Tag Archives: remittances

Tajikistan prepares $490m rescue plan for failing banks

DEC. 21 2016 (The Conway Bulletin) — Tajikistan’s government said it would spend $490m, around a fifth of its total budget, on rescuing its banking sector from collapse.

It will pump the cash mainly into Tajikistan’s two biggest lenders, Agroinvestbank and Tojiksodirot- bank, to boost their liquidity and protect them from bankruptcy.

Both banks have neared collapse this year, only being saved by previous government bailouts. Earlier this month, Tojiksodirotbank was taken out of administration. It had been run by Central Bank officials since May.

Two smaller banks, Tajprombank and Fononbank, will also receive funds.

Abdusalom Kurbanov, the Tajik finance minister, said the government had no choice but to intervene heavily to save the banks.

“This decision is aimed at the sustainable development of the banking system, the preservation of public confidence in the banks and the return of deposits,” media quoted him as saying.

Tajikistan is the most remittance- dependent country in the world and a recession in Russia has sucked its economy dry. Its somoni currency has also fallen apart over the past couple of years as the US dollar strengthens and low commodity prices continue to undermine confidence in Emerging Markets.

Earlier this year, a run on the banks in Tajikistan betrayed just how nervous people had become over the stability of the banks. Many ATMs ran out of cash.

Tajikistan has asked for advice from both the European Bank for Reconstruction and Development (EBRD) and the IMF, although it has yet to take any financial aid. This is probably because, despite a handful of missions to Dushanbe, the IMF and Tajikistan couldn’t agree on a set of conditions to guarantee the loan.

On a visit to Central Asia in October, Juha Kahkonen, IMF deputy director for the Middle East and Central Asia, said that it had moved closer to agreeing conditions for a loan. It also described the state of the Tajik banking sector as dire.

“Discussions will continue in the coming weeks and we hope the programme can be agreed in the coming months,” he told Reuters on a trip to Almaty.

But he also said: “Their [Tajik banks] lending practices have not been very sound. Non-performing loans are about half of total loans.”

Central Bank data showed that the share of non-performing loans had risen to 58.7% of the banks’ loan portfolios from 37.8% in September.

Banking systems across the region are creaking. A Handful of smaller banks in Azerbaijan have gone bankrupt and several are under pressure in Kazakhstan. The region’s financial system has been fragile for years. After the 2008/9 Global Financial Crisis, Kazakh banks were left with one of the world’s biggest bad debt ratios, forcing the government to pump billions of dollars into the system.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Remittances grow in Georgia

OCT. 14 2016 (The Conway Bulletin) — Remittance data from Georgia showed an overall increase of 3.6% for the first nine months of the year compared to the same time in 2014, although cash from Russia continued to fall, media reported. Russia is the biggest source of remittances to Georgia, and the rest of the Central Asia and South Caucasus region. It sent only $282m to Georgia in Jan. – Sept., down 12.3%. Remittances from Greece stood at $93m (up 1%) and from the US at $89m (up 11%). The data is important because is shows that, unlike its South Caucasus and Central Asia neighbours, Georgia is not overly reliant on remittances from Russia.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Money transfers to Georgia grow

SEPT. 16 2016 (The Conway Bulletin) – Georgia’s Central Bank highlighted a growth in money transfers from abroad in August, $106m, up 25% compared to last year. Russia remains the largest country of origin of worker remittances, although transfers to Georgia declined. The US, Italy, Greece and Turkey have all grown in absolute terms, representing over 40% of all remittances in August.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Migrant remittances fall to Armenia, Uzbekistan by 30%

SEPT. 20 2016 (The Conway Bulletin) – Money transfers from migrant workers in Russia to Central Asia and the South Caucasus fell by 12% in Q2 2016 to $2.3b compared to a year ago. Importantly, remittances to Armenia and Uzbekistan fell by 30% and 20% respectively, compared to the same period last year. Kyrgyzstan was the only country which received more than last year, $487m, a 21% increase. Remittances from migrant workers in Russia form a vital part of the economy for non-energy exporters in the region.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Fire in Moscow factory kills 17 Kyrgyz migrant workers

AUG. 26 2016 (The Conway Bulletin) — A fire in a printing warehouse in northeast Moscow has killed 17 migrant workers from Kyrgyzstan, the Russian authorities said.

