Dambisa Moyo is tired and frustrated by the aid apparatus that has not only come to “trap” poor and indebted African states but is, in her view, the root cause of poverty. The central argument of Dead Aid is that aid is the fundamental cause of poverty and therefore eliminating aid is critical to spur growth in ailing African states. Aid is the disease that we must treat to bring us back to full economic health. A bold and daring statement built around the central belief that aid distorts incentives among policymakers and society at large. It makes governments less accountable to their citizens and has led to civil wars, rampant corruption (electoral and otherwise) and has been central to an undercurrent of irresponsibility culminating in increased and self-reinforcing poverty since the end of colonialism. None of these arguments are new of course, but Dambisa is probably the first economist to boldly claim that aid causes poverty.
This article is a review of Dambisa Moyo "Dead Aid"
Also in openDemocracy:
Anna Lekvall, "Democracy and Aid: the missing link" (13 May 2009)If aid is the disease that causes endless bleeding, to stop the bleeding you simply need to stop aid, the only challenge therefore is how to do it. The Dead Aid solution is a five year exit strategy built around the idea of incentivising poor countries to access finance on international markets, supported by the tripod of microfinance, trade/foreign direct investment (FDI) and remittances. In the Dead Aid world there’s a stash of money out there on the international financial markets that is just waiting to be tapped by any African country willing to invest in a credit rating. If African countries can enter these markets and borrow, it would provide the right incentives to spark good governance since the international markets would be more willing to “punish” bad behaviour compared to those that provide aid at infinitum. In other words, borrowing through international financial markets is a sort of "self commitment mechanism" to good governance, and with that comes better long term prosperity.
It is certainly likely to be slightly more expensive than “easy money” that concessional loans and grants bring, but by rejecting these overtures nation states will find themselves on a better path to prosperity. The trouble is that African governments have limited incentives to do this on their own, though some have made progress in this direction, so they need to be compelled through the Dead Aid proposal of terminating aid completely within a five year period.
Radical stuff indeed, but is it too radical? Depending on your view of aid, this is either the most ingenious idea you have ever come across or the most naive, if not downright reckless. At this present time when many western countries are tightening their belts and some are seeking aid themselves due to the fallout from the credit crunch and many people are growing weary of Darfur, Guinea Bissau, Mauritania and Zimbabwe, the Dead Aid message is likely find some appeal not just in your Daily Mail or Fox News . I am afraid to say, and with deep sorrow, that the Dead Aid proposal falls far short in many areas, with at least four worth highlighting.
First, there’s a general lack of clear analytical rigour evidenced by elementary confusion in key areas : correlation/causality issues; definitional problems; poor evidence on policy counterfactuals; incomplete and unbalanced citation of evidence; and, perhaps more worryingly lack of general familiarity with refined areas of existing literature. Too many problematic issues to cover within this short review, but some key examples are worth highlighting.
In a number of instances Dead Aid embarrassingly confuses correlation with causality. For instance the correlation between foreign aid and savings, which Dambisa takes as strong evidence that foreign aid reduces domestic savings. It does not take a genius to work out that one expects poor nations to correlate with reduced domestic savings, and in so far as foreign aid is prevalent in poor countries, the issue of correlation between higher aid and low domestic savings becomes meaningless. Perhaps more worryingly is that in a number of places Dead Aid seems to rely on evidence just from single sources that always reinforces its general argument that aid is bad. So when Dead Aid posits that remittances are more effective than international aid, it ignores other studies that have shown remittances can also be a “curse”.
Evidence of poor research abound, with one of the glaring examples being the lack of reference and consideration of new emerging literature led by Daron Acemoglu and others on the importance of drawing a distinction between proximate and ultimate causes for underdevelopment. In many respect if aid was going to be a factor it would be nothing more than a proximate cause because ineffective aid preys on inefficient states, which are strongly determined by the existing distribution of power in society (ultimate cause).
Secondly, the treatment of aid in a homogeneous and aggregate way is particularly problematic. Dead Aid defines aid as the “sum total of concessional loans and grants”, but excludes “emergency aid” e.g. help for Darfur or the Asian Tsunami. There’s no distinction within Dead Aid between budget support, infrastructure aid, person to person aid, heath related aid, grants or concessional loans for discretionary spending. It is all discussed under one umbrella and handed the same fate. This is a remarkable assumption, especially given that the same book acknowledges the effectiveness of the Marshall Plan which largely focused on infrastructure spend. Surely the Marshall Plan demonstrates that a more nuanced assessment of aid has the potential to reach different conclusions? We may for example find that some of the aid is bad, some good and some requires further study.
This distinction is also important because we are now seeing a plethora of literature that suggests that some mechanisms work better than others e.g. cash based incentives as recently argued by Göran Holmqvist . When Britain gave Zambia £40m in 2007, I remarked that "I hope the money was new but not given freely". It presented a new opportunity for Britain to think outside the box and consider the possibility of converting this "new cash" into long term Kwacha bond claims of Zambians on the Zambia Government. Such a move would have helped restore much needed accountability in our system as well as strengthening our debt management practices. Britain could have allocated a share of the bonds to civil servants as part of civil service pay increase and so forth. The underlying point here is that not all form of aid leads to perverse incentives and indeed not all forms of aid perpetuate dependency. To put all aid in one basket makes the book appealing to the uninformed but it does not make for convincing argument to policymakers.
Thirdly, Dead Aid is characterised by a plethora of inconsistent arguments. A key example that stands out is the emotive issue of Chinese investment. Dambisa dedicates a whole chapter explaining why the “Chinese are our friends”, largely arguing from their historical involvement in Africa and their renewed commitment to trade and FDI. However, against a backdrop of Dead Aid’s “anti-dependency” rhetoric , the chant for China appears odd. Let us be clear, China is not only bringing FDI to Africa but it has also brought concessional loans and long term dependency. Zambia’s external debt has now risen to about $2bn since the HIPC completion point, a significant part of that is through new agreements with the Chinese government and Chinese businesses.
A closer look at Angola reveals the same truth. Not only is China investing heavily in that country but in exchange it is tying Angola and other countries to China for a long time reducing their options to renegotiate in the future. That is not necessarily bad, but if the central worry is that dependency leads to ineffective governments with poor incentives we should be honest enough to consider the possibility that China’s closeness to many African governments (which are not all democratic) may have similar negative impacts as aid. In addition, a more refined assessment of the China – Africa relationship would reveal that the issues go far beyond simple FDI but also relates to military cooperation and sometimes creating instability in various parts of Africa (see Michael Sata’s paper). More recently we have witnessed General Nkunda during the recent upsurge of violence in DRC use the China-DRC deal as a pretext for his insurrection, part of the so-called Coltan wars.
Another glaring inconsistency relates to the preferred metrics of measuring the extent of Africa’s aid led failures relative to the assumed metrics for measuring the success of proposed solutions. In assessing the state we are in, Dead Aid relies on national indicators such as GDP, life expectancy, level of external debt and so forth. However when it comes to assessing the extent to which the proposed solutions might be useful the book does not always stick to a consistent set of measures. For example to support the argument for microfinance, we are told Grameen Bank has helped lift many poor people out of poverty through helping “bank the unbankable”.
I am a fan of microfinance and a strong believer that aid properly directed at providing the right sorts of incentives, like IFAD are pursuing in Zambia to boost rural finance through the NARBARD style model , can produce positive results. What is particularly puzzling about the Dead Aid position is that if the metric for judging the effectiveness of microfinance is “lifting people out of poverty” at the micro level why not use the same measure for aid? If we are going to argue that remittances help bypass bureaucracy and can be effective in tackling schooling, not necessarily increase national GDP, why can’t we accept that the metric of “school attendance” is just as good a measure for assessing the effectiveness of certain aid interventions? Conversely if we are to judge the failure of aid interventions on their inability to raise national GDP (all things being equal) why don’t we accept that no empirical study to date has demonstrated that large initiatives of providing microfinance (e.g. in Bangladesh) has led to increases in GDP? The underlying point is that Dead Aid too often moves around between inconsistent measures for the problem and suggested solutions. Incidentally the IFAD initiative is a good example of effective aid that is unfortunately ignored by Dead Aid.
Fourth and finally, the solutions proposed by Dead Aid are ineffective. This is not surprising because without a clear definition of the problem, it is inevitable that the solutions would not work. But even if one was to accept Dead Aid’s basic premise that aid is bad, its solutions come far short. In order to assess whether any proposals would present an overall improvement beyond the status quo, we need to define what happens in the counterfactual carefully and then judge that against proposed policy initiatives.
In our scenario the counterfactual is the situation where we continue with the current process. We know already that Dead Aid has not demonstrated that this situation would lead to more aid driven poverty . More importantly, evidence in recent years from Zambia, Uganda, Kenya Tanzania and other countries shows an improving picture in terms of economic performance. This doesn’t mean aid causes good performance, but it does suggest growth is possible in the presence of aid even for nations at the bottom. It is therefore possible that in the presence of aid we may witness an improving counterfactual over time.
Two important questions flow from the above discussion : (1) what would be the impact of turning off the aid tap on poor nations relative to the counterfactual?; and (2) would these developing nations be able to borrow on the international markets, as an alternative to aid?
On (1) there’s no doubt that the answer largely depends on the economic and political situation in relevant nation states. For those countries with 20 % – 50% of national budgets supported by donor partners the adjustment would be too difficult and politically infeasible within the suggested five year time frame. The failure to implement their budgets would significantly weaken the human and physical infrastructures rendering these states ungovernable. More importantly locally targeted aid that is spearheaded by many aid organisations divorced from budget support would dwindle, possibly leading to multiple failed states. Dead Aid misses the point that even without aid, the incentive for military coups and emergence of vampire states would be remain because of the lucrative mineral wealth that exists. So the incentives for seeking alternative funding through financial markets as a way of survival are not always going to be as strong. Simply put for some countries turning off the aid tap would lead to chaos and breakdown in the rule of law.
