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Central Asia news

Expert-Kazakhstan: Migration prompts economic degradation in Uzbekistan

22.01.2008 18:37 msk

Expert

Migration Uzbekistan

The Uzbeks are considered the most settled nation in the Central Asia region. They would leave their homeland as a last resort. However, population outflow has significantly increased in the recent years. Those who had left the country before 1992 would hardly come back. The state in its turn tacitly fosters illegal immigration by relying on remittances sent by immigrants.

Numbers

Labor exchange and Labor Ministry issue permissions to the Uzbeks to work legally in South Korea solely. There is a relevant agreement signed between the two countries. Official statistics shows that about 20 thousand Uzbek citizens work abroad for Korean companies mainly.

With the bureaucratic red tape involved it will take about two years to get work permission. A go-between could fasten the process for a decent compensation of 130 thousand sums or $100 (a monthly salary). If you search for a job in Moscow, you will have to pay at least 500 thousand sums or $400. People used to borrow the money and repay from their foreign earnings.

The actual number of illegal Uzbek gastarbeiters varies from 500 to 800 thousand, independent experts said at the Conference on Labor Migration Regulation and Labor Market in the context of Uzbek Economy Liberalization. The conference was held in summer in Tashkent. It is really difficult to give any precise data. However, some experts suppose that the number of guest workers could rocket to 2.5 mln people, whereof 1.5 migrants pursue higher wages in Kazakhstan.

Russian labor market ranks first among the most popular labor markets. Migrants seeking job in Russia stay there for 1-3 years. A typical labor migrant is a 30-40-year-old low-skilled man (mainly a builder), with a family and children. Some may have higher education.

Kazakhstan still ranks second. Over 140 thousand of the Uzbeks work as labor migrants in Kazakhstan and over 220 thousand – in Russia, mass media reported lately quoting the Interior Minister of Kazakhstan. Actually, cheap labor from the neighboring countries is in great demand in the rapidly developing country. According to the Labor Ministry official forecast, the need for labor force will increase by 60 thousand people annually. In the meanwhile, Kazakh- Uzbek relation in migration realm is still unclear.

Breadwinners

Low-skilled young people under 30 led by minor demands (a cell phone, new clothes) seek summer jobs usually. They work for several month and return home.

However, skill level of labor migrants depends on the region they reside in. The Ferghana valley is well-known for builders and cookers. They got higher wages than low-skilled workers from southern regions (Kashkadarya, Surkhandarya, Samarkand, Bukhara, Jizak, Navoi). As a rule these young people either failed to enter university or get employed for some reason.

Poverty and unemployment leads thousands of men and women to seek jobs elsewhere in Central Asia or farther abroad. Official unemployment level makes up 0.6%. The World Bank says that each fifth Uzbek is unemployed.

The need for working places is growing. The country suffers strong demographic pressure with young people born during demographic boom of 1980 reaching employable age.

The number of consummate professionals (doctors, lawyers, engineers, IT-specialists) abandoning the country amounts to some 5% of the total labor flow. This seemingly small rate is gradually growing.

Each year about 60 thousand young people graduate from universities. As a rule they are dissatisfied with Uzbek salaries and search for better opportunities abroad. An average salary of a web-designer makes up $200, whereas Russian companies pay $1.5 thousand.

Yet, $1.5 thousand is a hard-hitting goal for an average IT-specialist from Tashkent. Uzbek labor migrants are usually underpaid. Their major competitive advantage is readiness to work for lower wages. Besides, Uzbek migrants are highly disciplined. They do not drink alcohol, always in time and never fail their duties. They would work overtime and never feel fastidious about a job. This people have come to earn money lured by the idea of a better life for their family. Even $300 earned by a guest worker is enough to maintain his family. The ardor they work with is easily attributed to the national traditions. The Uzbeks depend on opinion of their relatives, family; they value reputation in mahallya (community). Should a labor migrant return home without any earnings he would be smeared at. Therefore, the Uzbeks do their utmost to met requirements of the employers.

Exchange money for IQ

Uzbek labour migrants cope with their mission. Center for Economic Studies says that phenomenon of remittances features openness of economy and booming labor migration. It is a new index of economy growth. The Uzbeks abroad inject about $1.3 bln into their country's economy representing about 8 percent of GDP in 2006. The same index amounted to 7.2 percent in 2005. Thus, average annual increase has reached 52 percent since 2005. Within the first three month of 2007 Uzbek immigrants remitted $178 mln from Russia as compared with $37mln transferred from Uzbekistan to Russia within the same time period.

Official rates are surely much larger. Injections of the kind incur no liabilities, thus they are not accounted for external debt service. For this reason these injections are more reliable unlike credits granted by foreign banks or direct investment. Besides, money send by migrants make a difference to their families. As an additional source of income it eases social tensions and raises living standards. Thus, labor migrant outflow no longer exerts negative clout on the economy. Uzbekistan has proved that migration positively affects both donor and host-countries. Remittances strengthen balance of payments by funding foreign trade deficit and improving credit capacity of the national economy. However, the number of qualified specialists is decreasing. Unlike agricultural workers they would seek steady income. Later the country will certainly face off shortage of professionals replaced by low qualified specialists failed to get employed abroad. Finally, the country would lose its competitive advantage and plunge into economy degradation.

Migration process is developing at a rocketing pace. According to the International Organization for Migration, over 200 mln people or 3% of the world population are labor migrants. It is just the beginning. The worst is yet to come.

Expert-Kazakhstan, N 01-03, 21.01.2008. © Translated by Ferghana.Ru