Ilhom Abdulloev, Executive Director Open Society Institute Assistance Foundation – Tajikistan, GLO Fellow and GLO Country Lead for Tajikistan, reflects in an interview the challenging situation in the economy and on the labor market. He touches long-run trends, deals with the implications of the coronavirus pandemic and the Chinese “Belt and Road Initiative”, and reveals his mission and vision as researcher.
Some core messages of the interview:
- The coronavirus pandemic has decreased families’ wellbeing substantially also in Tajikistan.
- The size of remittances has reached 28% of GDP in 2019.
- Despite its positive contribution to economic activities, China’s “Belt and Road Initiative” impact on external debt is raising alarms.
- The mission of the Open Society Foundation in Tajikistan is the promotion, popularization, and protection of the principles of the foundation in the Republic of Tajikistan through humanitarian assistance and charity.
- In his research, he is currently studying the effect of migration on labor supply and job satisfaction of members of migrants’ families.
GLO Fellow Ilhom Abdulloev is Executive Director Open Society Institute Assistance Foundation – Tajikistan and GLO Country Lead for Tajikistan.
GLO Discussion Paper No. 709/2020
Job Status, International Migration and Educational Choice – Download PDF
by Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N.
GLO Discussion Paper No. 641/2020
Schooling Forsaken: Education and Migration – Download PDF
by Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N.
GLO: How is the Tajik labor market doing in the Covid-19 crisis?
Ilhom Abdulloev: Even before the pandemic, the economy of the Republic of Tajikistan could not create enough jobs for the growing working-age population. About half of the working-age population in Tajikistan is not economically active. Women’s participation in the labor force is very low, and many young people (15%) have become discouraged and have given up searching for domestic employment. Informal employment is also high (55%) and mainly concentrated in agriculture and rural areas, where most of the population lives. Under such conditions, emigration becomes a primary employment option for many young people in Tajikistan.
During the coronavirus outbreak, although Tajikistan did not declare a lockdown, it closed country’s borders and education facilities sending pupils and students to early vacation. Seventy four percent of families had to take care of children more than usual during the pandemic and that translates to an additional investment of time, money and resources towards caregiving. As a result, many unemployed people did not look for jobs as they were more engaged in housework and schooling activities. Many families (64%) spent their savings to stock up on food and other necessities during the pandemic, and many others experienced lower earnings because of reduced business revenue, temporary furloughs and layoffs due to the pandemic.
Additionally, some people have looked for paid work during the pandemic, which implies that families’ experienced budget constraints (due to increased prices) and job losses. This also indicates that the pandemic has contributed to increased unemployment. Compared to urban areas, families in rural areas are engaged in farming on their own land or animal husbandry, which reduces the negative impact of employment and creates alternative sources of livelihood. Overall, the pandemic has decreased families’ wellbeing.
With reduced business revenues because of the pandemic, many employers decided to keep businesses open and running as long as possible which necessitated the implementation of safety measures including protective equipment for staff, all of which increases operational costs. This resulted in employers cutting operational costs by any means available including the dismissal of workers without fair compensation, or offering lower paid informal jobs. Such workers require legal support and the government’s attention.
GLO: Tajikistan has been one of the world’s most remittance-dependent countries of the world, largely affiliated with Russia. What were the implications and how will this change in the pandemic?
Ilhom Abdulloev: Migration was playing an augmenting role for Tajikistan’s economy before the pandemic. It helped lift the budget constraint and supported families’ food consumption. Almost every other household in Tajikistan has had a family member migrate. The majority of migrants work in low-skill occupations in construction, retail trade and care services in the Russian Federation. The size of remittances reached 28% of GDP in 2019.
All labor migrants have been affected by travel restrictions that were imposed because of the pandemic. Since the migration from Tajikistan is seasonal, many migrants who were at home during the winter were expecting to migrate during the spring. They were not able to migrate because of the border closures. Some of these returned migrants were able to find some form of paid work in Tajikistan, but their current earnings do not compensate for the income they would have earned abroad. Most returnees are waiting for travel restrictions to be lifted so they can emigrate to Russia.
