The euro plummeted to a five-year low against the US dollar during Wednesday’s trading, amid heightened fears of a possible energy crisis and an economic slowdown in Europe.
Media reports from Europe said:
As of 11:01am GMT, the euro/dollar exchange rate was down to $1.061 from the previous closing level of $1.0636. Earlier in the day’s trading, the index fell to $1.0586, dropping below $1.06 for the first time since April 2017.
The euro weakened further after Russian energy giant Gazprom cut off gas supplies to Poland and Bulgaria over their refusal to pay in rubles, leading to uncertainty about the bloc’s energy security.
In March, Russian President Vladimir Putin announced that payments for natural gas supplies to the European Union and other countries that had imposed sanctions on Russia, were to be made in the Russian currency. The new payment mechanism has now been implemented, the Kremlin announced on Tuesday.
Rouble Vs Euro In Moscow
A Reuters report said on April 27, 2022:
The rouble soared to a more than two-year high against the euro in Moscow trade on Wednesday, supported by existing capital controls and upcoming income tax payments, after Russia upped the ante in a gas dispute with Europe.
Russia halted gas supplies to Bulgaria and Poland for rejecting its demand for payment in roubles, taking direct aim at European economies in its toughest retaliation so far against international sanctions over Moscow’s actions in Ukraine.
By 1418 GMT, the rouble had gained 1.8% to trade at 75.43 versus the euro, its strongest since early March 2020.
It was 1.1% stronger against the dollar at 72.75.
The suspension of gas supplies to a number of European countries could exacerbate geopolitical tensions and further worsen relations with Europe, negatively impacting sentiment, Veles Capital said in a note.
Promsvyazbank analysts said corporate income taxes due on Thursday could deter the greenback from strengthening significantly against the rouble.
The market is also looking ahead to Friday’s rate decision. The central bank is widely expected to cut its key interest rate by 200 basis points to 15% as it tries to stimulate more lending in the economy in the face of high inflation, a Reuters poll showed.
Lower rates support the economy through cheaper lending but can also fan inflation and make the rouble more vulnerable to external shocks.
Trading activity remains subdued and somewhat erratic compared with levels seen before Feb. 24, when Moscow sent tens of thousands of troops into Ukraine. On the interbank market, the rouble was weaker: banks offered to buy dollars for 74.15 roubles and were selling them for 74.57.
The Reuters report said:
Russian President Vladimir Putin said Russia had withstood the impact of sanctions, but an economy ministry document seen by Reuters on Wednesday showed it expects gross domestic product to shrink by 12.4% in its most conservative scenario, suggesting that sanctions pressure is taking its toll.
European Gas Prices Soar After Supply Disruption
Other media reports said:
Natural gas prices in Europe skyrocketed on Wednesday after Poland and Bulgaria were hit by a supply freeze from Russia in response to the countries’ refusal to pay for deliveries in rubles.
May futures on the Netherlands-based TTF trading hub climbed to $1,374 per 1,000 cubic meters on Wednesday morning, or nearly $125 per megawatt-hour in household terms, according to data from London’s ICE exchange.
Russian state energy giant and major gas exporter Gazprom said earlier on Wednesday it had completely halted gas flows to Bulgaria and Poland after the two countries failed to pay for April supplies in the Russian currency. According to Gazprom, the suspension will remain in force until payment is received in rubles.
Russia demanded in March that its natural gas exports to “unfriendly” countries be paid for in rubles, as Western sanctions over the conflict in Ukraine severely restricted Moscow’s ability to conduct transactions in dollars and euros. Most EU countries refused to accept the terms, leading to concerns that Russian supplies would be halted from April 20, when contract payments were due. Among EU member states, so far only Austria and Hungary have agreed to pay for Russian gas in rubles, with Germany indicating it could be a possibility.
Sanctions are a form of warfare, and few would deny that we have moved into a new era of economic warfare with sanctions, led by the US, have become the norm, rather than the exception. This was the conclusion recently of the pro-Western World Economic Forum. If there is general agreement that sanctions are a form of warfare, and not selectively, but regardless of who imposes them and for whatever reason, the next question is the cost-benefit ratio on the country or countries imposing them.
