The Impact of the COVID-19 Pandemic on Labor Migration in Russia



Before the COVID-19 outbreak, the number of international migrants had been continuously rising, reaching 266 million people globally in 2019. [1, p. xvi] The majority (62 %) are labor migrants whose movements are driven by factors such as economic insecurity, inequality, demographic imbalance and climate change. [1, p. xvi] Gains in global welfare and labor migration have contributed significantly to the economic advancement of labor-sending countries through reduced unemployment, poverty alleviation, knowledge transfer and improved business links. Receiving countries, in turn, benefit from reduced labor shortages and higher tax revenue.

Background

The Russian Federation is one of the top five host countries for migrants in the world, attracting large numbers of long-term and temporary migrants. In 2019, Russia registered the arrival of 13.8 million foreign citizens, with 5.5 million indicating work as the main reason for their visit. [2] Among those, 84 % came from the Commonwealth of Independent States (CIS) countries, mostly Uzbekistan (38 %), Tajikistan (22 %) and Kyrgyzstan (8 %). [2] About 62 % of labor migrants arrived at the two major cities of Moscow and St. Petersburg, and surrounding districts. [2]

The prevalence of migrants from other former Soviet Union countries is explained by historical links, the status of Russian as the language of inter-ethnic and international communication in the region, eased legislative procedures, and vast differences in the levels of income and employment. Citizens of the Eurasian Economic Union (EEU) (Belarus, Kazakhstan, Armenia and Kyrgyzstan) do not need a visa to enter Russia, and are authorized to formally work in the country without employment authorization. Those coming from CIS non-EEU countries also enjoy visa-free entry, but must obtain a special permit called a ‘patent’ to be eligible for official employment. To obtain a patent, migrants must provide necessary documents, complete a medical check and pass an exam testing their knowledge of Russian language, history and laws. Upon receiving a patent, they must submit monthly payments of $28-$125 depending on the region of employment. [3] Although the procedure for EEU citizens is relatively easy compared to the procedure for citizens from other countries, around 47 % of migrants enter the labor market informally. [2]

Men dominate the gender structure of migrants from Central Asia (76 %) which can be attributed to the socio-cultural characteristics of the sending countries. [4, p.4] Just over half of the migrants to Russia (51.8 %) are under 30 years of age. [4, p.5] The level of education among migrants is relatively low. A quarter of them (24 %) have secondary special or secondary vocational education, with only 13 % having higher or incomplete higher education. [4, p.5] The major economic sectors in which migrants are employed are construction (28 %), retail (14.2 %), hospitality (11.2 %), transport (6.3 %) and domestic services (5.8 %). [5]

Russia is also the main source of remittances in the Europe and Central Asia (ECA) region. [6, p.4] The majority of migrant workers regularly send money home to help their families access food, housing, education and health services. Remittances to former Soviet Union countries amount to $13 billion annually, with the top recipients in proportion to GDP being Tajikistan (34 %), Kyrgyzstan (30 %), Armenia (9 %) and Uzbekistan (8 %). [7] Remittances are the only source of income for some migrants’ families, making them vulnerable to fluctuations in the Russian economy.

Impacts of COVID-19

The Russian economy was severely hit by the COVID-19 outbreak. Russia’s coronavirus lockdown, which lasted from mid-March until early June, affected migrant workers particularly hard. Moscow and St. Petersburg put construction projects on pause and limited the use of taxis. Other sectors employing migrants also experienced a decline in economic activity. According to a poll conducted by the Group for Migration and Ethnicity Research, 75 % of migrants lost their incomes through being laid off or forced to take unpaid leave. [8, p.41] Seasonal migrants attempting to arrive in Russia in spring and summer to work primarily in agriculture and construction were not able to enter the country, leaving them and their families without an income source and causing labor shortages in Russia.

Due to the lockdowns, loss of employment and growing uncertainty, some migrants have initiated the process of returning to their homes to get access to regular meals, agricultural income and social protection programs, while also saving on expenses like monthly rent. However, the travel bans and disruptions to transportation services have restricted the ability of migrants to return home, and they have flocked to places where they believe they will be able to cross by land. As the borders with many Central Asian countries remain closed, thousands are living in makeshift tent camps in Russia and transit countries as they wait for permission to return home.

In the past, remittances have tended to make migrants’ families relatively resilient to crisis. However, the COVID-19 pandemic has not only impacted the lives and livelihoods of migrants but also put millions of family members at risk due to reduced remittance flows. The World Bank predicted a severe (27.5 %) decline in remittances across the ECA region, representing the loss of a crucial lifeline for many vulnerable households with limited access to social assistance. [9] This is consistent with data from the Central Bank of Russia, showing a 20 % decline in remittances in the first half of 2020. [10] Given the limited banking and digital finance services provided in Central Asian countries, the majority of remittance transfers are processed through cash-in/out agents, whose working hours were reduced during the lockdown. Although the flows started increasing in the third quarter of 2020, a second outbreak of the coronavirus in Russia may further jeopardize the situation in remittance-dependent countries.

