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July 2004, Volume 11, Number 3

Eastern Europe, ex-USSR

Hungary had 116,000 foreign residents in January 2002, including 45,000 Romanians, 10,000 Ukrainians, and 8,500 Yugoslavs. Some 8,400 foreigners became naturalized Hungarians in 2001, including 5,600 Romanians.

Roma or gypsies are about 10 percent of Hungarian residents, and many have moved to Canada and requested asylum; there were 9,700 applications in 2003. The Immigration and Refugee Board quickly decided several cases in 1997, and most of the asylum applications were denied.

Romania has one of the fastest growing manufacturing centers, Timisoara, the western city where in which the 1989 revolution began. Some 5,000 mostly European countries invested in the area in search of low wages and tax breaks, but the success of Timisoara in attracting foreign investors is also raising wages and heightening expectations- a third of the Romania's 6,000 IT specialists left in 2003, with several saying they want to go to Western Europe for even higher wages. Wages in Hungary average $725 a month, compared to less than $200 a month in Romania.

The CEO of Alcatel's Romanian subsidiary says that Romania must move up the value chain, from a place for obtaining cheap labor. Several major firms including Siemens and Microsoft have opened centers that hire software engineers, and unemployment in the area is far below the country's average eight percent.

Russia. Some 32 million of Russia's 143 million residents are entitled to "natural benefits" from the government that range from free public transportation and medicine to rent-free apartments. In an effort to increase economic efficiency, President Vladimir V. Putin proposed that these benefits be converted to cash payments of $25 to $75 a month. Many recipients do not want to lose their in-kind benefits, believing that the cash payments will not provide the same housing or medicines. The total costs of Russia's welfare benefits may be $30 billion.

Tajikistan. In 2004, some 336,000 Tajik migrants were abroad (other estimates are 600,000 to one million Tajiks migrants), but only seven percent were legally in Russia, the main destination. Russia has doubled the quota for skilled Tajiks to 18,000. Emigration peaked in 1998-99, when 800,000 Tajiks left.

The Minister of Labour and Social Protection of the Population said in April 2004 that "labor migration abroad has a decisive influence on the system of life support of an overwhelming majority of families in Tajikistan." Remittances are about 20 percent of Tajik GDP.

Dan Bilefsky, "European City Wins Jobs -- and Looks Over Its Shoulder," Wall Street Journal, July 8, 2004. Galina Gridneva, Valery Zhukov, "Labour migration massive in Tajikistan." TASS, April 29, 2004.