As for replacing aid with borrowing, dwindling international capacity following the credit crunch (likely to persist beyond 2011/12) means there is no immediate prospect of accessible markets with significant cash to spread around. Even if African governments had strong incentives to enter these sorts of arrangements and with good initial credit ratings (which is highly unlikely) the process may be too prolonged and the outcomes would be uncertain given prevailing global economic conditions.
In short on both theory and practice, Dead Aid falls far short of what is expected of a book advocating such a radical proposal of “turning off the aid tap”. If there’s any consolation in this assessment, it is that Dead Aid will hopefully not find any intellectual traction. The analytical consensus remains that aid is important and the challenge is how to make it smarter, better and ultimately beneficial to the poor. This question has never been more urgent given the limited aid resources around. Dambisa is certainly right that now is the time to examine these issues and we can certainly do better than the present.
Anyone who thought that the history of piracy was now something out of a Hollywood movie has had to think twice. The events in the Gulf of Aden lead us to wonder what differences there are between ancient piracy and the modern version. Perhaps if we examine the piracy that reached its peak between the end of the seventeenth and the early eighteenth century, and preyed on the major trade routes, we may get a clearer understanding of modern piracy. However, opportunity makes men thieves and the cleverly written and witty book by Peter T. Leeson, The Invisible Hook. The Hidden Economics of Pirates (Princeton University Press, Princeton, 2009), enables us to do so.
According to Leeson, pirates applied economically rational principles aimed at obtaining the maximum result with the least effort and above all minimum risk. They too, in other works, apply the rules of Adam Smith's invisible hand, or rather the invisible hook. Pirates were not cruel out of sadism but simply because by spreading terror they were able to increment their booty. Flying the infamous "Jolly Roger" served the purpose of generating what economists call the "announcement" effect: the potential victims were warned that any attempt to stave off the attack by a pirate vessel would lead to ferocious reprisals. If, on the other hand, the vessel attacked surrendered without any resistance, everything of value on board would be seized but the crew would be spared. The same applies to the pirates' widely publicized ruthlessness against prisoners: many of the latter were tortured, others forced to walk the plank. Also in this case the pirates' intention was to create what economists call the "reputation" effect. Prisoners might try to conceal information about valuable goods or about the routes followed by other trading or navy vessels and would be induced to reveal all their secrets by the terrible reputation enjoyed by the pirates.
Leeson gives credence to the economic interpretation of the pirates' behavior: mutineers were certainly attracted by high profits; in the early 18th century a sailor of a merchant vessel earned no more than 25 pounds a year, and a courageous pirate could earn as much as 300. But as well as borrowing from the trappings of economic theory, Leeson does not disdain also casting a penetrating glance at the social and political motives of these odd outlaw communities. Life on board ship, whether a merchant or a navy vessel, was regulated in an authoritarian and hierarchical fashion (and it might be added that things have not changed much since those times). The ship's commander had the power to inflict very severe corporal punishment, stop crew members' pay without good reason and demand that the crew perform work not envisaged in the original contract, and more besides. On board the captain had the power of life or death without any checks or balances. It is true that the sailors could sue for justice in the courts on returning home, although the latter usually sided with the commanders, also because the judges came from the same social class.
It is thus not surprising that, far beyond the reach of the dominant authority on land, sailors should set up a completely different social organization. And it is striking to see the extent to which this was based on principles of equality. In the first place, political equality. "Every Man has a Vote in the Affairs of the Moment" runs article one of the Code of Conduct on board the private vessel of Captain Bartholomew Roberts. Furthermore, it was the crew members who elected their own captain. Furthermore, the commander could be deposed by the pirates themselves if judged to be inadequate, corrupt or not bold enough, as happen to the famous Captain Edward England. In the rudimentary system of checks and balances characterizing the pirate republics, also a quartermaster was elected to look after the ship's management, and who had the power to avoid individual crew members being unjustly punished. Nor must it be overlooked that, in an era in which the European nations were getting rich from the slave trade, many pirate ships granted equal rights also to colored men.
The pirate communities were in other words far from being anarchic: indeed, they developed a democratic system opposed to the autocratic system prevailing in the other vessels. Pirates had even too many rules: their codes of conduct prohibited sailors from gambling and smoking on board, from drinking after sunset and from keeping lamps alight late at night. They were also prohibited from bringing women on board to avoid causing jealousy.
The distribution of the rewards was much fairer than the pay on merchant or naval vessels: the pay of the captain and the quartermaster was only twice as high as that of ordinary pirates. Moreover, in the case of accidents in the "working place", the pirates' republics had a much more highly developed welfare system than that applied on the other ships: they meticulously specified how much was due to any crew member who had lost a hand, a leg or an eye. On the other hand, desertion during a boarding operation was punished by death or marooning on a desert island.
If piracy offered so much more to its members than was available to other sailors, the question is not so much why there were so many (it is estimated that there were two or three thousand in the early 18th century) but rather why so many sailors did not become pirates. Perhaps it is because when captured they were almost always hanged: a count of executions between 1716 and 1726 indicates that about 400 were hanged, about 40 per year on average. But if we consider the high death rate among law-abiding sailors it must be concluded that the "announcement" and the "reputation" effects worked more for the scaffold than for the Jolly Roger.
