After partial mobilisation was announced in Russia, crowds of Russians flooded to neighbouring countries, including Central Asia. Most of them take these states as transit ones and do not stay there for long. However, the inflow of Russian citizens has seriously alarmed the residents of host countries. It is often due to misunderstanding of how it can affect their ordinary life.
The main concerns are consumer goods price rise and loss of work. But local and international experts share the opinion that such migration has more advantages for Central Asian states than disadvantages. According to economist Nurgul Akimova, the flow of migrants will first affect the economy in terms of consumption.
“The newcomers consume food, household items, and also rent or buy apartments. Therefore, there will be more imported goods on the shelves if they are in high demand. If domestic goods are in high demand, they will be sold more. Public catering, cafes and restaurants will also be in high demand,” Akimova said.
We can see this by the example of Kyrgyzstan. A number of indicators have reportedly increased with the first wave of newcomers, in March 2022. According to the official statistics, in January-July the retail sales increased by 25.3 per cent against the last year’s period, and the market services increased by 36.4 per cent.
Thus, consumption rises; a certain class of solvent people emerges and stimulates sales. This, in turn, will lead to the gross domestic product growth.
However, there’s the reverse side to the surge in demand.
“Amid solvent people who can buy everything at expensive prices, retailers can put up prices. It will affect those who bought the goods from them and their income did not change. Therefore, the food basket they used to consume previously will be less affordable to them,” the economist said.
However, there are sectors that reacted to the flow of newcomers from Russia. The first to react to demand were the market of air transportation and property market. In the first days of mobilisation, air ticket prices from Moscow to Almaty and Bishkek surged tenfold. According to Aviasales portal, one-way air ticket cost nearly 3.7 thousand dollars. The price of air tickets of Ural Airlines from Moscow to Dushanbe increased up to 1.75 thousand dollars. The Moscow-Tashkent air ticket reached 130 million sum (over 10 thousand dollars). The same ticket used to cost 200-250 dollars maximum. Currently, there is no panic buying and prices almost returned to their previous level.
If air transportation soon returned to their previous level, the property market in Central Asian states faces shortage of apartments for rent, hotel rooms, and high rent prices.
Kazakhstan
According to the Interior Ministry of Kazakhstan, over 200 thousand citizens of Russia entered the country since September 21. Most of them, nearly 147 thousand people, moved on to neighbouring countries.
“The mass migration of Russians definitely leads to rent increase. It’s not a good news for an ordinary Kazakhstani who is planning to buy an apartment or renting it,” said economist Daniyar Akhmetov.
Tenants confirm his words. They say about price rise and difficulties with searching an affordable accommodation. Astana resident Ainur Ilautdinova rents a two-room apartment since January 2022 together with her colleague in the city centre. But after the news of mobilisation in Russia, the owner called them and said that in November the rent will be 260 thousand tenge (546 dollars) instead of 190 thousand tenge (399 dollars).
“We cannot legally complain about his actions as we had previously signed the contract for six months only. Now we are desperately looking for a new apartment because the rent hits us in our pocket compared to our salaries,” Ilautdinova said.
This situation happens not only in large cities. The family of Saken Kalkaman this spring moved from the village of Terekty to Uralsk. At the new place, the found an apartment in the suburb for 80 thousand tenge (168 dollars), found jobs with his spouse, she was a nurse in the kindergarten, and he was a bus driver.
“We’ve just settled down but last week the owner deliberately increased the rent for 50 thousand tenge (105 dollars). Now his apartment is in high demand. And we cannot find a place to live at a cheaper price. What about food, clothes, stationery for kids? I decided to get back to the village if we can’t afford the rent until winter,” Kalkaman said.
This demand for accommodation contributes to extra income of property owners.
“I lease two apartments in Kostanai. One apartment is leased on a per day basis, and the second one is for a long term. The demand now is very high. The daily apartment is always occupied. Many Russians rent this apartment. They pay both in roubles and in dollars. It makes no difference to me as my rate is fixed. As to the second one, a decent family has been living there for two years. I have no complaints about them, and I won’t raise the price deliberately,” said Aziza Shuzheyeva, resident of Kostanai.
According to Azat Smagulov, realtor of the real estate agency, the property market of Kazakhstan is facing a turmoil currently. Because of the current situation, property owners have deliberately raised prices to benefit from solvent tenants.
“I have monitored many announcements on popular websites Olx.kz and Krisha.kz and the only thing I can say is that prices have surged almost 1.5 times. It’s true not only for Astana and Almaty, but also for regional cities at the boundary with Russia. When I say current prices to my clients from Astana, they say they cannot afford to pay such amounts because their salaries are 180-200 thousand (378-420 dollars) on average,” he said.
