Microfinance institutions are making matters worse by offering people in debt even more onerous loans.
Moscow-based business daily Vedomosti has reported that as many as 50,000 labor migrants living in Russia, many of them from Central Asia, may end up losing their legal residency status this year because of personal debts.
In its August 2 report, the business daily cited an Uzbek diaspora activist as estimating that the number of people ending up as undocumented migrants expand by 100,000 by 2024.
Under Russian law, foreign nationals are required to leave the country after the period of legal residence has expired. As Vedomosti’s sources have noted, however, those same foreigners are increasingly being slapped with exit bans by bailiffs looking to recover outstanding debts.
That predicament in essence forces those people to remain in Russia without authorization.
Asylbek Egemberdiyev, a labor migration expert interviewed by Vedomosti, said that every flight to members of the Commonwealth of Independent States, a post-Soviet grouping, sees between two to five people denied permission to leave the country. Those people are instructed to contact bailiffs to resolve their debt, the expert said.
The debt recovery claims appear to be coming in the main from microfinance institutions. The lenders have filed around 300,000 lawsuits in Russian courts between March and July seeking the recovery of loans issued to migrant laborers.
Average outstanding debts are around 70,000 to 80,000 rubles ($750-860 at official rates). That implies an overall debt pile of around one quarter of a billion dollars.
Microfinance lenders are said to be enticing expat laborers with new loans of up 100,000 rubles with annual interest rates of 120 percent.
Despite a notable official hostility to migrant laborers in some quarters, the evidence suggests that their numbers of growing strongly.
In May, Vedomosti cited Federal Security Services data to note that 1.3 million people had entered Russia for work purposes in the first quarter of 2023 – 1.6 times more than in the same period the year before.
The bulk of the influx was accounted for by nationals of Uzbekistan (631,000), Tajikistan (350,000), and Kyrgyzstan (173,000). While Kyrgyz citizens have it slightly easier in Russia by virtue of their country’s membership in the Eurasian Economic Union trade bloc, nationals of Tajikistan and Uzbekistan must contend with a time-consuming work permit process.
This upward trend in migration figures suggests a deceptively rosy outlook for expat laborers. Russian companies are seen as actively seeking foreign workers due to a labor shortage triggered in large part by the invasion of Ukraine. As if to confirm that fact, RBK news website reported this week, citing the findings of the Yegor Gaidar Institute for Economic Policy, that 42 percent of Russian industrial enterprises faced a shortage of workers in July, up from a previous record of 35 percent registered in April. The figures were the result of a survey of 1,000 companies.
According to Russian Central Bank findings from April, however, the most acute shortage of manpower is being experienced in skills-heavy sectors like manufacturing and mining. Central Asian laborers are often relatively low-skilled and may not be benefitting from this demand.
Source : Eurasia Net