Report Highlights Positive Impact of Remittances on Economy and Living Standards

Posted: 
10/29/07

A new IOM report titled "Migration, Remittances, and Living
Standards in Tajikistan" shows that seasonal migration and
remittances have become a strong structural feature of the Tajik
economy.

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"/jahia/webdav/shared/shared/mainsite/media/docs/reports/remittances_report_iom_tajikistan_2007.pdf"
target="_blank" title=""> "background-color: rgb(153, 204, 255);">Migration, Remittances, and
Living Standards in Tajikistan

Estimated at USD 550 million in 2004 and 735 million in 2005,
remittances sent by Tajik migrants who overwhelmingly work in
Russia currently represent 31 per cent of the country's Gross
Domestic Product (GDP).  This, according to the report, makes
Tajikistan the second largest recipient country of formal
remittances from Russia after Uzbekistan, a country with a
population four times that of Tajikistan.


The report estimates that in 2005, some 371,000 migrants
representing 17 per cent of Tajikistan's economically active
population were employed in Russia. The migration of Tajiks to
Russia is facilitated by the existence of a visa free regime; by
the relatively low cost of travel and by the presence in Russia of
large Tajik communities which help non–Russian speaking
migrants find jobs, both in the formal and informal sectors of the
economy.

It notes that over the past few years, increased demand for
labour in the Russian oil industry and a widening wage gap between
Russia and Tajikistan have reinforced migration patterns between
both countries.

According to the report, 86 per cent of money sent home by an
overwhelming majority of young, unqualified migrants is used by the
family in Tajikistan to meet basic current consumption needs. The
remainder is spent on real estate purchase, home improvement or on
debt repayment. The report underlines that only marginal amounts
are invested in business activities at home.

In the heavily populated southern administrative district
(oblast) of Khatlon, the report finds that 35 per cent of the
population relies on remittances, which in 2005 averaged USD 1,296
per migrant. It notes that more than 80 per cent of the money is
transferred through formal, legal banking channels.

As a result the report finds that 50 per cent of the extremely
poor households who have benefited since 1999 from remittances have
now risen above the poverty line.

The report issues several key recommendations on ways to
maximize the flows of remittances and their impact on the country's
development. 

In terms of expanding the volume of remittances, the report
underlines the need for the Tajik government to work with the
Russian government to improve the legal and social environment for
migrant workers, most notably by reducing the amount of unofficial
tax paid by Tajik migrants in Russia.

It also notes the need for the Tajik government to encourage a
reduction of transfer fees by encouraging more competition among
service providers. Furthermore, the authorities should invest in
teaching Russian and English at elementary and secondary school
levels to better prepare migrants for their expatriation towards
Russia and towards English-speaking countries, such as Canada,
Australia, and New Zealand.

As for leveraging remittances for development, the report
recommends that measures be taken to induce members of the diaspora
to invest their capital, know-how and skills acquired abroad at
home. This could be done through financial fairs for migrants in
Russia and by setting up hometown associations similar to those set
up in Latin America to promote local
development.     

This report is part of a broader EC funded project aimed at
developing small and medium enterprises and support of migrant
households associations in rural communities and is jointly funded
by UNDP Tajikistan and IOM.

The report is available online at "paragraph-link-no-underline" href=
"/jahia/webdav/shared/shared/mainsite/media/docs/remittances_report_iom_tajikistan_2007.pdf"
target="_blank" title="">www.iom.int,  "paragraph-link-no-underline" href="http://www.iom.tj/" target=
"_blank" title="">http://www.iom.tj/ or "paragraph-link-no-underline" href="http://www.migrant.tj/" target=
"_blank" title="">http://www.migrant.tj/.

For more information, please contact:

Mahmoud Naderi

IOM Dushanbe

Tel: +99 23 72 21 82 83

E-mail: "mailto:mnaderi@iom.tajnet.com">mnaderi@iom.tajnet.com