INDONESIA

The invisible victims of Russia’s economic crisis aren’t even in Russia

New data show that central Asian governments have been right to fear Russia’s economic crisis was heading their way: remittances from migrant laborers are falling sharply, more than in any other region worldwide.

Migrant remittances are the largest single source of foreign currency in Tajikistan and an important factor in declining poverty rates throughout central Asia in recent years. So the contracting Russian economy and stricken ruble—brought on by a sudden fall in oil prices and Western sanctions—have a direct impact on millions of the region’s laborers and their families back home.

A migrant woman stands with her daughter and nephew outside their shelter on the outskirts of Moscow July 26 2011. Russia's demographic situation is one of the many factors that contributes to uncertainty in understanding the future of the country. Not only is Russia one of the only developing countries with a decreasing population, also the chaos of the 1990's has produced a hole in the demographic curve meaning there are fewer young adults now than should be expected in a standard population. The result is a small indigenous labour pool and a large influx of migrant workers to fill this gap. These workers are mainly from former Soviet countries in Central Asia, Kyrgyzstan, Tajikistan, Uzbekistan, places with their own economic problems which contribute to migration. The migrants generally do low-skilled and heavy work on building sites, in markets or on the streets. Official statistics put the number at just under a million, but unofficial estimates there are several million, mostly concentrated in and around Moscow. Picture taken July 26, 2011.
A migrant family, on the outskirts of Moscow. (Reuters/Denis Sinyakov)

“Overall, reduced remittances are likely to worsen standards of living in remittance-receiving countries, and the increasing number of returned migrants could put upward pressures on unemployment rates,” the World Bank said in a regular briefing on Apr. 13.

Tajikistan—which sends approximately one-half of its working age males to labor in Russia—is the most remittance-dependent country in the world. Remittances account for the equivalent of 49% of GDP, according to the World Bank. In dollar terms, they fell 8% last year, largely in the fourth quarter, and are expected to decline another 23% in 2015. Tajikistan is the most remittance-dependent country in the world 

Kyrgyzstan is the world’s second most remittance-dependent country, with remittances totaling the equivalent of 32% of GDP. Last year they fell 1%, but are expected to drop another 23% this year.

A family of Tajik migrant workers are seen in their house outside Moscow October 9, 2011. Russia's demographic situation is one of the many factors that contributes to uncertainty in understanding the future of the country. Not only is Russia one of the only developing countries with a decreasing population, also the chaos of the 1990's has produced a hole in the demographic curve meaning there are fewer young adults now than should be expected in a standard population. The result is a small indigenous labour pool and a large influx of migrant workers to fill this gap. These workers are mainly from former Soviet countries in Central Asia, Kyrgyzstan, Tajikistan, Uzbekistan, places with their own economic problems which contribute to migration. The migrants generally do low-skilled and heavy work on building sites, in markets or on the streets. Official statistics put the number at just under a million, but unofficial estimates there are several million, mostly concentrated in and around Moscow. Picture taken October 9, 2011.
A house of Tajik migrants. (Reuters/Denis Sinyakov)
Migrant workers wait for work at a vegetable market on the outskirts of Moscow, November 11 2011. Russia?s demographic situation is one of the many factors that contributes to uncertainty in understanding the future of the country. Not only is Russia one of the only developing countries with a decreasing population, also the chaos of the 1990?s has produced a hole in the demographic curve meaning there are fewer young adults now than should be expected in a standard population. The result is a small indigenous labour pool and a large influx of migrant workers to fill this gap. These workers are mainly from former Soviet countries in Central Asia ? Kyrgyzstan, Tajikistan, Uzbekistan, places with their own economic problems which contribute to migration. The migrants generally do low-skilled and heavy work on building sites, in markets or on the streets. Official statistics put the number at just under a million, but unofficial estimates there are several million, mostly concentrated in and around Moscow. Picture taken November 11, 2011.
Waiting for work at a vegetable market outside of Moscow. (Reuters/Denis Sinyakov)
Migrants workers from Tajikistan gather in a shelter to watch TV after working at a local market outside Moscow, July 6 2011. Russia?s demographic situation is one of the many factors that contributes to uncertainty in understanding the future of the country. Not only is Russia one of the only developing countries with a decreasing population, also the chaos of the 1990?s has produced a hole in the demographic curve meaning there are fewer young adults now than should be expected in a standard population. The result is a small indigenous labour pool and a large influx of migrant workers to fill this gap. These workers are mainly from former Soviet countries in Central Asia ? Kyrgyzstan, Tajikistan, Uzbekistan, places with their own economic problems which contribute to migration. The migrants generally do low-skilled and heavy work on building sites, in markets or on the streets. Official statistics put the number at just under a million, but unofficial estimates there are several million, mostly concentrated in and around Moscow. Picture taken July 6, 2011.
Migrant workers gather to watch TV. (Reuters/Denis Sinyakov)

In Uzbekistan, where remittances total the equivalent of 11.9% of GDP, they fell 16% last year; they are expected to drop another 30% in 2015.

The region’s currencies have all been affected. In recent weeks Tajikistan’s government has taken drastic measures to staunch the somoni’s losses. The currency is down 14.5% against the dollar so far this year.

Indeed, the sharp remittance declines have been augmented by the ascendant dollar, the World Bank noted, which has reduced the purchasing power of cash transfers:

[T]he depreciation of the ruble compounded the decline in the US dollar value of remittances to Central Asia. To take one country as an example, the ruble value of remittances in Tajikistan increased by 7.6% over-a-year ago in the fourth quarter of 2014. However, the ruble depreciated against the dollar by 32% in that period, and the dollar value of remittances fell by 26.7%.

With the ruble rebounding somewhat in recent weeks and the price of oil not as low as some had forecast, losses this year may not be as bad as predicted. But uncertainty reigns, and new regulations making it harder for central Asians to work legally in Russia are also taking a toll on transfers.

The World Bank expects remittances to central Asia will start growing again in 2016.

This post originally appeared at EurasiaNet. We welcome your comments at ideas@qz.com.

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