Thursday, September 10, 2009

Window on Eurasia: Gastarbeiters in Russia Sending a Third Less Money Home This Year than Last

Paul Goble

Vienna, September 10 – Gastarbeiters in Russia transferred 31 percent less money to their CIS homelands during the first six months of 2009 than they did during the same period a year earlier, the result of worsening economic conditions and changing exchange rates and one certain to affect the lives of family members who had come to rely on such remittances.
And while polls suggest that many Russians are worried that unemployed immigrants are heavily involved in crime, the social and political problems in the countries from which these migrants come that declines in these transfer payments are likely to trigger may prove to be a far more serious problem for Moscow in the future.
According to a report in, the total amount of these transfers within the CIS fell from 5.68 billion US dollars in the first half of 2008 to 3.92 billion US dollars between January and June 2009. The falloff in such payments to those from outside the CIS, a far smaller group, was smaller in absolute numbers – 0.35 billion US dollars – but the same in percentage terms.
Uzbekistan, which receives 19.4 percent of all such remittances, suffered the largest loss, with the amount transferred falling from 1.1 billion US dollars in the first half of 2008 to 0.76 billion US dollars in the first half of 2009, according to the Central Bank figures RB reported (
Tajikistan, which gets 16.9 percent of these remittances, and Ukraine, which gets a smaller percentage, suffered equivalent declines. While the report did not mention it, the actual falloff may be far larger because not all of the funds migrant workers receive and then transfer go through official channels.
Some Russian experts, like Igor Polyakov of the Moscow Center for Macroeconomic Analysis and Forecasting, are inclined to point to the Russian government’s reduction in the quotas for such workers as being the main explanation for these declines. But the basic causes are clearly elsewhere, says.
First of all, because these transfers are in dollars, changes in the exchange rate between the ruble and the dollar have reduced the amounts reported. Second, many immigrant workers have lost their jobs or seen their incomes shrink. And third, prices in many Russian cities have risen, leaving Gastarbeiters with less to send home.
For some countries in the Commonwealth of Independent States, this reduction in transfer payments will dramatically affect the lives of a large portion of the population and the ability of the governments to function: In Moldova, for example, last year, such payments represented 37 percent of that impoverished country’s GDP.
And the difficulties that the decline in remittances have caused are likely to be compounded if many of the migrant laborers, having lost their jobs, return home and have to confront in many cases the same difficult economic conditions that drove them to seek employment in the Russian Federation in the first place.
The dangers that such trends involve for the other former Soviet republics give the Russian government a serious if not always much remarked upon lever in its dealing with these states, leverage that Moscow has not been shy about threatening or even using as it did against Georgia a year ago.
But this lever has two edges: If Moscow seeks to use it against one or another national group of immigrants, not only does it risk problems with the governments involved as last year’s diplomatic back and forth with Kyrgyzstan showed, but it also faces the prospect that some of the more than 12 million Gastarbeiters now in Russia might behave as many Russians fear.

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