The other side of the fence

28 February 2018, 15:16

What makes a person leave their home and travel hundreds and even thousands of kilometers to a new place? As many answers as there are people. Some are looking for better opportunities for personal development, others simply want to see the world. Some don’t identify with the place they were born in. Some simply aren’t tied down: no family of their own, and the rest of their relatives are strangers to them. All of these people have one thing in common: they’re looking for a better future. After all, no one leaves behind a place where they are happy and no matter how people think about it, in the majority of cases it all comes down to a higher standard of living—a good job for decent money. To leave on a long journey into the unknown and possibly never come back, a person has to be strongly motivated. A higher standard of living is the main factor in migration. In fact, there are few other internal or external factors.

Counting heads

How many Ukrainians are leaving home is one of the hot topics of the day, both among ordinary Ukrainians and among politicians. But there are plenty of myths being propagated as well, as there are few public estimates of just how many people have left and how many of them have not come back. According to official data from DerzhStat, the statistics agency, 6,500 Ukrainians emigrated in 2016, well down from previous years, when the numbers ranged from 14,000 to 23,000. If this number reflected reality, however, the issue would not be worth a fig and no one would be complaining about half-empty villages where only old folks and children live. Given that 14,000 people immigrated to Ukraine last year and migration numbers have been net positive since 2005, politicians could just clap their hands and talk about how great it is to live in Ukraine and how the country is seeing permanent population growth from migration.

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Of course, this isn’t what’s happening. Official numbers do not reflect the reality because they only include those emigrants who actually filed stacks of documents prior to leaving, without which the fact that someone has actually emigrated is not established and so DerzhStat cannot report it. In the vast majority of cases, people simply go, avoiding this bureaucratic nightmare. Even without that, things are not easy for those who travel many leagues to a new land. For one thing, many Ukrainians think that they will return and many of them do, after a certain time, if only to see their family again. These are all various streams of migration and official statistics can’t capture them.

And so we can only estimate the real scale of emigration from Ukraine. For this purpose, The Ukrainian Week has used data from the State Border Service (SBS) regarding exits and entries by Ukrainian citizens (see One in a Hundred). If the majority of Ukrainians that leave the country in a year is more than the number that enter it, the difference between the two is the de facto number of emigrants during that period. Even if someone who left returns in the next period, either net emigration will go down or someone else will leave the country at the same time and the numbers won’t change.

What the numbers say

The numbers tell an interesting story. First of all, the number of Ukrainians that leave—meaning the actual crossings of the border, given that some people cross back and forth multiple times a year—for all countries except the Russian Federation—meaning mainly to the EU, especially Poland—has grown 62% since 2013. For 2017, the number reached nearly 30 million. As the graph shows, this number has been growing steadily since 2013, although the visa-free regime with the EU kicked in barely half a year ago. This shows pretty clearly that the European Union began to support Ukraine in deeds and not just words neither today nor yesterday, but at least since the Euromaidan.

The number of exits needs to be understood properly. Its key component is residents in bordering oblasts. They make their livings by buying goods in neighboring countries and selling them at home, or the reverse. They can easily cross the border several times a day, which means a hundred crossings a year in both directions. Tens of thousands of these shuttle traders account for up to a million crossings a year. In fact, they could account for much more. They typically celebrate the Christmas season at home, in Ukraine, so they don’t figure in net emigration, nor can they be properly called migrants although they make a big difference statistically.

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The next group are seasonal migrants, those who go to work to some place like Poland, mostly just for the summer. They also can cross the border back and fort several times a year, going home in mid-season for some holiday or for personal reasons. But they also celebrate New Year’s and Christmas at home, because there’s much less work abroad in winter and so they also don’t figure in net migration. These two groups together form the lion’s share of those who cross Ukraine’s border. They have no issues with visas or passports, either, and so they were indifferent to Ukraine’s gaining visa-free travel from the EU. The fact that they are mostly not on visas, they effectively do not affect statistics on border crossings because the frequency of their crossings has not changed.

One more group is people who have no connection to migration at all: tourists, students and business travelers mostly associate themselves with Ukraine, at least at this point in time, so they will obviously return. Whether there are many or few of them, it’s hard to say, but anecdotally at least their numbers have been growing.

