The Ukrainian crisis will hit Central Asia and the Caucasus, but not the way they think. While economic deterioration in the form of decreasing GDP hardly bodes well for the future, the horizon is also clouded by the prospect of social conflict.
Central Asian states such as Uzbekistan, Tajikistan and Kyrgyzstan are not prepared to welcome labour migrants returning from Russia back into the fold. Addressing the returnees’ demands for employment, healthcare and social welfare has become increasingly difficult in states where the private sector is underdeveloped, the economic situation is unstable, and the national balance of payments, debt, central government finance and trade indices steadily continue to deteriorate.
Labour migration trends
Rising rapidly in recent years, Central Asian labour migration can be seen as a social cost of post-Soviet transition, affecting a nation’s independent statehood. For a long time, Uzbekistan, Tajikistan, and Kyrgyzstan were the biggest suppliers of labour migrants to Russia. Meanwhile, other countries in the Commonwealth of Independent States (CIS) lagged behind, such as Ukraine, Moldova, Armenia, and Azerbaijan.
Central Asian labour migration can be seen as a social cost of post-Soviet transition.
But in 2014, the number of migrants from Ukraine far outstripped Central Asia. Indeed, the statistical data for 2014 shows a decline in migration flows from all CIS countries, excluding Belarus (up by 4,455 in 2014) and Ukraine (up by 36,106 in 2014). Both Belarus and Russia have introduced simplified rules for residency and employment for people re-locating from areas affected by conflict in Ukraine.
According to statistics from 20 January, 2015, Russia’s Federal Migration Service (FMS) records show that, from the Former Soviet Union, there are 2,417,575 Ukrainians (5.6% of Ukraine’s population) living in the Russian Federation, alongside 999,169 Tajiks (12.1%), 597,559 Kazakhs (3.5%), 579,493 Azeris (6.1%), 561,033 Moldovans (15.8%), 544,956 Kyrgyz (9.6%), 517,828 Belarusians (5.5%), and 480,017 Armenians (15.9%).
Migrant workers are fast disappearing from the streets of St Petersburg and Moscow. Image by Kalabi Yau via Shutterstock. (C)
As a consequence of migration patterns changing, the volume of money transfers from Russia to Central Asian countries and the Caucasus has declined. During the first quarter of 2014, the remittances from Uzbek labour migrants decreased by 9.6%, and payments by Tajik labour migrants are expected to have fallen by 30%. Yet, strange though it may seem, payments from Russia to Ukraine have increased: $3.04 billion in 2011; $3.39 billion in 2013; and more than $4.1 billion in 2014.
The volume of money transfers from Russia to Central Asian countries and the Caucasus has declined.
Arguably, the IMF’s experts are right in stating that ‘if geopolitical tensions between Russia and Ukraine increase, this would significantly affect the economies of the Caucasus and Central Asia – both in the short and medium term.’ There are doubts regarding the forecast growth figures of Central Asian economies for 2015. The more realistic forecasts predict a decline in economic growth rates for all Central Asian nations: in Uzbekistan, down to 7.4%; in Tajikistan, down to 6%, and in Kyrgyzstan, down to 4.5% (against the planned 6.9%).
The return of labour migrants to their homeland could potentially lead to social conflicts within Central Asia and the Caucasus. Characteristically, even before the introduction of sanctions against Russia, it was estimated that inflation in Tajikistan alone would stand at the level of 8-9%, and job creation would slow. In the south of Kyrgyzstan, up to 70% of the population live below the poverty line – potential ground for unrest. Up to 35% of the population of Armenia live in poverty, and many are compelled to seek jobs abroad, mostly in Russia. Meanwhile, representatives of the Armenian Immigration Service expect the seasonal migration to Russia to fall by 50% and, as a result, the population’s living standards to decline.
Re-drawing the map
For a long time, Kazakhstan and Russia were countries that predominantly received immigrants, supporting the economies of other post-Soviet nations through remittance payments. According to data from the World Bank, the share of money transfers from labour migrants totals 5.5% of Ukraine’s GDP, 12% of Georgia’s GDP, 21% of Armenia’s GDP, 31.5% of Kyrgyzstan’s GDP, and 45% of Tajikistan’s. Furthermore, looking ahead, remittances are expected to decline in Moldova by 2.9 %, in Kyrgyzstan by 4.9 %, and in Tajikistan by up to 17.8 %.
Russian international migration up to 2011. Image by LokiiT via Wikipedia. Some rights reserved.
A similar situation on the remittance circuit emerged in 2009, in connection with the Russian economy’s decline. The volume of money transfers from Russia to Central Asia fell by more than 30%, to Moldova – by 29%. However, neither the economic crisis itself nor the decline in the volume of remittances seriously affected migration patterns in 2009. The situation was and is quite different in 2014. The Ukraine crisis has rewritten the migration landscape of the post-Soviet space.
The Ukraine crisis has rewritten the migration landscape of the post-Soviet space.
Russia is losing appeal both for its own citizens and for migrants. The Russian national statistics agency Rosstat records a growing tendency of outbound migration. During the first nine months of 2014, 203,659 people left Russia, as opposed to 186,382 in 2013. Capital, both human and financial, is fleeing Russia.
The protracted crisis in Ukraine, the toughening of Russian migration legislation, the rouble devaluation, and problems with retirement insurance for labour migrants have all contributed to the re-routing of migration flows. While FMS chief Konstantin Romodanovsky claims that ‘the numbers of labour migrants are not going to shrink on account of the fluctuations in the rouble exchanges rates’ and that ‘labour migrants will return to Russia within two to three months’, it is reasonable to doubt that these expectations will come true.
