The effects of remittances in Central Asia

International remittances in Central Asia have increased dramatically during the last two decades. Two Central Asian states, Tajikistan and Kyrgyzstan, are among five countries of the world where remittances equal or surpass 25% of GDP. The sheer size of remittances point to their importance for the recipient economies’ development. However, while there is a significant body of research that studied the impact of remittances around the world, the effects of remittances in Central Asia remains under-researched. Such gap needs to be addressed because the way remittances affect migrant-sending countries may differ. The nature of remittances’ effect on local economies may depend on the peculiarities of migration flows, the quality of institutions, the level of economic development or the state of democracy in both in remittance-sending and remittance-receiving countries.

In this policy brief, I will compare and discuss the impact of remittances on migrant-sending countries around the world and Central Asia. This is not an easy task as the effects of remittances on the receiving economies are complex because of multiple channels through which remittances affect recipients’ behavior. The extant body of research shows that remittances are not an unmitigated boon for recipient economies. Therefore, countries that receive significant remittance flows need to integrate strategies for harmoniously incorporating remittances into their overall development plans. I will also touch upon policy implications of these effects considering the unfolding situation with Covid-19.

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Jakhongir Kakhkharov, PhD, is a Lecturer in Finance at the College of Business, Government and Law, Flinders University in Adelaide, Australia.


The policy paper is produced as part of a project “Debating International Relations in Central Asia: Regional Developments and Extra-Regional Actors”. The project is led by Shairbek Dzhuraev and Eric McGlinchey with support of the Hollings Center for International Dialogue. The views expressed in this publication are those of the author and do not necessarily reflect the views of Crossroads Central Asia and/or the Hollings Center for International Dialogue.

The previous papers of the series: