Development Centre

Better integration of immigrant workers would enhance their contribution to Kyrgyzstan’s economy, says new ILO-OECD Development Centre report

 

 

Bishkek, 5 December 2017 – Since its independence from the Soviet Union, Kyrgyzstan has rather been known as an emigration country, however around 4% of the population was born outside the current national territory and the country keeps attracting new immigrants. A joint report by the OECD Development Centre and the International Labour Organisation (ILO), How Immigrants contribute to Kyrgyzstan’s economy, demonstrates the economic contribution of these immigrants and makes recommendations regarding the enhancement of this contribution.

 

The report looks at three dimensions of immigrant workers’ contribution: labour markets, economic growth and public finance.  According to the findings, foreign-born and native-born workers integrate very differently in the labour market. The proportion of the working-age population not participating in the labour market is higher for the foreign-born than for the native-born, which is partially explained by the high proportion of elderly immigrants. Unemployment is also more common for foreign- than native-born workers.  Employed immigrants are more frequently employees than self-employed and on average earn more than employed native-born workers.

 

The analysis also assesses whether the presence of foreign-born workers has benefited or harmed the employment opportunities of native-born Kyrgyz workers. It reveals that there are no negative relationships between the presence of immigrants and the labour market outcomes of native-born workers. Native-born employment may even rise when there are more immigrants.

 

Given the sectoral distribution of workers and their estimated productivity, the contribution of immigrant workers to value added was estimated at around 5.2% of gross domestic product (GDP) in 2010, while they represented 4.4% of the employed population. The over-representation of immigrants in certain sectors with relatively high levels of value added per hour worked, such as manufacturing, accounts for this result. The qualitative study of the trade and manufacturing sectors that was undertaken as part of the project revealed that in particular larger companies benefit from hiring immigrants in specialist or management roles to fill skill gaps and that this can entail skill transfers to native-born workers, which could yield further GDP gains from immigration. The study also revealed that aspects of the labour permit process, such as the frequent need to renew the permits, is perceived as an obstacle to employing immigrants.

 

The estimated net fiscal contribution of immigrants to public finance comes out as slightly negative in 2013, accounting for less than 0.6% of GDP. The negative contribution is mainly explained by the higher share of retirees amongst foreign-born individuals; it does not take into account their positive fiscal contributions during their years in the active population. The 2013 contribution of immigrants arrived after independence or born outside the former USSR was much less negative.

 

According to the report, the contribution of immigrants to the Kyrgyz economy could be further enhanced by improving existing policies based on the following recommendations:

 

  • Integration gaps need to be identified and addressed. Providing language courses, for example, could ease the integration of recent immigrants that do not speak one of the local languages.
  • The costs and benefits of particular immigration policies could be re-assessed. For example, a pilot programme could evaluate whether the benefits of the work-permit system to Kyrgyz-born workers exceed the costs to companies and the Kyrgyz administration. Similarly, the effects of the recent change in requirements for investor visas could be monitored.
  • Enhancing the co-ordination between ministries as well as between national and local authorities would allow Kyrgyzstan to develop a coherent policy agenda that maximises the development benefits of immigration.

 

 

Press contacts:

For more information or to obtain a copy of the report or request an interview, journalists are invited to contact:

  • Bolotbek Orokov,  orokov@ilo.org;  National coordinator for Kyrgyzstan, ILO
  • Bochra Kriout (email: bochra.kriout@oecd.org; Tel: +33 (0)1 45 24 82 96) at the OECD Development Centre’s Press Office

 

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How immigrants contribute to Kyrgyzstan’s economy is part of the joint International Labour Organisation - OECD Development Centre’s comparative project on Assessing the Economic Contribution of Labour Migration in Developing Countries as Countries of Destination that is co-financed by the European Union. The nine other countries covered by the project include: Argentina, Costa Rica, Côte d’Ivoire, the Dominican Republic, Ghana, Nepal, Rwanda, South Africa and Thailand.

Find more about the project: http://www.oecd.org/dev/migration-development/eclm.htm.

 

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