The human capital in the economy of Russia’s big cities will suffer irrecoverable losses. Big cities need cheap labour. The traditional spheres of labour migrants’ employment – services and urban amenities, public catering, construction and transportation – are bound to experience labour shortages. The St Petersburg city authorities have already announced that 30% of labour migrants left their jobs in the city’s urban amenities sector. The Moscow city authorities, summarising the results of 2014, spoke about declining numbers of incoming labour migrants. As a result, the inbound migration growth rate in Moscow fell by 40% in 2014 versus 2013.
The human capital in the economy of Russia’s big cities will suffer irrecoverable losses.
The amendments to the Federal Law 115 on the ‘Legal Status of Foreign Citizens’ (24 November 2014), allows Russia's 85 regions to set labour patent fees independently. This fee is payable by migrants (from between one to 12 months in advance) in order to be able to work in households and companies, and will eventually replace the existing work permit system. Currently, the patent cost is between 1,568 – 8,000 roubles per month depending on the region of labour migrant activity. While 28 regions out of the 85 of the Russian Federation do not set fees for work patents, elsewhere the fee is rising. These costs place further obstacles to employment. For example, in Moscow, the fee rose from 1,126 roubles (£11.50) to 4,000 (£40) per month, and in the Chukotka Autonomous Area, the fee is now 8,000 roubles (£81).
Russia and Kazakhstan
Following these changes in Russian migration legislation, it is expected that the migration flow will be re-directed partially from Russia to Kazakhstan. Data from Kazakhstan’s national statistic service already shows an increase in arrivals by 1.5%. Indeed, Russian migrants make up 6.2% and 8.5% of arrivals and departures, Ukrainians 0.9% and 1%, Uzbeks 0.5% and 0.4%.
Kazakhstan, however, cannot accommodate all of Russia’s unemployed migrants. First, Kazakhstan does not require an increase in foreign labour. In 2014, there were roughly 29,000 guest workers in Kazakhstan. In 2015, the guest worker quota is set at 0.7% of the nation’s economically active population – in other words, 63,900 persons. One seriously doubts that in 2015 the entire guest worker quota will be used up. Second, in contrast with Russia, Kazakhstan is in a stronger position demographically. According to the Institute of World Economy and International Relations of the Russian Academy of Science, Kazakhstan’s population will grow by 400,000 by 2020. Kazakhstan also has the best ratio between employable population and pensioners (7%), followed by Belarus (13–14%) and Russia (about 27%). Third, Kazakhstan has made serious efforts to encourage internal migration through its National Road Map to Employment – 2020 programme.
Besides, Kazakhstan’s economy, much like Russia’s, is heavily dependent on oil and gas exports. The fall in oil prices is bound to have negative consequences, including for the national labour market.
The most serious changes in migration policy have affected Ukrainian nationals. The events in Ukraine have created a new layer of migrants in post-Soviet space – humanitarian migrants, for whose support Belarus and Russia simplified immigration law (particularly employment regulation). Additionally, the Russian Federation has allocated 366 million roubles (£3.7million) from the federal budget to regions receiving and accommodating those newcomers. According to FMS, the numbers of Ukrainian nationals coming to Russia are still growing. More than 2.6 million Ukrainians stayed in Russia in 2014, and 245,510 among them applied for refugee status and temporary asylum. In January 2015, the number of Ukrainian citizens in Russia had grown by 1.6%.
Distribution of Ukrainians according to 2010 Russian census. Dark yellow 5-10%. Altes via Wikipedia. Some rights reserved
But the Ukrainian nationals who arrived in Russia as humanitarian migrants in 2014, will be deprived of their previous privileges in 2015. The head of Russia’s Federal Migration Service, Konstantin Romodanovsky, has already announced that all ‘privileges for Ukrainian nationals will end in 2015. We were exceptionally liberal in relation to Ukrainian nationals in 2014, but we will return to normal regulation and treat Ukrainians according to the rules in 2015.’
The Ukrainian nationals who arrived in Russia as humanitarian migrants in 2014, will be deprived of their previous privileges.
Ukrainian citizens will now face the general immigration rules, such as limits on their stay in Russia (a single stay may not exceed 90 out of 180 consecutive days); the requirement to establish their stay legally by obtaining temporary asylum, refugee status or by purchasing a labour patent. The question of whether Ukrainian citizens can enter Russia with Ukrainian national ID still remains unresolved. De jure Ukrainian citizens are not members of the Eurasian Economic Union and must show their foreign passports upon entering Russian Federation. But de facto Ukrainian citizens are granted a waiver, and still cross the Russian border with national ID.
However, the question of whether citizens of both countries can enter opposite territory with national ID has become a source of political contention. At the beginning of February 2015, the Ukrainian Foreign Ministry announced that Russian nationals could enter the territory of Ukraine only with foreign (travel) passports, thus annulling a 1997 agreement on visa-free travel.
The crisis in Ukraine has brought about serious changes not only in geopolitics, but external socio-economic relations in the post-Soviet space. The latter is bound to lead to qualitative and quantitative changes to migration corridors. The significant drop in the price of oil and other fuel – the main exports of Kazakhstan and Russia – has seriously damaged the attractiveness of these countries’ labour markets. The rouble devaluation resulted in the decline of Russia’s migration potential and, consequently, negative transformations of the economic potentiality.
Given the lack of clarity on the possible settlement of the crisis in Ukraine, one should expect a decline in the inbound migration flows within Russia and, therefore, a growth in the numbers of labour migrants returning to their countries of origin. Both the crisis in Ukraine and the potential scenario of collapsing migration corridors carry risks for economic, political and social stability in the countries supplying migrants, and the entire region in general.
Standfirst image: Historial migration trends. Image by Dbachmann via Wikipedia.