MOSCOW. (RIA Novosti political commentator Andrei Kolesnikov)

The Russian government, the Federal Migration Service, the Ministry of Economic Development and Trade and other departments involved have opted for a highly specific approach to restoring order on outdoor markets in Russia. They have de facto abolished freedom of trade, outlawed outdoor markets, and deprived the Russian economy of immigrants, who are the main labor resource in this country.
There is a clear reason behind the decision to set quotas on labor immigrants (300,000 annually, although the demand is one million) and establish a minimum required percentage of Russian vendors at outdoor markets (20%), and to prohibit foreigners from trading at outdoor markets and in retail stores.
This reason can be summed up in one word: Kondopoga, a town in northwest Russia where a confrontation between local Russians and Caucasians left at least two city residents dead and culminated in nationalist riots that shook the town, as locals demanded that non-Russians be expelled.
The influx of labor and other immigrants into Russia poses a problem, but another problem entirely is the reaction by some Russians to this phenomenon, which takes the form of social protests, growing nationalism, and sometimes attacks on immigrants by young neo-Nazis.
Vyacheslav Postavnin, deputy director of the Federal Migration Service, said: “There should be quotas for immigrants from the CIS, because we must prevent the emergence of areas in Russia where Russians constitute a minority. According to our calculations, the number of non-Russians in any given area should not exceed 17-20%, especially if they have a very different culture and religion. Exceeding this norm creates discomfort for the indigenous population.”
In my view, officials are approaching the problem from the wrong angle. Ethnic enclaves, or, if we must be frank, ghettos, appear when the country’s authorities do not take measures to adjust immigrants from the former Soviet republics to the current economic, social and cultural conditions in Russia. Prohibitions and limitations only spur illegal immigration and therefore ethnic agglomerations.
An appropriate regulation of this phenomenon would allow labor immigrants to obtain legal status and work permits, contributing to the growth of value-added products and Russia’s GDP.
The number of economically active Russians will start to decline in 2007, and the problem will be compounded by the aging of the working population. The Russian economy still has very many low-paid, low-prestige vacancies (sweepers, market sellers, builders, nannies, babysitters, housekeepers, and the like), which Russians are loath to fill. Therefore, if we set quotas on labor immigration, we will soon become badly short of labor.
As for traders at outdoor markets, the issue concerns predominantly people from the southern republics of the former Soviet Union. Russian officials, if they ever buy at outdoor markets, most likely visit the most expensive one, the Dorogomilovsky market off Kutuzovsky Prospekt. There is a roughly equal share of Slavic and “southern” sellers at other markets, and Slavic sellers constitute a majority at some of them. However, the majority of these Slavic sellers are foreigners from adjacent republics. Therefore, if the initiative of the Russian officials is implemented, not 20% but as many as 90% of stalls at outdoor markets will be vacant.
This will disrupt the economic ties that are the lifeblood of outdoor markets and vendors, where low-income people go to shop. This could spell a death sentence to the system of outdoor markets and the structure and volume of consumption, especially of fruit and vegetables.
The anti-immigration measures will predictably push up prices for fruit, vegetables and other commodities sold at outdoor markets, which will have a direct negative effect on inflation. This “inflation tax” will not affect the rich, but will be a heavy blow to the poor.
In short, there are no economic grounds for this new decision by the Russian authorities because it infringes on freedom of trade. The legal grounds are also feeble, because the majority of the measures will be enforced by bylaws, whose legality is questionable. And there are no political grounds for the decision at all. Instead of fighting nationalism, the authorities have decided to remove the “irritant” – immigrant workers.
This will not solve the problem. In fact, I view this as a retreat in the face of a nationalist onslaught that is not economically justified and will seriously damage Russia’s image abroad. -0-