At the same time, the current migrants in destination countries were not able to return home to Tajikistan. They face financial difficulties due to loss of jobs and the inability to pay for their lodging and meals in their destination country or for charter fights tickets to return to Tajikistan. The decline in economic activities in Russia and the reduced demand for migrant labor may lead to an increase in unemployment among international migrants, forcing them to return to their home countries.
Remittance income fell dramatically from April-August pushing the poverty rate higher. The unknown period of borders closure and the lack of employment opportunities in both Russia and Tajikistan would further decrease incomes and consumption of migrants’ families in Tajikistan.
GLO: How is the country involved in the Chinese “Belt and Road Initiative”?
Ilhom Abdulloev: Chinese financing plays an important role in Tajikistan, making a significant contribution to improving the economic infrastructure and the influx of new technologies. Chinese investment has increased significantly over the past decade reaching the total of 2.6 billion US$ in 2019, but at the cost of slowing down some other reforms. China’s Belt and Road initiative aims to strengthen ties with Central Asian countries through investment in economic infrastructure, technical assistance, and trade expansion. It became attractive for Central Asian governments because it does not impose any conditionality on human rights and good governance as does aid coming from other international financial institutions.
Despite its positive contribution to economic activities, China’s impact on external debt is raising alarms. Tajikistan has the largest debt to the China Eximbank which was over 1.1 billion US$ in 2020. A further increase in the debt to GDP ratio could make servicing the external debt unsustainable. The large debt repayments may reduce the amount available for investment in public services in the future. After starting to repay the Chinese debt, the country may attempt to borrow from other international financial institutions, causing the problem to spiral and amplify. With any inability of foreign debt repayment, China may request debt-for-assets or debt-for-nature swaps.
Tajikistan should consider positive reforms aiming at the business investment to other foreign investors and good governance, fighting against corruption and building the skilled labor force. The government can work closely with civil society organizations in promoting the transparency and accountability of state institutions and businesses.
GLO: What role has the Open Society in Tajikistan?
Ilhom Abdulloev: The Foundation in Tajikistan is a part of an international network of the Open Society Foundations, which work to build vibrant and tolerant democracies whose governments are accountable to their citizens. To achieve this mission, the Open Society Foundations seek to shape public policies that assure greater fairness in political, legal, and economic systems and safeguard fundamental rights. On a local level, the Open Society Foundations seek to implement a range of initiatives to advance justice, education, public health, and independent media. The Foundations places a high priority on protecting and improving the lives of people in marginalized communities.
The mission of the Foundation in Tajikistan is the promotion, popularization, and protection of the principles of open and civil society in the Republic of Tajikistan through humanitarian assistance and charity. The Foundation prioritizes the following open society and civil society principles in its activities:
– Promotion and protection of rights and freedom, including freedom of thought, freedom of conscience and belief, protection of rights to freedom of opinion and expression.
– Protection of equality, including protection from all forms of discrimination as well as ensuring gender equity.
– Building solidarity, including access to social welfare, ensuring dignified standard of living, health, and affordable education.
The Foundation’s current strategy is based on the following four priorities:
1. Focusing economic advancement on those most in need.
2. Strengthening social resilience in critical dimensions of education and public health.
3. Defending fundamental rights and the civic space in which they are expressed.
4. Enhancing independent oversight over public and private sectors.
GLO: What are your recent research interests?
Ilhom Abdulloev: My main research area is the impact of labor migration on the migrants’ families and their members who remained in the home country. I am currently studying the effect of migration on labor supply and job satisfaction of members of migrants’ families, as well as their decisions on schooling, particularly on forsaken professional schooling. I also study the labor market tendencies in transitional economies, informal employment, and female and youth participation in the labor force.
With Ilhom Abdulloev spoke Klaus F. Zimmermann, GLO President.