REMITTANCES AND THEIR IMPACT ON THE MACROECONOMIC SITUATION
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In summary, the inflow of worker remittances to the Kyrgyz economy (a) has a positive impact on GDP and personal consumption; (b) contributes to the growth of imports and, indirectly, of government revenues; (c) is associated with some growth of employment in the informal economy; (d) does not produce any measurable effect on investments; and (e) has no negative consequences for inflation and the real exchange rate.
Pattern of Remittances at the Micro Level To understand the factors driving remittance flows, it is necessary to examine the individuals and households that send and receive these money transfers. In the context of this study, key issues for consideration are the composition of senders and recipients, their preferences regarding transmission channels for remittances, the impact of remittances on their savings as well as business activities, and the attitude of recipients toward services currently offered to them by the Kyrgyz financial sector. Analysis in this section is based on data from two surveys conducted in the framework of the ADB project. The first is a representative household survey covering 3,997 households in all parts of the Kyrgyz Republic which provides information on household characteristics, welfare, migration, and remittances. Methodological details of this survey are provided in the Asian Development Bank report on remittances and poverty in the Kyrgyz Republic (ADB 2008). Another source of data is a remittance recipient survey (RRS), which was conducted in October 2006 in Bishkek and Osh at the premises of different branches of four banks: Amanbank, Bank Kyrgyzstan, Ecobank, and Settlement and Saving Company. Three hundred and six randomly selected recipients of remittances were interviewed. Table B.2 provides a composition of the sample. This survey is not representative of the country’s population because the sampling method led to a disproportionately high share of urban residents in the sample. Despite that, this survey provides useful information on the composition and behavior of senders and recipients of remittances. The survey included questions on the social and demographic profile of recipients and senders, details of money transfers, savings, business activities, and experience with the financial sector. Some questions were asked in both surveys, and an analysis of similarities of and discrepancies in the data collected by the two surveys is provided in this section to shed additional light on the pattern of remittances at the household level.
Profiles of Remittance Senders and Recipients Household survey data provide information on the characteristics of Kyrgyz migrants (table B.3). An absolute majority of migrants come from rural areas, but urban areas other than Bishkek provide the largest share of migrants in the total