Clearly, the desired goal is to use economic sanction as leverage, although there is an appreciation of their impact on the general population, rather the elite of the targeted nation. From the Cuban Revolution, to the Iranian Revolution, and to Russia’s invasion of Ukraine, history has shown that sanction do not yield the desired goal. When imposed on countries like China, economic sanctions have shown to cause far greater damage to those imposing them than on the targeted country. Assuming that heads of state are well aware of this reality, why go the route of economic sanctions, only to suffer the detrimental consequences?
The combination of ideology, power status, the mythology/pathology of “greatness”, even when time has diluted such “greatness”, revenge at any cost, desperation owing to lack of alternative paths, and, of course, delusional thinking of which it is always in abundance on the part of the political and business elite, merely because they embrace the fallacy of the eternal sameness against the harsh reality of constant change combined with the other reality of the unpredictability on the part of the sanctioned party. Just as Russian is not what it was in 1949 when it successfully tested the first atomic bomb, and simultaneously Mao’s revolution succeeded in China, neither is the US the same as the world’s hegemonic superpower with the dollar as the world’s preeminent currency.
When Biden announced the massive US-led sanctions against Russia, US and European officials as well as Western analysts were predicting the complete collapse of the Russian currency now linked to gold; the quick bankruptcy of the Russian state agencies owing to defaults, followed by an economic depression and presumably the Kremlin’s decision to leave Ukraine in humiliation. At the same time, US-Western analysts expected an international rush to buy dollars, thereby strengthening the US reserve currency.
The above scenario was around the end of February when the euro-dollar exchange rate just $1.13-1.14 to one euro. On 28 April the dollar-euro rate stands at $1.05, representing a significant drop against a currency itself in trouble because of the Russian sanctions. More significant, a number of private financial institutions as well as the IMF which monitors currencies globally, have concluded that the dollar is headed for continued decline. Saudi Arabia among other countries have already announced that they are transitioning out of the dollar as the most reliable reserve currency. The US-NATO sanctions regime which is in essence a reaffirmation of economic bloc trading in the absence of their ability to compete with China, regardless of what has taken place with Russia, demonstrates that the West is undermining the Western neoliberal model from within, using the Russian war as a pretext in a desperate attempt to retain core status in the world economy.
The US-NATO plan to weaken Russia militarily, thereby sending a message to China about Taiwan, rather than to pursue a diplomatic solution will hasten and deepen global economic recession, and by default strengthen China despite its own supply chain problems because of an austere COVID-19 lock down policy. Rhetoric aside, the Russian currency has stabilized. GAZPROM has already compelled a number of European countries and companies to pay in rubles for natural gas. And the idea that a war of attrition will only hurt Russia has proved delusional so far, and we are still early in a conflict that the US wants to be drawn out.
The idea that a military solution will favor the US-NATO bloc and result in the demise of Russia is another leap into the murky realm of delusional thinking, considering that autocratic Putin is more determined and far more capable of doing damage to Europe than NATO can inflict on Russia, unless the West has resolve to put an end to the continent. This is not to suggest that the Kremlin’s delusions are less imperialistic, less militaristic and more ethical than those of the US-NATO coalition. If China never existed, and if more than two dozen countries of the 195 in the world were taking part in US-led sanctions, US-NATO sanctions would not be as delusional, though they would still not be nearly as effective as policy makers assume.
Jon V. Kofas, Ph.D. – Retired university professor of history – author of ten academic books and two dozens scholarly articles. Specializing in International Political economy, Kofas has taught courses and written on US diplomatic history, and the roles of the World Bank and IMF in the world.
Many people would quite correctly argue that the conceptual pair of “communication and capitalism” are more about capitalism than communication and the media. While the imperatives of capitalism carry on, the requirements of corporate media become ever more determining.
More and more, the media – print, TV, online, etc. – define our lives from working (including working from home) to shopping (advertisements, marketing, online shopping, etc.) and virtually everything between work and consuming.
The pathological imperatives of capitalism become even more evident when looking at communication and capitalism from the standpoint of the Frankfurt School’s of critical theory. Such a view is mostly based on the German philosopher pair of Max Horkheimer and Theodor Adorno.
But, also on Herbert Marcuse’s, seminal masterpiece One-Dimensional Man and not to forget Jürgen Habermas’ Transformation of the Public Sphere, and somewhat less: Axel Honneth’s theory of recognition.
In any case, communication shouldn’t be viewed from a media-oriented standpoint only, as traditional media studies like to do. Instead, communication needs to be seen from a society and even through a capitalism-oriented approach.
