Sanctions imposed on Russia hit remittance-dependent countries in Central Asia, says IOM report

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The report says that currently, there are approximately four million workers from Central Asia working in Russia: around one million from Tajikistan, a similar number from Kyrgyzstan, approximately two million from Uzbekistan, and some 200,000 from Kazakhstan.

Labor migrants from Central Asia work primarily in the construction, transportation, agriculture, and service sectors (both seasonally and in longer-term) as well as in higher skilled occupations.

The sanctions imposed on the Russian Federation in response to its so-called “special military operation” in Ukraine are reportedly expected to have a severe impact on the Russian economy and labor market.

According to data compiled by IOM, up to two million jobs may be lost, with unemployment expected to rise from around 4.4% to 7.8%.

Given Central Asia’s dependence on the Russian economy, migrants and their families have reportedly already begun to feel these effects, mainly through increased unemployment but also in a reduction in remittances.

In the first quarter of 2022, 60,000 Tajik and 133,000 Uzbek migrants returned from Russia to their home countries, putting further strain on labor markets.

In 2020, remittances to Tajikistan and Kyrgyzstan accounted for 27 percent and 31 percent of GDP respectively, comparable to or even larger than the countries’ export value of goods and services.

In 2021, remittances from Russia accounted for more than 55 per cent of total remittances transferred to Uzbekistan, and 51 per cent of remittances to Kazakhstan.These countries are now expected to see a decline of 21 per cent and 17 per cent respectively in overall remittances compared to last year, according to independent data cited by IOM.

The volatility caused by the crisis in Ukraine and sanctions on Russia mean that the remittances flow to

Central Asia should be closely observed, said IOM, as sharp declines can result in increased and extreme poverty among families of migrants and the communities that depend on them.

It is to be noted that labor migrants are still a critical component in the economy of Tajikistan keeping many families at home above the poverty line.

The latest Migration and Development Brief released by the World Bank last month listed Tajikistan among the top three remittance recipients in terms of the share of the gross domestic product (GDP).As a share of GDP for 2021, the top three recipients were Lebanon – 54 percent, Tonga – 44 percent and Tajikistan – 34.5 percent.

Remittances remained by far the largest source of foreign currency earnings for these countries, and were comparable to—or even larger than—the countries’ exports of goods and services.

Russia is the largest source of remittances to many Central Asian countries, but transfer volumes have reportedly been on a downward trend since 2014 peaks.Despite this, outward remittances from Russia remain large and account for roughly two-thirds of total remittance receipts for Central Asian countries, Kyrgyzstan, Tajikistan, and Uzbekistan, as well as for Armenia and Azerbaijan in 2021.

Source: Asia-Plus