Remittance euphoria: Expansion or Dependency?

Remittance euphoria: Expansion or Dependency?

$1.139 billion was transferred from Russia to Azerbaijan in 2012, according to the Central Bank of Russia. The volume of remittance from Russia to the CIS states reached $20.11bn in 2012 which is almost 22% higher than the indicator of the previous year, Russian media report.

Personal transfers represent the income of house economies from abroad from their members and from the family economies of non-residents and usually associated with the temporary or constant migration of the population. The transfers were carried out both via the banks, postal offices, money transfer systems and through transfer of cash.

CESD experts stated that amount of remittance from Russia to Azerbaijan is much higher than individual bank transfers; “The central bank data, in fact, significantly underestimate actual remittance inflows. The concern is most apparent because of sending via money transfer operators, therefore Central Bank of Russia flowing to Azerbaijan are 23 percent greater than the total amount of remittance inflows reported by the State Statistic Committee of Azerbaijan. According to Russian mass-media, amount of remittance from Russia to Azerbaijan is about $ 3,5 billion. Azerbaijan State Statistic Committee reported amount of remittance as $ 900 million. CESD survey, however, found that amount is remittance from Russia to Azerbaijan is as a minimum 3 times higher that the Central Bank reported amount. It means that amount of remittance is not less than $ 3 billion per year”.

CESD mentioned that remittance keep many families out of poverty. Remittances, however, are the hidden economy of Azerbaijan; there is no official accurate calculation.  Preliminary data indicate that the dollar remittance outflows from Russia was increased of 25 percent in 2012. This shows a strong recovery after a decline in 2009. Despite the strong recover in 2012, remittances sent from Russia do still not reach the pre-crisis levels of 2008.

According to CESD experts, money is remitted from Ukraine, Belarus and Kazakhstan to Azerbaijan, too. In general, the Azerbaijanis of the CIS countries annually transfer $ 5 billion to their home country. In addition to the CIS countries, money comes from EU countries and Turkey, The amount of remittances from these countries is around $ 1.5 billion per year.

Uzbekistan was the leader for the volume of assets transferred from Russia in 2012 – $6.241 billion (30% growth), followed by Ukraine – $3.397 billion (11.5% growth) and Tajikistan-$3.125 billion (+15.5%).

$1.682 billion was transferred to Kyrgyzstan, $1.96 billion to Moldova, $1.398bn to Armenia, $843m to Belarus, $298m to Kazakhstan, $27m to Turkmenistan.

CESD, 2013

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