Ukraine Will Again Forego Conducting a Census of the Population

The last census of the population was conducted under the president Kuchma in 2001…

…in contrast to the Russian Federation, which conducts censuses every decade, and where the next one is planned for 2020.

I was watching one of my favourite YouTube channels (if you can follow content in Russian and Ukrainian, please give it a sub) and around the 3:33 mark, a video is played, featuring a newly elected representative, David Arakhamiya, who says this:

Census is, of course, needed but a census is a statistical action, and it would cost 90 million Euros, which is the preliminary estimate. We don’t have the money to conduct this every 5 years or something… We will conduct a census simultaneously with the distribution of new electronic ID cards…

Interesting, I wonder whether this would stop the guessing as to how many people are left in Ukraine. 25 million? 33.5 million?

Putler Expanded Citizenship Offer to All Residents of the Donbass

Russia clearly does not view the part of the Donbass occupied by the Ukrainian armed forces as separate from that held by the separatists. The Donbass has the most pro-Russian population of all Ukraine, and votes for pro-Russian candidates despite the propaganda about Russian aggression…

RFE/RL reports:

Russian President Vladimir Putin has signed a decree expanding the simplified procedure for obtaining Russian citizenship to include all residents of Ukraine’s Donetsk and Luhansk regions.

The July 17 move comes after Putin, just days after Volodymyr Zelenskiy won Ukraine’s presidential runoff on April 21, issued a decree to simplify the process for Ukrainian citizens in “certain areas” of the eastern Luhansk and Donetsk regions to get Russian citizenship — a reference to areas held by Russia-backed separatists.

Read my earlier articles on this topic (here and here)

Putler Comments on the Desire of Ukraine to give Passports to Russians

Recently, the president elect, Volodymyr Zelensky expressed the desire to grant citizenship to Russians, who suffer under the repression of the Kremlins. The darkest one commented on this…

I translate:

If in Ukraine they will start giving out passports to Russians, and we in Russia will give citizenship and passports to Ukrainians, sooner or later we will inevitably come towards an expected outcome. All will have a single citizenship. We cannot but welcome that.

Featured in Evgeny Mit’s video

Ukrainian Economy in One Picture

Below is a graph based on data from the National Bank of Ukraine. It shows direct investment in lined, and remittances from workers abroad in white. The data for 2018 are for only 9 months.

DweHUqRX0AUVJh-.jpg

This means that the number of people forced to work outside the country grew rapidly. It is highly likely most of Ukraine’s economic growth is due to remittances sent when you consider that the VAT is the major source of revenue for the Ukrainian budget.

A Problem For Czech Companies: The Germans Will Give Jobs To Ukrainians

Below is a translation of an article by Petr Zenker in the Czech business daily, Hospodářské noviny. In November last year, I published similar information from the Polish daily Rzeczpospolita about labour migration further West. 

It will have consequences for machine-building and the car industry.

In recent years, Czech companies found it increasingly harder to recruit new employees. There are fewer unemployed because during a period of economic boom, unemployment dropped to record lows. Companies are now forced to draw worker from their competition or to seek them abroad. But soon, this problem might become even more acute. Germany prepares a breakthrough step, starting next year she will allow people from outside the EU to join her job market.

It will concern mostly Ukrainians, who are a key component of many Czech companies. We can expect that many of them will give preference to a higher salary in Germany over work in the Czech Republic. It will have impact mainly upon our car industry and machine-building thinks Radek Špicar, the vice president of the Union of Industry and Transport. He estimates that: “Especially qualified specialists will go to Germany rather than to Czech Republic.”

The Union of Entrepreneurs in Construction sees this as a serious problem that does not have a solution. Jan Fidler, a shareholder in the company, Hinton says: “The biggest danger will be to our subcontractors, who have a large share of workforce from Ukraine. We are talking about hundreds of smaller firms. But in this way the problem will concern general suppliers as well.”

The new regulations were negotiated upon by the German [ruling] coalition before Christmas, and it is expected the Bundestag will agree to it in the middle of the Year. The Germans have decided to change their attitude because of the same problem that plagues Czech companies: the companies over there (in Germany) suffer from staff shortages, which slows down economic development. Germany currently has one million of free vocations, the Czech Republic has 300 thousand. (translator’s note: relative to population, the Czech Republic clearly has a worse problem)

The key difference in accepting employees from outside the EU will be that the Germans, unlike the Czechs, will not introduce any quotas. That is simply, anyone who meets the skill and language requirements will receive a job in Germany.

