Kyrgyzstan has discussed the efficient use of money of migrant workers for a few years, but still hasn’t clear understanding of it. They increasingly prefer to invest money in business back home instead of holding feasts or purchasing apartments.

According to the World Bank, Kyrgyzstan ranks second in the world by the ratio of money remittances to homeland from migrants to GDP. According to the National Bank, in 2018, the volume of remittances to the country was 2 billion 685.3 million dollars.

In early August, Kyrgyz president Sooronbai Zheenbekov noted at the first session of the Board for Relations with Fellow Citizens Abroad that in the last ten years the country received over 19 billion dollars from migrant workers and fellow citizens abroad. And the volume of foreign investments received was as little as 8.3 billion dollars.

Kyrgyzstan voices various initiatives on efficient use of money from migrants from time to time. For example, in 2011, the minister of labour, employment and migration, Almasbek Abytov, suggested to invest them into construction of social facilities – schools, hospitals, bathhouses, etc. A special deposit programme “Asyl Zher” was designed for this purpose, which remained useless since then.

At the end of June this year, deputy of parliament Ekmat Baibakpaev suggested to invest money remitted by migrant workers into government bonds. He said it would strengthen the ties between the Kyrgyzstanis and the motherland, and support the domestic economy.

Over a half of able-bodied residents of Batken region are external migrant workers. The reason is high rate of unemployment and social and economic problems in the region.

In 2018, migrant workers transferred 1.5 billion som (2.15 million dollars) to Batken region, according to the regional development department at the plenipotentiary representative of the government in the region. The main portion of this money is remittances of migrant workers from Russia.

Previously, migrants used to buy cars, hold feasts with the money earned. When they ran out of money, they again went abroad to earn a living. Lately, they prefer to invest the money they earn to open business back home instead of buying a car or an apartment.

Own business

Gulmira Mamatkabyeva, a native of Kadamzhai district, was in labour migration in Moscow for five years. In Russia, she learned to sew and upon arrival back home she opened a small sewing shop in the town of Batken.

“I’ve purchased four sewing machines 30 thousand som each, hired three women. We sew women’s clothes and repair them. I earn 700 to 3,000 soms every day,” Gulmira said.

Political analyst Seitek Kachkynbaev said migrants go through a natural process this way.

“At the first stage, 10-15 years ago, migrants spent all the money they earned to hold feasts, buy expensive things, cars, houses, clothing. They wanted to show they were successful and wanted to have everything they didn’t have before. For example, they used to buy expensive cars, which consumed much fuel, or buy expensive houses that needed to be filled with furniture and had high tax rates,” Kachkynbaev said.

Now migrant workers tend to gain experience abroad and open small workshops back home and provide jobs to their countrymen and friends. 

A resident of Batken, Aitbai Alzhirov, had been working in Russia for 13 years. Two years ago he returned to Batken and opened a furniture and construction material production facility.

“The life of migrants used to be very hard before. Sometimes, I had to work for bread, there was no other job. In the last 13 years, I’ve managed to save money and buy a house in Bishkek and a car. Also I opened my own business when I opened a plastic door and window production facility,” he said.

Wise investment

According to Sheraly Kasymaliev, executive director of ZHIA business association in Batken region, money remittances from migrants are the main source of income for people in the region.

“Therefore, we suggest that migrants invest their money to entrepreneurship. This is due to cases when migrants use their money in a wrong way,” Kasymaliev said.

However, according to Farkhad Pakyrov, executive director of the Young Entrepreneurs’ Association, it’s not enough to just invest money and start your own business. One needs special knowledge and skills to manage money and run business.

We need a programme that would turn a migrant into an entrepreneur.

“Based on our experience, we see that a migrant earns a definite amount of money and comes here and opens some business. In one-two months, he goes bankrupt and goes back as a migrant worker. It happens because our country doesn’t have a training programme on how to open business, to support migrants at first, and then letting them go. Migrant is not an entrepreneur, so we need a programme that would turn a migrant into an entrepreneur,” Pakyrov said.

According to him, there are many global examples of rational use of money from migrants. For example, there are special investment funds in India, where migrants invest their money. After bidding, this money goes to prospective companies as investments.

“If we look at Kyrgyzstan, migrant workers transfer 3 billion dollars to our country every year, and we have discussed the ways of use of such money at least for 5-6 years. However, we still don’t have a clear understanding of it, we don’t have a single decision or suggestion,” expert complained.

He noted that Kyrgyzstan has had unsuccessful funds similar to a pyramid scheme so people are scared to deliver their money to management companies. Moreover, the business sector is very young in the country and there are no ready projects that can be invested to.

Moreover, at the session of the Board for Relations with Fellow Citizens Abroad the initiative of money investment to projects was voiced only by migrants. There was no feedback from the government.