329 million U.S. dollars have been sent by physical entities from Russia to Tajikistan over the first three months of this year, which was 9.2 percent fewer than in the same period last year, according to the Central bank of Russia.
An average sum of transfer reportedly also declined — from 159 U.S. dollars in the first quarter of 2020 to US 126 U.S. dollars in the first quarter of.
Recall, 1.741 billion U.S. dollars (USD) were sent by physical entities through money transfer system to Tajikistan from Russia last year, which was 32.4 percent or 835 million U.S. dollars fewer than in 2019.
In 2019, physical entities reportedly sent 2.576 million U.S. dollars from Russia to Tajikistan through money transfer system.
Last year, an average amount of one money transfer sent from Russia to local banks in Tajikistan was equal to 151.00 U.S. dollars, while in 2019, an average amount of one money transfer sent from Russia to local banks in Tajikistan was equal to 162.00 U.S. dollars, according to the Central Bank of Tajikistan.
Meanwhile, the head of the National Bank of Tajikistan (NBT), Hokim Kholiqzoda, told reporters in Dushanbe on February 10 that a volume of remittances sent by physical entities to Tajikistan last year fell 6.3 percent compared to 2019.
According to him, the remittances declined last year due to the economic crisis induced by the COVID-19 pandemic and shutdown.
“Borders were closed and many migrants failed to travel to other countries to work,” the regulator head said.
The Asian Development Bank (ADB) notes that Tajikistan is one of the world’s top five remittance recipient countries measured by its relative size to gross domestic product (GDP).
The Russian Federation is the major destination country for Tajik migrants (97.6% in 2019). Longstanding ties from the Soviet era, language commonalities, migrant networks, significant wage differentials, as well as visa-free and on-arrival visa options make the Russian Federation a popular choice.
ADB’s Strengthening Support for Labor Migration in Tajikistan notes that in 2019, remittances amounted to US$2.7 billion, which is equivalent to 33.4% of GDP.
In 2018, US$2.553 billion were sent through money transfer system to Tajikistan from Russia, which was 17 million U.S. dollars more than in 2017. In 2018, remittances from Tajik citizens sent through money transfer system to the country from Russia were reportedly equivalent to 36 percent of all economic output (as measured by GDP).
Remittances from the Russian Federation have reportedly been substantial over time, aided by the relatively low transfer costs from the Russian Federation to the Central Asia countries. Among the factors behind this growth was the continued recovery of economic activity in the Russian Federation.
Over past decade, ratio in remittances to GDP in Tajikistan went down less than 32 percent only during the financial crisis in 2015 and 2016 — 28.3 percent and 27.6 percent, respectively.
The remittances to Tajikistan help the migrants’ families pay for their daily expenses and immediate needs. Migrant families use an overwhelming portion of remittances (94%) for private consumption, which is the most important component of GDP. However, remittances are rarely used for investments or to save for future contingencies.