The Czech Republic allows for this only in a limited way. From 2016, 20 thousand Ukrainians are allowed to enter the country every year. But the demand from companies far exceeds this capacity. Špicar from the Union of Industry and Transport says: “We are asking the government to increase the workers’ quota to 40 thousand per year.” The doubling of the quota is now being finalised by the government, and should start working from April.

120 thousand Ukrainians work legally in the Czech Republic at the moment. After Slovaks, they are the second most numerous group of foreign workers. Most Ukrainians are active in Poland, where 500 thousand have found their livelihood. The Polish have for a long time been the most open to workers from Ukraine, and do have that many barriers in their employment.

The Ukrainian workers are lured to Poland and the Czech Republic by higher salaries than what they have back home.  The average wage in Ukraine is around 7200 CZK. In the Czech Republic, the Ukrainian workers receive on average slightly more than 25 thousand CZK. Large part of them find work through agencies and receive less money. In Poland, according to the agency Personnel Service, the majority of Ukrainians receive between 15 and 21 thousand CZK. (translator’s note: 1 USD = 22.50 CZK at the time of writing)

Germany’s bold entry into competition over Ukrainian employees will fundamentally change this salary perspective. The average wage in Germany is greater than 2000 EUR, that is 50 thousand CZK. Czech companies will have to raise wages for the Ukrainians to keep them from going after the better German salary.

The Czech Republic and Poland will retain a competitive edge over Germany due to their linguistic closeness to Ukraine. That is a reason, why the opening of the German market does not automatically mean that all the Ukrainians will go there.

“We are not losing people who have already arrived. The problem of Czech Republic is that she isn’t as flexible in comparison to Germany and Poland in managing the influx of workers that the economy lacks. They will rather go to Poland or Germany,” says analyst, Tomáš Ervín Dombrovský from the company LMC.

Poland’s Chances to Recruit Ukrainians are Dropping

Anita Błaszczak in Rzeczpospolita writes…

This is the last bell to struggle over for workers from Ukraine, who are already being recruited by the Germans. They are also being picked off by the Czechs and Slovaks, who are luring them with higher salary and a two year contract.

Already now, the Czechs are taking increasingly more Ukrainian workers from us, and soon the time will come for Germany, where a large part of professionals can leave, warns Marian Przeździecki, director of the Ukrainian branch of the “Work Service” employment agency. He says, despite huge demand from domestic companies, it is increasingly difficult to make work in Poland attractive for Ukrainians.

First, staff shortages are growing in Ukraine, especially in Western regions. Second, this year competition for Ukrainian citizens has significantly increased from the Czechs and Slovaks, who have liberalised entry procedures. This was confirmed by other agencies that specialise in recruiting Ukrainians. Krzysztof Inglot, head of Personnel Service, which already has three companies in Ukraine, admits that this year Czech and Slovakian companies are recruiting on a much larger scale than before.

1506296.jpg
60% of Ukrainians think of work abroad; 26% want to work in Poland for several years; 22% want to work in Poland permanently; Germany is the second most popular destination for Ukrainians after; Treatment of Ukrainian with insurance at ZUS has grown from 59.8 thousand in 2015 to 425 .7 thousand in 2018; 3.2 million Ukrainians work abroad.

CZECH OFFENSIVE

Michał Wierzchowski, is director of the employment agency EWL, which this year wants to bring over 15 thousand employees from Ukraine. Recently, the company also opened an office in Prague, Czech Republic. It wants to take advantage of the boom of Ukrainian employees there. [He says:]

“Despite the announcement of liberalisation of procedures for Ukrainians, nothing is happening. We are standing still, while other countries are beginning to open to them.”

In the Czech Republic where salaries are one third higher than in Poland (and in automotive industry even 50%), Ukrainians can now easily obtain a visa for 90 days, and then an employer can employ them on a 24-month work card, which is part of a government programme “Režim Ukrajina” (see here at Czech Ministry of Foreign Affairs). The card pool has been doubled to 20 thousand this year. Next year it should be doubled as well.

Although, Ukrainians have to wait up to a year for such a long term visa (just like it is with work permits in Poland). However, a system of “informal accelerations” can shorten the procedure to 2-3 months. In addition, after one year you can bring your family to the Czech Republic.

