Will labour migrants save Russia's economy?

By Konstantin Rozhnov
Business reporter, BBC News

Image caption,
Russia has eased some rules to attract migrant workers to its Far East

Acknowledging the seriousness of its demographic problems, Russia has decided to spend more than 1.5 trillion roubles ($52bn; £32bn) over the next four years to try and solve at least some of them.

Russian Prime Minister Vladimir Putin said earlier this month that his government's aim for the next few years was to stabilise Russia's population at the level of 143 million people.

He wants to increase both life expectancy and the birth rate, and plans to implement a competent migration policy, although he did not specify what exactly the 1.5tn roubles would be spent on.

The government's move is a "reply in absentia" to a Standard & Poor's report which said that Russia's population could decline to 116 million by 2050 from 140 million in 2010 without further government reforms.

"We forecast a rise in debt levels to 585% of GDP by 2050, due to the associated increase in general government deficits," states the report, published earlier this month.

"In our view, Russia's ageing population will likely place substantial pressure on economic growth performance and public finances."

Experts agree that labour migration should be one of the main means of solving demographic problems in Russia.

But, as anywhere in the world, labour migration alone cannot be the answer, says Dmitry Valentey, project development and liaison coordinator at the Russian office of the International Organization for Migration.

Global average

According to Russian official statistics, more than two million work permits were issued to foreigners in 2009.

The figure for the first nine months of 2010 stood at less than one million permits, or 59% of the government's annual quota.

But Elena Tyuryukanova, director of the Centre for Migration Studies, estimates that in reality there could be up to 5 million labour migrants working in Russia now.

She says that for labour migration alone to offset Russia's population decline, net annual inflow of migrants workers should reach some 1 million.

"It is impossible, not least because there is nowhere you could find so many labour migrants [willing to go to Russia]," says Ms Tyuryukanova.

Besides, she believes, the Russian society is not ready for a rapid influx of migrants, even if it is required for economic reasons.

Migrants currently represent about 3-5% of the country's workforce.

This is broadly in line with the global average, but less than in some European countries, such as Germany, Belgium and the UK.

Face of migration

Many of Russia's migrant workers are low-skilled and arrive from neighbouring states in the former USSR.

Before the crisis, over 40% of them were employed in the construction industry.

The sector was badly hit by the downturn and only recently has it slowly started coming back to life.

This could explain the sharp drop in the number of work permits issued last year.

But the Russian government has made some steps towards changing the face of the country's labour migration.

"In 2010, significant changes in migration legislation were introduced, namely, easing procedures for highly-skilled professionals and introducing a special type of work permit for labour migrants from visa-free countries to work in households," says Mr Valentey.

"At present, these categories of workers are exempt from the quota system."

Regulations were also eased to attract specialists to huge construction and regeneration projects, such as the 2012 Asia-Pacific Economic Co-operation (Apec) summit in Russia's Far East or the Winter Olympics in Sochi.

Public opinion

Of all labour migrants coming to Russia, only about a quarter of them remain permanently in the country.

Also, most of Russia's migrant workers send money home, and as a result, only 10% of them bring their families with them, says Ms Tyuryukanova.

"[Working and living] conditions are tough for many labour migrants in Russia," she adds.

Mr Valentey believes that lessons learnt from multiculturalism policies in Germany, France and other European countries could now provide a good starting point for Russia in terms of developing its own effective migrant integration policy.

"At the same time, Russia has its own rich history of building Russian and Soviet state identity, and some of the best practices can undoubtedly be utilised," he says.

But despite a very low level of competition between locals and migrant workers, Russian public opinion does not really favour labour migration.

With the country entering a long election period, the government will be unwilling to change its migration policy dramatically.

But Ms Tyuryukanova believes that things will have to change.

"The realities of life will make the government pay much more attention to the question of labour migration," she says.

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