European Countries Scramble to Recoup Ukrainian Workers


KYIV, Ukraine—About 200 Ukrainian farm workers boarded a chartered
aircraft Thursday bound for Finland. 

The flight was one of the few to leave Ukraine that day—as part of
a national lockdown to stop the spread of the coronavirus, the country’s
airspace has been shut down to nearly all air travel for several weeks.

In the arrival hall at Helsinki-Vantaa
International Airport, farmers and landowners waited Thursday evening to pick
up their Ukrainian workers. According to the Finnish newspaper Ilta-Sanomat,
the mood was “amazingly quiet” and “even
nervous.”

“No warm hugs were
seen, no shouts of rejoicing were heard, and the expressions of those who
arrived were difficult to interpret with everyone wearing protective masks,”
the newspaper reported.

Despite the apparently somber mood at
Helsinki’s airport, the Ukrainians’ arrival was a welcome lifeline for
Finland’s farmers. 

Like many other European countries, Finland’s agricultural sector depends on migrant workers from Eastern Europe. Now, with Europe’s once porous borders mostly closed because of the coronavirus pandemic, those countries are facing acute labor shortages. Finland is short about 10,000 farm workers after coronavirus-related border closures, officials say.

“The situation has been downright grim,” said
Marko Mäki-Hakola, director of business development
for Finland’s Central Union of Agricultural Producers and Forest Owners. 

Germany reportedly also proposed charter
flights to bring in migrant workers from Eastern European countries, including
Ukraine. Poland offered to extend visa permits for visiting workers. Roughly
140,000 Ukrainian workers reportedly left Poland to return home once Ukraine’s
national lockdown went into effect last month.

Another chartered flight of Ukrainian farm workers was set to
arrive Monday in Finland. And some 800 more Ukrainian migrant workers have
registered for future charter flights to the European Union.

“We indeed witness the huge demand for Ukrainian labor migrants in
neighboring countries,” Ukrainian Foreign Minister Dmytro Kuleba said in a
recent interview with 1+1 TV, a Ukrainian news outlet.

Historic
Homecoming

Ukrainian President Volodymyr Zelenskyy announced last month that
he was closing Ukraine’s borders as part of the national lockdown. The news
spurred a mass homecoming of workers abroad.

From March 13 to April 1, about 650,000 Ukrainians returned home,
according to government data. Ukraine Business News reported that some 2
million Ukrainians have repatriated since the lockdown measures went into
effect in March. It’s unclear, however, how many of those returnees originally
were abroad for work. 

Nevertheless, that mass homecoming clearly marks a historic
reversal of the decadeslong leaching of Ukrainian workers by richer European
countries. That slow exodus contributed, in part, to the decline of Ukraine’s
overall population by about 20% since independence from the Soviet Union in
1991.

Nevertheless, some Ukrainians worry that the sudden influx of so
many job-seekers could spur an unemployment crisis—especially as a global recession kicks in.

“There were no jobs for them before the epidemic; it’s hard to
imagine the jobs appearing when there’s going to be an economic recession,”
said Julia Kazdobina,
head of the Ukrainian Foundation for Security Studies.

“I believe that the return of 2 million labor migrants to
Ukraine will be a social disaster,” said Denys Voroshylov, 40, a marketing
director and entrepreneur who lives in the Ukrainian city of Kharkiv. “They
left because Ukraine did not have decent jobs for them, and there is not a
single signal that new jobs will appear.”

Some Ukrainian officials, on the other hand, welcome their
repatriated fellow citizens. They say the government should try to encourage
those returned workers to stay. 

To that end, this week Kyiv plans to begin a program to give
returning workers low-interest loans to start businesses in Ukraine. Lawmakers also have proposed a public works
program, mainly aimed at improving roads, which could help put Ukrainians back
to work. 

“These are people who would probably be very
useful for the development of the economy within the state,” Ukrainian Prime Minister Denys
Shmygal said in a recent interview. “We want to try to keep people in Ukraine,
and we will do our best for this.”

