In early April, the head of the Presidential Office chaired a meeting dedicated to Ukraine's relations with African countries. The purpose of the meeting was to review migration rules and attract manpower from African countries due to an acute shortage of personnel. Mass media reported that following the meeting, a protocol decision was made to instruct the Foreign Ministry and the Security Service of Ukraine to urgently propose changes to the list of countries with a high migration risk. This list is attached to a joint Order of the Ministry of Foreign Affairs, the Ministry of Internal Affairs and the Security Service of Ukraine, regulating the procedure for issuing relevant documents. It covers 70 countries, mainly Asian and African, such as Afghanistan, Pakistan, Bangladesh, Nigeria, Ethiopia, etc.

The initiative to simplify imports of foreign manpower, announced by the Presidential Office head Kyrylo Budanov, looks like a response to the growing structural shortage of personnel in the Ukrainian economy. In conditions of wartime, emigration and demographic contraction, the domestic labour market naturally cannot meet the needs of business, especially in construction, logistics, agriculture and services.

The aforementioned initiative caused a wide public discussion, and Kyrylo Budanov's statement on attracting African residents to the Ukrainian labour market received a wide coverage.

In economic terms, attracting migrant workers is a classic tool for labour market balancing. This tool makes it possible to keep employer costs low, restrain wages in deficient segments and maintain the pace of economic recovery. At the same time, the effect will be stronger, if its mechanism is the more targeted. It is about using migrant labour for specific industries and skills, instead of broad uncontrolled admission.

Theoretically, the initiative to attract immigrants can work (not massively) but only with a rigid institutional setting. Without an institutional framework, the effect will be weak and problematic. Immigrants can partially alleviate the shortage manpower and fill certain vacancies, but at the same time they may produce a number of associated risks – economic, institutional and social, which are multi-faceted:

The key risk lies not in the origin of migrants as such, but in the mismatch between the scale of the task and the current capabilities of the state to manage migration and integration. Without a clear policy (qualification quotas, employment control, integration programs, coordination with the EU), Ukraine risks not solving the problem of labour shortage, but strengthening the shadow economy, transit flows and social tension.

By and large, the discussion of foreign manpower seems pointless at present, because the thesis “Ukraine lacks manpower, and therefore it is necessary to import it from somewhere” is far from as obvious as it seems at first glance. In this context, several factors should be taken into account.

First, the subject of manpower shortage – “employers want to attract foreign workers” – has been discussed for more than two years. However, as Razumkov Centre’s research has shown, such examples remain isolated and largely probational in nature, which points to a gap between the declarative demand of business and its actual implementation. The restraining factors include institutional barriers (complex and lengthy procedures for legalizing employment, high transactional burden on employers) and economic uncertainty, making companies reluctant to invest in the adoption of foreign manpower.

An additional factor is presented by the lack of a developed integration infrastructure (housing, language support, social security), which increases the costs of hiring and maintaining. As a result, business interest remains latent, not turning into a large-scale practice, which requires a targeted policy to reduce entry barriers and institutionalize relevant mechanisms.

The second point is that the country stands on a threshold of a local collapse of employment in small business, which has traditionally been the main employer in small towns and rural areas in Ukraine. The attack on so-called “small architectural forms” (outlets), increased regulatory and tax burden in wartime have effectively reduced the sector that provided a low threshold for entry into the labour market. In this situation, the key risk lies in the formation of a so-called “dual-circuit economy”, with a formally regulated sector with a high workload and limited employment, and a growing shadow sector as the only way to survive for small businesses and the self-employed. Against this background, the discussion of labour imports looks institutionally inconsistent. On the one hand, there is domestic unemployment, on the other, an attempt to close the deficit through external sources. The current situation is not so much about a labour crisis as a crisis of the local economic ecosystem. Until small businesses are restored as basic employers, any talk of labour shortage will seem disconnected from reality for a large part of the country.

