Central Asian Populations Continue to Look to Russia Because of Transfer Payments but Governments and Business Increasingly Look to China because of Beijing’s Investments

Paul Goble

            Staunton, June 14 – According to the Eurasian Development Bank, China has surpassed Russia and become the largest direct foreign investor in the countries of Central Asia; and as a result, businesses and governments increasingly look to China rather than Russia.

            But at the same time, the importance of transfer payments home by Central Asian migrant workers who remain several orders of magnitude greater in the Russian Federation than they are in China mean that in many of these countries the population and especially its poorer rural segment continue to look to Moscow.

            Consequently, experts in the region say, the shift to China by Central Asians is often overstated both in the Central Asian media and beyond because the existence of the migrant worker factor remains extremely important even as Russian direct investment falls (svoboda.org/a/biznes-estj-biznes-kitay-obgonyaet-rossiyu-v-tsentraljnoy-azii/33777438.html).

            This has a large number of consequences in the politics of the Central Asian countries, but two are especially noteworthy. One the one hand, because migrant workers and their transfer payments are so important, the shift from Russia to China as the dominant foreign direct investor remains less than many have suggested.

            And on the other, if Moscow does reduce the number of migrant workers from Central Asia in Russia dramatically as some in the Russian capital would like to do, that could change this equation and lead to a far more dramatic turn in the policies of Central Asian countries away from Russia and toward China.

            Concern about that possibility is thus likely to be part of Moscow’s calculus on just how many Central Asian migrant workers to allow into the Russian Federation. If the Russian government reduces that number too fast or if it shows itself too hostile to such people, Moscow would almost instantly see its influence in Central Asia decline and that of China rise.