On this, one might argue that communication is the social process of symbolic interaction through which various actors come together, entering into a communicative relationship in the production and use of objects to create meaning. This takes place less in the sphere of the state and more in the sphere of society.
German philosopher Hegel was one of the first to separate the state from civil society in a systematic and philosophical way. Overall, Hegel sees modernity taking place in three different spheres:
- firstly, there is the sphere of the modern state (bureaucracy, administration, police, army, government, etc.);
- next, there is the sphere of the economy as outlined by Adam Smith, and even more so by Karl Marx – often neglecting the role of the media in modern capitalism; and finally,
- there is the sphere of what we might call culture. On that, Adorno and Horkheimer‘s Culture Industry: Enlightenment as Mass Deception remains a key text.
One of the first philosophical illuminations on our ability to develop culture and communication dates back to the most recognized Greek philosopher – apart from Socrates and Plato – Aristotle. Aristotle once noted that man alone among the animals has speech. In other words, animals do not speak.
Currently, there are about eleven theories seeking to explain why us? Why is it that only we – human beings – can speak? Until today, Aristotle’s assessment remains correct – human beings are the only ones who speak. And, this has positives and negatives.
Perhaps one of the key pathologies of human communication occurs when capitalism’s culture industry advances the systematic promotion of positive thinking – including a positive attitude towards capitalism.
Simultaneously, the culture industry delivers a concerted attack on transcendent and critical notions. This seeks to reduce resistance against capitalism. In short, the cultural industry sustains capitalism’s status quo.
At the same time, it is trying to eliminate any real alternatives to the status quo. Critique that is system-stabilizing is admitted, incorporated, and even welcomed. System-supportive critique is generally framed as critique to imply there is no critique seeking to overcome capitalism. System-supportive critique refines capitalism rather than challenges it.
On forms of communication that are also welcomed by capitalism, a typology of five versions of communication emerge: 1) verbal communication, such as spoken language; 2) non-verbal communication, such as body language and gestures; 3) amplificatory communication, such as TV and radio; 4) storage communication, such as seals, coins, etc.; and, 5) alternative communication, such as democratic media and free radio.
With the emergence of the Internet, one perhaps finds Zoom in the first box, YouTube in the second category, Twitter in the third, CD-ROM and Cloud servers in the fourth, and Facebook and WhatsApp in the fifth category.
Neither the rise of the Internet nor the move from manufacturing to the service and knowledge industry has changed the fundamentals of capitalism. The aforementioned philosopher Adorno reminds us that large sections of the Internet and media production still takes place for the sake of profit.
Slowly but surely, capitalism’s profit imperative – including its adjacent forms of communication – infiltrates societies. The attack of the sphere of capitalist production on the sphere of society is an element that largely defines huge areas of communication under capitalism. Much of this impacts on what German philosopher Husserl (1936) calls the Lifeworld.
For Habermas, the attacks of capitalism on human society has led to the Colonization of the Lifeworld. Originally, i.e. at the dawn of modernity, Habermas’ public sphere was a sphere that used to serve three key functions:
- the public sphere is the realm for the formation of public opinion;
- in a true public sphere, all citizens have access; and,
- the public sphere enables political debate about matters of general interest in an unrestricted fashion underwriting key human rights such as, for example, freedom of assembly, freedom of association, and freedom of expression and publication of opinions.
Yet, today’s public sphere remains under sustained attack from at least five angles: 1) media concentration; 2) commercialized and tabloidized content; 3) power inequalities that underwrite the disempowerment of alternative voices; 4) private media ownership; and finally, 5) capitalism’s inevitable for-profit and “advertising-equals-revenue-and-profits” logics. To a large degree, these five elements shape how people experience mass media and communication.
Of course, like all systems of domination, capitalism depends on the production and dissemination of system-supportive ideologies. In that, ideologies serve three key functions: virtually all ideologies seek to eliminate contradictions such as, for example, from between a demand for high wages to sustain consumer capitalism set against a company’s interest in reducing wages as these are mere costs to a business.
Secondly, many ideologies serve to sustain capitalism’s system of domination – Hegel called this master and slave; and finally, ideologies seek to reduce or, preferably, eliminate – as much as possible – any moves into the direction of human emancipation from capitalism.
Most importantly, any ideology that stabilizes power asymmetry also – and always – sustains the rule of someone over others. In doing so, ideologies seek to naturalize domination and exploitation by making them appear natural. Ideologies communicate – for example, ideals like: that is the way it is; that’s how the world works; it has always been like that, etc.