Why do so many Uzbeks become migrant workers? Where do they go? And why, despite horrific exploitation, do so few return? These are among the main issues addressed in a recent report which brings together the results of sociological surveys on migration in 2006-7. [i]
The research, conducted before the financial crisis, clearly does not reflect the current situation, where migrant workers are losing their jobs and may have to return home. But covering problems of labour migration both external and internal as it does, it is revealing about attitudes to migration in Uzbek society, as it is about the identity of today's labour migrants. It describes the problems of migrant workers in Russia and in Uzbekistan itself and overturns entrenched stereotypes.
Why they leave
They leave because they cannot find reasonably paid work at home. They leave when there are too many dependents in the family, when they need to marry off a daughter; pay for their children's education, or build (extend) a house, and there is no way to earn these sums without leaving home.
„You can find work in our kishlak, but the level of salary here does not suit people, so they go to work in other places. You can survive on the salary here, but you can't pay for a wedding or build a house. Who is leaving these days? People who have to marry off their sons or hold a wedding for their daughter, or people with two or three families living in their home, but who have no money to build a house" (Employee of a Makhallya committee, Namangan province).
To find work in Uzbekistan which offers enough money to solve these financial problems is very difficult. This is not because the migrant workers lack education or qualifications: 33.3% of external labour migrants have higher education, 31% have secondary education, and 26.2% have specialised secondary education.
The problem is that there is really no work in Uzbekistan. And everyone has children.
„My eldest daughter is of marriageable age and we needed money. You know the customs: providing a large dowry and housing if possible. My next daughter was still studying at the institute, and my younger son was already in the 9th-10th class at that time. He had to prepare for applying to an institute, or enlist in the army" (a male migrant in Tashkent)
Men make the decision to leave after consulting their family. But women take the decision on their own, as the ones who leave to find work are usually single women: divorced, widows or single mothers. Or young women who are helping their parents to bring up their younger brothers and sisters.
„What work can you find in the village? All you can do is work in the field all year. My husband tried to earn more, and went to work in the field when he had a temperature, and when it was raining. He earned peanuts - not enough for anything... When he died, everything became my responsibility - the children and the household. It's hard for a woman with children in the village". (Migrant woman, Andijan)
Wives are reluctant to let their husbands leave: they are afraid that their husbands may stay away or find a new wife. This fear is justified. 23% of those surveyed had practically not been home in the last 18 months.
Women, who usually have small children at home, try to come back more often. But it is obvious that, even when they return home with presents and money, these absences, are very upsetting for both the children and mothers.
„My son really needs me. If I go one day without ringing him, he almost cries. At the moment he effectively has no father or mother."
„My absence has a strong effect on the moral side of my children's life. They don't have a father and when I am away they live with my mother-in-law. But she treats them very harshly and they don't want to go there. They say that she is mean and hard. Every time I go away, I leave them with her with a heavy heart. But I have no choice: we need to survive somehow."
„If we could find work here, nothing would make us leave," say the majority of those surveyed. Migrant workers pay too highly for the chance to earn $300-$400 a month if they work in Russia, and 145,000 sums [ii]($115) if they work in Uzbekistan. Of this money they send 90,000 sums home. A quarter of the internal migrants surveyed admitted that they receive less than $50 a month. But 90% believe that this salary is still better and more than what they could find near their homes. Research shows that the salary of a labour migrant is 5-10 times higher than any other family income.
„My husband only sends me money by post. We tried to send the money with friends, but for some reason it doesn't arrive in time, sometimes not at all or only some of it arrives. People who bring money with them say that they were stopped by someone, or things like that and you can't prove anything or demand anything from them. So we receive money by post. My husband tries to send money once a month. He earns $300 a month himself."
Life in the basement
Migrant workers usually live in very difficult conditions. To spend less on housing, people prefer to reach an agreement with their employer on free housing, or they rent a bed in a room which they share with several other migrants. This accommodation usually has no conveniences and not everyone is able to wash.
„We had to pay $80 for a bed. People lived like cockroaches in this apartment: there was a line for the toilet in the morning. Or we had to look for a toilet in town to freshen up. I went to the bathhouse to wash, but I had all my things stolen there". (Female migrant).
„We live right on the building site, so we try to make the basement more comfortable. We put heating in before the winter, but sometimes in frosty weather we were lying on the concrete floor. The boss took pity on us and brought some warm blankets and a heater. On public holidays we pitch in together and treat ourselves to meat, but that doesn't happen very often". (Male migrant).
„The unbearable cold ruins your health, and the damp... it's no surprise that people fall ill! And how many people disappear without trace! My husband also drinks there, but he says that he only does this so as to be able to endure the cold and stay healthy" (Wife of a migrant).
When the boom began
The boom in labour migration from Central Asian countries started in 2000. Since then, thanks to the rise in energy prices in Russia and Kazakhstan, the economic situation has stabilized and wars in trouble spots have gradually died down. By the beginning of 2000 there were also fewer opportunities for the shuttle trade??, which had been so popular in the 1990s. Soviet social privileges and free social services had also become a thing of the past. So people went to places where they could earn this money.