The fires once again raise concerns over safety standards for migrant workers from Central Asia in Russia. In January, 12 migrant workers died in a clothing factory in Moscow.

Emergency services said that the fire at the printing warehouse was started by a faulty light on the first floor. Smoke spread quickly through a lift shaft to the fourth floor where the workers were sleeping. Most of the workers died in their sleep through smoke inhalation and another died later in hospital.

Unconfirmed reports also said that the factory mainly hired women.

Russia remains a major source of employment for workers from Central Asia and the S.Caucasus although there have been accusations of substandard working conditions.

ENDS

(News report from Issue No. 293, published on Aug. 29 2016)

Remittances in Tajikistan fall, again

JULY 25 2016 (The Conway Bulletin) — Tajikistan’s Central Bank said that the flow of remittances from abroad fell by 22% in the first half of 2016, compared to the same period last year. The Bank said that a sustained recession in Russia has slashed the value and the volume of remittances. Tajikistan is one of the world’s top remittance-dependent countries. Tajikistan and the rest of the region have been having to cope with the fall from a collapse in oil prices and a recession in Russia.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Remittances drop in Georgia

JUNE 15 2016 (The Conway Bulletin) – Georgia’s Central Bank said remittances from abroad fell by 5% in May to $92.9m, compared to May 2015, a sign that the regional economic malaise is still biting economies in the South Caucasus and Central Asia. Money transfers from Russia represented one-third of all remittances last month. Remittance flows to Georgia have also been badly hit by Greece’s economic problems. Greece, also a predominately Orthodox country, had been the second highest originator of remittances to Georgia.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Tajik migration slows by 10%

MAY 18 2016 (The Conway Bulletin) – The Tajik ministry of labour said that outbound migration decreased by 10% in the first four months of 2016, compared to the same period last year. Around 200,000 Tajik labour migrants left the country in Jan.-April 2016. Around 87% of the migrants are men. Most of them head to Russia for work. Remittances from migrants are an important part of Tajikistan’s economy.

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(News report from Issue No. 281, published on May 20 2016)

IMF schedules mission to Tajikistan

APRIL 28 2016 (The Conway Bulletin) – The IMF said it will send a mission to Tajikistan in the next few weeks to work on a programme that could lead to a bailout, the FT reported. The IMF had previously offered help to Tajikistan, provided the government embraces a series of proposed reforms. Tajikistan has been hit hard by a regional economical downturn that has crashed into currencies and knocked out vital remittance flows from Russia.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Tajik and Kyrgyz migration start to rise

APRIL 8 2016, DUSHANBE (The Conway Bulletin) — Migration from Kyrgyzstan and Tajikistan to Russian cities rose in April, signalling an improvement in Russia’s economy and also, potentially, giving all-important remittance flows back to Central Asia a boost.

Kyrgyzstan and Tajikistan marked an increase of 0.2% and 1.8% in the number of migrants in Russia compared to the same time last year, according to official statistics from the Russian Federal Migration Service. It recorded its data on April 6.

The rise may be small but it is important as it breaks a downward trend over the past 18 months. Also, official figures only report on a portion of the total migrant population as a large part of it is illegal. When official statistics go up, analysts believe the overall number of migrants grows even faster.

Together with Uzbekistan, which recorded the same number of people living in Russia this year as 2015, people from Kyrgyzstan and Tajikistan represent the most important migrant populations from Central Asia. The home countries of these migrant workers depend heavily on remittances from their migrant workers.

Migrant numbers to Russia had slowed significantly in the past two years due to tougher migration policies and a sharp depreciation in the rouble at the end of 2014, linked to a fall in oil prices and a recession. The drop in the value of the rouble also depressed the value of remittances that migrants were sending home.

This year, though, the rouble has gained around 17% against the US dollar since the low point of 81/$1 in mid-January and the economic situation in Russia appears to have improved enough to attract migrants once again.

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(News report from Issue No. 276, published on April 15 2016)