Uzbek migrants contributing more to economy than gold exports

Today, approximately 2.5 million Uzbeks work abroad. The amount of money they send back to Uzbekistan surpasses the revenue from gold exports, constituting over 14% of the country’s GDP.

In 2000, the United Nations General Assembly declared December 18 as International Migrants Day. On the same date in 1990, the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families was adopted.

How many migrants are there worldwide?

According to the International Organization for Migration (IOM), the number of migrants globally exceeds 281 million. This represents a threefold increase in the past 50 years. The majority of migrants leave their countries due to unemployment, socio-economic challenges, and the search for better education.

Over the years, the volume of remittances sent by migrants to their home countries has also steadily increased. Between 2000 and 2022, these remittances grew by 650%, from $128 billion to $831 billion.

In the past decade, the United States, Germany, and Canada have been the most attractive destinations for migrants. The growing number of migrants in these countries underscores their appeal. For instance, while the U.S. hosted 12 million international migrants in 1970, that number has now exceeded 50 million. Migrants also account for over 18% of Germany’s population. Meanwhile, wealthy Arab nations such as Saudi Arabia and the UAE remain popular destinations for migrant workers.

The highest remittance volumes come from the U.S., amounting to over $79 billion in 2022. Saudi Arabia ($39 billion), Switzerland ($31.9 billion), and Germany ($25.6 billion) follow as significant contributors.

On the receiving end, the countries that benefit the most from remittances are India, Mexico, China, the Philippines, and Egypt. In 2022, India alone received over $111 billion in remittances.

The role of migrants in Uzbekistan’s economy

Uzbekistan is one of the leading countries in sending labor migrants abroad. According to the latest official data from the Agency for External Labor Migration, over 2.3 million Uzbeks have gone to work in foreign countries.

Historically, Uzbek migrants have primarily headed to four countries: Russia, Kazakhstan, Turkey, and South Korea. However, recent years have brought significant changes.

The economic downturn in Russia, stricter requirements for migrants, increased recruitment campaigns for military service, and rising anti-migrant rhetoric have led to a decline in the number of Uzbeks heading to Russia. Similarly, Turkey is becoming less appealing due to its struggling economy, the sharp devaluation of the lira, and high inflation.

New destinations for Uzbek migrants now include the UK, Germany, Poland, Hungary, Latvia, the UAE, Saudi Arabia, and Japan.

For years, remittances from labor migrants have played a vital role in Uzbekistan’s economy, covering a substantial portion of household expenses. In 2023, remittances to Uzbekistan totaled $11.4 billion, accounting for over 11.2% of the nation’s GDP. In comparison, Uzbekistan’s gold exports last year were valued at $8.1 billion.

In the first nine months of this year alone, Uzbekistan received $11.3 billion in remittances, marking a 34.8% increase compared to the same period last year. These funds accounted for 14.2% of GDP during this timeframe. Growth in remittances has been particularly notable from countries such as the UK (67%), South Korea (76%), Poland (97%), and the UAE (66%).

These remittances are often used to cover consumption expenses, education, healthcare, and housing, thereby boosting domestic demand and fostering economic growth. Additionally, a significant portion of Uzbekistan’s foreign exchange needs is met through the money sent by migrants.

Why does Uzbekistan have so many labor migrants?

The high number of Uzbek labor migrants can be attributed to several factors:

Economic transition: after gaining independence, Uzbekistan transitioned from the Soviet Union’s centrally planned economy to a market-based system. The state abandoned the Soviet policy of ensuring full employment, even at low wages. Consequently, unemployment rates rose sharply during the early years of independence, coinciding with a demographic boom in the final 30 years of Soviet rule, when Uzbekistan’s population more than doubled. As a result, many of those entering the labor market in the 1990s struggled to find employment, particularly as large factories closed or faced hardships. Moreover, the dominance of raw materials in Uzbekistan’s exports limited job creation.

Declining agricultural employment: for decades, a significant portion of Uzbekistan’s population worked in agriculture. However, with advancements in technology, the demand for agricultural labor has decreased. In developed countries, agricultural workers make up less than 5% of the labor force. Uzbekistan is following this trend, leaving many workers to seek alternative income sources.

Population growth: Uzbekistan’s population continues to grow rapidly. Over 600,000 young people enter the labor market annually, and this figure is projected to reach 1 million by 2030. For a developing country, ensuring employment for such a rapidly growing workforce poses a significant challenge.

Low incomes: according to updated data from Numbeo, Uzbekistan ranks 73rd out of 96 countries for average net monthly wages.