The Economic Impact of Labour Migration on Central Asia and Russia

H22 A contribution to the SIPCATS Discussion Forum

Dr. Olga R. Gulina, CEO & Founder of the RUSMPI – Institute of Migration Policy, Berlin–Moscow

Editorial remark
In a previous contribution to the Central Eurasia Discussion Forum, “Regionalism vs Networking in Central Eurasian Space”, it was argued that young Inner Asian states are becoming more and more deeply embedded in a greater Eurasian sphere delimited first and foremost by economic networks and infrastructures sustained by surrounding and partly overlapping strong powers, such as Russia, China, India, and Turkey.

The present contribution from Dr. Olga R. Gulina, CEO & Founder of the RUSMPI – Institute of Migration Policy, Berlin–Moscow, could be seen as another piece of evidence supporting this argument.

The Economic Impact of Labour Migration
on Central Asia and Russia

Labour Migration is a strong driving force behind human mobility in present-day Eurasia. Ever since the disintegration of the Soviet Union in the 1990s, the ex-Soviet states divide into migrant sending and migrant receiving countries. Among the Central Asian states Uzbekistan, Tajikistan, Turkmenistan, and Kyrgyzstan belong to the former category, whereas Kazakhstan qualifies for the latter together with Russia. For each Russian worker leaving the country there are 12 workers who arrive. For Kazakhstan the ratio is even greater – 1 to 44. This could be compared to the ratios for Uzbekistan and Tajikistan, where outbound labour migration by far outnumbers the inbound flow. The ratio in Uzbekistan is 7 to 1. This means that every newcomer in Uzbekistan is replaced by 7 emigrants. Tajikistan is the “leader”, with the aforementioned ratio between inbound and outbound migration, where one in-migrant makes way to 600 out-migrants (Rayazantzev & Horie 2011: 44).

Such a distinction between inbound and outbound migration has a strong impact on human development in the Central Asian states and may have negative effects on their economies. In 2012, the GDP of Uzbekistan was about $48.3 billion (96.6 Trillion UZS), $5.693 billion of which constituted legal remittances sent by Uzbek migrants working in Russia. In the same year, the GDP of Tajikistan was about $7.5 billion (31.16 billion TJS), of which $3.8 billion constituted remittances of Tajik migrants working in Russia. In 2015, the GDP of Uzbekistan was about $48.3 billion (171.0 Trillion UZS), $ 2.5 billion of which constituted legal remittances sent by Uzbek migrants working in Russia (Statistic 2016 & Central Bank 2015); the GDP of Tajikistan was about $ 7.87 billion (48.40 billion TJS), of which $ 1.9 billion constituted remittances of Tajik migrants working in Russia (Agency on Statistics 2016 & Central Bank 2015); the GDP of Kyrgyzstan was about $ 6.3 billion (424 billion KGS), of which $ 1.01 billion constituted remittances of Kyrgyz migrants working in Russia (National Statistical Committee 2016 & Central Bank 2015).

The relevance of remittance flows to those countries becomes even more conspicuous when these numbers are shown as percentages of the GDP. According to World Bank estimation, approximately 43 percent of Tajikistan’s GDP and 30.3 percent of Kyrgyzstan’s GDP were remittances in 2011–2015 (World Bank 2016a). Here it should be noted that World Bank data and figures from the Russian Central Bank only include official transfers (wired via bank or other official financial transfer systems), not cash carried home by migrants or persons authorized by them.

In contrast to Kazakhstan, which as a receiving country does not affect the GDP of other Central Asian countries to any great extent due to the lower capacity on the labour market, Russia has a considerable impact on the GDPs of sending Central Asian countries. Declining remittances as a result of the decline in the Russian economy affected Uzbekistan by 16 percent and Tajikistan by 8 percent in 2014. In 2015, migrant remittances from Central Asian workers in Russia were reduced by 20.3 percent in (World Bank 2016b; for some positive expectations, on the other hand, see KNOMAD 2016).

The Eurasian Development Bank published the 2015 Report on “Labour Migration, Migrant Remittances and Human Development in the Central Asian Region”, which proclaims that nationals of three Central Asian countries – Uzbekistan, Tajikistan, and Turkmenistan – constitute one third of 11 million foreign citizens officially registered in the Russian Federation and a majority of 3.5 million immigrants officially registered on the territory of Kazakhstan (EABR 2015: 8). These countries differ from the fourth ex-Soviet Central Asian country with predominantly outbound labour migration, Kyrgyzstan, in as far as the latter is a member of the Eurasian Economic Union, which guarantees a simplified migration regime towards Kyrgyz migrants (90 days instead of 30 days for the official registration, free movement on the territory of the Eurasian Economic Union member states, simplified rules for job acquisition, etc.).

Human capital remains a number-one export entity in Uzbekistan, Tajikistan, Turkmenistan, and Kyrgyzstan. The positive and negative migration outcomes in all of these countries strongly depend on socio-economic circumstances and not least on the state’s approach towards workers abroad. Uzbekistan’s president, Islam Karimov, recently urged migrants to come home. Following this call, Uzbekistan’s Agency for External Labor Migration sent “all local migration and registration authorities warnings about what labour migrants can expect to find abroad, from prostitution to slavery or recruitment to extremist organizations” (Bologov 2016). Meanwhile, Uzbek mass media announced a significant growth in the GDP (+8.0%) and the creation of 980 000 job-places for 2016 (Gazeta 2016). However, people still leave the country.

This is not the first attempt by Central Asian countries to restrain their nationals from job-searching abroad, i.e. Russia. However, the Central Asian economies, haunted by high domestic unemployment and dependent on migrant remittances, are unlikely to reach this goal and to be able to stop the human outflow in the foreseeable future.

To the Central Eurasia discussion forum

References

Agency on Statistics of Tajikistan (2016): Socio-economic situation in the Republic of Tajikistan from January to December 2015, http://www.stat.tj/ru/img/3c8b737e693be8769270f0f588a0a0e5_1455852583.pdf

Bologov, Petr (2016): Uzbeks in Russia: Not Homesick Yet, http://carnegie.ru/publications/?fa=63555

Central Bank of the Russian Federation (2015): External Sector Statistics. Cross-border Transfers of Individuals (Residents and Nonresidents). Breakdown by Country. http://www.cbr.ru/eng/statistics/?PrtId=svs

EABR (2015): Labour Migration, Migrant Remittances and Human Development in the Central Asian Region, http://www.eabr.org/general/upload/news/DokladMigraciyaden.perevodyRus.pdf

Gazeta (2016): the Uzbekistan’s GDP increased by 8% in 2015, https://www.gazeta.uz/2016/01/16/gdp/

KNOMAD (2016): Migration and Remittance: Recent Developments and Outlook. Migration and Development Brief Nr.26. April 2016, http://pubdocs.worldbank.org/pubdocs/publicdoc/2016/4/661301460400427908/MigrationandDevelopmentBrief26.pdf

National Statistical Committee (2016): National Accounts. Statistics. http://www.stat.kg/en/statistics/nacionalnye-scheta/; http://mineconom.gov.kg/index.php?Itemid=159&lang=ru

Rayazantzev, Sergey & Horie, Norio (2011): Modelling of the Labour Migration Flows from the Central Asian Countries to Russia. Moscow.

World Bank (2016a): Personal remittances, received (% of GDP), http://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS. Last access on June 17, 2016.

World Bank (2016b): Remittances to Developing Countries Edge Up Slightly in 2015. Press- Release. April 13, 2016, http://www.worldbank.org/en/news/press-release/2016/04/13/remittances-to-developing-countries-edge-up-slightly-in-2015

 

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