Why people leave

This leaves the net balance—those who cross the border with a one-way ticket—even when they actually have a return ticket just in case they’re asked by immigration officials. The best SBS statistics can offer is an approximation of about 200,000 individuals annually. This number has remained approximately the same over the last five year and was that high even before the Euromaidan. What does this suggest? Firstly, that those who are determined to leave Ukraine there are no obstacles: whether or not conditions for crossing the border are strict, they manage to do it. Most likely their motivation is not limited to material considerations, either.

After all, in 2013, Ukraine had “stability” with relatively high wages, a strong hryvnia, while the rest of Europe was in the middle of a crisis. This should have encouraged people to stay in Ukraine or to come back home from working abroad, but the emigrant flow never slowed down. We might assume that a big share of these emigrants were people who simply hated Ukraine and could not imagine living there under any circumstances, or those for whom the difference between $200 and $400 in wages was not significant as they needed at least $2,000. Every Ukrainian knows people like that, but are there really that many to form the main share of net emigration? In any case, over the last five years, socio-economic conditions have shifted more than one, and dramatically at that, yet the flow of net emigration from Ukraine to countries other than the RF has not changed. That’s a statistical fact.

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Indeed, the easier conditions for crossing into the EU that a visa-free regime ushered in has had very little impact on net emigration from Ukraine. Those who want to leave see no obstacles to doing so. In short, there’s no truth to statements that emigration picked up pace after the Euromaidan: the same number of people left permanently both before and since. There’s always a good reason if someone needs on: under Yanukovych the reasons were lack of prospects, reduced freedoms and unprecedented corruption at all levels; the reasons now are the economic crisis, the war, and widespread concerns about social issues.

Meanwhile, liberalized conditions for entering the EU, the US, Canada and other countries are providing many opportunities for those Ukrainians who want to travel to learn, to meet people, to wander around, to work temporarily, and so on, but plan to come back. And that’s why the total number of people crossing the border keeps rising… and will probably continue to do so.

The enemy’s rearguard

SBS data also make it possible to analyze emigrant flows to the Russian Federation. These reflect the actual number of crossings on those parts of the Ukraine-Russia border that are under Ukrainian control today, as there are no figures for the part of the border in ORDiLO, the occupied counties of Donetsk and Luhansk Oblasts where Russia controls the border. In the last four years, the number of Ukrainians who travel into the RF through official Ukrainian border controls has gone down by 22%.

As the graph shows clearly, 2013 was the watershed year. Since then, Ukrainians have been travelling less and less to Russia. There are several possible explanations for this. First, of course, the political factor is the extremely significant. The chances for a Ukrainian to be accused of espionage or to be jailed without an investigation or trial are quite high, as the hundred something Ukrainians currently languishing in Russian jails attest to. Why risk it?

Second is the economic factor. Western sanctions and falling prices for oil and gas led to a deep recession in Russia’s economy and a steep devaluation of the ruble. Incomes went down significantly and are not as impressive as wages in other countries (see Wage gap). In short, it became less profitable to work in Russia at that point. Right now, the Russian economy is slowly recovering as the price of oil rises and so somewhat more Ukrainians have begun to go there, but nothing like the scale prior to the crisis.

Thirdly, worldviews have changed. Obviously, since the start of Russian aggression in Ukraine, a majority of Ukrainians, from both Eastern and Western Ukraine, are not receptive to Russia, and a good portion of them see the country as the enemy. Some have probably decided it would be better to be poor at home than to work for the enemy—a motive that is surprisingly strong for many Ukrainians.

Indeed, the dynamic of net emigration reflects all these factors. In 2013, total emigration from Ukraine to Russia was much higher than to all other countries put together. In 2014, the numbers continued to rise, most likely reflecting large numbers of refugees who fled the war in Donbas to Russia that year. In 2015, when hostilities were at their fiercest, net emigration suddenly went into the negatives, that is, more Ukrainians returned from Russia than went there. Over the last two years, the number of people who left Ukraine permanently for Russia has started growing, but nowhere on the scale that it was before the war.

