PremiumLABOR MIGRANTS BEFORE AND AFTER ARRIVAL IN RUSSIA

The chairman of the Accountancy Chamber of Russia, Sergey Stepashin, proposed the Accountancy Chamber of Azerbaijan to carry out joint measures directed at analysis of efficiency of labor migration and financial flows between the countries in this respect. Stepashin grounds the necessity and possibility of control measures with the big financial losses of the public budgets as a result of financial flows organized by migrants. Russia, as a receiving country, is more difficult state.

According to the Central Bank of Russia, in the second quarter of this year those involved in seasonal work in Russia sent $1.3bln to their countries. It is 58% more than the funds sent to their country in the first quarter of 2006. 90% of all funds delivered from Russia to foreign countries fell on CIS countries. Major part of these funds was earned in the construction and strictly half of capital delivered to foreign countries was earned in an illegal way. The financial flows from Russia rose no less than $2bln in 2004 to $3.2bn in 2005.

Average estimation of labor migrants in Russia over several years

State of citizenship	Number of those employed in Russia, in ths	Average number of months of stay in Russia	Average annual number of the employed, in ths	Average amount of transfer, in USD per month	Amount of transfers, in mln dollars
Azerbaijan	1000	11,4	947	133	1511
Armenia	280	7,1	166	130	259
Georgia	117	9	87	112	118
Kazakhstan	50	7,1	30	100	35
Kyrgyzstan	300	7,1	177	100	213
Moldova	154	8,6	110	154	204
Tajikistan	504	7,1	298	51	182
Uzbekistan	390	7,1	231	52	144
Ukraine	1000	7,7	644	130	1004
Others, in total	1055	6,8	600	90	648
Including citizens
China	800	4,6	306	90	330
North Korea	55	10,6	48	90	52
Vietnam	100	10,6	88	90	95
Afghanistan	100	11,3	94	90	102
Total	4850	8	3227		3670

In the second quarter of 2006 the biggest funds were delivered from Russia by the citizens of Uzbekistan and Ukraine (each $210mln). Tajiks delivered $187mln, Armenians - $129mln, Moldovans - $115mln, Kyrgyzs - $102mln, Azerbaijanis - $94mln, Georgians - $81mln, Kazakhs - $22mln.

According to the Federal Migration Service, the funds delivered last year from Russia to Georgia by the citizens of this country are equal to 20% of Gross Domestic Product (GDP), while the citizens of Moldova delivered 30% of GDP to their country and Takiks the fund sin the amounting to doubled sum of their budget of Tajikistan.

Meanwhile, the State Statistics Committee of Azerbaijan announces that every labor migrant involved in the Russian economy sends $150 a month in average to their relatives in Azerbaijan. Incomes from migrants (some $720mln a year) are equal to 11.5% of the public budget of Azerbaijan expected in 2007 ($6.3mln). However, unofficial data urge the number of Azerbaijanis residing in Russia is higher than the official number and respectively the amount of transfers is also higher than the official indices. Russian sources estimate Azerbaijan's incomes, as a result of money remittances, constitute $1-2bln.

Recent conflict between Russia and Georgia over the past week along with a range of political problem revealed the key role of labor migration in the post-Soviet area. Russia and Kazakhstan are regarded as the major centers' attracting migrants from former Soviet countries. Obviously, the donor-countries of migrants are Armenia, Azerbaijan, Georgia Kyrgyzstan, Tajikistan, Moldova and Ukraine. Azerbaijan, in difference to Russia, is suffering from a problem of internal migration' linked with the economic and political factors. Armenia officially recognized the independence of the country from labor migration. Incomes from the remittances by the migrants from the country to their motherland brings no less than 25% of all incomes to the budget of Armenia. A total of 1mln people migrated from Armenia amid total population of 3.5mln people.

Material state of migrants before and after the commencement of working in Russia (in %)

Material state of migrants state of migrants	Before working in Russia	At present
Good (there is possibility for making savings)	3	5
Medium (incomes are sufficient for everything needed for normal life)	20	56
Bad (incomes are sufficient for the most necessary)	48	31
Very bad (incomes are insufficient even to cover the most necessary)	26	2
No reply	3	6
Total	100	100

According to UN, Russia has approximately 12 million foreign migrants, which makes it the second in the world as receiver of labor migrants following the Unite States. Russia is a powerful magnate for the workforce from CIS countries due to two principles. The first is the demographic situation: growth pace of workforce in the majority of CIS countries is higher than Russia. The second reason for scaly flow of migrants to Russia is different level of incomes in the CIS countries, where Russia is considered as the richest. Per capita GDP in Russia is 3 times more than in Ukraine, in some cases (for instance, as compared with Tajikistan) over 10 times.

Foreign workforce comes in Russia through two channels. First - through attraction by Russian enterprises and organizations, carried out through mediation of the federal Migration Service. The second - through illegal ways. No one is aware of illegal labor migration. Expert estimation differs essentially (from 1.5mln to 10mln people). The very experts think the labor immigration to Russia has more negative rather positive impacts. The majority of migrants turn out in shadow economy' in the employment sector and as a result, the losses of the budget increase due to declination from the payment for use of the foreign workforce and non-payment of taxes and remittances to social funds.

These are the losses that Stepashin spoke his Azerbaijani counterpart in Baku. They are calculated to million of dollars. Production in the shadow' economy of Russia is estimated to one fourth of the GDP and employment varies between 15% and 30%. The heads of enterprises frequently hire illegal migrants, because it makes possible pay less salaries and avoid payment of social and medical insurance.

Thus, speaking of negative side of labor migration, Russia should be more attentive while studying the positive milestones of the process. Russia need migrants, because they even in the official level make statements on the necessity of attracting migrants for the resolution of problems with insufficiency of human forces and demographic problem. Insufficiency in human resources will be a serious limitation in the growth of Russia economy, as at present Russia is an only country where 5-7% economic growth is observed amid cut in population by millions. Russians confess that is not observed anywhere else and very soon this problem will become a national tragedy for Russia. So, it is necessary make a compromise: do create better conditions for labor migrants and they will not stay in debt.