Kazakhstan no longer attractive for expats because of tenge depreciation: Deutsche Welle13 november 2015, 16:54
This year was indeed a turbulent period for Kazakhstan’s national currency tenge, which has lost almost one third of its value since the country relinquished control of the currency and shifted to a floating exchange rate on August 20 in an attempt to confront falling oil prices and economic slowdown of its two largest neighbors and trade partners Russia and China.
On November 6, tenge hit its all-time low reaching a historic 310 tenge per 1 dollar down from 185 tenge per 1 dollar in August. According to German broadcaster Deutsche Welle, such a sharp tenge depreciation caused some foreign workers from CIS countries (post-soviet space), who came to Kazakhstan for better prospects, to consider going back home, Tengrinews reports.
One year ago Kazakhstan seemed an economic miracle for many highly qualified professionals from Russia, Ukraine, Belarus and other former Soviet countries thanks to the policies of the Kazakh government aimed at attracting highly qualified foreign personnel for development of local businesses. Back then they were offered a fairly high salary - above $2,000 per month for an average manager, but now the situation has changed dramatically.
Some expats, who gave an interview to the German outlet and wished to remain anonymous, are already considering the possibility of going back to their home countries. Most of them cite weak Kazakh tenge as the main reason behind their decision.
“We should not delude ourselves. Most expats came to Kazakhstan just because of money. There is no other option possible. Taking up the job offer you provide all your knowledge, but do not get any professional experience in return,” a programmer from Kiev, who wished to be called Bogdan, said.
“Unfortunately, it turned out that very few employers agreed to adjust the salaries to compensate the changing exchange rate that had decreased the salaries value two-fold. And it makes us doubt about the main reason behind our coming to Kazakhstan," Bogdan said adding that it was quite difficult to work in Kazakhstan even with high wages because of lack of qualified personnel.
Andrey from St. Petersburg is of the same opinion. “Before coming to Almaty, I worked in Ireland and the Czech Republic. I was invited here to manage car sales. It is very difficult to work here. I always had to cope with the fact that lunch is of so much importance here. When the Russian ruble collapsed and a big number of cars from Russia flooded Kazakhstan, then one just had to forget about lunch at all if a potential buyer came to the showroom. But this rule does not work here at all,” the Russian manager said. In fact, after tenge plunged to its record low, he started thinking about returning to his previous job in Prague.
However, some foreign workers do not plan to leave Kazakhstan. One of them is Andrey’s business partner, who wished to be called Stepan. Despite the fact that he lost half of its initial salary value to the tenge depreciation, he is not going to leave Kazakhstan. The reason is simple - Stepan is from Donbass and for now he cannot go back home.
“Of course, the situation there has improved a little, but it can hardly be called peaceful. It is totally inappropriate for the business, which I have been doing for 15 years. Who will buy a car, when there is still shooting in Donbass? Here sales are not doing good either after the depreciation of the tenge, but at least one can live peacefully here. For the time being, there is nowhere to go. In Ukraine, all are strangers in Donetsk and in Russia, they are quite hostile to Ukrainians. In Kazakhstan and especially in Almaty, no one pays much attention to your nationality,” Stepan shared.
Boris from Minsk, who has been working in Almaty since 2012 heading the security service of a large company, does not want to go back to Belarus. “My parents live in Minsk and my wife’s parents live in Gomel (Belarus). And we visit them in Belarus every year. You have to learn through comparison,” Boris said.
According to him, it is calmer in Minsk than in Almaty, but “it is not always a good thing”. "In Almaty and Astana, life is vibrant. There are large hypermarkets everywhere, where you can come at any time of the day or night. In Minsk, when the evening comes, there is virtually nowhere to go. This is like what it was in the Soviet Union. Although salaries became lower in Kazakhstan, you still can earn more here than in Belarus. It is much easier to do business in Kazakhstan," Boris told Deutsche Welle.
His friends contacted him repeatedly asking for help in getting a job in Kazakhstan, he said. It seems that it is quite possible given the fact that the country is still in need of high qualified labor.
In the meantime, head of Antal Kazakhstan recruiting company Anna Kovinskaya also noticed that Kazakhstan was becoming a less popular destination among professionals from CIS countries looking for jobs. According to her, the company is now getting much less CVs than it used to receive last year.
Moreover, most of the potential employees tend to state their salary expectations in dollars, she said. In fact, those expats, who receive salary in dollars, are doing fine. But those, whose salary is in tenge but who have expenses in other currencies, for instance, if their families live outside of Kazakhstan, are thinking about leaving Kazakhstan more often.
Expats also fled Russia, when its ruble collapsed last year. “After the Russian ruble depreciation last year, many expats began to leave the country. And it was not always their choice. It became unprofitable to work in such conditions not only for foreigners, but also for many local employers. Working with expatriates turned out to be very expensive for the companies, so they just did not renew the contracts with them after the previous one expired,” she told Tengrinews.
Kovinskaya also said that some companies were negotiating a transition from fixed salaries in dollar to tenge with their foreign employees. “There are cases, when employers refuse to prolong the contract with foreign workers upon the end of probationary period because of increased spending on wages,” she said.
Therefore, companies plan to hire local workers for the positions previously occupied by foreigners. In this sense, it is a great chance for local managers to try themselves on new jobs.
Head of Forsage HR Agency Yelena Grischuk also believes that Kazakhstan becomes less attractive for expats because of “devaluation, economic slowdown and bigger interest of employers in local personnel". "Nonetheless, Kazakhstanis themselves are somehow sure that the flow of foreign workers is inexhaustible and they tend to react to them getting employed quite harshly," she said.
Devaluation, in turn, brings about new changes for Kazakhstan's labor market, as with no adjustment of salaries, there will be an outflow of professionals, both foreign and local, abroad. In addition to that, Grischuk is convinced that wages will not be increased in Kazakhstan in the near future, because there are still qualified and not so expensive professionals, who are available in the market.
However, the official statistics show quite the opposite. According to the International Migration Organization, the number of foreign specialists, who got work permits in Kazakhstan as of October 1, 2015, was 35,813, which is considerably more then last year, when there were 29,936 such persons. A vast majority of foreign workers hail from China, Turkey, Uzbekistan and Tajikistan.
Reporting by Aizhan Tugelbayeva, writing by Assel Satubaldina, editing by Tatyana Kuzmina