Remittances, Consumption, and Economic Growth in Central Asian Countries

The liberalization of human and capital movements has made migration a global phenomenon. Migration has various effects on the economies of both receiving and sending countries. These effects are mostly determined by the direction of migration flows. The flow of labor comes generally from underdeveloped and developing countries with foreign trade deficits to developed countries. Since labor flows between countries are high, the amount of foreign exchange that migrant workers send back to their families is also high. Accordingly, the remittances have become an important resource for underdeveloped countries facing foreign exchange shortages. This study examines the nexus between remittances and economic growth for three Central Asian countries (Kyrgyzstan, Tajikistan, Uzbekistan) for the period 2005–19. The findings indicate that remittances and consumption expenditures positively affect economic growth. The impact of openness and foreign aid on economic growth, however, is negative.