IOM Facilitates Migrant and Diaspora Investment in Ukraine

14 June 2019

With its new project, UN Migration supports Government of Ukraine’s efforts to boost economic development through attracting and facilitating investments by Ukrainian migrant workers and diaspora into local businesses.

Ukrainian migrants are the biggest external contributors to the Ukrainian economy, having transferred about USD 11 bln through remittances in 2018, which corresponds to over 8 per cent of GDP according to the National Bank of Ukraine (NBU).

As highlighted by the Head of the NBU Department of Economic Analysis Olga Bogatska at the IOM project launch event on 13 June 2019, the economic crisis, triggered by the conflict in the east of Ukraine, led to the increase in external labour migration. “While migrants’ remittances contribute to the wellbeing of their families in Ukraine, the potential of labour migrants’ funds for intensification of internal investment is still to be explored and boosted. Therefore, the new IOM project is extremely relevant for Ukraine,” said Ms. Bogatska.

The latest official data on labour migration from Ukraine is lacking, and there always have been disputes about the estimates. IOM’s implementing partner, PricewaterhouseCoopers, refers to the Centre of Economic Strategies assessment that about 4 mln Ukrainians were working abroad in 2017, predominantly in Poland (40%), the Russian Federation (25%), and Italy (11%).

“We should stay alert that growing out-migration can lead to further brain drain, unethical recruitment and fraudulent employment schemes, and even to trafficking in human beings,” said IOM Ukraine’s Counter-Trafficking Programme Coordinator Etsuko Inoue. “However, if managed effectively, labour migration could be greatly beneficial to both the countries of origin and destination of migrants,” she added.

According to IOM’s previous assessment, 21 per cent of Ukrainian labour migrants would like to invest the money they have earned abroad, and most of them prefer to arrange a business at their hometown or village.

Within its new project, implemented in partnership with PricewaterhouseCoopers, IOM will prepare policy recommendations and action plan on enabling migrant investments in Ukraine. Best investment mechanisms for Ukrainian migrants and diaspora will be identified.

IOM Ukraine’s migration and development portfolio includes a study on migrant remittances and savings, which has been used by the National Bank of Ukraine to update its own methodology of remittances assessment. IOM also has been supporting small businesses in Ukraine through its economic empowerment programme for victims of trafficking, internally displaced persons (IDPs) and IDP host community members, returnees and other conflict-affected people, as well as Ukrainian labour migrants and their family members.

The new project facilitating migrants and diaspora investment in Ukraine is funded by the IOM Development Fund, which is designed to contribute to the harmonization of IOM member states’ migration management policies and practices with their overall national development strategies.