While people in Moscow are already queueing outside foreign exchange shops to get rid of the ruble, eyeing the current 9.1% price inflation rate, neighbours of the “Russian bear” are likely trembling in fear.
Until a year ago, the Russian economy was flying high on the wings of a seemingly endless oil-fuelled boom, which showered economic migrants with hard cash to send back to their origin country. With the economic depression on the horizon and investors pulling their money out of the country by the billion each month, Russian companies have already started cutting wages and making redundancies.
Poor former Soviet republics with a troubled recent past like Tajikistan and Kyrgyzstan are suffering the most. Millions of Tajik migrants live in Russia and send much of their salary back home. According to World Bank data, remittances in Tajikistan make up 42.1 % of the Central Asian republic’s GDP, making it the world’s biggest recipient.
A staggering 60% of those remittances come from Russia. If we consider that over a million Tajiks – half of the country’s workforce – work in the giant neighbouring country, we see why Russia’s incoming economic depression may potentially wreck those countries.
Neighbouring Kyrgyzstan is in a similarly desperate situation. The small mountainous state has a 32% share of GDP of remittances.
It has been calculated that Tajik growth will slow to 6.5% this year from 7.4% in 2013 as a result of the drop in worker remittances in the January-September period. Both Tajikistan, a state of 8 million, and Kyrgyzstan have a troubled post-soviet past. From 1992 to 1997, a civil war marred the prospect of economic growth in Tajikistan, which borders with Afghanistan and China.