It makes domination, poverty, global environmental destruction, and the pathologies of capitalism appear normal, neutral, and even natural. Beyond all that, many ideologies can serve two additional functions: justification and concealment. Ideology justifies capitalism by making it appear to be a just and even legitimate.
Simultaneously, concealing pathologies from slavery to child labor and from mindless consumerism to global environmental vandalism can easily be concealed by focusing on, for example, one actor slapping another one at the Oscars, the Kardashians, etc. This can even reduce interest in democracy – including attempts to eradicate democracy as seen on the 6th of January 2021.
Despite the rather common myth that – almost inevitably – capitalism will lead to democracy, capitalism can – and has done and continues to do – very well without democracy. On the capitalism-means-democracy myth, one might like to argue that authoritarian capitalism is a particular form of capitalism. In this version, the state is used in a repressive manner to advance the interests of the capitalist class. Worse, authoritarian capitalism also uses corporate media to advance its interest.
In some cases, this has led to what Edward Said describes as Culture and Imperialism. On this, cultural imperialism supports the cultural dominance of US-style capitalists’ mass culture and consumerism throughout the world. Of course, this is inextricably linked to Americanization, McDonaldization, CocaColonization, and Disneyfication, etc. Perhaps Facebookization and Amazonificaton might be added today.
Meanwhile, inside corporate media, the old logics of anything can be said, provided that you can afford to say it and that you have to say it profitably continue to hold sway. Some of the most evil heretics have even said that the freedom of speech boils down to about two-hundred people who own most of the world’s corporate media.
In addition to all that, the anonymity of Facebook, etc. has changed much of the way in which human beings communicate and even relate to one another. On Facebook, Instagram, and others – many things can be said and is indeed said – anonymously. This aids the rise of hate speech and right-wing conspiracy fantasies, such as: no, Angela Merkel is not Hitler’s daughter!
Set against conspiracy fantasies, and our current media and communicative pathologies, one might like to suggest that we return to Habermas‘ Theory of Communicative Action. This focuses on two kinds of communication:
- there is a strategic and instrumental communication in which communication is used to serve a specific strategy, plan, purpose, or ideology; and
- there is an un-damaged communication seeking two outcomes: a) communicative action dedicated to reaching a common understanding among people, and b) communicative action dedicated towards consensual, and above all: rebellious social action.
In the instrumental-strategic version of communication, we find concealed strategic actions in the form of unconscious deception, and accidental misinformation. But we also find conscious deceptions in the form of deliberate disinformation, propaganda, and corporate public relations
Today, the ideological media apparatus of capitalism has advanced to such a state, that we can no longer escape its ideological domination. This is Adorno’s Grant Hotel Abyss from which you can checkout anytime but you can never leave. It is an enjoyable and mind-numbing place lavishly furnished with silly entertainment, consumerism, and meaningless distractions. As Adorno once said,
Immovably, they insist on the very ideology which enslaves them.
Thomas Klikauer teaches at the Sydney Graduate School of Management at Western Sydney University, Australia. He has over 770 publications including a book on Media Capitalism.
Meg Young is a Sydney Financial Accountant who enjoys the outdoors, good literature, foreign music and in her spare time – works on her MBA at WSU, Australia.
It was summer 1982 in the aftermath of the Zionist invasion and the total destruction of the camp by the Zionist planes. For this reason, the camp residents could live in semi-destroyed houses without doors or windows without suffering from severe cold. Therefore, the main concern was that winter would come before reconstructing their homes. I used to hear these expressions of worry from the camp people, afraid of the coming of winter, while they were in this situation.
Until that time, the camp still consisted of rubble blocks scattered here and there, despite the modest efforts of the residents to remove the rubble and minor repairs to some houses. There was no electricity, so the camp was plunged into darkness at night. And when it was dark, no one would move in the camp. The camp looked like a completely deserted place.
Perhaps the description of Sheikh Hammod, who was a cleric in the camp, that the camp is like a cemetery, expresses the reality. We sometimes heard shooting sounds at night, but we did not know their source.
Once, we heard the sound of gunfire at night close to us.
I thought of opening the door to see what was happening, but my mother caught me and prevented me from going out. She was worried about me all the time.
