Unemployed heading from europe to azerbaijan

The global financial crisis has led to dismissal of dozens of millions of people. As a result, the number of unemployed people throughout the world can rise to 230 million by the end of 2009. This is the conclusion of experts from the International Labor Organization. In 2007, roughly 179 million people were unemployed. In 2008, the army of people deprived of work hit 190 million, an 11-million rise. And the figure is expected to more rapidly increase in 2009. Unemployment throughout the world can rise to 7.9 percent in 2009 compared to 6.0 percent in 2008 and 5.7 percent in 2007.

As far as Azerbaijan is concerned, the financial crisis and has not bypassed the country. The crisis had an adverse effect especially on the banking sector. As a result, consumer lending was suspended. Before the crisis consumer lending had revived country's trade sector. A lot of people in the country were working in this field. Tightening lending conditions and a rise in interest rates has had a tremendous impact on business activity in the country. A decline in business activity has led to the closure of retail outlets. A plenty of people chained to loans left several business areas (trade in automobiles, mobile phones and home appliances). And all of this has an impact on unemployment in the country.

Since August 2008, many private banks have been reducing their staff. Specialists emerging in the market fail to find adequate employment options. According to the Azerbaijani Labor and Social Protection Ministry, businesses around the country have reduced their staff by 3.84 percent in connection with the global economic crisis.

In 2008, Azerbaijani Labor and Social Protection Ministry employment services received 43,500 job offers. As a result, 31,100 people were provided with jobs, a 1.4-percent or 444-people rise from 2007. A total of 4,090 people were issued an official status of unemployed, 4,740 people were provided with doles, 3,390 people were sent to specialized courses, and 1,900 people were involved in paid public work.

According to Azerbaijan State Statistics Committee, unemployment rate declined in Azerbaijan in 2008 and hit 262,200 people. Perhaps the figure would have been much lower if not for the impact of the global financial crisis. Unemployment hit 6.07 percent in 2008, a 0.5-percent fall from 2007. A total of 44,481 people were issued an official status of unemployed, a 12.2-percent fall from 2007. Number of officially registered unemployed has been declining in April 2006. Employment fairs held by Labor and Social Protection Ministry and opening new jobs countrywide played a great role in reducing unemployment.



Unlike Azerbaijan, the global financial crisis has created a situation that every day increases the number of unemployed in the European Union countries. Unemployment in Spain rose from 11.33 percent in early 2008 to 13.91 percent in late 2008. Unemployment in Ireland rose from 4.8 to 6.2 percent and in France increased from 7.5 to 8 percent in the same period. Over the past three months, unemployed in the UK rose by 140,000 people and hit an 11-year peak at 1.8 million. Unemployment projections for Russia are higher than for any other European country. The number of unemployed will reach 20 million people, i.e., roughly 13.5 percent of working-age population.

Unemployed experts in Europe began to migrate to the countries that have been affected by the crisis least, such as Azerbaijan. According to the Labor and Social Protection Ministry, the number of registered migrant workers in Azerbaijan has almost tripled in 2008 compared to 2007. Some 1,700 labor migrants were registered in Azerbaijan in 2007 and 4,360 in 2008.

Migrants come to Azerbaijan from 72 countries, mainly from Turkey. Besides the migrants who obtained individual permits to work in Azerbaijan, many expatriates who live and work in the country do not have an official permission. In January to February, 2008, 360 employers submitted to the Labor and Social Protection Ministry a list of 2,030 expatriates. Only 1,349 of them were issued permissions.



                                                    Source: Azerbaijan Labor and Social Protection Ministry


Besides the crisis, foreign workers are very popular in Azerbaijan. In 1990s, local employers, especially in industrial and construction sectors, were inviting mainly foreign experts. According to the Azerbaijani State Statistics Committee, in January to November 2008, 5,000 foreign workers were officially employed at enterprises and organizations in Azerbaijan. Of them, 1,500 were employed in industry, 1,300 in construction, 1,000 real estate transactions, 0,500 in wholesale and retail trade and repair, 0,300 in education, 0,100 in transport, communications and storage, and 0,400 in other fields.


                                                                Source:  Azerbaijan State Statistics Committee

Flow of foreigners to Azerbaijan continues as they are provided with favorable conditions and jobs in the country. Wages received by foreigners is quite different from those received by local experts with the same position and qualifications for the same work. Multi-year observation of labor remuneration assessment in foreign oil companies have shown that it can be conditionally divided into four categories. The first category includes staff from Western European countries. Their wages range from $10,000 to $30,000. The second group consists of experts from Eastern Europe. They earn up to $15,000. The third category comprises workers from the third world countries, mainly India, Indonesia and Singapore. They earn from $3,000 to $10,000 per month. The fourth category includes local engineering and technical personnel. Their earnings total up to one thousand dollars per month.

As a positive, foreigners bring new investments, technologies, best practices to the country. But migration processes in Azerbaijan often raise serious problems that directly impact on the state treasury and create difficulties to the indigenous population. As a result of an increased number of foreign migrant workers, there is a high risk for local workers to be discriminated. They can become unemployed, as migrants occupy local population's jobs and cause devaluation of their work. Social situation of the indigenous population may worsen in areas with excessive numbers of immigrants. Prices for housing and food increase, health services and social protection related problems occur as the institutions become overloaded. And illegal foreign migrants do not occupy officially registered jobs, but have a significant impact on the labor market, evade taxes and engage in the shadow economy, thereby causing considerable damage to the state.

In this situation, the Azerbaijani Government had to increase cost of permits to foreign migrants by more than 22 times. The measures are aimed at increasing local businessmen's interest in employing local workforce. As a result, employment will increase in the country. In the case of an illegal migrant is employed employer will be fined from 30,000 to 35,000 manat.

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