VTB Bank, a prominent financial institution in Russia, has reported that Uzbekistan has ascended to the top five nations receiving remittances from the Russian Federation in 2023. This announcement was made by Georgy Gorshkov, the Deputy Chairman of VTB, during the 14th Investment Forum “RUSSIA CALLING!” held in Moscow.
The forum, which took place on December 7-8, focused on the theme “Making Deglobalization: Uniting Sovereign Economies” and brought together representatives from government authorities, the Russian business community, and international investors. During this event, Gorshkov highlighted the significant role of Tajikistan, Belarus, Kazakhstan, Kyrgyzstan, and Uzbekistan in the volume of outbound transfers facilitated by VTB clients.
Belarus leads the pack in terms of transfer volume, followed by China, Kazakhstan, Tajikistan, and Armenia. The preferred methods for these transactions are typically through mobile numbers or cards associated with local payment systems. In 2023 alone, VTB facilitated 275,000 such transactions.
VTB’s projections for the coming year are ambitious, with an expected increase in transfer volume to exceed $200bn, tripling the figures from two years prior. This growth comes despite the bank facing significant challenges in 2022, including blocking sanctions imposed by the United States, the European Union, and the United Kingdom in response to the Russian invasion of Ukraine. These sanctions resulted in VTB’s disconnection from the SWIFT international payment system.
Despite these obstacles, Uzbekistan has demonstrated a robust increase in cross-border transfers through the VTB Online application. Over the past eight months, more than 140,000 foreign transfers were executed, amounting to RUB 21 (approximately $218 mn). This marks a substantial rise in cross-border financial activity, particularly with neighbouring countries.
The surge in transactions is partly attributed to the growing number of Uzbek migrants to Russia, which increased by 72% in the first quarter of 2023, totalling 630,000 individuals. This influx has positioned Uzbekistan as the primary source of labour migrants in Russia, with 1.45 mn arrivals in 2022, accounting for 42% of foreign workers.
The World Bank reports that remittances to Uzbekistan reached $16.9bn in 2022, doubling from the previous year and representing 21% of the nation’s GDP. The first four months of 2023 saw a 21% increase in transfers to $3.1bn, mainly originating from Russia.
"Amid the changing economic paradigm, the consolidation of the most active part of our society – the entrepreneurs – is especially crucial. The economy is currently focused on introducing and implementing breakthrough technologies, executing infrastructure projects, and creating new financial instruments. Many of these goals can be reached only through cooperation. It is not only about globalization anymore but about partnerships and mutual investments. At what stage of the process are we right now, what kind of risks and opportunities lie ahead of us, and where do we find stimuli for transformation – we will try to find answers to these questions at the RUSSIA CALLING! Forum” summed up the event’s agenda President and Chairman of VTB Bank Management Board Andrey Kostin.
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