Azerbaijani migrants benefit Russian economy, rather facilitate unemployment in motherland

Russian Premier Valdimir Putin issued a new ban for foreigners on Dec. 31, 2008, which bars employment of migrants in retail trade of alcohol drinks, pharmaceutical products, as well as in camps and different retail trading outside shops.

The Russian Government has repeatedly taken decision concerning migrants. Law on migration registration is in force in Russia from Jan. 15, 2007 and makes eligible every migrant desiring to work in Russia to b issued an official license. In case a foreigner works without a license, the employer will have to pay fine up to 700,000 rubles (roughly $27,000) per person. Moreover, the foreigners are banned to get engaged in trade in the field of pharmaceutical and alcohol, while only 40% of foreigners can be involved in other trading facilities. Moreover, on Apr. 1, 2007 the foreigners' employment in retail trade was fully banned. In 2007 the quota for access to Russian labor markets made up 6 million for countries with non-visa regime and 302,000 for visa regime.

The migrants faced the same restrictions in 2008 as well. In addition to salesmen, sportsmen were also were added to the list of people protected against migrants' domination. The share of foreign employees in sports organizations is expected to make up 25 percent starting from the Q2 while this figure was 50 percent in Q1 of 2008.

Ban on migrants' engaging in retail trade of alcoholic drinks and pharmaceuticals was necessitated by a need to create jobs to reduce unemployment in Russia on backdrop of the global financial crisis and to ensure safe products.

However, the aforesaid decisions did not change Russian government's status as a country who imports labor resources and did not harm interest of the CIS citizens to the Russian labor market. For instance, only 5 to 10 people engaged in trade were imported from Russia to Azerbaijan as compared to anticipated flow of 2,000 to 750,000-800,000 people. The ban has been in force for already three years, but labor migrants from the CIS make up majority of salesmen engaged in petty trade.

According to the 2008 statistics, 70 to 90 percent of Russian employers employ migrants from Kyrgyzstan, Moldova, Uzbekistan, Georgia, Azerbaijan and Armenia. According to Russia's Federal Migration Service (FMS), Azerbaijan has the largest share of migrants in Russia - 900,000 per year. Georgia and Armenia have the second largest share - 400,000-450,000. Azerbaijan and Georgia also have largest share of illegal migrants.

According to official Russian statistics, around 69,000 Azerbaijani migrants work in Russia. The average term of residence is about 25 months. They send $200 per month to their country. Money transfers by the Azerbaijani migrants exceed those of other migrants. According to the Ministry of Labor and Social Protection of Azerbaijan, each individual transfers over $5,800 to Azerbaijan from Russia which makes up 1 percent of GDP at an annualized pace.

Obviously, migrants did not face problems to get Russian citizenship even through false documents. The number of foreigners with the false documents almost doubled in 2008 compared to 2007. According to the FMS, immigration control department uncovered 8,364 citizens with false documents.

Though global financial crisis has affected almost all sectors of the Russian economy, demand for migrants has not reduced. Moscow's population is not ready to replace migrants for the same position and for the same salary. But sharp rise in unemployment among Russian citizens compelled authorities to change their viewpoint.

The number of unemployed people is increasing each day and is expected to hit 10 million people in 2009. Therefore, many fear that millions of the so-called guest workers can take away jobs of the Russian citizens left to go without jobs. One should not expect competition in this case. The crisis will not bring about significant changes. If the crisis deteriorates and unemployment will further rise, certain part of local residents will agree take less prestigious, but paying jobs for the time being. But they will not whatever they are offered. Crisis last only for certain period of time which is usually followed by a rise.

Eviction of migrants in large numbers can lead to sharp drop in sales outlets and rise in value of retail trade services and price rise as well. In addition difficulties in recruiting new staff, Russian employers will also spend more to hire new labor force as they will pay different sum of salaries. All the afore-mentioned will take place if the decree will be actually implemented.

According to social study, 79 percent of labor migrants are engaged in unskilled and unskilled jobs in Russia. Majority of Russia's foreign migrants - 38 percent are engaged in construction, 26 percent - trade, 9 percent - transport and communication, 8 percent - forestry and 5-7 percent in agriculture. So, migrants deal with less prestigious and less paying jobs which are not interesting for local population.

It is noticeable that Russia has encountered sharp deficit of skilled workers for the last years. The statistics shows that it becomes matter of survival not in certain, but in all sectors of economy. Demographers say Russia's labor resources will shrink 8 million people by 2015 and 18-19 million by 2025. It can also deal a blow to Russian economy which employs 75 million workers. According to the Azerbaijani State Statistics Committee, 4.056 million of 4.138 million economically active people were employed in 2008. According to the Ministry of Labor and Social Protection, there are 4,367 legal migrants in the country. Majority of legal migrants accounts for Turkey, Georgia, the United Kingdom, India and Russia.

Foreigners are engaged in oil, construction and trade. Around 1,700 people worked in Azerbaijan legally in 2007. The figure has tripled since then.

So, it is obvious that Azerbaijani migrants benefit Russian economies to a great extend rather than ease unemployment in our country. It is not advantageous for Russia at all to evict Azerbaijani migrants in large numbers.

One can conclude that the recent restrictions for migrants on the Russian market will not have a significant impact on further trade activities, namely retail trade. However, the Minister of Labor Fuzuli Alakbarov says that if migrants in Russia return home, they will have good chances to be employed as new jobs are created both in capital city and rural areas.

It is noticeable that creation of new jobs is vital for rural areas as regions account for 75-80 percent of Azerbaijani migrants.

The State Program on Socio-Economic Development of Regions helped develop non-oil, especially agricultural sector. Around 6 billion manat were spent to implement the program. About 2 billion manat were allotted in 2008 as a part of the program.

The implementation of the program considerably reduced unemployment in regions. About 26,641 news enterprises were established for the last 5 years. Roughly 766,300 jobs were created 546,600 of which are permanent.

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