TAJIKISTAN: REMITTANCE ECONOMY LEAVING LONG-TERM SOCIAL IMPACT

The omnipresent yellow and black Western Union signs in Khujand, Tajikistan’s second largest city, say it all. Tajikistan’s most valuable export is its manual labor. And as the world economic crisis sets in, the worth of that commodity appears to be declining rapidly, putting additional social pressures on this remote, impoverished nation of some seven million.

A recent World Bank paper estimates that roughly half the money in the country comes from workers abroad - the highest level in the world. Ninety-eight percent of those remittances originate in Russia, according to the Asian Development Bank.

This system has worked for most of the last decade while Tajikistan has enjoyed the residual effect of Russia’s economic boom. Now, with a slowing economy worldwide, the pain may just be starting. At a recent press conference, Dovlyat Usmon, the former Minister of Economy of Tajikistan, estimated that between September and November, "Remittances from migrants decreased by 50 to 60 percent, which is 20 percent of the Tajik GDP."

The International Monetary Fund has also modified downward its growth forecast for Tajikistan. Axel Schimmelpfennig, head of the IMF’s mission to the country, recently told reporters that "Growth for Russia and Kazakhstan has been revised down and this is likely to affect the remittances coming into Tajikistan." As further evidence of the growing crisis, in November some 250 Tajik workers walked off the Alfa-Story construction site in Yekaterinburg to protest mounting unpaid wages. Other strikes have also been reported. Read more