Economic Advancements in Uzbekistan: Initial Signs of Progress in Reform Efforts
Uzbekistan Sees a Shift in Labor Migration As Remittances Rise
A noteworthy adjustment in Uzbekistan's labor migration patterns seems to be bearing fruit. The first nine months of 2024 have seen a significant increase in remittances from Europe and South Korea, according to a report published by Gazeta.uz.
The total amount of money transfers in Uzbekistan amounts to $11.62 billion from January to September this year, marking a roughly 28 percent surge compared to the $8.4 billion recorded during the same period in 2023. July was the highest transfer month, with $1.78 billion returned to Uzbekistan, as per Central Bank data. Labor migrant remittances account for the majority of wire transfers in Uzbekistan.
The Uzbek government initiated the implementation of a strategy in 2024, with the long-term objective of relocating Uzbek labor migrants from low-skilled jobs in Russia to higher-skilled positions in Europe, the Gulf, and South Korea. Key aspects of this strategy encompass job training and placement programs.
In addition, President Shavkat Mirziyoyev's administration aims to negotiate labor-migration agreements with industrialized states, mirroring a deal signed with Germany in September. Russia, however, remains the primary destination for most Uzbek labor migrants, with $8.75 billion in remittances sent back to Uzbekistan from Russia so far this year. This figure represents a slight dip in Russia's overall share of remittances in 2024. Meanwhile, remittances from South Korea grew 76 percent from the previous year, reaching $420 million, while remittances from Poland more than doubled, reaching $48 million, and transfers from the United Kingdom increased 49 percent to $93 million.
Dynamic trends in Uzbekistan's labor migration and remittances are shaped by domestic economic growth, regulatory developments, and shifts in international labor markets. Historically, the majority of Uzbek migrants head to Kazakhstan and Russia, but there are signs of a gradual reorientation towards other regions, such as Europe, the Gulf, and South Korea. Domestic policy focuses on job creation and formalizing employment, with efforts underway to regulate labor migration more transparently and to improve legal protections for Uzbek migrants. As new migration channels open up, remittance sources are expected to become more diversified, though Russia will likely remain a major source in the short term.
The rise in remittances from Europe and South Korea indicates a shift in Uzbekistan's financial landscape, potentially impacting the country's business sector due to increased capital inflow. As part of the government's strategy, there's an effort to move Uzbek labor migrants from low-skilled jobs in Russia to higher-skilled positions in Europe, the Gulf, and South Korea, which could influence the demand for certain business services and resource allocation.