She wanted me to leave the camp, but this was a hard thing to do. I have a moral obligation towards my people and could not leave them in this situation. When I remember my mother now, I feel much pain in my heart. I feel enormous hatred and contempt towards the Zionists criminals who came from their ghettos in Eastern Europe and destroyed our lives, forbidding us to live in our country freely and peacefully.
The most provocative is that the Zionist criminals, unlike all occupants in history, portrayed themselves as victims. They managed to brainwash people in the west that they are so.
One major problem in the camp was that if someone got sick at night, we couldn’t move to take him or her to Doctor Outside the camp. Moving at night meant exposing us to Zionist fire.
The only clinic was the clinic run by the Norwegian medical team, who left after the invasion. There were no medical services left in the camp, neither in regular times nor in emergency cases.
I remember my grandmother’s case, who had severe stomach cramps, but we could not move at night to take her to Abu Issam, a nurse in the camp who functioned like a Doctor in the absence of doctors and proper health care. Abu Issam worked many years a nurse.
He had much experience and indeed got a good reputation among the residents of the camp .In addition, he always kept medicine at home. We gave her some herbs that help the stomach, and we waited until next day and went to Abu Issam, who gave her some medicine.
Once, an accident happened that saddened the whole residents in the camp.
It happened with a young man from the camp named Youssef, a Mongolian type.
Youssef was moving in the camp all time. When he approached the Israeli checkpoint, they shot and killed him one day. Once I saw him in the street. He tried to explain it to me in his way the situation.
So he made his finger the shape of a pistol and aimed it in all directions. Youssef knew that we had fallen under a ruthless occupation. He was trying to express this situation with the movements of his hands.
Youssef’s death was a tragedy because everyone knew his condition. The Zionists kidnapped his life as they kidnapped and still the Palestinian lives. I do not stray from the truth when I say that the word “Zionist” or “Israeli” or “Jew” has become equivalent to death in the Palestinian culture.
All camp residents walked in his funeral, which was an expression of rejection of the occupation. It was a sad funeral. Everyone walked into the funeral knew Youssef. And everyone knew that he might get killed at any time and for no reason.
PS
This is part of my testimony about the situation in Burj Shimali camp under the Zionist invasion to Lebanon in June 1982. I witnessed all the horror inflicted by Zionists. So I feel it’s a moral obligation to tell the story of those people who lived all this horror to help in revealing the murderous nature of Zionists.
I’m grateful to Mr. Binu and countercurrents for publishing this testimony.
Salim Nazzal is a Palestinian Norwegian researcher, lecturer playwright and poet, wrote more than 17 books such as Perspectives on thought, culture and political sociology, in thought, culture and ideology, the road to Baghdad. Palestine in heart.
Does Russia need workers?
The labor force in Russia is gradually declining. This indicator reached its peak in 2008-2011. Then the labor market was 76 million people, or 53% of the total population of the country. By 2020 that figure has fallen below 73 million, less than 51% of the total population.
Employees leaving the labor market are moving into the category of state-funded pensioners, increasing the burden on the Pension Fund and the Federal budget. This trend is expected to continue in the medium term.
Together with the growth of life expectancy, this state of affairs becomes a challenge for the government to provide social guarantees. The current situation prompted the country’s leadership to start a reform to gradually increase the retirement age. This will keep experienced workers in the market and redistribute the costs of the Pension Fund. However, due to the specifics of the Russian pension system, the economy needs workers who pay taxes and make monthly contributions to the Pension Fund.
Consequently, the Russian economy in its current form needs at least 70 million workers not only to maintain production, but also to fulfill basic social guarantees.
In 2000-2020, the Russian economy used its labor force almost to the maximum. Over the past 20 years, the unemployment rate in Russia has been steadily declining, except for the crisis years of 2008-2010. Then unemployment reached 8.3% of the entire labor force.
The recent rise in unemployment happened in 2020 under the influence of the covid-19 pandemic. However, the pandemic factor was regarded as temporary. It hit the service sector the hardest – shopping malls, restaurants, nightclubs and cinemas. The immunization of the population and the abolishing of quarantine restrictions stimulate the revival of the economy and its return to pre-pandemic levels.
Labor migration to Russia
In recent years, the countries of the former USSR have served as a source of labor for Russia. In Russia, there is a large influx of migrants from Ukraine, Belarus, Moldova, the states of Central Asia and Transcaucasia.
