How will influx of migrants from Russia affect labor market in Armenia?

  • October 4, 2022
How will influx of migrants from Russia affect labor market in Armenia?

After the beginning of the conflict in Ukraine since the end of February 2022, a serious inflow of citizens to Armenia from Russia began. In particular, 54.5% of the 588,000 tourists who arrived in Armenia in the first six months of this year were from Russia (a 3.1-fold increase). This trend intensified after the announcement of partial military mobilization in Russia.

The first wave of migrants

Migrants from Russia, who arrived before the announcement of partial military mobilization, are not represented in industrial sectors, they do not apply for jobs in industrial enterprises, there is no such trend. The same goes for the service sector. Their eyes are more focused on engineering and the IT sphere.

At the same time, according to Gagik Makaryan, chairman of the Republican Union of Employers of Armenia, they do not change much the dynamics of the labor market in the IT sphere, as they are registered not as employees of SMEs, but as individual entrepreneurs, because from the viewpoint of the tax legislation it is more expedient, as they do not pay income tax. They only pay a flat tax, and that's a serious motivation.

"That is, there is no change in the dynamics of the labor market, stimulating employment or reducing unemployment, attracting new personnel to various industries," the expert argues.

In addition, under both Armenian legislation and EAEU norms, a Russian cannot come to Armenia, register as unemployed and take advantage of the programs being implemented.

Within the projects aimed at activating the employment sphere, there are no areas which could interest the Russians, because they received higher salaries in their home country than they can be offered under these programs. "The newcomers are mostly from big cities and were paid high wages, so it would be unprofitable for employers to hire such an employee," Makaryan told

He called the way the Russians have chosen right, which also contributes to the growth of individual entrepreneurs.

The influx of Russian citizens has a multiplier effect on Armenia's economy, as newcomers spend money on food, clothing, transportation, housing, and taking their children to paid kindergartens or schools. Businesses involved in these areas can benefit.

Besides, Armenian IT companies get an opportunity to accept more orders for foreign markets. If before the volume of orders was limited because of the personnel deficit, now, though a few, but still new, high-quality employees can make up for this deficit to some extent. A significant part of newcomers continues to work for the same companies they worked for in Russia. But all this concerns only the first wave of migrants from Russia.

The second wave of migrants

But Russians (including those of Armenian descent) who left Russia after the announcement of partial military mobilization, according to Makaryan, can potentially be involved in other sectors of the economy, such as road construction, restaurant business, and the service sector.

Among the second wave of Russians coming in could be industrial specialists, technologists, engineers, who could be of interest to us in other sectors of the economy.

"The unemployment rate from the influx of citizens from Russia will not increase. The indicator will increase if Armenian migrants returning from Russia register as unemployed. If not, the unemployment rate will be high, but formally the indicator will not change," the expert stressed.

The contingent who has no job at all and is not competitive in the labor market will remain unchanged, and the state is trying to implement programs for them. In terms of content and quantity nothing will change in this part. The work with this category of citizens is conducted incorrectly, there is no data on their number, on what spheres they can be involved in.

Newly arrived citizens from Russia will not fill this niche, because they are often experienced specialists in the construction sphere, the need for which is very acute in Armenia.

Today, due to the shortage of such specialists, prices in Armenia have increased, so their arrival will have a positive impact on the construction sector both in terms of lower prices and reduction of staff shortages, including in other areas.

During the first 5 months of this year the growth in the construction sector exceeded 11% and the prices for housing soared several times.

The President of the Republican Union of Employers of Armenia complained that the state doesn't keep a register and suggested filling in questionnaires at passport desks, airports and customs points to see what kind of specialists come to Armenia.

"And this way we can again miss serious opportunities, because a chaotic situation may arise in the labor market," the expert concluded.

Aram Danielyan

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