Policymakers obsess over trade agreements. Traders care about markets and logistics.
Trade policy is increasingly linked with international diplomacy. Governments debate tariffs, free trade agreements, and strategic corridors as if commerce were mainly a matter of international relations. However, from an investor’s point of view, this perspective misses an important detail. Trade does not start with treaties. It begins with places—physical, local, often informal—where goods are exchanged, and supply chains develop.
I learned this lesson on the outskirts of Tashkent while building Abu Saxiy, an open-air market that would eventually become the largest commercial and wholesale market in Uzbekistan. It began simply with demand, access, and the practical question of how traders could move goods efficiently and at scale to customers who wanted them.
That experience shaped my view of trade infrastructure. Policymakers often underestimate these elements. Markets, logistics hubs, and last-mile distribution networks are not minor parts of establishing trade, they form its foundation.
Missing links
When governments invest in trade infrastructure, they usually consider at a national level: ports, railways, border posts, and free trade zones. These are significant and often require substantial investment to get started. However, they represent only part of the system. The more delicate links are often much closer to the ground. Wholesale markets, warehousing clusters, cold-chain facilities, and dependable transport access for small and medium-sized traders all determine whether goods can move smoothly from producers to consumers. When these links are missing, poorly planned, or badly designed, trade policy remains largely theoretical.
The early challenges at Abu Saxiy centred on access, storage, security, and establishing predictable operating rules. Traders required confidence that their investments in stalls would be supported, that logistics could expand as volumes increased, and that success would not be thwarted by sudden regulatory shifts. Once those conditions were secured, trade grew naturally.
This pattern recurs in economies at every stage of development. One of the most common misconceptions in trade policy is that informal markets are always inefficient or undesirable. In fact, they often exist because formal systems have failed to satisfy demand. They absorb risk, lower barriers to entry, and offer access and pricing well before formal retail or export channels develop. For many businesses, they serve as the initial step on the ladder to a scalable enterprise.
The error policymakers often make is trying to eliminate informality instead of encouraging and improving it. When markets are hidden instead of integrated—through legal recognition, basic infrastructure, and sensible taxation—trade goes underground, not forward.
Global supply chains are often misunderstood. They are not crafted in conference rooms; instead, they develop and change over time. Investors and operators seize opportunities and respond to incentives: speed, reliability, cost, and predictability. Where these factors are present, logistics clusters form and thrive. Where they are absent, trade halts. This highlights why land-use policy is as important as trade policy. Markets need space. Warehousing requires zoning. Transport needs access. When local rules or political hesitation impose constraints, scale becomes impossible.
Governments often focus on attracting anchor investors—large manufacturers, exporters, or global logistics companies—while overlooking the ecosystem that supports them. However, these anchor investments rely on networks of smaller operators: suppliers, distributors, repair services, and transport providers. Without an effective wholesale and logistics infrastructure, flagship projects find it hard to deliver on their potential.
Governments as enablers
Recent shocks, such as the Covid-19 pandemic and geopolitical disruptions, have revealed the fragility of global supply chains. Many countries have responded by discussing reshoring or friend-shoring production. While these strategies may lessen exposure, they do not solve issues of execution. Resilience is not determined by geography alone; it relies on redundancy, flexibility, and local capacity. Markets and logistics hubs are vital in this context, as they enable goods to be rerouted, stored, and redistributed in the event of disruptions to formal channels.
From an investor’s perspective, resilience is developed gradually. It derives from systems capable of adapting under pressure, not from slogans about sovereignty or self-sufficiency.
The most successful trade infrastructure projects I have encountered share a common trait: governments act as enablers rather than controllers. They provide land, clarity, and basic services, then permit operators to adapt as demand changes. This requires restraint as much as ambition. Predictable and long-term rules are more important than generous incentives. Consultation with local traders and logistics operators is more vital than imported models. Trade is practical—the infrastructure supporting it must be as well.
As governments reconsider global trade in a more fragmented and contested world, they should look beyond agreements and corridors. The real work of trade occurs much closer to the ground, where margins are thin, logistics are crucial, and efficiency determines survival.
Photo: Dreamstime.