Kyrgyzstan
According to official data, almost 10.5 thousand Russians have registered in Kyrgyzstan from September 21 to October 3. The urban real estate broker said to CABAR.asia that prices and demand for accommodation have doubled.
“One-room apartments that we used to rent out for 15 thousand som (187 dollars) today are promptly leased for 30 thousand som (374 dollars). Today it is almost unreal to find a one-room apartment for a price below 23-25 thousand som (287-312 dollars). Only if you have acquaintances,” he said.
The increase in real property prices in Kyrgyzstan is also related to the seasonal factor. In autumn, when students come back to the country or new students arrive, accommodation prices always rise. But they were never that high and the increase was never above 20 per cent.Now prices increased not only for available housing in the market, but for apartments that have been rented already. As a result, tenants that did not have any contract with the landlord faced a sharp change in contract terms. Landlords did not want to lose excess profit and simply increased prices. Such price rise was unaffordable for many tenants and they had to move from rented accommodation and search for new apartments at lower prices.
Tajikistan
Currently, many Russians can be seen on the streets, in cafes and restaurants of Dushanbe. They ask locals about registration in Tajikistan and look for places of temporary accommodation.
According to city hotel staff, the flow of guests has increased in recent days and all hotels are overcrowded.
“There are many tourists, and we have no vacant rooms. Many guests have arrived from Russia. There are young people and families among them. Some stay for one-two days, and some stay until October,” a manager of a hotel in Dushanbe said.
According to Atlas Hotel, they have no rooms in the next days, and all rooms are occupied.
“There are guests from other countries, but the majority of them are Russian. Most of them stay until October. And most of them are young people aged below 40,” hotel staff said.
We have called some hostels in Dushanbe, and they said they had no vacant rooms, and most of their guests are Russians, who have chosen them as a temporary residence.
Moreover, the rent price of apartments has increased, as well, for 15-20% on average. Until September 24, the minimum rental price of a single-room apartment on the outskirts of Dushanbe, was 100-200 dollars on average, but now it costs 300 dollars and more. The rent price of a one-room apartment in the centre of the capital increased from 300 to 800 dollars.
Most citizens of Russia said they came to Tajikistan for a while, and plan to move to third countries, when they have such an opportunity or come back to Russia, when the situation there calms down.
Uzbekistan
In Uzbekistan, they do not publish official data on the number of Russians who arrived after the partial mobilisation was announced in Russia. Some economists estimate 170-180 thousand people, including those who arrived in the country right after the war in Ukraine began.
Now hotels and hostels of Tashkent are overcrowded, and their prices have increased. Rental fees for apartments and houses have increased several times in the last two weeks.
In summer, a good two-room apartment in the city centre could be rented for 400 dollars, and now one-room or two-room apartment costs 600 to 1,500 dollars. Moreover, all owners of apartments for rent want to receive prepayment for 2-3 months ahead.
One of Tashkent-based realtors, Anastasia I., said to CABAR.asia that in late September prices of rented dwellings have surged because of high demand among those who moved from Russia.
“Most of them want to rent a dwelling in the city centre because the infrastructure is always the best here. They seldom prefer bedroom suburbs. That’s why prices of apartments located in the centre have surged. In spring, one could easily find an apartment for 600 dollars, but now it is almost impossible,” she said.
How long the Russians will stay in Uzbekistan is unknown. Some plan to move on, some want to wait here until it’s over, others are confused and simply do not know which way to go.
Russian Irina A. came to Tashkent with her husband and little kid a few days ago. They live in a hotel. They didn’t find a suitable apartment so far.
“First, it’s very expensive. Second, it turned out that it’s not that easy to find an apartment if you have a baby. Moreover, almost all property owners ask for prepayment for two-three months ahead. But we cannot pay for several months ahead because we haven’t decided yet for how long we will stay here. I cannot say for sure what we will be doing next. So far, I feel uncertain and vague,” she said.
Another Russian Artyom K. arrived in Uzbekistan with his family in April. First, they planned to stay here for a month and then move on, he said.
“But one month later we decided to settle down here so far. I have a remote job. Therefore, it makes no difference for me where to work from. The rest goes fine with us. The climate is warm, the people are friendly, and the food is delicious. Of course, we want to go home, but circumstances dictate otherwise,” he said.
Because of this situation students in addition to the citizens of Uzbekistan arriving in the capital were left without affordable apartments. There have been cases when some property owners who leased apartments one or two months ago at one price try to increase the price under any pretext or to evict old tenants.
Sabir Urakov was enrolled to the National University of Uzbekistan based in Tashkent this year. He comes from Namangan and came to the capital in late August. His relatives told him that they agreed with their acquaintance to rent her apartment at a low price.
