people go — another method of fighting extremism??). Uzbek citiznes are allowed to hold not more than 2 000 USD when leaving the country.
3 000 pilgrims X 2 000 USD allowed = 6 000 000 (6 mln).
Just 50 soums made on each U.S. dollar ends up with a 300 000 000 USD(yes, 300 K mln USD!) — the money black market businessmen got and still getting from pilgrims and all those who have to buy dollars these days. Now count a difference if the exchange rate raised for up a hundred soums. How’s that to you?