ECONOMY
‘There Are No Other Countries that Could Supply Such Numbers of Migrants to Russia’
April 9, 2024
- Nikolai KulbakaIndependent economic expert
Tatiana Rybakova
Journalist and writer
Economist Nikolai Kulbaka explores what the recent terrorist attack in Moscow means for labor migration from Central Asia. Should we expect an exodus of migrants from Russia? Which industries are most vulnerable to an outflow of these workers?
The original interview in Russian was published in Republic and is being republished here with their permission.
After the terrorist attack, many migrants began to have problems: no one wants to rent them apartments, people refuse to ride in taxis with migrant drivers, the police are intensively checking migrants. At the same time there have been calls to tighten immigration legislation, rather xenophobic calls, etc. Leaders of migrant communities are already asking their compatriots not to leave their homes at all. In your view, will migrants from Central Asia, against this backdrop, really begin to leave Russia and come to Russia less?
It will probably influence some people, but not everyone. We are likely to see some kind of outflow. But this outflow will happen because migrants will simply face additional risks on top of existing ones. In fact, anytime a migrant chooses a country for work, there is a tradeoff of risk and return.
After the terrorist attack, many migrants began to have problems: no one wants to rent them apartments, people refuse to ride in taxis with migrant drivers, the police are intensively checking migrants. At the same time there have been calls to tighten immigration legislation, rather xenophobic calls, etc. Leaders of migrant communities are already asking their compatriots not to leave their homes at all. In your view, will migrants from Central Asia, against this backdrop, really begin to leave Russia and come to Russia less?
It will probably influence some people, but not everyone. We are likely to see some kind of outflow. But this outflow will happen because migrants will simply face additional risks on top of existing ones. In fact, anytime a migrant chooses a country for work, there is a tradeoff of risk and return.
“Returns in Russia versus Central Asian countries declined in real terms some time ago, when the ruble weakened against their national currencies.”
The migration center in Sakharovo, located some distance from Moscow, where labor migrants must go to get their documents done. Source: Wiki Commons
In other words, working in Russia has become less lucrative.
Meanwhile, migrants face the risk of being mobilized. The current situation [after the terrorist attack] simply means additional risks, and the number of people coming here to work is decreasing. But those who have lived here for a long time, settled down and generally have already integrated into our society will most likely react to this less [drastically].
Overall, this factor will probably not have such a big effect: our migrants have seen more than one such wave – this is not the first such surge of attention on them from various [government] organs. Therefore, I think they already know how to react to this to some extent.
Speaking of the risk-return tradeoff, there is another thing that boosts returns in some of these countries. Quite a lot of Russian emigrants went to Uzbekistan and especially Kyrgyzstan, quickly receiving citizenship or residence permits and opening businesses there. Thanks to this, there are opportunities for higher earnings and great opportunities to work for Russian companies or companies of Russian emigrants. Do I understand this correctly?
On the one hand, you are right. But, on the other hand, there is another important point here. We must distinguish between those people from these countries who go to work in Russia and those who go to work in other countries. The difference between them is primarily income level and education. People with higher education and high qualifications do not go to Russia, but to Turkey, South Korea, maybe China. There they can earn more thanks to their skills and qualifications. And children are sometimes sent there to work and study. By the way, people are also actively going to Europe, including from Uzbekistan and other Central Asian countries. So,Russia gets a lower segment – those who are needed for lower-level, low-paid jobs.
As soon as it came out that Tajik citizens were implicated in the terrorist attack, shares of construction companies began to fall on the Moscow Exchange. For obvious reasons: construction is one of the industries that widely uses low-skilled migrant labor. In your view, what industries, besides construction, could suffer if the requirements both for migrants themselves and for companies that hire them are tightened?
Besides construction, the sphere of cheap services – foodservice, all sorts of delivery – could take a big hit. We are already seeing problems with taxi services, since quite a large number of migrants are employed there. In all industries that use cheap, unskilled labor and where it is possible to pay employees less, there will be problems.
