Anti-Russian sanctions hit Uzbekistan, Kyrgyzstan and Tajikistan

The Diplomat
Anti-Russian sanctions hit Uzbekistan, Kyrgyzstan and Tajikistan

Remittances sent by labor migrants have an overwhelming significance for families in Kyrgyzstan, Tajikistan, and Uzbekistan who are supported by these transactions and for the overall economies of these countries. Russia is the destination for most Central Asian labor migrants and therefore the main source of remittances. Russia is also a major trade partner of these countries. Russia’s economic activities have begun to contract under sanctions, a trend that will likely continue. The weakening of the ruble has immediate and long-term effects for Central Asian migrants and their home economies, The Diplomat writes.

According to the latest estimates, remittances to Kyrgyzstan are the most dependent on Russia. Last year (January-September 2021), the share of remittances from Russia constituted 83 percent of all remittances to Kyrgyzstan. The same statistics for Tajikistan and Uzbekistan indicate less dependence on Russia: 58 percent of all remittances to Tajikistan and 55 percent of all remittances to Uzbekistan came from Russia. 

In absolute dollar amounts, remittances from Russia to Uzbekistan are still the highest compared to Kyrgyzstan and Tajikistan, given the greater number of Uzbeks traveling abroad for work, a product of the country’s vastly larger population. In 2020, Uzbekistan migrants remitted $6.98 billion, Kyrgyzstan migrants $2.4 billion, and Tajikistan migrants $2.18 billion. The World Bank has projected that, on average, remittances from Russia will fall by 25 percent in 2022.  Migrants who lost jobs in Russia and whose earnings have been devalued have started returning to Central Asia. Tashkent reported 133,000 returned migrants from Russia in the first quarter of the year but did not provide the previous year’s numbers for comparison, which makes it hard to evaluate the magnitude of the problem. Dushanbe, on the other hand, reported 60,337 returned migrants from Russia in the first quarter of this year, which was 2.6 times more compared to the same period in 2021. 

In a large scale survey conducted by Uzbekistan’s State Migration Agency among 15,000 migrants who are currently in Russia, 40 percent reported a desire to return to Uzbekistan due to a loss of employment or the devaluation of the Russian ruble. Those who are ready to leave Russia are paired with a near equal share (36 percent) who reported no plans to return to Uzbekistan because they hold stable jobs. The remaining 24 percent reported holding a stable job for the moment and might consider returning to Uzbekistan if they lose their positions. 

A similar poll among Kyrgyz migrants in Russia found that, as in the case of Uzbek migrants, 40 percent intend to return to their homeland due to financial difficulties. This indicates that the consequences of Russia’s economic contraction and currency devaluation are the same for all migrants from Central Asia. However, the number of those who already returned to Tajikistan indicates a possibly larger impact on Tajiks.

Another area where Central Asian countries are affected by Russia’s economic troubles is trade. For Uzbekistan (using 2020 data) Russia is the second largest export partner, accounting for 12.5 percent of exports and 21 percent of imports. Inevitably, Russia’s economic difficulties will push Uzbekistan to seek other markets to sell and buy, but these adjustments are not easy to come by and will take time. For Tajikistan, Russia is not a big export market; Dushanbe only sends 2.56 percent of its exports to Russia. But Russia is Tajikistan’s second largest import partner. For Kyrgyzstan, 9 percent of its exports go to Russia and 21.8 percent of imports come from Russia.

The governments of Kyrgyzstan, Tajikistan, and Uzbekistan have not openly expressed concerns about a possible sudden inflow of returning migrant workers even though none of their economies would be ready to absorb them if migrants decide to permanently return to their home countries. There is likely a hope among senior officials in Central Asia that Russia’s special operation in Ukraine will end soon and the economic situation will not continue to worsen. 

Polls conducted among Central Asian migrants a month after Russia’s operation in Ukraine started indicate that around 40 percent of migrants both from Uzbekistan and Kyrgyzstan are ready to return home after losing jobs or income. That share is probably similar for Tajikistan migrants as well. The remainder are not guaranteed to maintain what they called “stable jobs” as the Russian economy is battered by sanctions, so while they did not express an immediate desire to return, that could change in the weeks to come.

It is clear that not all migrants will return, and some will maintain their positions no matter how bad Russia’s economy gets. Others will likely reorient and shift to other countries rather than return to Central Asia. A large number of Central Asian migrants working in low-skilled jobs that are highly dependent on the domestic economy, such as construction, delivery services, and taxi driving, which are usually among the first affected by any economic contraction.

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