The largest donor of labor migrants in 2010-2020 are the countries of Central Asia. Since 2000, the population of three republics – Uzbekistan, Tajikistan, Kyrgyzstan and has grown by 10, 3.3 and 1.7 million people. As a percentage, these figures look even more impressive. Uzbekistan and Tajikistan added about 30%, Kyrgyzstan – 25%. After the collapse of the USSR, the economies of Central Asia experienced a decline. The government and private enterprises could not employ the entire workforce. Therefore, young people began to massively go to work in Russia.
Many migrants (mainly from Ukraine and Belarus, as well as ethnic Russians from all the republics of the former USSR) eventually received residence permits and citizenship, replenishing the Russian labor market. The rest are counted as labor migrants. However, since many migrants work semi-legally or illegally, it is difficult to accurately calculate their number. Various estimates for 2017-2019 converged on approximately 10 million people. During the pandemic, this figure dropped to 6-7 million people.
It can be expected that some migrants will return to Russia, while others will look for new destinations. Among the Kyrgyz, for example, Turkey is popular. An exit channel is being formed to the countries of the Middle East – the United Arab Emirates, Qatar, Oman. Educated youth are considering moving to Europe, the US, South Korea, and Japan.
Although Russia retains an advantage in attracting labor from Central Asia, Russia may have to compete for these workers in the foreseeable future. This has already happened with Moldova, whose workforce has shifted to the EU labor market. Another option is to search for alternative donor countries. It is not easy to do due to higher logistics costs and adaptation barriers.
Structure of employment by industry
The most common professions in Russia are driver and salesman. Further – accountants, teachers, loaders, cleaners, security guards and doctors. Many of these professions do not require high qualifications. Overall, unskilled workers make up about 7% of the workforce. Pay in these areas is usually not high, but there are exceptions.
Now in Russia there is a growing demand for engineers and qualified blue-collar workers. At the same time, wages are on the rise. Jobs are becoming more profitable.
Urbanization and renovation of cities continues in Russia. Tens of thousands of migrants work in construction now. The Ministry of Construction and Russian developers are interested in the labor force to keep the business going.
It is worth noting that during the pandemic, some migrants moved from construction to less difficult areas. For example, they became food-delivers and taxi drivers. This exacerbated the shortage of workers in the construction industry.
Finally, there was a stereotype in Russia that migrants were mostly unskilled workers. However, Russia has received many engineers from Ukraine and Belarus, and there are really good opportunities for IT specialists in Russia. Migrants from Central Asia work not only in construction, but also in healthcare. Some of them start their own business.
Labor productivity
In Russia For many years there have been difficulties with labor productivity. OECD calculates this indicator as GDP produced per 1 hour of working time. According to the organization, in 2020 Russia produced $27.7 worth of goods and services per hour, which is slightly better than in Costa Rica and slightly worse than in Chile. Russia is 4 times behind the leading Ireland. Of the post-Soviet countries, Estonia can be singled out, where labor productivity reaches 41.8 dollars. In India, labor productivity does not exceed $10. In general, for OECD countries, this figure is 54 dollars.
Over the past 20 years, Russia has managed to increase labor productivity by 45%. In the 2000s, this became possible thanks to a significant increase in oil and gas prices, which allowed to increase GDP and to stimulate the development of other industries. After the financial crisis of 2008-2010, labor productivity began to grow more slowly. The fall in world prices for hydrocarbons reduced GDP, and then growing sanctions pressure was added to this.
Sanctions from developed economies complicate the import of high-tech equipment to Russia. The modernization of production facilities with the help of imported equipment has also been an important growth driver for Russian enterprises in recent years. The use of modern machine tools and robotization made it possible to reduce the number of employees of enterprises by several times.
The recent major wave of sanctions could significantly slow down the modernization of production. In some cases, a rollback due to the inability to maintain and repair imported equipment is not ruled out. This means that the demand for labor in Russian industry and agriculture will remain quite high. Just keep in mind that in many cases such work will be low-paid.
Of course, Russia will look for all possible solutions. Therefore, on the one hand, the Russian economy will need workers, on the other hand, Russia needs to modernize equipment. The latter is possible with the development of our own machine tool industry and establishing contacts with potential exporters of equipment.