“Three days ago, the owner said that she was going to increase the rent to 400 dollars. Previously, the apartment cost 150 dollars. It is simple, without repair, and is located in the area of Kadyshev market (southern suburb of Tashkent). But 400 dollars is very expensive for my relatives and me. I cannot move out because there are no vacant places in the dormitory, and I doubt I can find cheaper place now. I don’t know what to do,” he said to CABAR.asia.
Risks and opportunities
This inflow of Russian citizens to Central Asian states carries both risks and potential benefits. According to Kazakhstan economist Daniyar Akhmetov, the massive inflow of new staff can lead to the increase of unemployment in the region.
“The influx of ‘new’ citizens soon will cause a problem in the labour market. There will be competition for jobs, and to some extent Russian specialists can be more qualified than local staff. It’s clear that relocation and emigration from the neighbouring country can overheat the labour market,” the expert said.
Although current changes in the real estate and food market in the region have created some excitement, but, according to economist Abdulla Abdukadirov (Uzbekistan), in terms of economic science this all is called market fluctuations, which will gradually level off with the general market indicators for the same periods of last years.
“I see benefits from the influx of the significant number of defectors, who do not want to die for some dubious ideas, or don’t support aggression in any form,” he said.
According to him, the benefits of massive influx of Russians for the region can be in several regards:
- The growth of the aggregate consumer demand, especially for rented dwelling, food commodities, medicines, clothes, services of restaurants and bars, transport infrastructure;
- New workforce that migrated from the market that is more advanced in all regards, in terms of both urban development ideas and workforce quality. This will let local businesses hire more energetic and qualified specialists, who can apply their organisational and business skills here;
- A thin layer of people has emerged who are used to a certain life comfort and they will slowly but surely inspire us for changing living conditions towards more comfort for all;
- The society will have more voices and more opinions and this is the best that can be for development of tolerance and development based on the compromise between ideas and attitudes.
According to economist Madi Kusherbayev (Kazakhstan), despite the seemingly negative influence of migrants from Russia, they can contribute to the country’s economy provided that they successfully integrate into the society.
“These are rather educated, active middle-class people. The sphere of services will recover with the large influx of money. The massive inflow of the Russians will do good to service, managing companies,” the economist said.
Kyrgyzstan-based political analyst Denis Berdakov said that Central Asia could create conditions for them not to visit regional countries en route, but stay here. It would improve the economy and contribute to dozens of thousands new jobs. So far, according to him, only Uzbekistan creates attractive terms for specialists needed by the state.
“Today we see that there is an oversupply of labour force in Central Asia. But the paradox is that we have an oversupply of non-qualified resources who don’t have expertise and skills. And it is virtually impossible to find a good welder in Bishkek, or specialist doctors, teachers of exact sciences, linguists, technologists, etc. And representatives of these professions often come to Bishkek,” Berdakov said.
Moreover, experts of Tajikistan indicate that some Tajiks can possibly transfer their businesses and capital back home.
“Those who will come to Tajikistan will surely take their money with them that exceed the amount that they previously transferred. Some of them will transfer their business and capital back home, but given the attitude of the authorities to small and medium business, they will be few. This factor can give an impetus to the economy and development of the currency market of Tajikistan in the short-run. In the long-run, the impact will be negative,” economist Abdumanon Sheraliev said.
In addition to the labour market, this influx of people opens opportunities for the tourism sector. Despite the fact that many Russians see Central Asian states as transit ones, they use the opportunity to see the country of temporary residence and get new impressions.
“For the first time in the history of Kyrgyzstan, the holiday season at Issyk-Kul Lake lasted until the end of September. This is a big load, tens of thousands of jobs. Moreover, this is why of the reasons of our economic growth. Russians spend their money here: they order cards in our banks, live here for 5-7-10 days, buy food, clothes and appliances here, etc. In fact, the paradox is that we are beneficiaries in this process,” Denis Berdakov said.
Even the short stay of Russians left the indelible mark on the economies of Central Asian states. In particular, tens of thousands of people passed through the economy of Kyrgyzstan. They all left one thousand dollars and more here each – for rent, food, accommodation at Issyk-Kul.
International expert organisations agree with it. According to representatives of the Asian Development Bank, this migration can have a positive impact on the economies of host countries. This opinion was voiced by them during the briefing on September 29 dedicated to the bank’s operations in Central and Western Asian countries.
They noted that there are many qualified specialists among movers who can contribute to the economic development.
“We have noticed that in general the rate of restoration of Central Asian economies seems to be much faster than we expected,” said Cindy Malvicini, Senior Advisor of ABD in Central and Western Asia.
However, ADB experts emphasise that the impact of relocation of the Russians on the economies can change depending on the duration of trends, business decisions and decisions of authorities. The risks of inflation rate acceleration continue to persist.