Labor migration: Ukraine suffers from brain drain

Author : Olexandr Honcharov

Source : 112 Ukraine

Ukraine's massive labor migration causes not only demographic loses but also damages the markets of the science-intensive products
12:10, 21 August 2018

Open source

Most of the specialists of the Ukrainian labor market and many university professors usually do not realize the scale of the problems of labor migration from Ukraine. When they are in the relevant positions, they are analyzing the situation with labor migration only in one plane: how much money labor migrants bring to Ukraine.

Speaking about my own experience, for the first time I have faced this problem in 1994, when I went to Washington, at the invitation of the United States Agency for International Development (USAID), to attend specialized training courses. One American professor has stated that it was not the Soviet Union that collapsed at the very beginning of the 1990s, but rather the system of division of labor, created by the Soviet Union since the late 1940s, has been ruined. Then he showed us, people from Ukraine, a special causal chain – the Soviet Union has lost markets, then the incomes of enterprises, because of this, social and economic problems began and the Union has finally disintegrated.

Related: Labor migration from Ukraine increases: Should it be limited?

And today, amidst the incitement of trade wars, increased protectionism, and the aggravation of problems with labor migration, the American professor's lectures, and his prophetic warnings began to recollect increasingly that these factors will be harbingers of another and more powerful crisis wave in the labor division market. However, in today's world, the system of division of labor is global, there is no division into zones that existed until the end of the 1980s, but in recent years its functioning has been very difficult. And so now there are at least two key questions.

First, is the disintegration of this unified system of the world division of labor inevitable? Secondly, if it is inevitable, what new system should we build taking into account the growing labor migration from Ukraine? After all, according to various studies, the number of labor migrants from our country reached 4 million, or 16% of the able-bodied population. Of particular concern are the following impartial figures: in 2002-2017, the aggregate net departure of Ukrainians outside Ukraine, that is, those who left and did not return, amounted to 6.3 million people. And this is our national human capital.

Related: Labor migration may be beneficial for Ukraine

The division of labor system is based on the competitive advantages. And those states that are able to increase their competitive advantages in high-yielding sectors of the economy get a better position in the markets, dominate over the other countries in terms of trade and economic relations. I recall the words of the American professor again, then the Soviet Union has lost its markets, now Ukraine similarly is losing its markets quite quickly. Our politicians, unfortunately, do not think about the new industrialization, taking into account the fourth industrial revolution and the next technological order, respectively, we have almost completely lost the markets of science-intensive products.

General designer of the world famous Ukrainian aviation concern Antonov Dmytro Kiva has moved to Baku to deal with the creation of the Azerbaijani aviation industry. And yet, a couple of decades ago, we were traditionally and rightfully considered a scientifically and technically powerful state, which was successfully controlling the markets of high-tech products. In recent years, we have actually left these profitable markets. Before 1990, 40% of the world's aircraft fleet was produced in the Soviet Union, the great share of which was produced by the Ukrainian aircraft manufacturers.

Related: Labor force migration slows economic growth, increases price rates, - National Bank of Ukraine

If our developers and manufacturers of passenger and military transport planes had a national program for aircraft construction, and leading designers and engineers have not gone abroad for work, then we would have had a colossal locomotive of Ukraine's economic growth today. For example, we would not face such a large-scale unemployment. In this regard, the head of the National Bank Council Bohdan Danylyshyn said: "The unemployment rate among the economically active population in the first quarter of this year was 9.7%, and among the working-age population - 10%... Thus, the current wave of labor migration of Ukrainians, in fact, is a kind of safety valve in conditions of low job opportunities for decent jobs."

Danylyshyn just banally voices this very disturbing indicator. And what did they and his team do to create our national competitive advantages in the world division of labor system? Why do not we even try to study, in particular, China's experience in implementing the strategy of advanced development, placing a stake on science-intensive technologies? Look at the potential of the Ukrainian economy: we have huge natural resources and many talented people (almost 100% of high school graduates want to get the higher education).

Related: Some 24,000 people renounce Ukrainian citizenship in 3 years, - Migration service

However, Ukrainians continue to actively move abroad for work. The reason is simple and it connected with the economy. For example, in neighboring Poland or the Czech Republic, there is a high level of wages and available jobs. Someone might think that the European Union, the United States, and China needs only the hands of our compatriots. More and more foreign employers are looking for Ukrainians to be involved in the IT industry and high-tech production. Accordingly, about 2.6-2.7 million people might be outside of Ukraine, they successfully and zealously work for the GDP of the other countries.

And if in the short term the state does not raise the quality of the services provided and create conditions when our local employers can raise the level of remuneration to the European, American, and Chinese level with an adequate increase in labor productivity, then the number of migrant workers will continue to grow uncontrollably.

Related: How to stop mass labor migration from Ukraine?

Yes, many of our officials did not have opportunities to listen to lectures in Washington, but I think they could have thought about such eloquent statistics: 92% (!) of those polled on the HeadHunter portal would like to work abroad. The majority (37% and 34% respectively) consider foreign work a chance to earn money or stay there, considering that work in another state is paid much better than the similar one in Ukraine.

And finally, we came to the main question: what are our potential opportunities and actions to revive our system of the division of labor and jump into a new long wave of economic growth and sustainable development?

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Related: Ukraine's population decreases due to labour migration, - survey

This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

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