Czech Minister of Labor and Social Policy Jaroslava Němcová has visited Ukraine twice this year and during the last September visit announced the introduction of a fast administrative path for employees in selected occupations, including babysitters. Already now, Ukrainians can more easily get the right to a two-year stay in Slovakia, where wages are around 20 percent. higher than in Poland.

Competition from Germany can soon become a greater problem. Since January 2019, the labor market for non-EU labor migrants, including Ukraine, has been to open more widely. From January 2019, the labor market for non-EU labor migrants, including from Ukraine will be been open more widely.

NEEDED STABILISATION

Marian Przeździecki claims that Poland ceased to be the leader of openness to employees from Ukraine. He explains:

“We fell to the last place in the region. In addition, we lag behind competition in terms of pay, and the housing conditions of employees are often worse.” 

According to him, the main problem is in a limited, six months working time in Poland according to the simplified visa procedure for the so called permit. Declarations by the Ministry of the Family Labor and Social Policy that they will longer it to a year in autumn have not been implemented.

Marian Przeździecki says:

“If we do not do it, if we do not introduce facilitations that encourage permanent work and the settlement of workers from Ukraine,, we will soon lose them.”

He points out that the current system of statements supports the inflow of unskilled seasonal workers from the East, and discourages the arrival of specialists in Poland, who care for stable employment and settlement with their families.

Krzysztof Inglot says:

“We should extend the work to a license of up to 18 months and give Ukrainians incentives to work legally and bring families.”

As the head of Work Service in Ukraine says, Ukrainians or Belarusians seeking a long term residence in Poland do not have any preferences…

“They are treated the same as visitors from Bangladesh or Nepal, even though they (the Ukrainians) are culturally close to us and they adapt fast. If they could live in Poland for longer with their families, they would be more motivated to increase their qualifications. They would not change work so often from 1 or 2 zlotys of hourly rate increase, which has become a nightmare for companies, particularly in construction.” 

OPINION

JACEK PIECHOTA, president of the Polish-Ukrainian Chamber of Commerce

Our advantage in competition for employees from Ukraine is geographical and cultural proximity, and the fact that many [Ukrainians] are familiar with living conditions in Poland.Despite this, competition from countries where wages are higher is a real threat. Despite this, competition from countries where wages are higher is a real threat. In addition, our country’s migration policy is not very clear, the waiting time for residence and work permits is not being shortened, and some politicians combine labor migration with the migration threat. An open government declaration is needed that Ukrainians are welcome in Poland. It is also worth showing positive examples of their employment and integration, which we do in the social campaign “Partnership and employment”(„Partnerstwo i zatrudnienie”).

WORK AND SUPPORT THE ECONOMY

Transfers of money from Ukrainians working abroad has risen to $11.5 billion and is expected to increase in 2018 – estimates National Bank of Ukraine. Last year, Ukrainian migrants sent over $9.3 billion back to the country (about 9 percent of the GDP). As is estimated by the Ministry of Social Affairs of Ukraine, 3.2 million citizens of this country work continuously abroad, and another 9 million seasonally. A large part of both groups goes to Poland, where the number of employees from Ukraine is estimated at 1.8-2 million. As the Association of Entrepreneurs and Employers warns, the outflow from the Polish labor market of even some of them (in a moderate variant – 500,000) may lower our GDP by 1.6%, which was 1/3 of its growth in the previous year. For several years, employers’ organizations and economists have appealed for a coherent Polish migration policy. It was not ready in summer and in autumn it was returned for inter-ministerial consultations. The ministry of investment and development explains:

“The migration policy touches upon many topics, and their reconciliation takes time.”

***

Earlier this website already wrote about the volumes of Ukrainian labour migration to the EU, about staff shortages in Western Ukraine, and about Ukraine rapidly losing her human capital.

Ukraine’s Outflow of Workers: Why The Crisis is Only Deepening

Deutsche Welle Ukrainian service reports…

Even though Ukrainian firms are trying to keep their workers, they are filling the ranks of labour migrants. And higher salaries are not the only impulse that drives them.

Not even favourable location, where there aren’t any other large firms, not even increase in salary, not even bonuses for workers saved a firm with German investment ,the Private limited company “Elektrokontakt Ukrayina”, in the Lvov region, from the lack of workers. The factory of 2.5 thousand workers makes electrical equipment for German cars. The number of orders the firm receives is constantly growing but the number of workers, especially with the beginning of spring, is on the contrary dropping.

