Page 39 - RusRPTApr23

· Defence industry businesses are taking on workers from the civilian sector. This is a problem because the transition typically restricts the potential of the overall economy.
· Two waves of emigration led to the departure of many qualified specialists, while foreign companies left Russia and local operations mothballed plans for expansion due to increased uncertainty.
· Many people (almost 40mn) are working in the small business sector, or as individual entrepreneurs, self-employed or in casual employment. Moreover, according to the Federal Tax Service, the number of self-employed individuals went up 1.7 times to 6.5mn last year. By the end of January, that figure had risen to 6.78mn. As a rule, when workers are laid off or dismissed, they drift into this segment. There is far less movement in the opposite direction.
· It is impossible to replace specialist staff who left Russia after the outbreak of war.
Migrants trends
As many as 3.47mn foreigners came to Russia for work last year. That’s about a 30% year on-year increase, FinExpertiza calculated using data from the Federal Security Service (FSB) and the Interior Ministry. In 2019, the last year before the pandemic, 4.1mn foreigners — mostly from Central Asia — came to work in Russia (12.5% of the labor market). Migrants were primarily attracted by the strong ruble: at the start of the war, when the ruble tumbled against the dollar and the euro, migrants left. According to NGO Memorial, by the start of April last year 60,000 people had returned to Central Asia’s Tajikistan and 133,000 to Uzbekistan. However, this trend quickly reversed as the ruble recovered.
Migrants continue to come to Russia for work despite facing a greater risk of being caught up in the war. In particular, Memorial established that, after Russia invaded Ukraine, Defence Ministry officials threatened to revoke the passports of new Russian citizens from Central Asia if they refused to serve in the military. As well as that stick, the authorities dangled the carrot of an accelerated pathway to citizenship and higher salaries.
“In migrant chats, joining the military or working in the occupied territories is actively promoted, everybody knows about these opportunities. They offer Moscow salaries,” said Temur Umarov, a Central Asia specialist at the Carnegie Endowment for Peace. “But in the end it turns out that they do not pay enough, they house people in barracks or, at best, in school or sanitorium buildings. Migrants find themselves in the line of fire.”
Climbing salaries
Employers continue to compete for staff by raising salaries. This trend can be seen in almost every region, according to the Central Bank. Between January and December, real salaries dropped 1% compared with the equivalent period of the previous year. However, in December salaries went up 39% compared with November (that increase is partly due to end-of-year bonuses). In the fourth quarter, real salaries were up 0.5% y/y.
39 RUSSIA Country Report Russia April 2023 www.intellinews.com