Everyone went looking for work, even Uzbeks and Tajiks, although the study we have cited considers them the „traditional settled population of Central Asia", for whom labour migration is not typical. Even women went to find work - although just a few years ago it was difficult to imagine that an Uzbek or Tajik woman would leave her children and home to look for work. But the men left (or died), and the women were forced to go to look for work to raise their children.
„My husband died, and my fellow villagers and brother-in-law suggested that I go to Moscow with them to work. I agreed, and my sister supported me too. I had to raise my children, and I couldn't earn anything in my home town. Now at least my children are not hungry, and I send my grandchild parcels, and money to my children."
The post-Soviet migration space
Where did they go? Initially, to gain experience, people became internal labour migrants. They usually went to Tashkent (70-80% of internal migrants), but there they encountered problems with registration, the police, and finding housing. Then, when they had saved some money, they went abroad: to Russia and Kazakhstan, usually illegally. Even official statistics, however, show that 80% of external labour migrants from Uzbekistan go to Russia and in Kazakhstan Uzbeks make up 57.6% of all migrants from CIS countries.
„New nations may have been formed very rapidly, but for the majority of people there is still just one former USSR migration space," the study says. „There are close family and cultural ties between the peoples of the new countries, common systems of transport and communications, to a large extent still one language of communication and similar education systems. The complementarity of the labour markets, the similar mentality and behavioural patterns were also a factor, as was the fact that, with rare exceptions, no visa is required to cross the borders of CIS countries."
Most migrants to Russia currently come from Central Asia and Kazakhstan: they provide two thirds of the increased migration from all CIS countries. Central Asia has recently become the main source of labour immigration, and is likely to become the main provider of migrants to Russia.
Changes in legislation
Before 2007 the procedure of legalising labour migrants in Russia was extremely difficult and only led to increased corruption. But after 2007 Russian migration legislation changed, and now the legalisation process is significantly easier.
In the past, the police were responsible for registering migrants. It wasn't only the owner of the residence where the migrant wanted to register who had to present himself to the police - everyone living there had to agree to the registration. Now you only have to write a statement at the local migration service department, indicating the address of the workplace or the intermediary firm. The stub from this statement with a stamp of acceptance certifies that the migrant is a legal resident. The migrant's passport and immigration card is required for the statement. If the card has been lost, it can be restored by paying a fine. The new legislation is thought to reduce corruption.
„It's not difficult to work, but it is to get through customs. There are many people who want to work in Russia, and at customs they check documents and take money, both when you enter the country with money for initial living expenses, and when you leave the country when you are taking home money and presents for your family."
Russian permits and visas
The study demonstrates that in Russia there is now a quota: 6 million permits for foreign citizens from countries without a visa regime with Russia, and 308,800 visa invitations for immigrants who come to work in Russia. (In November 2008 the Russian government confirmed a quota to issue almost 4 million work permits to foreign citizens in 2009. In 2008 the quota was 3.4 million - Ed.) The simplified legislation led to 85% of migrants registering in the first half of 2007. Previously, only half of all migrant workers were registered.
Furthermore, in Russia migrants now receive a „labour card", which allows them to look for work and change their workplace if necessary. In the past work permits were obtained by the employer, which mean that migrant workers were completely dependent on them. Now migrants can change their jobs, because employers are entitled to hire migrant workers in possession of a labour card. To receive this card, migrants must undergo a medical examination within one month, and confirm that they do not have AIDS, tuberculosis or venereal diseases. Today, three quarters of migrants in Russia have received immigration cards - in the past as many as this worked without them.
However, the work of the migration services is not coordinated, officials are poorly briefed, and it certainly cannot be said that corruption has been eliminated. Flows of illegal migration are not controlled, and the rights of migrants are violated everywhere - by both employers and the police. Migrants face harsh exploitation, there are frequent cases of deceit and non-payment of money, and migrant workers often become the slaves of their employers. As these migrants are usually illegal and do not know the language or the everyday culture of the country where they have come to work, they are practically unable to appeal for aid to the authorities or ordinary citizens of the host country.
„I fell ill after a week, and had to spend everything I had earned on treatment. I treated myself; fortunately my parents are doctors. They don't let you into hospital there without registration."
Internal labour migration in Uzbekistan
The figures for internal labour migration in Uzbekistan paint an interesting picture. 70-80% of those looking for work go to Tashkent and try their luck at the mardikor (local informal job markets - Ed.). 80.5% of people looking for work in Uzbekistan are rural residents, and 83.8% of mardikors or labourers (people looking for work at mardikor bazaars - Ed.) are rural residents who have never worked officially. 60.9% of migrants are young people (16-29 years old) who have no qualifications or professional education. The majority of young migrants who have not graduated from secondary school are from large families.
23.2% of migrant workers are women, 45% of whom do not have husbands: half of them have not yet married, a third are divorced, and the rest either live separately from their husbands or are widows.
The men work at building sites, in retail trade, or at agricultural and repair works; the women do cleaning and washing, agricultural work, sort and pack fruit and vegetables, wash dishes and help in the kitchen during important public holidays. 1.3% of women are engaged in prostitution.
