Russia’s Severe Labor Crunch

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The Kremlin needs higher production to meet the needs of the domestic economy, sustain exports and supply the military, but a severe labor shortage is holding it back. Russia faces persistent brain drain, a declining population, and rising demand for soldiers as well as workers in defense and import-substituting industries. The problem has deepened as migration from Central Asia declines due to tighter immigration policies. Skilled worker shortages have reached record levels, with the construction sector – traditionally reliant on migrants – experiencing the greatest strain. Although the central bank reports that an economic slowdown and tight monetary policy have alleviated some of the labor squeeze, authorities do not expect a rapid stabilization.

To sustain growth under sanctions, Russia has turned to nontraditional sources for skilled migrants – namely Africa, Latin America and South Asia. For example, Primorsky Krai and Amur oblast have recruited skilled workers from Myanmar, and Tatarstan hopes to do the same. Bashkortostan’s sewing industry has been approved to hire specialists from Southeast Asia, including Thailand, Vietnam and Bangladesh. Meanwhile, Kenya has agreed to send 10,000 workers to Russia.