Meanwhile, migrants face the risk of being mobilized. The current situation [after the terrorist attack] simply means additional risks, and the number of people coming here to work is decreasing. But those who have lived here for a long time, settled down and generally have already integrated into our society will most likely react to this less [drastically].
Overall, this factor will probably not have such a big effect: our migrants have seen more than one such wave – this is not the first such surge of attention on them from various [government] organs. Therefore, I think they already know how to react to this to some extent.
Speaking of the risk-return tradeoff, there is another thing that boosts returns in some of these countries. Quite a lot of Russian emigrants went to Uzbekistan and especially Kyrgyzstan, quickly receiving citizenship or residence permits and opening businesses there. Thanks to this, there are opportunities for higher earnings and great opportunities to work for Russian companies or companies of Russian emigrants. Do I understand this correctly?
On the one hand, you are right. But, on the other hand, there is another important point here. We must distinguish between those people from these countries who go to work in Russia and those who go to work in other countries. The difference between them is primarily income level and education. People with higher education and high qualifications do not go to Russia, but to Turkey, South Korea, maybe China. There they can earn more thanks to their skills and qualifications. And children are sometimes sent there to work and study. By the way, people are also actively going to Europe, including from Uzbekistan and other Central Asian countries. So,Russia gets a lower segment – those who are needed for lower-level, low-paid jobs.
As soon as it came out that Tajik citizens were implicated in the terrorist attack, shares of construction companies began to fall on the Moscow Exchange. For obvious reasons: construction is one of the industries that widely uses low-skilled migrant labor. In your view, what industries, besides construction, could suffer if the requirements both for migrants themselves and for companies that hire them are tightened?
Besides construction, the sphere of cheap services – foodservice, all sorts of delivery – could take a big hit. We are already seeing problems with taxi services, since quite a large number of migrants are employed there. In all industries that use cheap, unskilled labor and where it is possible to pay employees less, there will be problems.
“Developers will now face another problem, as most likely (possibly secret) checks on the quality of construction will begin.”
A roundup of migrants following the recent Moscow terrorist attack.. Source: Youtube
Therefore, I think another reason for the decline in shares of construction companies is that in the near term the relevant government agencies will probably pay more attention to fire safety and the quality of construction.
By the way, the quality of construction depends not only on expensive materials being swapped for cheap ones, as well as import substitution, but also on the qualifications of labor – low-skilled workers are so-so builders.
That is true, but still flammability depends on the materials used. Here, to a greater extent than the qualifications of workers, the factor of materials and cheap construction is in effect: if you start using higher quality, less flammable and thus more expensive materials, and you do better coating, then your costs will go up. I think this should also be taken into account.
You said that more qualified migrants are now going to other countries, not to Russia. Still, currently in Russia, even in Moscow, quite a lot of specialists from Central Asia have appeared – for example, in clinics and medical centers. In your view, will they leave? Or are these the specialists [you mentioned] who will not?
These specialists most likely will not leave, as this market is quite familiar to them. This, incidentally, is not only a problem for Russia: medical personnel from Eastern European countries go to Western Europe, and their places are taken by others, including from Russia and other countries. This is how labor markets all over the world are linked. Russia is included in this process, but at, say, the lower levels. Those who cannot get a good job at home come to us, while more qualified specialists are leaving us for Europe. And this process will continue until the difference in wages and quality of life evens out.
By the way, the quality of construction depends not only on expensive materials being swapped for cheap ones, as well as import substitution, but also on the qualifications of labor – low-skilled workers are so-so builders.
That is true, but still flammability depends on the materials used. Here, to a greater extent than the qualifications of workers, the factor of materials and cheap construction is in effect: if you start using higher quality, less flammable and thus more expensive materials, and you do better coating, then your costs will go up. I think this should also be taken into account.
You said that more qualified migrants are now going to other countries, not to Russia. Still, currently in Russia, even in Moscow, quite a lot of specialists from Central Asia have appeared – for example, in clinics and medical centers. In your view, will they leave? Or are these the specialists [you mentioned] who will not?
