Tajikistan's Hidden Economy

Tajikistan has the highest remittance rate in the world — a recent World Bank report says that around half of the Central Asian country's money comes from workers abroad. But a weakened economy in Russia, where 98 percent of Tajik remittance income originates, has drastically slowed cash flow back to Tajikistan and its seven million inhabitants.

EurasiaNet reports that between September and November of last year, remittances from migrants dropped more than 50 percent. That decrease alone accounts for a 20 percent drop in the Tajik GDP.

Nearly one million Tajik men work abroad. These workers face growing tensions as local workers fight to keep their own jobs, feeling threatened by the guest workers who poured into Russia and Kazakhstan during better economic times in those countries. The New York Times says that during the migrant boom, the portion of Tajiks living below the poverty line dropped by one-third, to around 50 percent.

At home, Tajik women are left to manage the fields and young boys are the primary wage earners. Remittances help keep Tajik families out of extreme poverty, reports EurasiaNet's Rob Cavese, but because most transactions are cash-based and few Tajiks have bank accounts, the concern is that most funds from abroad are used for immediate consumption and not for investment.

With so many in Tajikistan relying on outside wages, Cavese writes, there is little incentive for the government to initiate a restructuring of domestic wages.

“The Tajik economy is not sustainable without migration,” Dilip Ratha, a senior economist at the World Bank, told The New York Times. “It is not diversified. People are the most important resource they have.”