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Central Asia: The Drop in Remittances from Russia is Bad. But How Bad?

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Russia’s Central Bank has released new data showing drops as steep as 15 percent in the amount of money transferred by individuals to Central Asia in 2014 versus the year before. Much of that cash – no one can say exactly how much – comprises remittances from labor migrants. There is no question that remittances make up a huge part of post-Soviet Central Asia’s economies, but their net, long-term effect is far from clear, especially since figures can be misleading and misused.
 
Much about remittances remains poorly understood: They encourage consumption and seem to reduce poverty overall. But how do they affect growth? Some economists believe they may actually hurt it by contributing to a massive outflow of workers – a consequence that’s tricky to quantify.
 

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David Trilling is EurasiaNet's Central Asia editor.

Central Asia: The Drop in Remittances from Russia is Bad. But How Bad?

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