Economic

Instead of Ukrainians, foreign migrants: consequences of migration exchange 

The economic development of Ukraine largely depends not on the financial assistance of international partners, which is planned for recovery, but on its population. The state should not repel with its decisions, but should make maximum efforts for the return of its citizens, creating favorable conditions for this now. The government’s policy on the return of Ukrainians from abroad should become the number one priority, as this issue is of vital importance to the nation.

According to the general conclusions of economists, for the successful recovery and development of the economy, it is necessary for the population of Ukraine to be at least 55 million people. However, according to the Ukrainian Institute for the Future (UIF), the population of Ukraine today is approximately 28.5 million people. Of these, 16.8 million are economically inactive, approximately 11.7 million are economically active, but only 9.3 million are actually employed. These figures were announced by UIF experts during the presentation of the forecast of the economy of Ukraine for 2023-2024.

If we subtract public sector employees from this number, there are only 6-7 million people left, on whom the entire economy of the country now actually rests. The situation may worsen even more if Ukrainians continue to go abroad, because there will be no one to create GDP and pay taxes. A labor shortage will increase the tax burden, as there will be more unemployed people per worker, and tax rates will need to rise further to keep them. This will lead to even greater fiscalization of Ukraine’s economy.

According to a study by the Center for Economic Strategy, as of 2024, there are 4.9 million Ukrainian refugees abroad. The main category is women aged 30 to 44 with children – 13%. The number of migrants was concentrated in Germany (30%), Poland (22%) and (4.4%). There is also a large number of Ukrainians in the USA (280,000 people) and Canada (210,200 people). However, many experts note that the number of our refugees significantly exceeds 6 million.

Considering the composition of refugees, they can be conditionally divided into the following categories:

  • classic refugees are mainly women with children who have not been abroad before (41%);
  • quasi-labour migrants – those who go to earn money abroad constantly (29%);
  • professionals are refugees who had their own business in Ukraine, or work exclusively in their profession (29%);
  • refugees from the war zone are the category most affected by the war, having lost their own housing (16%).

If we take into account all the conditions of these groups that forced them to move abroad, we can conclude that the third and fourth groups are the most ready to return to Ukraine. The results of the study indicate that in the end, about 1.4 million – 2.3 million Ukrainians will remain in their new place of residence. The consequences of such a decision will have a painful impact on the socio-economic development of Ukraine.

As a result of the significant increase in the outflow of labor resources abroad, a certain negative trend has recently been observed in Ukraine. The country’s promising young population moving abroad is causing an aging nation and a demographic crisis. According to experts’ forecasts, by 2030 Ukraine will experience a shortage of 4.5 million workers. It is obvious that at this rate, Ukraine will soon need an influx of emigrants from other countries to fill its own gaps. In turn, this decision will force the country to review the state of the economy, as well as affect the reaction of society to the stay of foreign emigrants in the country. Ella Libanova, director of the Institute of Demographic and Social Research named after M. V. Ptukh:

“If jobs appear in Ukraine, if positive and economic dynamics begin to grow, a clear plan for housing reconstruction will be created, then most people will return from abroad. And if we cannot regulate the situation in the country, then those who would like to return will not be able to return to the country because of the low economic and social standard of living.”

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According to her, Ukraine will be able to return only a part of the refugees who went abroad because of the war. For the country, such factors as depopulation, shortage of labor force and decrease in population density in certain territories are increasingly becoming inevitable. In addition, about 2.8 million women of working age who left Ukraine as refugees will not return home, and this will cause a new wave of loss of Ukrainian GDP of 10% of the annual pre-war gross domestic product.

Our country has already begun to feel the negative consequences of the migration wave. Millions of Ukrainians abroad began to pay there with their own bank cards, which caused a large-scale outflow of national currency to other countries, causing a financial crisis in Ukraine itself. Ukrainians abroad are putting more and more pressure on the currency market of our country, forcing it to chaotically search for any tools to escape the crisis. Large-scale outflows of currency from Ukraine helped to block international partners who provided billions in loans and grants to the state budget. In addition, the economy received foreign currency from labor migrants.

At the same time, while our country’s economy is suffering from a whole series of problems, other countries receiving refugees have some benefits from this and are trying to get the maximum benefit for their own economies and raise their standard of living. Ukrainians abroad stimulated the growth of the level of consumer demand and supported the economic activity of the host countries during the difficult time when the world economy was plunged into recession.

What do other countries do with their migrants who left their homeland and went to seek a better fate abroad?