Furthermore, driven by falling oil prices and rising political risks, the currency of the Russian Federation has experienced a substantive devaluation of approximately 16 % against the US dollar, weakening the value of any money that is still being sent home. [7]

Immediate responses

The pandemic has threatened global prosperity and stability, requiring immediate collaborative actions by governments, development agencies, civil society and the private sector to support migrant workers and their families. The World Bank has supported governments by mobilizing financial resources and providing technical assistance for health sector interventions and social protection programs focusing on migrant workers, including programs to support reintegration and strengthen employability. It also intends to enhance assistance in the medium term through the Migration Umbrella Trust Fund. The International Organization for Migration has provided assistance to migrants in the ECA region in accessing safe and appropriate living conditions, or in returning to their home countries. It has also provided support with economic and social reintegration. [11]

It is incumbent on host countries to ensure all migrants have access to health care and basic goods and services. There have been some positive steps in this area with the Russian government having announced that COVID-19 care is free for everyone, even if a person is undocumented. Furthermore, Russia waived 'patent' payments for three months (March to June 2020), maintained the permits of those workers staying outside Russia, and placed a moratorium on expulsion from the country. [12, p.47]

Countries of origin, particularly those experiencing a severe decline in remittances, should provide their populations with access to safety nets in the form of targeted cash or in-kind assistance protecting migrants and their families and reducing the risk of returning to poverty. The Uzbek Embassy in Moscow has created a program whereby any Uzbek labor migrant diagnosed with coronavirus will receive an automatic payment of $153.

Falling outside the scope of immediate COVID-19 responses, there is general value in programs that support job retention and help returning migrants reintegrate into the labor market. Such programs are currently being designed in Tajikistan and Uzbekistan with the support of UN agencies and development banks.

The way forward: Building on lessons learnt

Labour migration from Central Asia to Russia and the corresponding remittance flows are essential components of the region’s economy. The pandemic has exposed the vulnerabilities of migrant workers and their families, pointing to the need for a systematic approach to mitigating the risks and challenges for labor migrants.

The crisis has demonstrated the unreliability of labor migration statistics in sending and receiving countries. Joint efforts are needed to ensure the availability, reliability and comparability of labor migration data for informed policy debates at the national, regional and international levels, and also for designing policies which address the real impact of migration on labor markets and national development.

Governments of host countries need to ensure that migrant workers have access to social protection regardless of their migratory status, including employment-related support and social assistance, as well as essential health services.

The existing channels for sending remittances were largely unaffected by pandemic restrictions, highlighting the strengths of these systems. Barriers still remain, however, particularly for recipients. The financial services sector in the small economies of Central Asia operates within underdeveloped banking systems and a heavy state presence. Investments in adapting the regulatory framework and increasing the levels of transparency and competition will help lower the costs of remittances. As digital remittances have consistently lower costs, building digital infrastructure and increasing digital literacy will help provide more resources to vulnerable families.

The financial literacy of migrants and their families is key to sound remittance management resulting in financial inclusion, formal savings and entrepreneurship in home countries. Financial literacy programs will help transform remittances into savings and investments that can improve living standards through access to better housing, education and health services.

References:

1. The World Bank, 2019. Leveraging Economic Migration For Development — A Briefing To The World Bank Board. [online] Washington DC. Available at: < https://www.knomad.org/sites/default/files/2019–08/World %20Bank %20Board %20Briefing %20Paper-LEVERAGING %20ECONOMIC %20MIGRATION %20FOR %20DEVELOPMENT_0.pdf > [Accessed 16 October 2020].
2. Ministry of Internal Affairs of the Russian Federation, 2020. Selected Indicators of the Migration Situation in the Russian Federation for January — December 2019 with Distribution By And Regions. [online] Available at: < https://xn--b1aew.xn--p1ai/Deljatelnost/statistics/migracionnaya/item/19365693 > [Accessed 16 October 2020].
3. Legal Labour, 2020. Cost Of A Work Patent For Foreigners For 2020. [online] Available at: < http://legallabor.ru/sobytiya-i-informatsiya/190-stoimost-patenta-na-rabotu-dlya-inostrantsev-na-2020-god > [Accessed 16 October 2020].
4. Denisenko, M., Varshavskaya Y., 2013. Migrants At The Russian Labour Market: Characteristics, Status, Mobility. WP3/21 Search Working Paper. [online] National Research University — Higher School of Economics. Available at: < http://www.ub.edu/searchproject/wp-content/uploads/2013/07/WP_3_21.pdf > [Accessed 16 October 2020].
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7. Quinn, A., Bisenov, N. and Bedwell, H., 2020. Crisis in Russia Puts $13 Billion of Remittances at Risk. Bloomberg, [online] Available at: < https://www.bloomberg.com/news/articles/2020–04–14/russia-s-coming-crisis-puts-13-billion-of-remittances-at-risk > [Accessed 16 October 2020].
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9. The World Bank, 2020. World Bank Predicts Sharpest Decline Of Remittances In Recent History. [online] Available at: < https://www.worldbank.org/en/news/press-release/2020/04/22/world-bank-predicts-sharpest-decline-of-remittances-in-recent-history > [Accessed 16 October 2020].
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11. International Organization for Migration, 2020. “Clear And Present Crisis” In Russian Federation And Central Asia — IOM Launches Urgent Appeal. [online] Available at: < https://www.iom.int/news/clear-and-present-crisis-russian-federation-and-central-asia-iom-launches-urgent-appeal > [Accessed 16 October 2020].
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