On the final Monday of each month, Moscow-based Faridun Abdulloev wires half of his month-to-month pay to his spouse in Dushanbe, the capital of Tajikistan. A mid-level supervisor at a development agency, Abdulloev is often in a position to ship throughout $500 — sufficient to cowl his household’s family bills, his son’s personal college charge, and a month-to-month installment on a house mortgage.
However in late January, the 34-year-old worriedly known as his spouse earlier than transferring cash. The Russian rouble had crashed 8 % towards the US greenback since December and 15 % since October — all at the same time as costs in Moscow have climbed steeply in current months. He would have the ability to ship residence solely $450, he informed her. Then, he shared a deeper worry together with her. “I informed her issues would possibly get so dangerous that I might need to return again,” he recalled in a cellphone interview with Al Jazeera.
I informed her issues would possibly get so dangerous that I might need to return again.
Abdulloev is amongst hundreds of thousands of Central Asian migrant staff in Russia who threat changing into collateral victims of the continuing tensions between Moscow and the West over Ukraine. The Kremlin has positioned greater than 100,000 troopers and heavy weaponry alongside its neighbour’s borders, sparking fears of an imminent battle. The US has responded by getting ready a set of sledgehammer sanctions geared toward deterring Russian President Vladimir Putin from any invasion of Ukraine.
But whereas the measures Washington is proposing are focused at Moscow, they might additionally find yourself crippling the economies of Tajikistan and the Kyrgyz Republic whereas additionally considerably hurting Uzbekistan, as a result of these nations rely on cash despatched residence by residents working in Russia.
The blow to remittances
Greater than 3 million migrant staff from Uzbekistan, almost 1.6 million from Tajikistan and 620,000 from the Kyrgyz Republic entered Russia between January and September 2021, based on information from the ministry of inside affairs in Moscow. Put merely, one in 10 residents from these three international locations works in Russia. Remittances — primarily from Russia — represent 30 % of the gross home product of Tajikistan, 28 % for the Kyrgyz Republic and nearly 12 % for Uzbekistan, based on the newest World Financial institution information.
However the mere risk of sanctions has already despatched the rouble tumbling, chopping the worth of the earnings and financial savings of migrant staff.
Prior to now, consultants have discovered that remittances to Central Asia take huge hits when the Russian economic system faces crises, together with after 2014 when Washington imposed financial curbs following Moscow’s annexation of Crimea. And this time, the US and its allies in Europe are warning of unprecedented measures if Putin proceeds with army aggression. A number of the proposed sanctions may successfully block the pipeline of remittances that maintain Central Asian economies buzzing.
“A decline in remittances is prone to result in financial, fiscal, and social pressures in Central Asian international locations significantly depending on remittances,” Tigran Poghosyan, the Worldwide Financial Fund’s resident consultant to the Kyrgyz Republic, informed Al Jazeera.
A decline in remittances is prone to result in financial, fiscal, and social pressures in Central Asian international locations.
Among the many financial penalties that the US is contemplating towards Russia are sanctions focused at that nation’s main banks. Such a transfer may ship the Russian economic system — and the lives of extraordinary individuals — right into a tizzy, doubtlessly elevating the prices for Putin. It may additionally devastate hundreds of thousands of households in remittance-dependent former Soviet republics.
The nation’s 4 largest banks management 55 % of economic sector property. And greater than half of all wages and pensions in Russia are paid out by way of Sberbank, the nation’s largest financial institution. If the proposed sanctions carry these banks to their knees, it’s unclear whether or not staff like Abdulloev will even obtain their salaries. And if banks in different international locations snap ties with their Russian counterparts to keep away from sanctions themselves, worldwide cash transfers — not less than by way of authorized mechanisms — would possibly turn into subsequent to unattainable, consultants say.
“I’ll return to Dushanbe and drive a taxi,” mentioned Abdulloev, talking with the assistance of an interpreter. “However there’s no means I will help our life or our desires for our son.” He and his spouse have mentioned shifting their son to a public college. And the house mortgage they should repay? “I don’t even need to give it some thought,” mentioned Abdulloev, who has labored in Russia since 2017.
Squeezed by geopolitical tensions
This isn’t the primary time that Central Asian migrants have discovered themselves squeezed within the geopolitical battles between Russia and the West. The sanctions imposed by the US in 2014 halved Tajikistan’s incoming remittances between 2013 and 2016. Uzbekistan noticed its remittances plummet by almost 30 %, and the Kyrgyz Republic by 25 %, in a yr.
“The general stage of remittances shrinks when Russia has an financial disaster,” mentioned Caress Schenk, affiliate professor of political science at Nazarbayev College in Atsana, Kazakhstan’s largest metropolis.
However earlier crises may pale compared to the punishment that the West is readying for Russia if it invades Ukraine. Prior to now, sanctions have largely been focused — targeted on people and entities believed to be near Putin, or these concerned in Moscow’s actions in Ukraine. This time, the sweeping nature of proposed financial measures may dry up remittances to Central Asian republics like by no means earlier than.
The general stage of remittances shrinks when Russia has an financial disaster.
For these nations, the timing couldn’t have been worse: Earlier than present tensions erupted between Moscow and the West, remittances had simply began recovering from the blow delivered by the COVID-19 pandemic.
Uzbekistan, as an example, noticed a 23 % improve in cash despatched from Russia within the first half of 2021. Some international locations, like resource-rich Uzbekistan, would possibly climate the approaching storm higher, Schenk informed Al Jazeera. However for probably the most half, “these economies are already challenged,” she mentioned.
They depend on remittances as a serious supply of international forex, mentioned Poghosyan. For a lot of poor households, cash despatched again residence by kinfolk working in Russia is “their important supply of revenue”, he mentioned.
Backup plans
Not all migrant staff in Russia are urgent the panic button simply but. Ahmadjon Usmanov, an Uzbek taxi driver in Moscow, mentioned he believes that Putin’s administration will take steps to insulate migrant staff from the worst results of any new sanctions. Russia’s economic system will depend on international staff, whose absence in the course of the pandemic — when many went residence — slowed the nation’s restoration. “They will’t afford to have all of us depart once more,” mentioned Usmanov to Al Jazeera.
His backup plan? To hitch a rising set of the area’s staff who lately are heading to Kazakhstan as a substitute of Russia. Turkey, South Korea and the United Arab Emirates are additionally rising as different locations, mentioned Schenk.
However these international locations are usually not but able to compete with Russia for Central Asian staff, she mentioned. Migrants typically depend on present networks of compatriots in new international locations, making Russia significantly engaging. Russia’s migrant labour economic system additionally largely works by way of casual mechanisms, Schenk mentioned. “This makes it comparatively straightforward for migrants to work informally or with out paperwork than in a rustic that depends on formal procedures,” she mentioned.
And within the speedy neighbourhood, there’s no different economic system that may take up so many migrant staff. That’s why hundreds of thousands of migrant staff are repeatedly drawn to Russia, regardless of its frequent financial challenges and — lately — rising cases of xenophobia.
“All we will do is wait and watch,” mentioned Abdulloev. “On the finish of the day, our fates can be determined in Moscow and Washington.”