Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Unlocking the Potential for Labor Productivity Growth
Remittances have contributed to economic growth but the recent poor 
economic outlook in migrant host countries has caused remittances to 
decline, prompting the return of some migrants. 
With millions of Uzbeks 
working and living abroad, remittances are a major contributor to economic 
growth, but levels have been declining in recent years. As the majority of 
migrants are from rural areas, remittances from migrant workers tend to be 
spent mainly on consumption and family welfare in rural areas. In 2013, personal 
remittances peaked at around $6.7 billion, equivalent to 12% of the country’s 
GDP (Figure 3.18). However, remittances declined to $2.5 billion in 2016, or 
about 40% of its 2013 level, as the number of migrants fell by about 26% due 
to the weak economy and stricter migration policies in the Russian Federation 
(Box 3.6). The stricter labor requirements in the Russian Federation also made 
it difficult for foreign workers to find a job and cover their living costs. 
Data from the Russian Federation’s Migration Service indicates that in the 
second half of 2014, about 365,000 Uzbeks left the country (cited in Farber 
2015) because the Russian ruble had devalued more than 50% against the 
United States dollar between July and December 2014. In addition, the average 
remittance by Uzbek workers in the Russian Federation to the families at home 
has also declined, from an average remittance of $581 per transaction in 2010 
to only $279 in 2016 (Figure 3.19). For a country with a minimum monthly 
wage of $21, a reduction of $302 is very substantial.
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In light of the recent economic crisis in the Russian Federation, along with 
the collapse of the Russian ruble, more Uzbek migrants are expected to 
return (UNDP and CIS 2015). Returning migrants will likely rejoin the labor 
market and raise the unemployment rate, thus creating both a challenge 
and an opportunity for policymakers. The challenge is to accommodate 
the influx of people into the local labor force to avoid repeated out-
migration. The opportunity is the possibility that the returnees could use 
their acquired skills and savings to start their own businesses or invest in
entrepreneurial activities.
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21
The minimum wage is set at SUM172,240/month ($21/month), compared with the Russian Federation’s $163/
month as of 10 February 2018. 
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There is very limited analytical work done on the occupational choice of returning migrants in Central 
Asian countries. Using 2013 CALISS data, Khikmetov et al. (2016) find that returning female migrants are 
more likely to stay out of the labor market than males with similar demographic characteristics. A study 
by Hausmann and Nedelkoska (2017) shows that following the 2009 Greek economic crisis, the return of 
more than 100,000 migrants to Albania did not reduce the wages of nonmigrant workers. Instead, returning 
migrants started engaging in entrepreneurial activities such as commercial farming, using their savings and 
technical know-how.

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