Decades of military conflict and mass violence in Iraq have prompted millions of Iraqis to migrate abroad. By the end of 2023, about 5 million Iraqis returned, 2.1 million people remained abroad. For their return, the Iraqi authorities opened support offices in their embassies, created community councils in countries where many Iraqis lived to facilitate the return process, held free vocational training courses for returnees, concluded a cooperation agreement with the EU to expand dialogue regarding the voluntary return of migrants. The budget of the reintegration program was 1,800 euros for adults and 2,800 euros for children.

Since the 1990s, a civil ethnic war has been going on in Rwanda, which caused a large-scale wave of refugees from the country. About 1.2-1.7 million people fled to neighboring countries. 1 million Rwandans became internally displaced persons. Subsequently, the change of government in the country and the emergence of the program for the creation of small villages for a hundred families, where returnees received free land and housing, encouraged 3.5 million Rwandans to return to their homeland, successfully reintegrate and receive all the necessary conditions for a normal, peaceful life.

Angola was in a state of bloody war for more than 30 years. During this conflict, 500,000 people died, and the number of migrants from the country increased to 4 million people, which was a third of the country’s population. After the peace agreement and the end of the Angolan war, UNHCR and the two countries that hosted the majority of Angolan migrants signed agreements on the repatriation of migrants. The Angolan government has developed a strategy for comprehensive solutions to the issue of migrants. Since then, about 94,000 migrants have returned to the country from camps in the Congo, Zambia and Namibia. The UN government helped the country process documents for asylum seekers, provided them with humanitarian assistance, implemented safe integration of migrants and in developing legislation that ensured all the needs and rights of refugees.  Between 2003 and 2015, 523,000 migrants returned to Angola.

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Involvement of foreign migrants and consequences

In Ukraine, there has been a lack of natural population growth for a long time, the same situation in most European countries. Therefore, attracting the able-bodied population from abroad is practically the only way to achieve the economic reconstruction of our country.

In 2019, during his inaugural speech, Volodymyr Zelenskyy called on Ukrainians living abroad to return home, noting that there are 65 million Ukrainians in the world. This means that there are 28 million people abroad, the main part of which is the Ukrainian diaspora. However, after his speech, no programs were implemented for their return. In addition, there are millions of foreigners who are interested in Ukraine, in particular, people from other CIS countries.

It is now obvious that domestic resources and reserves are not capable of ensuring economic growth. On the one hand, we do not have enough people of productive age, on the other hand, the population does not have a sufficient level of savings to create a significant consumer effect. In addition, there are no financial reserves in the budget: according to the Center for Economic Strategy, we must return $15-20 billion annually by 2027 to repay the debts taken, that is, most of the money received will be returned to creditors for previously received loans. So, Ukraine needs to be “saturated with people”, and then they will “saturate the economy with money”, and not the other way around.

Currently, more than 74% of companies in Ukraine are experiencing a shortage of personnel, and the construction industry already lacks up to 30–40% of specialists. Construction and other companies are planning to attract migrants from Asia and Africa amid a staff shortage. In this regard, Ukraine may face numerous challenges related to the influx of foreign migrants. While there may be potential benefits, it is important to consider the following negative effects that may occur.

Political challenges

An increase in the number of migrants can affect the country’s political landscape. This may lead to the emergence of new political movements and parties representing the interests of migrants. At the same time, nationalist and anti-immigrant sentiments among the local population may increase.

Attracting large numbers of migrants requires effective public policy and coordination between various government agencies. Inadequate preparation or inappropriate policies can lead to worsening of the situation and emergence of social and economic problems.

Economic challenges

An increase in the number of migrants may put additional pressure on the labor market. This can lead to lower wages and worse working conditions, especially in sectors where migrant employment is high.

Migration imposes significant costs on social services such as health care, education and housing. The state may face financial difficulties in providing these services to a large number of migrants, which may affect the overall level of social security in the country.

Social challenges

In some cases, the influx of migrants may be accompanied by an increase in criminal activity. This may be related to economic difficulties, discrimination and social isolation of migrants. The spread of stereotypes and negative ideas about migrants can further worsen the situation.

In addition, social isolation and discrimination can contribute to the radicalization of some migrants. This may create additional challenges for national security and social stability in the country.

The influx of foreign migrants can lead to the emergence of cultural and language barriers between the local population and the new arrivals. This can become a source of misunderstandings, conflicts and even discrimination.

Increasing numbers of migrants can create competition for scarce resources such as jobs, housing and social services. This can lead to growing social tension and discontent among the local population.

Migrant children may have difficulties adapting to the Ukrainian education system due to language barriers and cultural differences. This can negatively affect their academic performance and future career prospects.

 

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