These specialists most likely will not leave, as this market is quite familiar to them. This, incidentally, is not only a problem for Russia: medical personnel from Eastern European countries go to Western Europe, and their places are taken by others, including from Russia and other countries. This is how labor markets all over the world are linked. Russia is included in this process, but at, say, the lower levels. Those who cannot get a good job at home come to us, while more qualified specialists are leaving us for Europe. And this process will continue until the difference in wages and quality of life evens out.
A sign advertising Russian language testing needed for migration documents. Source: Wiki Commons
Is it even possible in Russia to replace migrants from Central Asia with migrants from other countries or local workers?
In Russia, the situation with labor is very bad. Demographics show that our labor resources are shrinking. This is a process that will continue for at least the next decade.
Replace them with migrants from other countries? People go to countries that, among other things, are close to them in terms of education, cultural links and so on. Since Central Asia was part of the Russian Empire and the Soviet Union, both the Russian language and culture at a basic level are familiar. That is why people will go to Russia, at least until these countries drift very far away from Russia.
Overall, there are no other countries that could supply such numbers of migrants to Russia.Obviously, Africa is far away, and it is a continent that is very different from Russia in terms of culture, level of education and so on. Therefore, the likelihood that people will come to Russia from there is extremely low. In African countries that were previously colonies, people tend to go to their former metropolises. For example, France gets quite a lot of people from Algeria, Tunisia and other French-speaking [former] colonies. These people, of course, will not go to Russia.
So how do you think the situation with labor migration will evolve?
The labor market situation in Russia will remain difficult for a long time. Our birth rate will decline. And the number of people joining the workforce will also decrease every year. So, yes, clearly migration is very important for Russia. If Russia does not replenish its labor force, production volumes are bound to decline.
Were it not for migrants, our population would have started declining 10 years ago. We must keep in mind that, all other things being equal, even if we do not consider political reasons, people from Belarus and Ukraine are more interested – for purely economic reasons – in going to Europe than to Russia.
In other words, Russia now faces a dilemma: either continue to accept a fairly large number of migrants from the countries of Central Asia – with the constant risk of their being recruited by radical Islamists – or see a decline in the economy, production and GDP and other delights, coupled with a decrease in the population?
Yes, for sure. Just remember that this would happen not in one or two years – rather, over a horizon of 10 years there would be a very noticeable decline.
In Russia, the situation with labor is very bad. Demographics show that our labor resources are shrinking. This is a process that will continue for at least the next decade.
Replace them with migrants from other countries? People go to countries that, among other things, are close to them in terms of education, cultural links and so on. Since Central Asia was part of the Russian Empire and the Soviet Union, both the Russian language and culture at a basic level are familiar. That is why people will go to Russia, at least until these countries drift very far away from Russia.
Overall, there are no other countries that could supply such numbers of migrants to Russia.Obviously, Africa is far away, and it is a continent that is very different from Russia in terms of culture, level of education and so on. Therefore, the likelihood that people will come to Russia from there is extremely low. In African countries that were previously colonies, people tend to go to their former metropolises. For example, France gets quite a lot of people from Algeria, Tunisia and other French-speaking [former] colonies. These people, of course, will not go to Russia.
So how do you think the situation with labor migration will evolve?
The labor market situation in Russia will remain difficult for a long time. Our birth rate will decline. And the number of people joining the workforce will also decrease every year. So, yes, clearly migration is very important for Russia. If Russia does not replenish its labor force, production volumes are bound to decline.
Were it not for migrants, our population would have started declining 10 years ago. We must keep in mind that, all other things being equal, even if we do not consider political reasons, people from Belarus and Ukraine are more interested – for purely economic reasons – in going to Europe than to Russia.
In other words, Russia now faces a dilemma: either continue to accept a fairly large number of migrants from the countries of Central Asia – with the constant risk of their being recruited by radical Islamists – or see a decline in the economy, production and GDP and other delights, coupled with a decrease in the population?
Yes, for sure. Just remember that this would happen not in one or two years – rather, over a horizon of 10 years there would be a very noticeable decline.
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