Kazdobina, for her part, was skeptical of the
government’s plan.

“The government is working on a program of cheap loans for
businesses. However, most of those who worked abroad worked as hired labor, so
it’s hard to imagine they have developed the skills necessary to run a
business,” Kazdobina said.

Bad Timing

Prior to the global pandemic, Ukraine’s economy
was just regaining its legs after the twin body blows of revolution and a war
with Russia in 2014.

At the beginning of 2020, a survey by the European Business Association showed
that 41% of Ukrainian small businesses were planning new hires and 45% planned
to raise wages. 

“Before the lockdown, Ukrainian businesses were
expecting growth and there was a clear demand for additional workforce,” said Iryna Fedets, a senior research fellow at
the Institute for Economic Research and Policy Consulting, a Ukrainian think
tank.

That positive beginning to the year was quickly
overshadowed by the pandemic.

As of Friday, Ukraine recorded 7,647 COVID-19 cases and 193 deaths
from the disease. Kyiv expects the
number of cases to peak sometime in May. The national lockdown measures,
originally set to expire April 24, now are expected to last until May 11.

All nonessential businesses are closed, as are schools, parks,
and public transportation. With few exceptions, foreigners aren’t allowed in
the country, and air travel remains at a standstill. Wearing masks outdoors is
mandatory. 

The lockdown has sent Ukraine’s economy into a tailspin. The
International Monetary Fund predicts the country’s gross domestic product will
fall by almost 8% this year.

Consequently, the number of unemployed has roughly doubled to
about 2.5 to 2.8 million, according to the Ukrainian
Chamber of Commerce and Industry. That number corresponds to a national
unemployment rate between 13.7% and 15.4%, officials say.

Experts point to several major pitfalls regarding Ukraine’s
repatriated workforce. For one, the job market, while on the mend, was still
relatively weak before the pandemic—which is the reason why so many Ukrainians
sought work abroad in the first place.

Additionally, Ukraine received $15.8 billion in wage remittances
from workers abroad in 2019—the largest amount of any European country,
according to the World Bank. That number represents roughly 10.5% of Ukraine’s
gross domestic product.

“If there are no jobs and the only way to provide for themselves
is to go abroad, [Ukrainians] should not be prevented from going,” said Kazdobina of the Ukrainian Foundation for
Security Studies.

“If foreign countries want to organize recruitment to gather
fruit and vegetables, Ukraine should let its citizens go,” Kazdobina added.

Let Them Go

At the outset, Ukraine’s independence from the Soviet Union in
1991 was an economic catastrophe.

Ukrainian industrial production reduced by more than half from
1991 to 1996—a bigger drop than what the Soviet Union experienced during World
War II when half the country was occupied by Nazi Germany and 24 million
people, both civilians and military, were killed.

Hyperinflation from 1992 to 1994 left about 80% of Ukrainians in
poverty and roughly one-quarter of the population unemployed. For Ukrainians on
minimum wage, their purchasing power for basic food items fell by as much as
95% from 1992 to 1994, according to studies from the Kyiv National Economic
University.

By 1996, Ukraine’s gross domestic product had fallen by about
60% from its 1990 level. In comparison, the U.S. GDP fell 30% during the Great
Depression from 1929 to 1933.

That post-Soviet economic meltdown spurred many
Ukrainians to look for work abroad. And, over the years, migrant or seasonal
work in Europe has become the means by which many Ukrainians support their
families or save up financial nest eggs.

Now, with a post-pandemic recession in the
works, that post-Soviet status quo isn’t likely to change in the near-term,
experts say, despite the optimistic economic tailwinds heading into 2020.

“When the trade, services, and other businesses resume their
work after the lockdown is lifted, it will probably take time for them to get
to their pre-crisis income,” Fedets said.

“For those who have the option to earn more by
going abroad, the best strategy will be to do that until the Ukrainian economy
recovers.”





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