Monetary indicators' measurement in Economy dependent on migrants’ remittances (Case of Tajikistan)
Madina Turaeva (Public and Economic Research Center of Tajikistan, Dushanbe)
Tajikistan is the poorest newly independent state and one of the poorest countries per capita in the world. We observe double resources' flow process last several years. On one hand there is significant labor outflow; on the other hand huge remittances inflow.
Inhabitants of Tajikistan are distributed on 7% country's lands, and more than 70% from population of 7 millions are non-urbanized, rural people. By the different estimations (experts, institutions, IOM etc.), 0,91,2 million of population (mostly men) are abroad as workers (both legally and illegally), and they send remittances to families and relatives regularly. The scope of remittances into Tajikistan is huge. Almost all the remittances are going from Russia. Experts and Institutions differ in measurement of received transfers. According to IMF, transfers' flow to Tajikistan varies between US$ 500-1000 million annually, which amount 20-50% of GDP. At this magnitude in 2005 Tajikistan was comparative with Honduras (21,2% of GDP), El Salvador (17,1% of GDP) or Jordan (18,61% of GDP). Just for the comparison: the total volume of state budget revenues in Tajikistan was on 1510 million somoni for 2006, which equals to US$ 447 million.
Following the version of the National bank of Tajikistan (NBT) (specifically according to NBT Chairman's interviews) "remittances from the abroad have consist more than $663 million in 2005", and "the labor migrants have legally remitted $300 million during the January-May, 2006".
There are the explorations of money supply measurement in high dollarizated (or eurorizated) economies (for example, Edgar L. Feige and James W. Dean). Suppose, we can assess Money supply most exactly basing on Edgar L. Feige and James W. Dean formula, afterward the effective broad money in Tajikistan could be amounted by formula taking into account data from formula:
EBMTJK = ?1 + FCD + (Exwf + Swf -SBwf - RLC)/e - OFM,
EBMTJK index, which will be found from the survey, in contrast to officially measured aggregates, will be more adequate to contemporary state of Tajikistan's monetary system. Accordingly, this will be a possibility to correct the monetization index, as well the velocity of money.
In addition, there will be possible the changes in quantitative targets of NBT's monetary policy because of Tajikistan's money market re-measurement, taking into account impact of workers' remittances.