Remittances play a vital role in the economic wellbeing of Tajikistan’s population; emigrants regularly send remittances to their relatives and households in Tajikistan.  Remittances sent by migrants to their home countries contribute to the economic development and poverty reduction. .

Tajik migrants make an enormous contribution to the Tajik economy.  The amount of remittances sent home by Tajik migrants from Russia was estimated to be US$2.553 billion or 36% of GDP in 2018 (Russia’s central bank).  The remittances sent to Tajikistan help the migrants' families to solve some of their financial problems, and a large amount of these resources are used to cover their immediate needs.  Investment in longer term sustainable economic activities is, however, quite limited.

The deposit base of the banking sector has been growing.  However the cluster of the population for which remittances are the primary source of income keep their savings outside the formal financial sector, thus leaving significant investment opportunities unrealized.

There is a potential for unused savings to be put to work, and the country’s authorities are seeking ways to attract unused savings of the received remittances into the financial system.

Meanwhile, international organizations also note that remittances could be used for savings and investment in productive assets.

Thus, Financial Analysis to Support SDGs Implementation in Tajikistan, a report that was released by UNDP last year, in particular, says that improvement  in  the  regulatory  environment will serve to direct remittances to productive investments. 

Remittances  play  a  critical  role  in  providing  households  with  necessary  finance  for  basic  consumption.  Currently, remittances reportedly act as a significant buffer to poverty for a large section  of  the  population,  and most  of  the  remittances  are  used  for  consumption  of  food,  house  renovations  and  celebrations.  Under  these  circumstances,  remittances  assist  in  reducing  income poverty but with minimal contribution to human development, according to the report.  Meanwhile, remittances  could be  used  for  development‐related  initiatives.  

The report notes that large  remittances, if  properly  channeled within an improved business environment,  could lead  to  much  higher  investment.  Tajikistan  needs  to  reduce  the  state’s  footprint  in  the economy,  prioritize  public  expenditures  within  a  realistic  fiscal  envelope,  and  significantly improve the business environment, according to the report.