In addition, one should take into account the need to provide manpower after the end of hostilities. It is currently impossible to say exactly how many workers will be needed. The need for manpower in Ukraine will largely depend on future investments. With a large-scale inflow of capital and international aid, the demand for workers in construction, industry, energy and infrastructure projects will increase sharply, which may lead to a shortage of personnel and an increase in wages. With moderate investments, the recovery will be gradual, with an emphasis on local resources, retraining of the population and return of labour migrants. With low investment, the demand for labour will remain limited, the recovery will be slow, and part of the population will continue to look for work abroad, exacerbating demographic and economic problems.

Experts also note that the issue of immigration may arise for political reasons rather than for economic ones. The point is that during talks on accession to the European Union, the EU could theoretically set admission of migrants according to approved quotas as one of the conditions for Ukraine's accession to the EU. However, the thesis of “quotas for Ukraine as a condition for accession” does not correspond to the current legal and political practice of the European Union. The mechanisms for redistributing the migration burden in the EU are internal instruments between member states, and even within the union they remain debatable and often have a flexible, partially voluntary nature (alternatives in the form of a financial contribution, operational assistance, etc.).

Setting mandatory quotas for a candidate country as a formal “condition for accession” is legally difficult: the candidate joins the acquis but does not bear the same obligations as members before accession, and forced “external” redistribution without the consent of the country and its people runs contrary to the current norms. Nevertheless, softer and more realistic formats of pressure/incentives are possible. In the negotiating package, Ukraine could assume expanded obligations on readmission (reception of returnees), strengthening border controls, participation in pilot schemes for processing protection applications or placement of infrastructure (processing centres, transit capacities) – in exchange for financing, access to funds and progress in negotiations. De facto, this could increase the migration burden and look like the result of an agreement with compensations (the content of which may not always be publicly announced), rather than unilateral imposition. 

Therefore, we tend to believe that mass integration of migrants should not be expected. With a high probability, a limited model of “temporary labour corridors” can theoretically be formed, where immigration is possible for specific projects, with subsequent return of migrants to their homeland. This is a working scheme, but it does not solve the systemic problems of employment in the country. That is, imports of manpower from Africa or Asia to Ukraine can take root as a highly specialized tool to close the deficit in certain sectors, but as a mass strategy, it seems unrealistic and risky now, especially given the weak local labour market. Without the recovery of small businesses and domestic employment, attraction of immigrants will be seen as an economically and socially inappropriate solution.                                                                                                        

In addition, Ukraine is not a classic centre of gravity for migrants, since:

- incomes are lower than in the EU, sought by many African or Asian migrants;

- there is a military risk – a critical factor for long-term settlement;

- weak integration infrastructure (language, legal status, adaptation services);

- climate and cultural distance – not decisive, but increasing adaptation costs. 

Subsequently, as we noted, Ukraine may become only a transit country or a temporary location for many potential migrants, rather than their final destination.

From a strategic viewpoint, Ukraine's migration policy should not replace the development of domestic human capital. Labour import is a compensatory, not a basic tool. A sustainable solution to personnel shortage lies in a combination of three aspects: return of Ukrainian forced migrants, higher labour productivity (including automation), and investments in education and retraining (in addition to the main condition – the end of hostilities).

It is critically important that such a policy is targeted, not universal. Its optimal configuration should include:

• admission of foreign workers only for specific projects/contracts;
• priority employment of Ukrainian citizens;
• parallel programmes of retraining and stimulation of internal employment;
• regional coordination (matching vacancies and unemployed).

Relatively successful adaptation seems realistic primarily in segments with a long-term shortage and low elasticity of labour supply, such as construction and restoration of infrastructure, agriculture (seasonal work), logistics or warehousing.

Its geography requires special attention. Cooperation with Asian and African countries potentially expands the supply of manpower, but requires interstate agreements, selection mechanisms, language and professional adaptation. Without this, transaction costs for business and the state may exceed the expected effect.

https://razumkov.org.ua/statti/ukraina-shukaie-sposoby-kompensuvaty-defitsyt-robochykh-ruk