This fall the economic slowdown in Kazakhstan and Russia, especially accelerated by the global credit crunch during recent weeks, hit hard the Central Asian seasonal migrants and their families. It is estimated that between two and three million seasonal migrants from Kyrgyzstan, Tajikistan and Uzbekistan have been working in various regions in Russia and Kazakhstan. If the economic, social and legal needs of these migrants are not effectively addressed soon, both the sending and receiving countries would face serious social and economic consequences.

BACKGROUND: The collapse of the Soviet-era economic, social and investment ties between Central Asian Republics and the Russian Federation in the early 1990s has had a negative effect on the Central Asian economies. However, within a decade a new type of the economic cooperation emerged on a very different base, including the development of a rudimentary common labor market, which proved to be beneficial for all of the countries involved. Since the mid-1990s and early 2000s, Kazakhstan and Russia have begun benefiting from the rising energy prices in the international market pouring billions of dollars into various infrastructure projects and raising salaries. The economic growth in these two countries has created an increasing demand for labor that their national labor markets alone could not meet.

This demand was largely met by migrant workers from the Central Asian states (Kyrgyzstan, Tajikistan and Uzbekistan), where the rapid population growth and stagnant economy put domestic labor markets in turmoil. Under the pressure from budget constraints, the Central Asian governments cut subsidies to agricultural and industrial sectors, but failed to attract significant investments to revive their failing economies. In this environemnt, hundreds of thousands of workers lost their jobs, especially in overpopulated and rural areas in the region, and extreme poverty skyrocketed. In the late 1990s average teachers’ salaries in Tajikistan sank to about US$15 a month. Thus, many of those workers, especially young people, packed up and left for other countries attracted by job opportunities. In the host countries they have picked up low-skill jobs, agreeing to work for salaries as low as US$200-300 per month. Gradually, the Central Asian migrants found their niches in the construction and real estate sectors, in retail trade and food-catering, and in the intensive agriculture and food processing businesses. Since the mid-1990s millions of workers from the Central Asian republics have been involved in seasonal migration to the more prosperous countries in the north - Russia and Kazakhstan - in search for higher incomes.

Nobody knows for sure the exact number of migrants but various sources estimate that between 15 and 30 percent of the working-age population in sending countries have been involved in temporary and permanent migration. This amounts to between 350,000 and 800,000 migrants from Kyrgyzstan; between 700,000 and 1.2 million from Tajikistan, and between 700,000 and two million from Uzbekistan. For example, Kazakhstan’s internet newspaper Gazeta.kz reported recently that as of 2008 up to two million migrants have lived and worked in the country on temporary or permanent basis.

These labor migrants benefited the sending countries in many ways. Scholars and international experts still debate the impact of the labor migration in the region. Among the positive factors, they cite the integration of the small Central Asian economies into the global economy and the rise of remittances, which accounted for up to 20-40 percent of the national GDP in Kyrgyzstan and Tajikistan in 2007. It is estimated that these migrants send home between one and US$ three billion per annum to support their immediate and extended families and to repay loans and credits that many of them have taken to cover the cost of traveling to and doing business in foreign countries. The emigration also helped to ease the pressure on the domestic labor markets and on welfare- and healthcare-systems in sending countries. Labor migration has created economic interdependencies between the sending countries (Kyrgyzstan, Tajikistan and Uzbekistan) and receiving countries (Russia and Kazakhstan). Yet, experts also point out the negative factors of the emigration for sending countries, including brain drain, separation and breaking up family and social institutions, the rise of shadow financial institutions, human trafficking networks and increasing exposure and dependency of the Central Asian national economies to the fluctuations of global markets.

IMPLICATIONS: The economic slowdown and global credit crunch have negatively affected the existing market equilibrium. Nezavisimaia Gazeta reported on October 10, 2008 that the Russian currency, the Ruble, lost 16.6 percent of its value during the last few weeks and that several large construction projects were delayed. The economic difficulties have led to a steep decline in labor market demand in the receiving countries, as many construction, renovation and infrastructure projects in Russia and especially in Kazakhstan have been temporarily halted, delayed or abandoned all together and a lack of job openings in the retail sector. Tens if not hundreds of thousands migrant workers lost their jobs and income opportunities. The situation has worsened even further due to the fact that these workers have few or no skills to find other jobs in the receiving countries. The implications for migrants and their families are quite serious.

First, the families of migrants that still live in Central Asia have begun receiving much smaller remittances and many of them have stopped receiving any income from their relatives abroad. This trend, if continued, would leave many families and communities in hardship during the forthcoming winter season. Second, it is expected that the higher competition for jobs and economic resources would lead to social and political tensions in many local communities if the migrant workers decided to come back. These tensions would become even worse if the migrants would arrive with little or no savings to support themselves until the next season. Third, the mass returning of migrant workers would also cause an increasing pressure on already fragile healthcare and social welfare infrastructure in many local communities. Some workers return home with chronic diseases, such as tuberculosis which, if untreated, would endanger the well-being of many communities in densely populated areas across Central Asia.  Fourth, the lack of economic opportunities, unemployment and underemployment pushes impoverished young people into the black market that exposes them to illicit drugs, involvement in human trafficking, criminal gangs or militant political groups.

Even the migrants who decided to remain in the receiving countries face the consequences of a deteriorating business climate both in Russia and Kazakhstan, as they confront the difficulties in adjusting to the tougher market and social conditions, competing with locals for jobs.

CONCLUSIONS: The global crisis and economic slowdown is here to stay and probably no country in the region will be immune from it. Therefore, it is very important for both the migrant-sending countries and migrant-receiving countries to cooperate in dealing with the challenges posed by population movement. One of the most pressing issues is meeting the needs of both potential employers and employees by streamlining and easing the job contracting process for migrant workers and by creating comprehensive job data-banks. More opportunities for vocational training and re-training for migrant workers both in the sending and receiving countries could help people to acquire new skills needed in the sectors less affected by the crisis or would prepare them for work in the new sectors of the economy. There is also a need to develop a better business environment to provide migrants with more chances for self-employment through opening and operating small and medium enterprises (SMEs). Finally, more efforts are needed for the integration the migrants in the receiving countries, even if they come on a temporary basis, through supporting networks of NGOs and ethnic diasporas, who would be in a better position to provide various forms of assistance in emergency situations.

AUTHOR’S BIO: Rafis Abazov, PhD, is an adjunct Assistant Professor at the Harriman Institute/SIPA at the Columbia University (New York). He is author of the Historical Dictionary of Kyrgyzstan (2004) and The Culture and Customs of the Central Asian Republics (2007). At present he conducts research on migration trends in Central Asia.