Effects on labor migration and personal remittances of Uzbekistan and-or Tajikistan joining the EAEU

Munich, 23 April 2020 – Upon a potential joint accession of Uzbekistan and Tajikistan into the Eurasian Economic Union (EAEU), the migration of Uzbek and Tajik workers to the EAEU member states would increase by 36.8% (725 thousand people) and by 30.5% (225 thousand people), respectively. Money transfers of individuals to Uzbekistan could increase by USD 1.2 billion (2.4% of GDP), to Tajikistan by USD 444,1 million (5.9% of GDP). This is the result of a study by Yuri Kofner, editor-in-chief, analytical media “Eurasian Studies”, using a partial equilibrium model.

One of the main successes of the Eurasian Economic Union (EAEU) is the creation and functioning of the common labor market in which citizens of the five member states (ARM, BLR, KAZ, KGZ, RUS) enjoy the same rights in respect to labor, freedom of movement and social security. In 2017, nearly 8 million EAEU citizens moved within the Union’s common labor market and sent home USD 7 billion. In particular, Armenia and Kyrgyzstan received from their fellow citizens working and living in the other states of the union USD 1.1 and 2.4 billion, which is equivalent to 9.7% and 31.7% of their GDP, respectively.

However, not being member states of the EAEU and not participating in the common labor market of the Union, high costs for legalization and administrative barriers remain for labor migrants from Uzbekistan and Tajikistan, including passing a Russian language exam and obtaining health insurance policies that are abolished for workers within the integration bloc.

Still, the Eurasian Economic Union is highly important as the main recipient of labor migrants from both Central Asian countries. In 2017, 1.5 million citizens of Uzbekistan and 513 thousand citizens of Tajikistan were in the EAEU on a long-term basis, i.e. for work. 71.4% and 80.3% of all UZB and TJK labor migrants who travel abroad went to the EAEU member states. They transferred USD 3.3 and 2.1 billion home, which is equivalent to 5.6% and 29.7% of their gross domestic product.

Using a partial equilibrium model, Kofner estimated the likely effects on labor migration flows and on personal remittances of Uzbekistan and-or Tajikistan joining the EAEU.

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