By Douglas Green for The Times of Central Asia
In Central Asia job supplies do not match job demand since governments and their investment policy do not offer the required political stability and sufficient incentives to attract local and foreign investors. This simply means that migration of Kyrgyz, Tajik and Uzbek working forces toward Russia and in less number other countries is here to stay for quite a while.
Russia main destination
Russia remains the main recipient of labour flows from other former Soviet republics, since there are no language barriers and both physical and financial traffic with migrants' home countries is well organized. This leaves alternative destinations such as Turkey and the Middle East far behind. But low oil prices reducing Russia's national income, and western "economic sanctions" against the Russian Federation have forced employers to rationalize labour expenses and the government to put caps on labour migration influx.
"Migrations became a large-scale phenomenon at the beginning of the present century and at its peak in 2013 more than 2.7 million citizens of Uzbekistan, more than 1.2 million citizens of Tajikistan and almost 600,000 citizens of Kyrgyzstan were working in Russia," a report posted by the Polish Centre for Eastern Studies (OSW) in late April this year was to read. "Due to the crisis, these remittances declined by 48% — from US$ 13.6 billion in 2013 (the final year preceding the crisis) to US$ 6.9 billion in 2016 (a drop of 2.95% compared with 2015). When broken down into the individual countries of the region, this decline is the biggest in the case of Uzbekistan (around 59%, from US$ 6.7 billion to 2.7 billion) and Tajikistan (54%, from US$ 4.2 billion to 1.9 billion). It is less prominent in the case of Kyrgyzstan (17%, from US$ 2.1 billion to 1.7 billion)."
Caps on labour migration
In response to trends on the labour market, Russian authorities have turned the screws on migrant labour within its borders as well. According to information provided by the Civic Assistance Committee, the Russian visa code has changed more than 30 times since 2013. "Now all foreign workers who arrive in the Russian Federation need a working visa/job visa and entry permit is not sufficient to work in Russia for CIS member states," a report posted by the Pakistan-based Dispatch News Desk in July this year was to read. "Citizens of CIS member states can still enter Russia without visa but working inside Russia without a working visa has become illegal and subject to arrest and sending back to country of origin. Experts believe that the most urgent issue to be handled by government is the Tajik labour migrants returning to their homeland from Russia and 90,000 Tajik citizens will return home soon."
Scope of possible employment
Similar shadows hang over the fate of Uzbek migrant workers in Russia, even though the Uzbek government remains discrete about their numbers. Only Kyrgyzstan has been spared the ordeal thanks to its membership of the Eurasian Economic Union (EEU), which unites the country with Russia, Belarus, Kazakhstan and Armenia. Over the first five months of this year, remittances of migrated Kyrgyz citizens came close to 700 million in US dollars, an increase of almost 40 per cent year-on-year, local media reported lately quoting government sources. Tajikistan mulls application for EEU membership, while Uzbekistan is in the middle of a political reform process that could eventually lead to an application. But the existing members seem to be in no hurry to let them in, presumably fearing that it could hollow out their privileges.
Production costs and consumer prices
This leaves outsiders Uzbekistan and Tajikistan with a huge socioeconomic problem. Unemployment rates are low in both countries: according to CISISC figures, as of end-2014 Uzbekistan counted 687,000 registered jobless people, or 5.1 per cent of the working population. For Kyrgyzstan as of end-2015 the figure stood at 192,200 or 7.6 per cent. No recent figures are given for Tajikistan, but as of 2009 the rate stood at 11.5 per cent and little visible has been done to improve it.
States with strong financials can handle such numbers, but impoverished ones with no financial resources to speak of cannot. It means that the economies have to solve the problems themselves, but here a fatal deadlock appears. In Kyrgyzstan, industrial production costs rose by 4.2 per cent on-year in the first half of this year against a consumer price index increase of 2.8 per cent, while in Tajikistan those figures stood at 0.2 and 5.9 per cent. Since wages account for the bulk of production costs, it means that in Kyrgyzstan wages' purchasing power is improving while in Tajikistan it is declining.
Industrial production costs and consumer prices are complementary: increase or decrease the former and the latter will follow. Moreover, high production costs make industrial output less competitive on cross-border trade markets, unless it is accompanied by superior quality, which in cases of low costs is unlikely.
A structural solution to the problem is not, as often claimed, an influx of investors' money accompanied by crackdowns on corruption and extortion. As long as both national and regional markets are absent, investors must be able to generate profit in exporting their goods outside the limited markets. This needs incentive and stability and only in such case investors will consider other risks for granted. It should be considered that private investments are the result of economic and market improvement, they cannot cause them. Calls for change in the local structure have been heard for many years on all levels. But since this is bound to require profound economic reforms for the entire system not for the poor but for the rich, such a solution is nowhere in sight since giving up part of their wealth to share it with the poor is not on any more prosperous nation's agenda.
All this brings us to the obvious conclusion that dependence on migrant labour for Central Asia's economies may be undesirable but eliminating it is simply unrealistic.