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. Last Updated: 07/27/2016

A Problem Crossing Borders

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Recent changes to Russian labor migration policy have long been overdue. But while they are a step in the right direction, the new rules may have unintended consequences that would damage the economy and send negative ripples through the economies of its neighbors.

Russia is heavily dependent on foreign labor, the vast majority of which comes from these countries. With its population declining at an alarming rate -- falling at roughly 750,000 people per year -- Russia needs to attract migrants to forestall a drastic labor shortage.

And the migrants need Russia. This is particularly true for the poorest former Soviet republics of Central Asia, the South Caucasus and Moldova. Conservative estimates put the number of Kyrgyz workers in Russia at 500,000, or about 10 percent of Kyrgyzstan's population, and some experts say it is closer to 1 million. Tajikistan and Uzbekistan also send high percentages of their workers abroad.

Anyone who lives in Central Asia has noticed the signs of a population on the move: job seekers lined up at transportation hubs, waiting grimly for the plane, train or bus that will shuttle them north. The flip side is the huge amount of money the migrants send back. According to an IMF position paper, overall remittances in Tajikistan amount to at least 20 percent and perhaps as much as 50 percent of the country's gross domestic product, the vast majority coming from Russia.

The effects in Russia are equally dramatic. A recent World Bank study ranked Russia's immigrant population as the second largest in the world, surpassed only by the United States. Non-citizens dominate whole sectors of the Russian labor force, including outdoor markets and many other categories of unskilled work.

The majority of migrants from what Russians refer to as the "near abroad" benefit from visa-free travel, but Russia's labyrinthine bureaucracy has so far deterred most from getting the proper labor registration. In January, Federal Migration Service chief Konstantin Romodanovsky told Ekho Moskvy radio that fewer than 1 million of an estimated 11 million migrants were working in the country legally.

The benefits of remaining off the books are clear: The workers can evade taxes and avoid a long and likely losing battle for registration with the bureaucracy, while employers get cheap labor. But undocumented workers have little recourse when their bosses, law enforcement officials or others decide to take advantage of their vulnerability.

The package of new legislation and decrees that came into force in January has the potential to change the situation dramatically. Quotas for foreign laborers in Russia have been expanded significantly, and huge fines will be levied on employers who hire undocumented workers. Meanwhile, the process of registering and obtaining a work permit has been made much easier. Weighed against these positives is one major drawback: a ban on foreign nationals working in the country's open-air markets, which is to come into full effect April 1.

Overall the changes should be welcomed as a good-faith attempt to fix a broken system. But xenophobia and political considerations have determined some aspects of the new policy, and the results will hurt both Russia and the countries from which most of the migrant workers come.

The market ban is part of a trend of growing intolerance; a populist move intended to placate elements in society that would rather have immigrants out of sight and mind. Moreover, if fully enforced, it would lead to higher prices in many markets, as employers switch from migrants to more costly domestic labor. Even now, markets have curtailed activities and even closed in some cities, the public relations manager for the Tsentraziya migrant support group, Nurbek Atambayev, said last week.

The damage will be greater for sending countries. Concrete numbers are hard to come by, but Aygul Ryskulova, head of Kyrgyzstan's Migration and Employment Committee, told the Institute for War and Peace Reporting that the changes were likely to leave about 100,000 Kyrgyz unemployed, and figures for Kyrgyzstan's neighbors are likely similar. It is not yet clear how market workers are reacting to the ban; some may find jobs in other sectors, while others may continue to work illegally or even seek Russian citizenship. But a significant number can be expected to return home to fragile economies that have little capacity to absorb the influx.

One of the unintended ripple effects caused by the ban is a copycat Kyrgyz law that forbids foreigners from working in Kyrgyzstan's own markets starting in April, a move expected to hit the many Chinese merchants operating in the country's bazaars. Kyrgyz officials have connected their ban directly to the Russian example, saying they hope to open up employment opportunities for their compatriots coming home from Russia.

Even the obvious improvements in the laws could prove double-edged. Many labor migrants are unaware of how the changes in the registration rules will affect them, which opens the door to their exploitation. Word is spreading of scams in which unscrupulous employers try to extort money from laborers, such as by telling them they must pay a steep fee to get registered.

Another potentially ominous consequence is the increased politicization of migration policy. As the labor market seems likely to become more regulated, countries of origin have begun lobbying for a greater allocation of slots for their citizens. There is a danger that the Russian approach to labor migration may become as politicized as its energy policy, with officials allocating preferential quotas to Russia's allies and punishing those with whom it disagrees. Such moves, although by no means unprecedented in Russia or elsewhere in the world, would further expose foreign workers to the vagaries of international politics.

Improving on the current policy should not be particularly difficult. Lifting the ban on foreign laborers in markets would be a good start, along with raising the overall quota of 6 million to a figure that more closely reflects the actual number of migrants in the country. Perhaps most important, an extensive information campaign will have to be conducted to make sure workers know how the changes affect them.

Russia's labor migration policy does not need to be a zero-sum game; a few adjustments can bring benefits to both sides of this complex equation.

Daniel Sershen is a freelance journalist based in Bishkek, Kyrgyzstan.