Ukraine - Ukrainians working abroad send back to Ukraine more funds than the combined total of foreign direct investment (FDI) and international donor contributions coming into the country, according to a new IOM study.

Ukrainian migrant workers transferred almost USD 2.8 billion in 2014 through formal and informal channels. In addition, about USD 100 million was received in goods as in-kind remittances, according to the Canadian-funded study.

“Migrant workers are clearly biggest investors in the economy of Ukraine,” said IOM Ukraine’s Chief of Mission Manfred Profazi.

“Migrant communities possess knowledge and resources that are invaluable to their home country. The study confirms that if properly managed, labour migration and its capital can facilitate humanitarian, intellectual, economic and cultural development in countries of origin and contribute to their social and economic growth,” he added.  

The results show that in 2014, the Russian Federation remained the main country of destination for long term Ukrainian migrant workers (30 percent). Other important destinations were Poland (21 percent), the Czech Republic (15 percent) and Italy (11 percent.)

The average long-term migrant worker household received about USD 4,348 in 2014. For the majority of migrant households, remittances represent their main source of income. Unlike in many other countries, consumption represents only 40 percent, while another 42 percent go into savings in Ukraine, according to the study.

For the first time in Ukraine, the IOM study also surveyed the usage of formal and informal money transfer channels. Some 53 percent of Ukrainian migrant workers preferred using informal channels when sending remittances – a significantly higher percentage than expected.

Even higher in volume than remittances are the savings generated and kept abroad by long-term migrant workers, estimated at around USD 4 billion.

The intention to purchase property or durable goods and education of children are among the most important savings objectives, according to respondents.

Another important savings objective, emergencies and risk management, undoubtedly reflects the ongoing insecurity in Ukraine, and the economic deterioration associated with it.

The study revealed a high interest among migrant workers to invest in local infrastructure projects (22 percent) in Ukraine.

In addition, almost 20 percent of migrant workers interviewed expressed an interest in investing, mostly in their local communities in Ukraine. Construction, tourism and retail trade are the top three sectors of interest for potential investors.

With this study, IOM aimed at raising awareness among relevant stakeholders of the enormous impact Ukrainian migrants have on the economy, and building the scientific base for an informed policy dialogue on the potential migrant remittances and savings have in this respect.

Members of the Project Steering Committee, which included representatives of key Ukrainian ministries, the private sector and academics, developed a set of policy recommendations and identified relevant areas for intervention based on the findings of the survey.

IOM hopes that this will serve as a base and guide for developing more efficient migrant-oriented policies, aimed at better harnessing the development impact of labour migration and engaging its capital in Ukraine’s development policies.

Some key recommendations include building the capacity of the Ukrainian government to manage labour migration through coordinated action at international, national and local levels, as well as promoting civil society and public-private sector cooperation and mainstreaming migration in development planning, continuous public consultations and migrant-inclusive approaches.

The report can be found at: http://www.iom.org.ua/sites/default/files/iom_migration_as_an_enabler_of_development_in_ukraine.pdf

For more information, please contact Varvara Zhluktenko at IOM Ukraine, Email: vzhluktenko@iom.int, Tel. +38 044 568 5015 or +38 067 447 97 92.