Civilizational faultlines

SBS data shows that over the last few years, a tectonic shift has taken place in migration flows. Many Ukrainians used to look for a better life in Russia: in 2013, 30% of all emigrants went there, while the share of temporary migrants was 150% higher even than that. Over the last four years, these numbers have halved.

Even Ukrainians from the western oblasts used to go to Russia for work: they knew the language more-or-less and cultural adaptation was faster because of the common soviet past. Moreover, the RF was very competitive in terms of wages: 10 years ago, it offered wages that were higher than the average in Eastern Europe, while Western Europe was too distant, both geographically and in terms of mentalities for many Ukrainians to try to adapt themselves and learn a very different language just for higher wages. When Europe’s debt crisis began, Russia became even more attractive to Ukrainian migrant workers: it survived the 2008-2009 global crisis relatively intact, while the European crisis barely affected it.

Since then, much has changed. First came the war in Donbas and Russia’s deep economic crisis, creating a set of objective and subjective factors that made it less attractive to Ukrainians looking for work. Some Ukrainians absolutely refused to go there under any circumstances. In Western Ukraine, people are more and more turning into shuttle traders, travelling into the EU and back, trading goods from the Union, as stores with such products are available even in Kyiv. Others started looking for alternatives, but the options aren’t many, because it means countries where Russian is spoken and are significantly wealthier than Ukraine. Interestingly, illegal migration to Israel has surged. As an example, a few months ago, on an excursion from Egypt to Jerusalem, the guide explained that 2-3 people from every excursion never went back, “So if any of you plan to stay, let me know right now so that we don’t hold rest of the folks up.” She noted that in 2016, nearly 40,000 illegal migrants made their way to Israel in this manner, many of whom were Ukrainians.

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Second, the soviet generation is slowly leaving the stage and is being replaced by a more mobile, less ossified generation that finds it less of a challenge to learn a foreign language. These Ukrainians are quite willing to look for work in the EU. A decade and more ago, there weren’t many of these, compared to labor migrants who went to Russia. Getting into Europe was much harder and even if someone from a village found a loophole to get a visa and a job in a specific European country, then others from their village would follow suit. Some villages worked in Czechia, others in Greece, Portugal, Spain, or Italy. The European crisis sent many Ukrainians packing, who returned to Ukraine an either stopped migrating for jobs or began looking for new opportunities.

Third, in the last 10 years, relative wages have changed radically (see Wage gap). Average wages in Russia are half of what they are in Poland today. Of course, illegal migrants are not paid that much, but there’s little advantage to migrating to Russia for work, even for diehard pro-Russians. According to OSCE figures, the purchasing power parity (PPP) of wages in Eastern Europe, that is, Poland and Czechia, has become equal to those in Southern Europe, meaning Portugal and Greece. So there’s little point in travelling all the way to Portugal from Ukraine just for a job. And that’s why we hear that over a million Ukrainians are working in Poland today, large numbers of whom probably have moved east from more distant countries.

Changing views, changing destinations

In short, Ukraine has made a huge leap not only in self-awareness but also in orientation, as emigration flows demonstrate. This shift is, moreover, likely not just to remain but to even deepen. Russia’s economy is stagnating and few new jobs are being generated (see Where two can eat, a third won’t go hungry). Hypothetically, rising fuel prices could help Russia but how long will these prices hold as alternative and renewable sources are developed at an accelerating pace? Meanwhile, European economies are coming out of their doldrums: growth is picking up and, more significantly, more jobs are being created. If the difference in wages and the ease of entry are added, the opportunities for Ukrainians become obvious.

The tectonic shift can even be seen in the infrastructure. Where earlier, the majority of Ukrainian migrant workers in a country like Spain were from Halychyna and fewer from adjacent oblasts. Once in a while there might have been someone from central or eastern Ukraine. Today, the mix is much more even. Once, transport to Europe was problematic and people looking to work there mostly traveled in small groups with experienced private carriers. Today, the choice of transportation is enormous: from Lviv alone, there are buses to the EU several times a day. In downtown Khmelnytsk, which is relatively distant from Ukraine’s western borders, there’s a huge board with the schedule of buses to Poland and other neighboring EU countries. Routes to the EU are being launched even from small towns in Donbas, which was once effectively closed.

