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On the possible impact of the entry of Russian citizens into Kazakhstan on the economic situation

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The impact of the large influx of Russian citizens is now often considered in terms of negative effects on Kazakhstan’s economy. Most often among such concerns are the negative impact on the labor market (the occupation of Kazakhstani jobs by newcomers), the growth of consumption of goods and the rise in prices for this reason, and a number of others. In order to assess the real effects for the Kazakhstani economy of the situation with the increased inflow of Russian citizens, one should take into account some facts, in particular, the fact that the vast majority of these citizens do not claim to take jobs (as the experience of the last spring influx showed) and are rather tourists; limited employment opportunities for them are also due to the limit of 90 days of stay. As for possible problems with the creation of additional demand for goods and services by newcomers, it can have almost no effect either on the supply-demand balance of goods or on prices, for the reason that the number of incoming citizens in relative terms is very small.

In this regard, we can recall a similar surge in the flow of citizens from Russia in the spring of this year. Then, from February to April, according to the data of the National Security Committee, the additional flow of Russian citizens into Kazakhstan amounted to about 60 thousand people, which corresponds to 0.3% of the population of Kazakhstan. Such magnitude can put pressure neither on the volume of goods on sale or their price, nor on the labor market or other spheres. This is confirmed by the indices of the same labour market – in the second quarter of this year (when at the labour market of Kazakhstan, as some experts had feared, the Russians had entered the market) the rate of unemployment remained the same, as in the first quarter – 4.9%. Moreover, employment even grew – from 8816 thousand people to 8828 thousand.

Foreign nationals entering Kazakhstan, including for reasons currently arising in Russia, have a rather positive effect on Kazakhstan’s economy, since they primarily act as consumers of products and services of Kazakhstani enterprises and organizations, form additional demand, and pay their money to Kazakhstani businesses. This strengthens the impetus for the development of a number of industries directly involved in serving the incoming foreigners, as well as for related industries – for this reason, most countries of the world (including Kazakhstan) pay great attention to the development of inbound tourism. Increase of production in such kinds of activities increases employment, volume of collected taxes, etc.

In Kazakhstan, the growth in the number of Russian citizens entering the country this year has also led to outstripping growth in several sectors – tourism, hotel and restaurant business, and transport. Thus, in the first half of the year 2.4 times more non-residents were served in inbound tourism than in the first half of last year. In January-August the growth of passenger traffic by air transport of Kazakhstan (where the role of foreign customers is more significant) amounted to 31%, by railroad transport – 38.4. These figures are many times higher than the average for all sectors of the economy and are largely due to an increase in the entry of Russian citizens to Kazakhstan for various reasons, the influx of which, according to various estimates, increased by 2.5-3 times.

Thus, an increase in the number of people entering the country is not a burden on the economy, and in some sectors, it gives an additional impetus to their development, stimulating, among other things, the creation of additional jobs. This situation has already been observed in Kazakhstan in the spring and summer of this year, and there is no reason to assume that the additional influx of Russian citizens in autumn will have a different effect on the economy.

Vyacheslav Dodonov, chief research fellow of KazISS under the President of RK

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