VZCZCXRO3879
RR RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHNT #1029/01 1701031
ZNR UUUUU ZZH
R 191034Z JUN 09
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC 1037
INFO CIS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0065
RUEHBS/USEU BRUSSELS 0005
RUEHBUL/AMEMBASSY KABUL 0094
RUEHIL/AMEMBASSY ISLAMABAD 0273
RUEHKA/AMEMBASSY DHAKA 0210
RUEHKT/AMEMBASSY KATHMANDU 0207
RUEHLM/AMEMBASSY COLOMBO 0210
RUEHNE/AMEMBASSY NEW DELHI 0261
RUEHNT/AMEMBASSY TASHKENT

UNCLAS SECTION 01 OF 02 TASHKENT 001029 
 
SENSITIVE 
SIPDIS 
DEPARTMENT FOR SCA/CEN 
EEB/IFD/OMA 
AND EEB/EPPD 
 
E.O. 12958: N/A 
TAGS: ECON EFIN SOCI UZ
SUBJECT: UZBEKISTAN:  REMITTANCES 2009 -- DROP NOT AS BAD AS 
EXPECTED? 
 
REF: 08 TASHKENT 951 09 TASHKENT 67 09 TASHKENT 441 
 
¶1. (SBU) SUMMARY.  Remittances are an important 
source of external financing for the Uzbek economy, 
accounting for 10 percent or more of the national 
GDP.  With the downturn in the world economy, many 
feared a dramatic drop in remittances to Uzbekistan 
followed by ballooning unemployment and possible 
civil unrest.  Indications for the first quarter of 
2009, however, are that the drop is more modest, in 
the range of 15-20 percent, with only one source 
indicating a larger drop in the 40 percent range. 
With the peak summer months for remittances having 
only just begun, the full impact of the crisis on 
remittances should become more apparent.  END 
SUMMARY 
 
¶2. (SBU) The Government of Uzbekistan (GOU) does 
not publish accurate, detailed statistics on money 
transfers, but even official figures acknowledge 
almost USD 1.8 billion (over 10 percent of GDP) in 
remittances in 2008.  Estimates of the number of 
migrant workers abroad vary wildly from 500,000 to 
five million, but most observers believe the true 
figure is in the range 1-2 million (refs A, B, and 
C).  Overall about a third of Uzbekistan's 
workforce goes abroad in search of employment.  The 
majority of these are men who work in the 
construction, agriculture, and energy sectors in 
Russia and Kazakhstan.  Thus, when the world 
financial crisis brought a sudden end to the 
construction boom in these countries, many 
predicted a precipitous drop in remittances, the 
return of migrant workers to Uzbekistan, and the 
possibility of civil unrest brought about by a 
large unemployed population. 
 
WESTERN UNION 
------------- 
 
¶3. (SBU) The picture surrounding 2009 remittances 
is beginning to form.  According to analysts in the 
World Bank's Tashkent office, the volume of 
remittances in January-April was down by 15 percent 
year-on-year.  Western Union Country Director Mr. 
Jalil Haydarov told us that, based on numbers seen 
to date, his company expects a 20 percent reduction 
in remittances in 2009.  Only the Russian Central 
Bank indicates a larger reduction.  Its published 
numbers show remittances of USD 292 million from 
Russia to Uzbekistan in the first quarter of 2009, 
which is 41 percent less than in the same period 
last year. 
 
¶4. (SBU) Mr. Haydarov added that the majority of 
labor migrants in the CIS still do not trust 
financial institutions and legal money remittance 
channels.  More than half of all remittances go 
through illegal or "undocumented" channels.  This 
means that the contribution remittances make to 
Uzbekistan's GDP could be much larger than 10 
percent, and thus even a modest drop in remittances 
could have a significant effect on the 
macroeconomic picture.  Haydarov told us that, in 
addition to Russia and Kazakhstan, there are 
significant numbers of Uzbek workers (both official 
and unofficial) in EU countries (particularly 
Poland, Holland, Germany and Spain), the Middle 
East (UAE, Turkey), Asia (Korea, Thailand), and the 
Americas. 
 
SOCHI OLYMPIC GAMES 
------------------- 
 
¶5. (SBU) A human rights activist in the Ferghana 
Valley told the Ambassador this week that he 
 
TASHKENT 00001029  002 OF 002 
 
 
expected up to a quarter of the migrant workers 
based in this most populous region of Uzbekistan to 
find work in the coming year.  Construction 
projects associated with the Olympic Games in 
Sochi, Russia, were expected to be a prime source 
of employment.  But this would still leave up to 
three quarters of the sizable Ferghana Valley 
migrant labor pool looking for work. 
 
COMMENT 
------- 
 
¶6. (SBU) If the World Bank and Western Union 
figures are correct, they lend credence to earlier 
predictions from some of our GOU contacts to the 
effect that Uzbek labor migrants have advantages 
that migrants from other Central Asian countries do 
not.  Namely, the Uzbek laborers are more skilled, 
are spread over more countries and regions, and 
have responded with mobility and flexibility to the 
changing labor market. 
 
¶7. (SBU) Remittances have a seasonal character, 
with peak money transfers taking place in June-July 
and November-December.  Although early indications 
are that the situation is not as bad as some 
feared, the full picture on remittances will only 
emerge later in the year. 
NORLAND