What’s more, UkrZaliznytsia’s new train schedules and new flights to European destinations by low-cost carriers should ensure that there are plenty of options. Meanwhile, schedules to Russia are shrinking even though 10 years ago, thanks to the range of destinations inherited from soviet times, they offered the best options for leaving Ukraine. Whether they are being shut down because of the war or because of lack of demand, options to Russia are being curtailed.

Silver linings to ominous clouds

No matter how much we might wish people good fortune and a better fate, mass emigration is a problem for any country. Over the last five years, net emigration out of Ukraine was nearly 2 million. This is far too much for any patriotic politician to ignore. The main negative consequence of large-scale emigration is that it sets up a demographic pyramid, where the number of young people is small relative to those who are well past their prime. The direct result is a financial chronic shortfall in the pension fund and low pension benefits. Indirectly, it means the population is in decline, which is a time bomb for the economy. This has not only other obvious results, such as dying villages, but also leads reduced number of users of infrastructure such as roads, power grids and social facilities, and it becomes economically unfeasible to upgrade them or even keep them in good working condition. Some elements might even have to be abandoned altogether.

Every Ukrainian is a marching economic unit, because even if they work in the shadow economy and don’t pay any direct taxes, they still contribute indirectly through VAT and excise as consumers, when they buy goods and services from those who pay directly. Every Ukrainian’s work contributes to the GDP and the country’s economic strength. And, as many put it, the money transfers from emigrants do the same. However, the output produced in the country does not meet the amount of that money. This is money that the emigrants’ families use to buy imported goods and services because domestic manufacturing doesn’t meet demand.

What is the essence of an emigrant? Workers are an economic resource and when people emigrate, this resource is lost. Imagine if Ukraine’s land were all taken away, the way the German army carted millions of tonnes of chornozem off during WWII, or if someone invaded Russia and took control of all its oil and gas? No one would just stand by if that happened. Nor should Ukraine stand quietly by in the face of such emigration numbers. Yet disquiet can be heard only from a handful of second-tier politicians. Premier Groisman says that Ukraine’s economy should grow 6-7% annually, but nothing about the kind of labor pool that kind of growth will need. How will Ukraine ever reach that level when every year 2-3% of its most able-bodied citizens leave the country forever?

The only advantage to emigration is that it is undermining the oligarchy’s hold on Ukraine’s economy. When the country was closed, there was a constant surplus of labor and so oligarchs were able to establish long-term monopolies on the backs of cheap labor, giving them economic clout and effective control over the country itself. Now people have a choice, they go where they find good jobs, and we hear about huge shortfalls in skilled labor, for instance, in Mariupol. In the end, the businesses of oligarchs, which tend to be inefficient, will lose in the competition for quality labor because they will be unable to pay market wages and either chronically operate in the red, gobbling up their owners’ economic reserves, or they will fold altogether. Ukraine will be the winner in all this, but if the large outflow of migrants continues too long, the shortage of labor could mean that eventually market-oriented businesses will suffer along with the oligarchs.

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How to fight the brain drain

Labor migration is an issue that is not just Ukraine’s problem. The population losses of the Baltics are also legendary, even though wages are far higher than in Ukraine. The Economist uses Bulgaria as another example of a country that has been losing its population for a long time: according to UN estimates, its population could shrink from 7.2 million to 5.2mn by 2050. The point is that some countries have governments whose policies are combating the impact of emigration, while others do not. Among the former are Poland, which has been patching up the holes with Ukrainian workers, and Slovakia, which is providing conditions to attract its highly qualified emigrants back, writes The Economist. Ukraine belongs to the latter group.

To stem the tide of emigration, action needs to b taken. Ukraine needs to offer an alternative, such as jobs in Ukraine with wages that are not much lower than in the West. But the first step is to acknowledge that there is a serious problem, and then to come up with quality policies. The investment climate must also move to a qualitatively higher level. There can be no room for raider attacks, a crooked judiciary, pressure on businesses from government agencies, and much more. SMEs should get comprehensive support. Overall, the state needs to organize life in such a way that economic resources—labor, capital, enterprise, public institutions and so on—are high quality and accessible. In order to do this Ukraine must learn to play in a completely different economic league. With the current line-up of players and trainers, this looks highly unlikely.

Translated by Lidia Wolanskyj  

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