The women's work is more monotonous than the men's, and their working conditions are often more difficult. But employers do not usually take this into account, and pay women 30% less than men. Both women and men without secondary education are forced to agree to do any work, as they have no other choice.
„The most unpleasant job is peeling radishes in March, because in March the weather is still cold. I remember this because this year we washed radishes at the beginning of March. The water was very cold. Our hands turned blue from the cold water (female mardikor, Namangan province)
The majority of migrants have 2-5 dependents; half the men and three quarters of the women looking for work have young children. 54% of migrants support three or more children and relatives, and only 13% of migrants work „for themselves", mostly men.
Migrants usually end up doing unskilled labour, so their own professional skills gradually atrophy. Working far away from home ruins family relationships (families often fall apart); children grow up without parental supervision, and this causes many problems in future.
The workday of an illegal migrant lasts on average for 9 hours and 40 minutes (sometimes 18 hours - during the cherry harvest, for instance). The working week is 6 days long or 58 hours. The employer provides work tools and meagre food at an average cost of $1 dollar per person per day, with unheated accommodation lacking conveniences. People sometimes have to sleep out in the open.
The average labourer's wage is 7,000 sums a day (about $5), around 118,000 a month. Payment is by the day, and the volume of work is not fixed.
However, despite the difficult working conditions, migrants prefer not to sign official work contracts, because then they will have to pay for registration and pay taxes. For this reason people prefer to work illegally, to risk being deceived (non-payment of promised wages is almost an everyday event) and to give bribes from time to time - just to be left alone and given the chance to work. The migrants themselves have no interest in legalisation, and nor have the authorities or the employers. A rural family from Andijan say of the conditions of work of ‘their' migrant in Russia: „He works illegally. On payday a policeman waits at the exit, and all the illegal workers give him 500 rubles each."
87% of internal migrants are never registered, and 79% never get temporary registration.
Temporary work, permanently
The majority of migrant workers see their work as temporary: psychologically it is difficult to imagine that you will live your whole life starving and in inhumane conditions, far from your family and friends, saving and sending home every penny you earn. But studies show that once people begin working as labour migrants, they continue to do this year in year out. Sixty percent of migrants have been working far from home for between 3 and 10 years. There are those who have been doing it for as much as 15 years. Most hope that one day everything will come right in Uzbekistan, and they will be able to find jobs near their homes.
„I don't want to stay there because I do not have family and friends there. My plans for the future involve earning money there, buying a car here and working as a taxi driver".
Migrant workers may see their work as temporary. But they are in no hurry to return home. For returning labour migrants are regarded as failures, who were unable to earn a lot of money and ruined their health. Even their own families look askance at these migrants: if you couldn't establish yourself there and find work, then you are not much of a breadwinner. Many prefer to work at the hardest and most thankless jobs in the city rather than return to their villages.
Thirty percent of the population of Uzbekistan is prepared to leave the country to earn money - this is a very high level of migration. In any year 15-40% of families send someone away to work. Leaving the country to work is often hampered by the lack of initial capital: money is needed for a ticket and the initial living expenses, until a job is found.
„After we decided that my wife would go away to earn money, I got into a huge amount of debt, because we had to sell everything in the house. My wife travelled with a relative who gave her money for the journey and living expenses. I then spent 6 months working off the debt."
Less than 8% of those surveyed in 2006-2007 intended to return home for good over the next six months. Half the migrants will return home if there is work there. A third plan to return when they are well-off. Only 28% of migrants, according to the research, reply confidently that they will not under any circumstances try to go back home. Women do not want to return home more often than men: public opinion regards women who return much more critically and negatively. 30% of women surveyed do not want to return home under any circumstances (over 40% of these women were from towns and cities).
Once they adapt to the new environment labour migrants often start new families (or bring their own families to the place where they work) and do not wish to return home. Many of them take out new citizenship.
The majority of labour migrants surveyed believe that many problems would disappear if the government were to sign the necessary interstate agreements, for example to simplify border and customs control procedures.The study shows once more that the survival of most families in Uzbekistan depends directly on the earnings of migrants, both external and internal. When migrant workers start being laid off in Russia this will not just mean that Russian streets are filled with rubbish - which is quite normal and expected. It will also mean that most families in Uzbekistan will starve. This will cause a social explosion.
[i] "Labour migration in the republic of Uzbekistan: social, legal and gender aspects", published in Tashkent under the aegis of the UN Development Programme in Uzbekistan and the Gender Programme of the Swiss Embassy in Uzbekistan.
[ii] The Uzbek currency
The article was first published in Russian at the www.fergana.ru site
I won't, of course, take issue with the obvious fact that the northern regions are richer than the subsidised regions, and State Statistical Committee figures show that the salary levels in my native Surgut are not much lower than in Moscow (27,000 rubles/$1080 compared with 29,000 rubles/$1160) and much higher than in Skt. Petersburg (14,000 rubles/$560). Any visitor to Surgut is amazed by the active social and economic policy of the authorities: the roads are repaired every year, children receive free meals at school, and there are social programmes - for example, there is aid for single mothers, and also for former drug addicts. All orphans go to Greece for their holidays once a year, and at the age of 18 they receive one-room apartments and 400,000 rubles for repairs.
