The EDB has assessed the potential impact of CES accession on the status of labour migration and human capital in Kyrgyzstan
St. Petersburg, 29 April 2013. The Eurasian Development Bank Centre for Integration Studies (EDB CIS) has published a report «Labor Migration and Human Capital of Kyrgyzstan: Impact of the Customs Union „. Authors of the report identified the effect of Kyrgyzstan’s possible accession to the CU and CES on the flow of labour resources, the volume of cash remittances, labour market conditions and professional education and training in this country. For that purpose the econometric and social research was carried out.
Migrant workers from Kyrgyzstan are sent to work in Russia (92%) and Kazakhstan (8%). The report’s authors argue that migration is mainly caused by Kyrgyzstan’s level of unemployment and low income levels, against the demand for labour in Russia and Kazakhstan. Therefore, the «push» factor is the pre-determining parameter in predicting migration trends — the difference in the rate of GDP per capita. Should GDP per capita fall by 1%, labout migration increases by 0.7%.
The report’s statistics indicate that young people under the age of 35, living in the Chuy and the country’s three southern provinces are the most active labour migration segment. Migrants from these areas display a greater willingness to leave their country in search of work. This is due to the economic situation and the prevailing disparities in the country’s development. Therefore, the development of these regions and employment policy can be used to manage the migration flow from Kyrgyzstan.
The authors also note the significance of social networks. «When making the decision to leave Kyrgyzstan for work, for 90% of migrants leaving for Russia and 78% leaving for Kazakhstan, the presence there of relatives, friends and fellow countrymen is an important factor», said Evgeny Vinokurov, Director of the EDB Centre for Integration Studies. «Most of those surveyed (81% in Russia and 63% in Kazakhstan) said that fellow countrymen had assisted them with living arrangements and employment in the new country». The authorities“ low level of involvement in these processes was noted in both the countries of origin and the host countries: less than 3% of those surveyed received assistance from the authorities. As a result, therefore, the authors of the report have recommended that the authorities and non-governmental organisations work closely with the migrant communities.
The migrants themselves maintain that financial difficulties, looking for work, housing and utilities and problems with the migration police are the underlying problems associated with labour migration. Other less significant problems include the complex registration system, low legal literacy, lack of vocational training, poor knowledge of Russian and workplace discrimination as a result of legislative deficiencies.
The report states that the overriding positive aspect of migration for Kyrgyzstan will primarily be in the flow of cash remittances. Cash remittances in 2011 amounted to $US 1.7 billion, excluding transfers through unofficial channels. The survey showed that over 40% of migrant workers send up to half of their salary back home to their native country, which is between 200 to 500 dollars a month. These funds to date have mainly been used for consumption, but the trend of investing in the development of small businesses is gradually increasing, particularly in the retail sector.
The research study revealed that 44% of Kyrgyzstan nationals have long-term plans to work in Russia and 33% in Kazakhstan; only 6% and 9% respectively intended to stay there permanently.
The research results indicate that family is the main reason for the migrants» return to their home country; the desire to start a business and use the skills acquired abroad back in their home country is the second reason for migrants returning. The report noted that the return of migrant workers will have a positive effect on the development of human capital, through the arrival of professionals in Kyrgyzstan with new skill sets and competencies, obtained in the country of immigration.
The research showed that if migrants from Kyrgyzstan were employed primarily in Kazakhstan in trade (41% of survey respondents) and in agriculture (5%), then the construction sector and industry were the main employers in Russia for migrant workers (30% and 5%, respectively).
Authors of the study believe that it is important to ensure Kyrgyzstan’s accession to the CU without restrictions on labour migration. Otherwise, the unresolved issue of illegal immigration, which is a major source of problems associated with migrants’ rights, living conditions, health and income, will continue to linger.
A full copy of the research study can be obtained here.
Information
The Eurasian Development Bank is an international financial organisation, set up by Russia and Kazakhstan in January 2006, to promote the development of market economies in the member-states, their sustainable economic growth and the expansion of trade and economic ties. The EDB’s authorised capital exceeds US$ 1.5 billion. The Bank’s member-states are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation and the Republic of Tajikistan.
Further detailed information about the EDB can be found on the website: https://www.eabr.org.
The Centre for Integration Studies (CIS) is the Eurasian Development Bank’s specialised research centre. The Centre is responsible for conducting research, producing reports and recommendations with regard to the problems and issues concerning regional economic integration. Further detailed information on the Centre’s projects and publications is available on the website: www.eabr.org/r/research/analytics/centre/