The director of HR of the company Roman Kuybida explains:

“Abroad, seasonal works begin and workers often go there to make money. After the season is over they come back, and the majority wants to work for our firm. Their main argument is usually salary, which is higher over there than in Ukraine.”

To keep workers, the factory constantly improves upon the conditions of work, in particular they increase the salary. The median salary is now 9.5 thousand HRN for the manufacturing personnel. Apart from that, the workers are being offered opportunity for career growth, official employment, free healthcare, transport to work, cheap meals, and so on.

Kuybida continues:

“The shift is eight hours in our factory, safe conditions for work. In Poland, to receive a decent salary, for instance twice that as in Ukraine, one ought to work 12 hours per day.”

Why Ukrainians are leaving for abroad

Millions of Ukrainians are working abroad. We do not have exact statistics as to the number of Ukrainians who became labour migrants. The counting is complicated by the fact that many people work illegally, or on seasonal basis. But this trend continues even now. In September, the Minister of Foreign Affairs, Pavlo Klimkin estimated the volume of labour migration out of Ukraine could be million persons per year.

The fact of significant outflow of workers from Ukrainian firms was also mentioned at the Federation of Ukrainian employers. The director of the federation, Ruslan Illichov says:

“The staff shortage crisis caused by the outflow of workers abroad is the result of a badly thought out policy which was conducted in the country for years. Ukraine was built up as a resource exporting country. In such countries where industries with low added value are developed, there cannot be high salaries.”

According to him, Ukrainian employers no longer have the reserves to further increase salaries. The reason he says is the increase of financial burden on business, in particular the growth of tariffs, by 30% the tariff on gas in September-October.

Ruslan Illichov asks rhetorically:

“We are now calculating a yearly plan of production. We are including the cost of wages, energy, and other expenses. And suddenly the state increases the tariff by 30%. What should as entrepreneur do? How can I plan to increase the salary under these conditions?” 

The experience of the Lvov region

In Lvov region they hoped that the increase in wages by employers would be stimulated by the arrival of new investors.

The head of Lvov Region State Administration, Oleh Synyotka said:

“Competition between firms would automatically lead to increases in salary.”

In 2017, the Lvov region even took sixth place in Ukraine as to the amount of investments received. But а jump in salaries hasn’t been felt. The median salary in the region is 8415 HRN, slightly lower than median Ukrainian salary.

The government of the Lvov region has recently decided to complicate life to agencies that search employment for Ukrainians abroad. According to the politicians, the activity of these agencies is one of the main reasons behind outflow of workers abroad.

In September, the head of administration suggested at a meeting to restrict advertisement to such businesses but has rejected this idea in an interview with DW.

“We cannot prohibit a company, which does not break the law from advertising. That’s illegal. I am just saying that we shouldn’t support activity which is detrimental to the state. Moreover, if there are violations in this business, the state ought to react to such violations. There cannot be cases that a company which engages in the export of people has no license. That’s why we have directed a submission to Ministry of Social Policy to inspect these companies.”  

The head of All Ukrainian Association of International Employment Companies Basil’ Voskoboinyk doubts that such an initiative can influence the flow of labour.

“According to data of a sociological research which we have ordered from the sociological group “Rating”, 59 percent of Ukrainians look for job abroad through relatives, friends or colleagues. It is therefore overstated that taking down work agencies would decrease the flow of migrants abroad.” 

Although, he acknowledges that plenty of scammers without a license work on the market. In his opinion, if as the result of inspections only legal recruiting agencies remain, this will be of benefit because people will travel to real employers.

The salary is not the only impulse

However, Ukrainians are leaving not only for higher salaries as we were reminder in the Federation of Employers. According to a study which they ordered last year, 40% of labour migrants polled that apart from salary they have other reasons to leave the country, that is instability in the country, lack of fair social policy, [lack of] security, poorly developed healthcare.

Ruslan Illichov expalins:

“Today there are cases where absolutely competitive salary, comparable to Polish is offered. But the people are still leaving because they do not see a future here. It’s politics, which does not depend upon employers.”

Oleh Synyutka also admits that it is not just the salary which is the reason behind migration of Ukrainians. However he gives also different arguments:

“Very often, the people are fleeing their personal problems, from [their] responsibilities. They find it easier to be far away, to once per month send money to [their] families, and to think that they have done their duty to [their] families this way. Therefore it is necessary to instill family values. And that is a collective task of family, church and society.” 

***

Earlier this website published the words of Olga Pishchulina from the Razumkov centre, who said Ukraine is fast losing her human capital.