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The Russian Economic Crisis and Falling Remittances in Central Asia

6 Pages Posted: 1 Dec 2016  

ChiHyun Yun

Korea Institute for International Economic Policy

Date Written: November 30, 2016

Abstract

Long since before the Russian economic crisis, remittances from Russia have been a major source of foreign currency income in Central Asia. In 2013, Tajikistan received remittances of $4,219 million, or 49.6%, as a proportion of GDP. In the same year, remittances accounted for 31.1% and 11.1% of GDP in the Kyrgyz Republic and Uzbekistan, respectively. By that time, approximately 60-80% of labor migrants of these three remittance-dependent Central Asian countries, a population of roughly 4.3 million, were assumed to be residing in Russia. Remittances from Russia amounted to $14 billion, which accounted for more than 90% of total remittance inflows.

However, Western economic sanctions against Russia over the Ukraine Crisis in mid-2014, and the collapse of the Russian ruble coinciding with persisting lower oil prices, have negatively affected the remittance-dependent countries over the last two years. Remittance inflows slashed in half, the unemployment rate jumped as a large number of migrant workers lost their jobs, and the inflation rate rose due to extreme currency depreciation.

In this context, this article aims to understand the current economic status of the three remittance-dependent countries in Central Asia - Kyrgyz Republic, Tajikistan and Uzbekistan - and suggest countermeasures for sustainable socio-economic development in terms of labor migration and remittances.

Keywords: Remittances, Labor Migrant, Migration, Central Asia, Kyrgyz Republic, Tajikistan, Uzbekistan, Russia

Suggested Citation

Yun, ChiHyun, The Russian Economic Crisis and Falling Remittances in Central Asia (November 30, 2016). KIEP Research Paper World Economy Brief No.16-28. Available at SSRN: https://ssrn.com/abstract=2877576 or http://dx.doi.org/10.2139/ssrn.2877576

ChiHyun Yun (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

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