The reality under this shiny surface is quite different, although people who live a long way from the "oil-producing paradise" are unaware of this.
Super profits and super expenses
To start with price levels. For greater clarity I will take the example of a fairly typical Surgut resident - my friend Irina, a single mother of a 12-year-old child. Irina's average salary is 26,000 rubles/$1040 a month, i.e. practically the average for Surgut.
Utility bills are the first item of obligatory expenditure. In August, she had to pay 6,921.43 rubles/$276.86 for a two-room apartment where three people are registered. And this is far from being the highest payment for housing. My former literature teacher pays around 12,000 rubles/$480 for a two-room apartment, i.e. almost as much as it costs to rent an apartment in St. Petersburg.
Out of the remaining 19,000 rubles/$760, Irina spends from 5,000-6,500 rubles/$200-240 on petrol. Despite the abundance of drilling rigs and the condensate stabilisation plant, which produces petrol, fuel prices in the city are unjustifiably high: according to my latest information, 26 rubles/$1 for a litre of 92 octane fuel. Thus, Irina has 13,000 rubles/$520 left. White bread in Surgut costs 25 rubles/$1, ten "select" eggs cost 54 rubles/$2.16, a litre of milk costs 46 rubles/$1.84, a kilo of Russian cheese costs 250 rubles/$10, and a kilo of tomatoes (the cheapest kind) costs 270 rubles/$10.87. May the Surgut Meat Processing Plant live long and prosper, for it provides relatively cheap products to the city - 110 rubles/$4.40 for a kilo of chicken and 210 rubles/$8.40 for a kilo of "Doctorskaya" sausage. It is said that the minimum food basket in Surgut is 4,800 rubles/$192. But you wonder who can live on this minimum, If a family of two people in Surgut spends less than 11,000 rubles/$440 a month on food, they will simply starve.
To all of this we must add expenditure on clothing, especially winter clothing, household appliances, medicine etc. In other words, our northern salaries are easily eaten up by our northern prices. And another thing about "Surgut super-profits": average salary calculations for the region include the oil-workers, whose income, even by northern standards, is very high. For example, a school-friend of mine, who works at Surgutneftegaz as a technical translator from the Japanese, receives an average of 300,000 rubles/$12,000 per month. Granny Shura, my mother's neighbour, washes floors at a school for 7,000 rubles/$280. Workers on the rigs receive around 50,000 rubles/$2,000. Working conditions are extreme: two weeks in the deep taiga (the drilling rigs can usually only be reached by air), and the whole working day spent in the cold, at a temperature of minus 50 degrees. Plus a complete lack of communications - there are no mobile networks in the taiga...
Drunk with boredom
According to data from the city administration, the main problem that concerns the majority of Surgut residents is the drug addiction in the city. The head doctor of the clinical psycho-neurological centre (PNC), Sergei Smerdov, is optimistic, however. In an interview with the medical journal "Who's who in medicine", he said: "There were especially high levels of drug addiction here in 1999-2001. But whereas in 2000, 292 people per 100,000 suffered from drug addiction in Surgut (six times higher than the average for the Russian Federation in this period - O.M.), at the end of 2006 the figure was only 22. Many people have been cured. Today the level of addiction is more than 10 times lower. The main thing is that many fewer children are involved: in Surgut there are currently 4 young people under 18 who have a drug problem... The number of occasional users is higher than this, of course."
The doctor's comforting words are somewhat disingenuous. If we're talking about addicts registered at the PNC in 2000, then almost all of them are not cured, but dead. According to PNC data, from 400 to 1,000 people die of overdoses in the city every year. City Health Committee figures show that in 2000 the main clients of the PNC were on hard drugs, i.e. heroin. Today in Surgut, dealers mainly specialising in synthetic drugs and marijuana are flourishing. Overdoses from these drugs are not as common, so users rarely end up at the PNC - and the statistics have "improved". However, from personal experience of talking to the youth of Surgut, I can say that many young Surgut residents do not even consider LSD, speed, cocaine and marijuana to be drugs. They use them as "sedatives". It is true that child drug addiction really has dropped in Surgut in recent years, but... A study by sociologists at the NGO "New Generation" showed that in 2001 617 minors (under 12) were drug addicts and 132 had alcohol addiction problems, whereas in 2007 82 minors used drugs, but 436 regularly drank spirits. So schoolchildren, who have realised that drugs can kill, have replaced heroin with vodka. The law-enforcement bodies have recorded an increasing number of crimes committed by minors under the influence of alcohol. According to data from the Surgut police department, in 2007 there were 130 such crimes, compared with 24 in 2001.
The reasons for the widespread teenage addiction to alcohol and drugs are not particularly original: peer group influence, trouble at home and a desire to escape from problems. But there is another important factor - boredom. In Surgut there is virtually nothing for young people to do. This particularly affects the children.
