Kazakstan Is Drowning In Contraband

Smuggling thwarts investors--and exacerbates a fiscal crisis

In Almaty's noisy wholesale bazaar, Erkin Takisaev patiently stacks cartons of Camel cigarettes into a pyramid. Despite the Western brand, black lettering on each carton lets customers know it's "Made in Kazakstan." Only there aren't any buyers for these cigarettes. Instead, they ask for the U.S.-made Camels that Takisaev gets twice a week from Uzbekistani smugglers and hides in a dirty sack. At $8.50 a carton, they cost more than locally produced cigarettes, but smokers prefer the taste.

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