Perspectives for migrants from India
As per the United Nations Department of Economic Affairs about 17 million Indian were living abroad in 2017, it was 7 million in 1990. The number of unskilled migrants was 6, 37, 000 in 2011, which decreased to 3, 91,000 in 2017 as per a report by the Asian Development Bank. International emigration increases when more people have the access to financial resources to travel abroad and decreases when countries reach upper-middle income status. Limited or decreasing opportunities in the home country, combined with labor demand abroad causes international migration for about 73% of workers in their host countries as per the ADB report. India’s working age population is increasing by 1.3 million per month, in a stagnated job market creating new challenges for employment.
With the rapid expansion of Gulf countries’ economies, large scale development project started in these countries. Worker from India and other South Asian countries started to migrate there. Between 1990-2017 the number of Indians living in Qatar increased from 2, 738 to 2.2 million. Oman and United Arab Emirates saw increase of Indian population 688% and 622% respectively, whereas in Saudi Arabia and Kuwait Indian population rose by 110% and 78% during 2010-2017.
Within India, southern states like Kerala and Tamil Nadu have been traditional sources of migrant workers to the Middle East and South East Asian countries, however, lately less developed states like Uttar Pradesh and Bihar are taking the lead in sending low-skilled youths overseas.
Emigration from India to Gulf Cooperation Council (GCC- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) increased since the 1970s due to the oil boom. Oil boom has attracted both semi-skilled and unskilled labors from India. Most of these workers emigrate mainly for economic betterment and for short period of time. Their economic success motivates other Indian youths to migrate to these countries, which is the reason we see the increase in their number of Indians going to Gulf countries. The remittances sent by these workers help their families come out of poverty as well as boosts economic growth in their parent states. It is not to say that their life in host countries is hassle free, however, given the benefits, this trend has continued for more than three decades. As compared to their parent states, the sense of security, availability and accessibility of facilities in the host countries as well as regular income have been noted as major causes to attract migrant workers. The reason for providing a comparative picture of GCC is that Russia is also an oil rich country, and given the current restrictions, and India’s high number of working population, a match can be found.
Below we discuss advantages and disadvantages of such proposition-
In our opinion, one should not expect a large influx of Indians to the Russian market in a short run. Establishing labor migration channels from India to Russia is much more difficult than from Central Asia or Moldova. However, there is potential to draw Indians into the Russian economy. The foundation for this is educational migration. Every year a large number of Indians enter Russian universities. Some of the graduates do not return to India, but remain in Russia. There are already several examples of successful Indians in Russian business and even politics. There is also an option with the creation of joint Russian-Indian enterprises. Such companies can attract Indian workers to Russia. The most promising projects are in pharmaceuticals, the space industry and other areas (but they require both semi and skilled professionals, with lesser demand for unskilled workers).
Advantages:
– The vacant niches in the economy and the labor market after the departure of Western campaigns and the outflow of some migrants from donor countries;
– Opportunities for the emergence and growth of new economic industries (more joint Russian-Indian companies instead of European ones);
– In large cities and in large industries, the level of wages is higher than in India;
– Opportunity to obtain citizenship and, accordingly, social benefits from the state (free education, medical services, pension);
– Possibility to rent land both for life and for economic activity;
– Relatively low cost of basic foodstuffs;
– Developed service sector and cultural environment, especially in large cities;
– Historically positive attitude towards people from India;
Challenges:
– One needs to learn Russian (English can be used as a language of communication within large international companies, but for other issues, including legal procedures, knowledge of Russian is extremely important);
– Competition with Russian citizens for a shrinking labor market (after the pandemic and the departure of some Western companies, many Russians will look for work);
– Relatively high cost of rental housing (especially in Moscow and St. Petersburg);
– If the purpose of the move is to start a business in Russia, then difficulties may arise due to regulations;
– Due to sanctions, there may be difficulties with cross-border payments and money transfers (from Russia it is impossible, for example, to pay for Apple services);
– Possible fluctuations of the ruble against the dollar;
– Climatic features (long and relatively cold winters);
– Geographical remoteness (flight from Moscow to Delhi takes more than 6 hours);
Sources:
https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=RU
https://www.rbc.ru/rbcfreenews/5fd974b79a79476744e0063f (In Russian)
https://rg.ru/2017/10/19/samymi-massovymi-professiiami-v-rossii-ostaiutsia-voditel-i-prodavec.html (In Russian)
https://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV
https://paa2014.princeton.edu/papers/141653
Yevgeny Ivanov is a lecturer and researcher at the HSE, Moscow, Russia and Ashish is a doctoral candidate at the NRU-HSE, Moscow, Russia
