The Future Role of Migration for a Shrinking and Aging Ukraine

By Manfred Profazi, Chief of Mission of the International Organization for Migration (IOM) in Ukraine

The population of Ukraine is shrinking and aging. To speak of a “dying nation”, as some commentators have suggested is surely exaggerated. However, this trend is certainly a cause for concern as it will impact on the economic and social development of the country.

In 1990 the population of Ukraine was 51 million, while by 2010 it shrank by more than 5 million to 45.5 million. The World Bank suggests this trend is continuing, with the population decreasing by 0.8% per year, or 380.000 people, roughly the population of Sevastopil.

“Prediction is very difficult, especially about the future” the Danish Physicist Niels Bohr once said. However, demography is not about reading in a crystal ball. In circumstances of peace and disregarding migration, one can fairly accurately assess how many 20 year old Ukrainians there will be in 20 years, simply by counting the newborns of today.Ukraine’s fertility rate currently stands at 1.1, which is below the EU average of 1.2 and far lower than the 2.1 required to maintain a steady population level. Moreover, demographic decline means the population is ageing, with a continuously growing percentage of elderly persons in society.

The population of Ukraine will continue to shrink and age; this is not prophecy, but simple extrapolation. In the not so distant future, these demographic trends will result in shortages on the domestic labour market. Already today, some regions are short of construction and metal workers as well as electricians, to name just a few examples.  It will also put pressure on the pension system and the public health sector, with less and less people of working age having to support a growing number of elderly persons.

The Role of Migration

In the past 20 years Ukraine has shifted from a relatively immobile society with limited freedom of movement to a country of origin, transit and increasingly destination of migrants. Out-migration will continue and future shortages on the Ukrainian labour market have the potential to be further accelerated as the populations of many traditional destination countries for Ukrainian migrants are also shrinking and aging, notably in the European Union and the Russia Federation. Their labour shortages might very well be filled by an ever growing number of Ukrainian migrants in the future.

Discouraging Ukrainians seeking employment abroad cannot be the solution. To mitigate the negative consequences and promote the positive impact of migration, Ukrainians should rather be encouraged to migrate circularly and return to invest their savings. This will simultaneously alleviate demographic concerns and also increase the development potential of migration.

Few people realize the crucial importance of the money transferred home by migrants. Ukrainian migrants remit 5 to 9 billion USD per year, representing between 5 to 8.5 % of national GDP and equaling the amount foreign companies invest in the country. How this inflow of money could be increased and better used for development purposes is an issue which needs to be addressed.. Traditional labour-sending countries like Mexico and the Philippines have long realized the enormous development potential of migrant transfers and have successfully created substantial support structures to increase and better utilize remittances.

Paradigm Change in the Perception of Migration

The current migration debate focuses mainly on Ukrainians going abroad and citizens of other countries transiting through Ukraine. However, in the future it will become increasingly necessary to include the need for immigration into this debate.

The population of Europe as a continent is shrinking and ageing, while the world population continues to grow. Ukraine’s neighbours are beginning to realize that due to increasing labour shortages, more immigration will become necessary to fill this gap.

Countries like Germany, Sweden and Russia for example, have started looking into their immigration needs. The European Union’s Eastern Neighborhood policy also reflects the need to establish more legal employment opportunities for labour migrants from the region. To a certain extent this means Ukraine will be competing with other countries in the future in terms of attracting foreign labour and also employing its own Ukrainian citizens. It is therefore of vital importance that Ukraine considers how to attract migrants to work in Ukraine legally and promote circular and return migration for their own nationals.

It is important to note that migration cannot be regarded as the sole solution to demographic decline. The challenges accompanying shrinking and ageing societies are far too complex to be solved by simply importing labour. Increasing the fertility rate and live-work time are amongst those questions that have to be addressed. However, if managed well migration can become one of the tools which will stem the negative affects of demographic decline and promote sustainable economic growth. 

Ukraine is currently about to address several demographic and migration–related issues, such as pension reform and the revised Statute of Foreigners Act that is currently being discussed. Demographic decline will affect the country no matter what, the question is how to respond to it and how migration can help to alleviate the consequences of this trend.

The article was published in the “Kyiv Post” newspaper on 24 June 2011

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http://www.kyivpost.com/news/opinion/op_ed/detail/107372/