Fears of social unrest in both Russia and Central Asia are growing, as an economic downturn, weak currencies, and inflation transform the region’s job markets and negatively impact the lives of millions. One telling sign of the economic decline is the decrease in remittances flowing from Russia to Tajikistan by over 65 percent in the first nine months of this year compared to the same period in 2014, according to new figures published by Russia’s Central Bank. This comes two weeks after Tajikistan’s government closed down all currency exchange offices. At the same time, the Russian government last week issued a decree allowing Russian regions to ban foreign laborers from former Soviet states like Tajikistan from working for up to one year, in an effort to promote job growth for Russian citizens and prevent potential unrest.
For Tajikistan, remittances from Russia have served as a major source of economic stability. In 2013, remittances were the equivalent of 52 percent of the country’s GDP. In mid-2015, there were at least one million Tajik citizens residing in Russia, according to official statistics, though the real number is probably higher. Nevertheless, since mid-2014, reports have emerged of a growing number of Tajiks returning to their home country. Starting in January 2015, Russia introduced new language exams for foreign workers, making it harder for some Tajiks to obtain work permits. However, the primary reason why many Tajiks — some estimate the number to be in the hundreds of thousands — are returning home is because Russia’s economic troubles are making it financially unprofitable to work abroad. The falling value of the ruble, as well as inflation, have greatly eroded the value of Tajik migrant workers’ earnings. For the Tajik authorities, greatly reduced remittances and the return of young, unemployed Tajiks presents a significant risk.
Over the past several months, Tajikistan’s government has been engaged in a crackdown on its opposition, while also accusing some of its opponents — as well as a former deputy defense minister — of trying to launch an armed coup. The crackdown may have been designed in part to consolidate the regime’s position in the face of deteriorating economic conditions. Tajikistan has yet to experience significant protests, but it is a country where memories of a bloody civil war in the 1990s run deep. While Tajikistan is a small country, it is significant geopolitically due to its location at the heart of Central Asia and bordering Afghanistan. Instability in Tajikistan would impact Russian interests in the region and U.S. interests in Afghanistan and potentially even create volatility in western China. In fact, Central Asia is already in a vulnerable position due to the growing threat posed by the Islamic State and the Taliban in the region, according to officials.
Worries about potential instability in Tajikistan mirror Russia’s own concerns about social unrest. A weak ruble has made imports more expensive, while inflation and rising food prices are impacting the daily lives of many Russians. Last week, a report by Russia’s Central Bank concluded that the country’s efforts to develop its food industry and replace food supplies lost due to a ban on importing food from the West have failed to completely offset the shortage created by the embargo. In an effort to curtail the impact of the economic downturn and prevent unrest, Russian President Vladimir Putin on Dec. 15 signed a decree raising the minimum wage by 4 percent. Nevertheless, inflation is expected to reach over 14 percent in 2016, meaning that real wages will continue declining. In addition, a weeks-long protest by Russian truckers over a new toll is signaling that frustrations are growing. The decision to allow regions to temporarily ban foreign workers is thus one of several Kremlin moves over the past several weeks to attempt to minimize the potential for protests and unrest in Russia.
Another impact of Russia’s financial problems is its ability to support nearby economies and protect its interests in the region has been limited. For example, Russia recently cut its contribution to the budget of Abkhazia, a key strategic area for Russia in the Caucasus.
In both Russia and Central Asian countries, governments have a strong hold on power. Nevertheless, the economic crises gripping the region are slowly but noticeably eroding the ability of governments from Moscow to Dushanbe to manage discontent.