088 Migration & Remittances In Central Asia/Caucasus: An Opportunity For Nutrition and Rural Development

Promoting Inclusive Economic Growth Through Matching Grants By Leveraging The Remittances Of Migrant Workers

Organizers

  • Ministry of Finance of the Russian Federation
  • Ministry of Labour, Migration and Employment of Population of Tajikistan
  • Moscow State University
  • Eurasian Center for Food Security
  • Social and Industrial Food Service Institute
  • International Organization for Migration
  • FAO

Abstract

Armenia, Kyrgyzstan and Tajikistan are the largest sources of labour migration in the Caucasus and Central Asia region, as well as the largest recipients of remittances, mainly from the Russian Federation and Kazakhstan. Personal remittances received can reach more than half of these countries' GDP. The majority of migrants from Central Asia are men, and the gender-differentiated impact of migration on families left behind is recognized as having adverse effects on children, women and the elderly.  At the same time, a potentially large number of labour migrants are returning to these countries where the domestic market is showing little capacity to absorb them. The issue of migration (both migrant and returning migrants) and remittances have an enormous impact on agriculture, food security, nutrition and social protection systems in the countries involved. Potentially, the huge amount of resource coming into these countries as remittances could be in part channeled into agriculture and agro-processing and could boost agricultural productivity, commercialization and increase employment opportunities. Unfortunately, the development potential of remittances in the agro-rural sector is hardly exploited. In fact, the vast majority of remittance flows into these countries (up to 90 percent) are spent on primary needs (food consumption, housing, education, etc.), whereas a much smaller share goes to savings and investments in rural areas. A number of projects could be supported with resources coming from remittances and complementary funding from the Government to help migrant's families/communities in formulating viable small and medium scale rural investments projects.

Key speakers/presenters

  • Mr Eugeney Bessonov, the Deputy Permanent Representative of the Permanent Mission of the Russian Federation to FAO and other international organizations in Rome
  • Ms Iulia Costin, State Secretary of the Ministry of Economy and Infrastructure of the Republic of Moldova and an advisor to the Organization for the Development of Small and Medium Enterprises
  • Ms Irina Ivakhnyuk, Professor and Member of the Global Migration Policy Associates (GMPA), the Russian Federation
  • Mr Nurullo Mahmadulloev, Deputy Minister for Labour, Migration and Employment of Population of the Republic of Tajikistan
  • Mr Sergey Kiselev, Head of the Agricultural Economics Department of the Faculty of Economics at the Lomonosov Moscow State University, the Russian Federation.

Special invitees: Ms Anarkul Bekkulieva, Head of Food Security and Agromarketing Division of the Ministry of Agriculture, Food Industry and Land Reclamation of the Kyrgyz Republic; Ms Irina Davtyan, Deputy Head of the State Migration Agency of the Ministry of Territorial Administration of the Republic of Armenia; and Ms Ekaterine Zviadadze, Head of Policy and Analytics Department of the Ministry of Environmental Protection and Agriculture of the Republic of Georgia.

Main themes/issues discussed

The event aimed at increasing awareness on importance of migration in the region and discussing the potential of attracting remittances from migrants to invest them in agribusiness for rural development. The experts presented and discussed challenges, consequences and opportunities of interregional migration faced by the destination country in the context of the policy response.

The event looked across food security and nutrition, social protection and rural development issues to discuss policy options. This event was a great opportunity to help provide a clearer picture of the policies that are required to deal with the migration issue. This includes exploring new markets for labour migration; strengthening economic protection, social and legal rights of migrant workers; stepping up social protection; providing capacity development for the establishment of professional qualifications; and strengthening public and private partnerships for rural development. The main subject for discussion was the investment of remittances in agriculture. Countries in the region, heavily depends on the remittances migrants send back to their home country. While the remittances could be an enormous source of investment in the country, the largest part is spent on primary needs such as food, housing and education, with only a small percentage going to savings and investments in rural areas.

However, channeling remittances into agriculture, which is the second largest sector of the country’s economy but which has been suffering from low productivity, would have catalytic effects on rural development by promoting food security and nutrition, employment creation and inclusive growth.

 

Summary of key points

  • Insufficient financial resources, and, to a lesser extent, lacking entrepreneurial skills and investment ideas are the main reasons for not investing remittances in agricultural business. In addition, receiving remittances sometimes even seems to lead people to move away from agriculture.
  • Migration rather seems to constitute an alternative livelihood strategy by replacing agricultural incomes with salaries earned abroad. Given the fact that the countries are already heavily dependent on food imports and consequently, are affected by high and volatile domestic food prices and supply, agricultural development is of crucial importance in addressing food security issues in terms of lacking economic access to food and poor food utilization.
  • In the country of destination, only a very small share of the rural migrants ends up working in agriculture; the majority working in other sectors acquire  different skills than those required in agriculture. Combined with the general negative perception towards agriculture, the returnees will most probably not be attracted to working in the sector.
  • Engaging returnees and families of migrants receiving remittances into developing the region’s agricultural sector would allow for effectively and productively using available human capital and further development of people’s entrepreneurial skills. Additionally, facilitating the investment of remittances in sustainable and inclusive development of the agricultural sector would promote broader rural development, which would also (economically) empower the poorest people – those who often did not have the opportunity to engage in international migration.
  • Developing agriculture with the help of the financial and human capital of migrants and returnees should, however, take place in a nutrition-sensitive way. In particular, the aim should be to address the changing malnutrition concerns in the region and to improve household nutrition in a practical way by increasing the availability and affordability of fresh, diverse and nutritious foods.

Key take away messages

In general, remittances are used for consumption rather than investments that could generate (additional) income; this has made households particularly vulnerable with regard to the region’s recent economic slowdown and stricter immigration policies.

Many rural households use remittances for food but this does not necessarily lead to improvements in diets, which often lack variety and are low in protein quality, additionally return migration – through “social remittances” – seems to play a role in changing consumption patterns.

Rural out-migration seems to have serious implications for food security and nutrition by causing a labour loss in agriculture in migrants’ countries of origin, while the remittances received are not invested in the agricultural sector.

Promoting agricultural investments is crucial in breaking the vicious cycle in which the countries concerned seem to be trapped: low profitability in agriculture promotes migration, while migration, in turn, seems to lead to a move away from agriculture – disinvestment in the sector again pushes rural people to look for better employment opportunities abroad.

In order to help break the countries’ vicious cycle in which low agricultural stagnation and migration both seem to stimulate and reinforce each other, the financial and human capital of migrants and returnees should be mobilized for promoting sustainable and inclusive development of the agricultural and rural sector. Developing agriculture should happen in a nutrition-sensitive way, addressing persisting as well as new malnutrition challenges – including rapid increases in the prevalence of overweight and obesity – and improving household nutrition in a practical way by increasing the availability and affordability of fresh, diverse and nutritious foods.

CFS - Side Event 088: Migration & Remittances In Central Asia/Caucasus: An Opportunity For Nutrition and Rural Development