Echoes of Russia’s Sanction War in Central Asia

The repercussions of the current sanctions standoff between Russia and the West are being felt well beyond Russia’s European borders and the parties directly involved in the conflict. While Russia’s EU neighbors are feeling the pain of Russia’s self-inflicted blanket trade ban, it is far-flung Central Asia that has the most to lose as a result of an economically weakened Russia. Straining under the weight of rising inflation, the weakening of the ruble and falling oil prices Russia’s increasingly precarious economic situation could send a tidal wave across Central Asia.

Central Asia’s Precarious Dependency

Long before the Ukrainian conflict began, Russia had become the world’s second largest immigrant-receiving country with a population of migrant workers estimated to be anywhere from 10 to 15 million (reliable sources are difficult to come by). Russia’s economic boom, propelled by gas and oil, generated a need for cheap, disposable labor to fill in low-skill jobs vacated by Russians. As a result, migrant workers from Central Asia have flocked to Russia to take up low-paying jobs as construction workers, cleaners, drivers, cooks, waiters and cashiers. This mass migration has not only changed the ethnic makeup of Russia’s labor force, but also had a tremendous impact on the source countries in Central Asia. Accurate numbers are hard to come by, but even the official – and notoriously underestimated – data collected by Russia’s Federal Migration Service reveal the extraordinary scale of this labor exodus. Based on these numbers, 17% of Uzbekistan’s and almost a quarter of Kyrgyzstan’s labor force are currently in Russia. Things are even more dramatic in Tajikistan where over 50% of the country’s 3.4 million labor force have left their country as migrant workers. The proportion of migrants is even higher when looking at the male population of working age, although the number of women making the journey to Russia is constantly growing.

The women, children and the elderly left behind in Central Asia rely on remittances from their family members working in Russia. These remittances make up to 50% of Tajikistan’s GDP making it the most remittance-dependent country in the world. This puts the economies of these Central Asian states at the risk of collapse should Russia’s economy and its need for cheap labor falter.

Russia’s Economy Under Pressure

Western sanctions and  the drop in the price of oil have made a dent in Russia’s economy, although it is too early to call it a full-blown recession. The latest round of Western sanctions targeting Russia’s banking sector have had a devastating impact on the Russian credit market, making the access to cheap credit extremely difficult. Without the ability to secure affordable loans from key Russian banks such as VTB, Sberbank and Gazprombank, large-scale construction and infrastructure projects will get shelved without direct financing from the government– something that would have a potentially devastating effect on migrant workers. Moreover,  Russia’s self-inflicted ban on EU food imports has pushed retail prices upward, curbing consumption and thereby hurting migrant workers employed as shelf stockers, drivers and cashiers in the retail industry. A weaker ruble means that the money migrant workers send home is losing in value.

Current exchange rates and oil prices as seen on 15 December 2014

Current exchange rates and oil prices as seen on 15 December 2014

Since these sanctions are still relatively recent, there hasn’t been a noticeable reduction in the number of migrant workers in Russia, but as the latest EBRD report shows remittances have already dipped since the sanctions have come into place.  While employment remains abundant for migrant workers in Russia at the moment, rampant unemployment could become reality in one year’s time if the construction industry takes a serious hit as predicted. Such a perturbation of the Russian labor market could spell trouble for the future of Central Asia.

Migration as a Safety Valve

For years the corrupt and authoritarian regimes of Central Asia have been perfectly happy to let their citizens work in Russia. In fact,  this endless flow of emigration has acted as a safety valve for public discontent, allowing dictators such as Uzbekistan’s Karimov and Tajikistan’s Rakhmon to consolidate power while their young male labor populations work abroad. If young Tajiks and Uzbeks didn’t have the opportunity to make a living in Russia, Central Asian government would be facing social upheaval and unrest at home. The situation has allowed the kleptocratic regimes of Uzbekistan and Tajikistan to remain in power for the past 25 years. Keeping the cycle of migrant workers and remittances going is therefore essential to the survival of the authoritarian regimes in both countries. Turning a blind eye to the rampant human rights abuses perpetrated against their labor migrants in Russia, these Central Asian government are eager to please Russia in order to maintain the current status quo.

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Image source: Sergey Karpov / TASS

 Preemptive Deportation of Migrants

There has been no official response from the Russian government to the very real possibility of rising unemployment as it seeks to demonstrate assertiveness in the face of Western sanctions. At the same time, Russia has been busy quietly adding migrant workers to a growing entry blacklist, to the tune of 3000 people per day. So far over 900,000 foreign citizens have been banned from entering Russia, which amounts to somewhere between 10-18% of the total migrant population from Central Asia. While Russia has flirted with mass deportations and blacklists in the past for political purposes, this new trend appears to be part of a concerted effort to reduce the number of migrant workers in Russia in anticipation of rising unemployment and economic difficulties. By closing its borders to a growing number of migrant workers Russia is also pursuing other ulterior motives. Kyrgyzstan, for example, has experienced a sudden spike in the number of its citizens being turned back at the Russian border in recent months. Many politicians inside the country see Russia using the blacklist as a means of coercing Kyrgyzstan into joining the Eurasian Union. Indeed, Kyrgyzstan’s dependency on remittances from migrant workers leaves it vulnerable to political blackmail by Russia. Within Russia expanded blacklists have been greeted with approval by the general population where anti-immigrant sentiments prevail and many are quite happy to see the number of migrant workers decline.

A Central Asian Spring?

While Russian authorities downplay the inevitability of an economic downturn, the consequences of a significant reduction in migrant workers due to a combination of re-entry bans and an economic slump could be potentially catastrophic. Returning migrants will face unemployment and financial difficulties at home, putting the livelihoods of their families in jeopardy. Any significant drop in remittances would send Central Asian economies into a downward spiral, with Tajikistan being the most exposed to the threat of complete economic collapse. In fact, the rapidly weakening ruble is already taking a toll on Central Asia where local currencies have also taken a hit and food prices have risen significantly. Dependent on Russia for imports and remittances, Central Asia finds itself in an extremely precarious economic position that could translate into political upheavals against the authoritarian regimes of the region.

Looking at the endemic corruption, nepotism and political repression of post-Soviet Central Asia – with the notable exception of Kyrgyzstan’s shaky democracy – it’s difficult not to make parallels with the pre-Arab Spring autocratic regimes in Tunisia, Libya and Egypt.  As some migration experts have already suggested, there may indeed have been a strong link between the popular uprisings in North Africa and return migration from Europe due to the financial crisis. If the situation continues to worsen, a similar scenario could become reality in Central Asia in the near future. It is unclear whether Central Asian migrant workers will leave Russia due to worsening economic conditions since many of them would still find life in Russia preferable to that of their home country. But by continuing to dish out reentry bands to migrant workers by the thousands, Russia is only accelerating the process and pushing the region to the brink. Having annexed Crimea and manufactured a military conflict in Eastern Ukraine, Russia may have indirectly started another conflict along its Southern borders.

Cover Image Source: ITAR-TASS Valery Sharifulin via http://pasmi.ru/archive/96019
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One thought on “Echoes of Russia’s Sanction War in Central Asia

  1. Pingback: Working in the Glubinka: How Migrants Are Keeping Rural Russia Afloat | Eastern Profiles: Today's Post-Soviet Spaces

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