This fall Tajikistan’s economy faced a vast decrease in migrants’ money remittances due to the coronavirus pandemic. Experts say that the effects are already being felt and over the time the problems will only get worse.
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Ayub Sharipov, 32 years old, has travelled to Russia for the last 12 years to work as a migrant. He earned around 300 thousand Russian rubles per year (about 4 thousand US dollars). This money was used by him and his relatives in Tajikistan.
While working as a migrant Ayub got married, renovated his house and bought his father an affordable “Opel”. Every year, November was a happy month for Ayub and his family of six people, since every year he was coming back from Russia, according to his words, with pockets “full of money” and was buying all the necessities. But this year Ayub’s family is not very happy, as well as many other Tajik families.
Currently the family is out of supplies, they were forced to sell a few sheep. Only one milk cow is left which was saved, so that the kids could drink some milk.
Since March, international flights and ground traffic in Tajikistan have been suspended. Usually March and April were the months when Tajik migrants travelled to Russia and Kazakhstan to make some money. Many migrants did not leave the country in time, since Russia closed borders due to the virus widespread.
Ayub Sharipov and thousands of other migrants in Tajikistan were waiting for the borders to open. Autumn and cold weather has come, but the situation has not changed. The borders did not open, and the migrants’ families are claiming that at the threshold of winter they are left without any means of subsistence.
Tajikistan authorities informed the international financial institutions that the volume of money transfers to Tajikistan are decreasing.
In particular, President of Tajikistan Emomali Rahmon wrote a letter at the end of April to the International Monetary Fund (IMF) in which he stated that money remittances from Russia had decreased by 50 per cent. In his letter, Rahmon described the economic situation in Tajikistan as adverse and asked for help.
According to the Russian authorities, previously more than a million Tajik migrants yearly travelled to Russia looking for a job. Migrants were sending about 3 billion US dollars per year which is almost a third of Tajikistan’s gross domestic product.
At the end of July, Head of the National Bank of Tajikistan Jamshed Nurmuhammadzoda informed that the amount of incoming money transfers during the first six months of 2020 have decreased by 14.8% or by $195 mln in comparison with the previous year.
Data on migrant remittances flow for the first nine months is not available yet, but a few interviewees of Cabar.asia in banks have confirmed that they are much lower than last year’s.
Last year Tajik migrants sent 2 billions 576 million US dollars by bank transfers from Russia, which is equal to 33 percent of the gross domestic product (GDP).
However Tajik economic expert Abdumannon Sheraliev assumes that an even larger amount of funds are transferred in other ways: bring with themselves during winter break or are sent through friends.
He estimated that, overall, taking into account all sources, migrants in previous years were bringing to Tajikistan around 6-7 billions of US dollars per year.
According to Sheraliev, the official statistics are not taking into account these channels. He assumed that in reality the reduction volumes of the migrant remittances are 15% higher.
“Such a significant decrease of money transfers would lead to a 30-40% GDP reduction or it has already led to it. Although the government is trying to hide this fact by manipulating the statistics”, said the expert.
Tajikistan’s economy suffered from the COVID-19 pandemic, due to which thousands of Tajik migrants were not able to travel to Russia. In particular, budget revenues decreased by 2 billion 349 million somoni (227 million US dollars), thus the government was forced to resort to external loans and grants.
Particularly, the International Monetary Fund allocated to the Republic of Tajikistan 189 million US dollars. Several countries and other financial institutions as well provided Tajikistan with money and grants this year.
Another effect of reduced remittances, according to experts, is the depreciation of the national currency — somoni and the rise in prices.
Remittances are one of the main sources of the foreign currency inflow in Tajikistan, and experts say that as remittances declined the national currency depreciated. If at the beginning of 2020 the rate of one US dollar was equal to 9.6 somoni, now the value of one US dollar is 10.33 somoni. Moreover, the value of one US dollar on the black market is more than 11 somoni.
Tajik authorities have always tried to downplay the contribution of migrants into the state’s economy.
“Migration — is a natural process worldwide” or “Do not dwell on migrants’ money, we have a successful economy without them”, phrases that the Tajik senior officials used multiple times. Beyond that, the Tajik government always tried to lower the actual number of citizens migrating to other countries.
For instance, as the Russian president Vladimir Putin stated on 17 April, 2019 at the briefing following their meeting with Emomali Rahmon “more than 1.2 million Tajik citizens live and work in Russia, and their remittances constitute a great asset for the state’s economy and their families”.
Despite that Tajik authorities state that less than 500 thousand Tajik citizens reside in Russia as migrants.
Experts claim that the most important effect of reduced remittances is the reduction of the purchasing power of the population, which will eventually affect all sectors of the economy.
According to Abdumannon Sheraliev, so far, people have used their savings and food supplies. However, these resources will last another month or two, says the expert.
“But with the beginning of a new year both the people and the government will face greater challenges. Seasonal work on construction sites for the remaining migrants will end in Russia. This will further aggravate the currency shortage and significantly reduce market turnover, particularly in the non-food and service markets. It will affect the state’s budget and the income of tens of thousands of people”, said Sheraliev.
Meanwhile, in Tajikistan, an opposition politician disappeared under mysterious circumstances, who appealed to the Mayor’s office of Dushanbe with a request to hold a meeting.
The relatives of the Deputy Chairman of the Social-Democratic Party of Tajikistan — Makhmurod Odinaev, have reported him missing on 20 November.
Before going missing Odinaev on his Facebook page asked the mayor’s office of Dushanbe to allow protests against the food prices increase.
This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project.