When it comes to finding ways of squeezing money out of people, Tajikistan’s government is second to none in the innovation stakes.
Russian business daily Kommersant reported on February 16 that a plan is in the works for the National Bank of Tajikistan to create a single clearing house for all the remittances being sent home by migrant laborers.
Tajikistan is a major market in the cash-transferring business in Russia and represents the second-largest destination for money wired overseas, according to Kommersant.
The proposal being enacted by the National Bank will require all transfers to go through its system, which will accordingly earn healthy commissions.
The details are hazy so far, but Kommersant’s unnamed sources in the financial sector say that proponents of the new arrangement are toying with the idea of imposing a 1 percent commission on all transfers.
Market leaders at the moment charge between 0.3 percent and 0.6 percent.
It is presumed that wire companies and the banks paying out the cash at the other end will come to some arrangement with the National Bank on how to distribute the earnings.
The model will completely invalidate any avenue for competition since clients will find themselves having to pay that 1 percent (or more) commission come what may. And it should probably be safely assumed that the National Bank will retain a healthy proportion of the fees for itself.
Critics of the government will be quick point out that the deputy head of the National Bank is none other than President Emomali Rahmon’s son-in-law, Jamoliddin Nuraliyev, and that given the opaque nature of Tajikistan’s financial system, there can be no certainty about the ultimate destination of the revenues earned through commissions on transfers.
Kommersant reports that clues about this yet-to-be-confirmed plot were there to see for anybody looking. A notice posted on the National Bank website featured a notice for an IT consultant to assist in creating a national processing center for the transfer of money.
By way of an explanation, the call specifies that the system is being put in place at the behest of the World Bank, which the National Bank says provided a $10 million grant to help boost competitiveness in the private sector, the newspaper reported.
How thwarting competition among wire companies in Russia and charging Tajiks more to pay remittances is going to enhance competitiveness is not immediately clear.
Kommersant does, however, cite a representative from one of the minor wire companies operating in Russia, who hails the proposed measure as a way of limiting the advantages enjoyed by larger companies in the field.
The decline of the Russian economy is causing Tajiks substantial pain as it is.
Remittances from Russia in January-September in 2015 dropped by 65.1 percent to $1.54 billion compared to the same period the previous year, when the figure stood at $3.16 billion.