MIRPAL III Regional Conference Management of Labor migration in Kazakhstan

1. MIRPAL III Regional Conference Management of Labor migration in Kazakhstan Meruert Makhmutova, PhD 65, Kazybek bi, office 420, Almaty, 050000 Rep. of Kazakhstan Tel.: +7 (7272) 670340, 670432. Fax: +7 (7272) 670340. E-mail: meruertmakhmutova@hotmail.com Dushanbe, May 21,2012

2. Introduction • Economic growth in Kazakhstan observed in 2000-es has made it an attractive destination for job-seekers from near and far abroad. • The Government regulates labor migration to the Republic of Kazakhstan by setting annual quotas.

3. Regulating labor migration • The quota is set as a ratio of foreign labor to the number of employed. • In setting the quota, the MoLSP is guided by requests from employers. • Employers annually before September 1 submit justifications for attracting foreign labor in the coming year to the authorized body. • Then the authorized body, based on the analysis of the domestic labor market and employers’ requests, by October 1 submits a justification for attracting foreign labor in the coming year to the MoLSP. During the same period, relevant government bodies may submit their proposals to the MoLSP regarding the foreign labor quota. • Based on proposals from authorized bodies and relevant government bodies the MoLSP by December 1 submits its draft decision on the quota for the coming year to the RK Government. • Once the Government decides to set the quota, the MoLSP within 15 calendar days allocates it among regions and cities of Astana and Almaty given the labor market situation and labor demand in respective regions and the two cities. • Information on the foreign labor by category, by region and by city is supposed to be presented at the MoLSP website no later than three working days upon its allocation.

4. Quota and actual foreign labor attracted

5. Hungary Azerbaijan Other countries Great Britain India 2,1% 1,2% 16,2% 8,6% 7,6% Kyrgyzstan 1,6% Italy 4,6% Uzbekistan 2,0% Russia 3,7% Philippines China 3,9% Thailand 23,6% Turkey Romania 1,5% Serbia 18,4% 1,7% U.S.A. 1,6% 1,6% Countries of origin, 2010, %

6. non-CIS countries 89,6% CIS countries 10,4% Sources of foreign labor

7. Construction 51,5% Manufacturing Trade 5,0% 4,5% Hospitality 1,7% Transport and communication Mining 1,0% 12,8% Agriculture Education and health Financial Other services 2,4% 0,7% Real estate 4,3% 1,3% 14,8% Labor migration by sector, 2010

8. Informal labor migration • There is a huge gap between the MoLSP data and actual labor migration figures. Majority of labor migrants use informal channels. • There are different informal estimates of undocumented migration in Kazakhstan (between 300 thousand and 1M) by international organizations and experts. • Majority of such migrants are CIS citizens who enjoy visa-free entry and later find a job in Kazakhstan. Many of them live in Kazakhstan for several years or from time to time return to their home countries[1]. • According to a PPRC survey of migrants from Azerbaijan, Armenia, Kyrgyzstan, Uzbekistan and Tajikistan, 6,4% stayed in Kazakhstan for less than 1 year, 60% – 1-4 years, 25% - 5-8 years. [1] PPRC (2007). Survey of remittance senders in Kazakhstan. Study for ADB «Remittances and Poverty in Central Asia and South Caucasus countries» project.

9. Issues with quota system (1) • Currently the quota system fails to reflect actual needs of the labor market and actual numbers of labor migrants: there are major discrepancies between the quota size and actually attracted migrants. • Foreign labor statistics do not indicate what specialists exactly were invited, - only categories and sectors. This makes it more difficult to perform further studies of labor market needs. • In addition, the quota system does not help to legalize and bring into the formal economy a huge number of undocumented labor migrants already present in Kazakhstan who originate from Kyrgyzstan, Uzbekistan, Tajikistan, Azerbaijan and other CIS countries and are employed at bazaars and construction sites, - in fact, in the informal sector.

10. Issues with quota system (2) • The quota-setting system is inflexible, for the economic situation may change rapidly between the request submission and actual arrival of foreign labor • The quota system is not based on any labor analysis and forecasts. • The quota is set as a share of the employed population, with one third being self-employed. • Foreign labor is brought in when there is unemployment among the local population, while the reduction in unemployment is achieved by a statistical increase in the number of self-employed. • There is a long list of exceptions – organizations for which the quota does not apply. • In fact, currently there is no complete information on the number of foreign labor migrants in Kazakhstan.

11. Migration policy priorities • With the advent of the Customs Union, Kazakhstan tends to emphasize cooperation under the Unified Economic Space (UES). To achieve free movement of labor, Agreement on Countering Illegal Labor Migration from Third Countries and Agreement on the Legal Status of Labor Migrants and Members of their Families have been signed. • However, the bulk of labor migration comes not from Russia and Belarus, but from neighboring countries of Central Asia. • According to official data, in Kazakhstan there are virtually no labor migrants from Tajikistan. However, the Migration Service of Tajikistan estimates their number in Kazakhstan at 50,000. • Moreover, as a consequence of sign of Agreements number of non-documented labor migrants from neighboring countries of Central Asia will increase

12. Policy Recommendations (1) • The Government should stress cooperation and migration data sharing with countries of the region • Provide labor market and financial services access to incoming migrants • Support regular periodic program of applied data collection and analysis on migrants and remittances • Establish voluntary life insurance/pension scheme for remitters and families to alleviate risks

13. Policy Recommendations (2) • Create more open environment for incoming migrants to Kazakhstan (and to Unified Economic Space) by: • Establishing broader amnesty • Setting up seasonal worker program • Offering blend of taxation and pension, insurance benefits

14. Thank you!