Ukraine’s migration pressure valve in Russia’s hands


August 21, 2016  

By Eduard Popov for Fort Russ

Translated by J. Arnoldski

On August 20th, the former minister of education and science of Russia, Dmitry Livanov, assumed the post of special presidential representative for developing trade and economic relations to Ukraine. The order for his appointment was signed by Russian President Vladimir Putin himself, thus marking a turning point in the ongoing diplomatic dispute between Russia and Ukraine. This appointment itself is intriguing, which offers the occasion to discuss the activities of Russia’s new special representative, the all but severed diplomatic relations between the two countries, and the implications of this rupture.

In an earlier article, I wrote that reducing the level of diplomatic relations with Ukraine would benefit Russia. Following this publication, Kiev refused to grant authorization to the new Russian ambassador, Mikhail Babich. As announced by the Ministry of Foreign Affairs of Ukraine, the proposed candidate did not “suit” the Ukrainian side. Refusing to accept an ambassador is an extremely rare diplomatic practice in the world which, in Ukraine’s case, can be regarded as yet another hostile step by Kiev.

However, the Ukrainian leadership has gone even further. Following Russian President Vladimir Putin’s sensational statements from August 10th on Ukraine’s preparation of terrorist attacks in Crimea, Ukrainian Foreign Minister Klimkin announced the possible introduction of a visa regime with Russia. In an interview with Ukrainian Channel 5, Klimkin remarked that the two countries already have virtually no diplomatic relations. 

With these nervous and emotional statements, Kiev has basically done the work for Russia of initiating a rupture of diplomatic relations. The Russian Ministry of Foreign Affairs, on the contrary, has shown the utmost restraint. During the meeting between Russian Foreign Minister Sergey Lavrov and his German colleague, Frank-Walter Steinmeier, expressions were made against severing diplomatic relations with Ukraine. 

Perhaps’ Lavrov’s restrained tone and assessment had a sobering effect on Klimkin, the young and inexperienced diplomat. Already the following day, August 16th, Klimkin followed up on Lavrov’s statements with his own. In an interview with the Austrian newspaper Der Standard, he denied the possibility of severing of diplomatic relations. “We support maintaining diplomatic relations. We have a million Ukrainians in Russia whom we have to care about,” Klimkin said.

Indeed, the introduction of a visa regime would make the situation difficult for the Ukrainian migrant community in Russia. According to Russia’s migration authorities, around 2.5 million Ukrainian citizens are in the country. In my opinion, official data is very much understated, as the real number of Ukrainian migrants in Russia is approximately 2 times higher. The number of immigrants from Ukraine’s former Donbass region alone is hardly fewer than a million people. 

Distribution of Ukrainians according to 2010 Russian census

Given European Union countries’ tightening of migration policies towards Ukrainians, Russia has become the main labor market for Ukrainian citizens. Earlier, most emigrants came to Russia from the Southern and Eastern regions of Ukraine (historical Novorossiya). Now, there is an increasing presence of immigrants from the Western regions of Galicia and Transcarpathia. 

Despite the fall in attractiveness of the Russian labor market due to the general crisis in the financial sector, Ukrainian citizens are still moving to Russia, albeit in smaller quantities, to make money. According to figures from the Central Bank of Russia, in 2014 2.4 billion US dollars were transferred to Ukraine from Russia, which in 2015 was 1.252 billion US dollars. According to the National Bank of Ukraine, Russia is the leading country in terms of money transfers to Ukraine. In 2015, 42.5% of all money transfers to Ukraine came from Russia. For comparison, the US makes up only 12.4% of the total volume.

Note that the official statistics far from reflect the real situation with money transfers. There are many ways to bypass the official transfer system. Overall, the main motivation lies in that Ukraine has tightened its tax laws. The state is seeking to impose taxes on all forms of citizens’ incomes, including assistance from abroad. Receiving money transfers from abroad is now sufficient grounds for depriving retirees of subsidies for their utility bills.

Thus, if Ukrainian Foreign Minister Kilimkin’s initiative is realized, then Ukraine would lose at least 1.252 billion US dollars in capital inflow. Let us recall, moreover, that Kiev has no way of obtaining the IMF loan in the amount of 1 billion US dollars. Receiving a loan demands rigid economic, social, and political conditions, and then interest has to be paid. Money received from senders in Russia, however, is free of charge and literally allows millions of Ukrainian families to survive. 

And the life-saving aid for Ukraine that labor migration to Russia offers is not exhausted. Even according to official figures, 2.5 million Ukrainian citizens are working in Russia. Introducing a visa regime on Kiev’s initiative would deprive most Ukrainian migrant workers of employment, thus making Ukraine have to take in 2.5 million new unemployed. Russia is continuing to save Ukraine by providing jobs to millions of Ukrainian citizens and, through money transfer systems, millions of their relatives. It is therefore surprising that it is Ukraine, and not Russia, that is talking about introducing a visa regime.

There can be only one explanation for this: the astonishing incompetence and extreme irresponsibility of the highest people in Ukraine’s ruling establishment. 

Talk of a visa regime, moreover, is not being raised for the first time. Back in March 2014, I was asked to give comments to the media on a similar initiative of Prime Minister Yatsenyuk. Klimkin has only repeated the same nonsense two years later. After all, Yatsenyuk and Klimkin are wealthy people. The former, according to some reports, stole 1 billion dollars during a year of work as the head of the Ukrainian cabinet. He can afford the introduction of a visa regime, unlike the millions of Ukrainian families who depend on the opportunity to work in Russia or receive money transfers from there.

Russia has a weapon capable of destroying Ukraine and making life in Ukraine literally unbearable, if need be. The 2.5 million strong community of Ukrainian laborers is one of the most important weapons in its arsenal. 

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