Most sport groups and extra-curricular education centres charge fees. Teenagers who are in the so-called risk group simply cannot afford them. The free groups, art schools and dance studios have long since fallen into disrepair, or simply vanished. What can you say if a city where there is snow for 8 months a year only has two open-air ice-skating rinks? The construction of an indoor ice-skating rink is only at discussion stage. And has been for the last eight years...
For just one example, take my sports school № 4. In the mid-90s, it trained sportspeople of all age groups: it had 17 departments and a gymnasium. In 2003, the city administration passed a decision to disband the school (only four departments were left by that time) and turn it into a health complex. The children's groups were closed, and the building is practically empty - only the gymnasium and a yoga class are functioning. But they have opened a solarium...
There is almost nowhere for children to go after school. Some schools organise hobby groups, trying to "get children off the street". But just remember how you felt in the "best years of your life" and ask yourself: after five hours at their alma mater, would many schoolchildren want to spend even one more hour there? So children are doomed to wander the streets.
In general, it's not only the children that have a tough time with cultural activities. The city has only one music and drama theatre. It started unbelievably confidently - it immediately attracted fans, and in 2002 won the "Young Generation" young theatre competition, outdoing even some Broadway theatres. But for four years now, the repertoire at the Surgut theatre has been the same. The good actors have moved to television or left for Moscow.
There are also two cinemas in the city, though they have an incredibly boring selection of films. I especially remember July last year. I decided to go to the Avrora cinema in Surgut, and was surprised to discover that for two weeks, from 10 a.m. to 7 p.m., all they were showing was "Harry Potter". And at 10 p.m. they showed a horror film. The "Mir" cinema does try to change the programme every week, with 2-3 new films. But there is simply nowhere to watch art films, except on home video.
And so there is only one thing to do in Surgut: make money...
A city with a flickering history...
And finally, to address the claim that we "don't share with the rest of Russia". Russian oil is produced almost entirely in Siberia, including in the Surgut region, but over the last five years the tax burden of oil-producing companies has been increased several times. Firstly, allocations for the replacement of the mineral resources base were abolished. The state thus reduced the finance for geographical exploration of new fields (from 18 billion/$72 million to 6 billion rubles/$24 million per year), shifting this obligation to companies.
Secondly, special rules were established for taxing the extraction of subsoil resources for oil. The per-ton rate was "pegged" to world oil prices. Thus, when the price of 1 barrel reaches the level of $85, the co-efficient rises to 8.0! With the current base rate of 419 rubles/$16.76 per 1 ton of oil produced, the mineral extraction tax comes to (419 x 8.0) 3352 rubles/$134 per ton. Thirdly, export customs duties on oil were drastically increased. In fact, the Russian Federation is the first country in the world to introduce customs duties on oil. They were introduced in 1999, but until 2002 the rate was low - from 2 to 30 Euros per 1 ton. Since 2002, the system for calculating duties has also been pegged to world oil prices. From 1 April 2006, the level of export duties on oil has been $186.5 per ton, or 4,662 rubles (at the rate of 25 rubles to the dollar). According to the magazine "Industrial Journal", under the new tax conditions the net profit of a company is only 10%. It was by increasing taxes for oil producing companies that the government was able to reduce rates for several other taxes (VAT, profit tax, consolidated social tax etc.)
The new tax system has done the most damage to small oil-producing companies which mainly sell oil on domestic markets, where the prices are much lower than world prices. Pegging taxes to international prices has proved ruinous for these firms.
Surgut residents have also suffered from the "tax squeeze": oil workers' salaries have dropped, there has been a general deterioration in the economic situation in the city, and worst of all there is the fear that soon social programmes may be abolished. The entire city lives off the taxes from Surgutneftegaz, which at the moment go almost entirely to Moscow.
Surgut has the unofficial title of "oil capital of the Russian Federation". But this is a dubious title, because it is unclear what will happen to the city if the oil runs out, or if there is a drop in demand. I can't answer this question. I can only point out an interesting tendency for Surgut - a "historical flickering"... 400 years ago, when the city had just been founded, it served as a staging post for the detachments that conquered Siberia. Then the conquest ended, and the city practically disappeared. At the end of the 17th century, it expanded once again - there was fur trapping and rare species of fish were caught in the River Ob. By the end of the 19th century, the city almost vanished in the taiga, but in the 1930s it was reborn once more when the forestry boom began in Siberia. And then oil was found...
According to data from Greenpeace, oil supplies in Siberia will last for another 50 years - and no longer. What will happen to Surgut then? Will it disappear once more?
The article appeared in Russian in the Skt. Petersburg weekly "Delo"
William C. Morris is devastated, but somehow its inhabitants stagger on. A few young men, powered by boredom and adrenaline, annex its dirt streets with revolvers once night falls. Mothers of large families gather for their milk rations each afternoon, bewildered fathers rue the absence of work. Once in a while, when bellies and pockets are empty, the locals march a few blocks, light a fire, and stew their leftovers in front of the local town hall; the hope is that their political bosses might be shamed into donating food.
The marchers in this destitute corner of Greater Buenos Aires call themselves the Movement of Unemployed Peronists, though one of their leaders, Francisco, finds it hard to name a single politician who meets his approval. “If they give you milk or noodles, they want you to put their name and flag on it”, he complains.