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What are the challenges behind Russia’s plan to boost job creation?

Russia recently announced an ambitious plan to create 25 million high productivity jobs by 2020. Olga Koulaeva, Employment Specialist at the ILO Moscow office, analyses Russian labour market challenges in an interview with ILO News.

Analysis | 21 May 2012

1. What are the main trends on the Russian labour market?

There is evidence that Russia is recovering from the crisis, both in terms of GDP growth and the situation in the labour market.

The total number of unemployed reached its peak of 7.1 million in February 2009 when the unemployment rate rose to 9.4 per cent. At the end of March 2012, it went down to 6.5 per cent - thus coming back to the pre-crisis level.

2. What are the challenges for Russian jobseekers today?

There are regions in the Russian Federation where the unemployment rate is much higher than the average. This is particularly the case in the Northern Caucasus where unemployment stood at 14.9 per cent in April 2012 and in the Chechen Republic where the registered unemployment rate reached 32.3 per cent. Since the share of youth in these regions is high, the youth employment crisis is one of the major challenges. The ILO was therefore asked to provide technical support.

Another problem is the skills deficit in certain key sectors and occupations which may become a constraint for the modernisation of the economy and its innovation capacities. Also, there is still a clear mismatch between labour market demand and education system offer. The situation could be improved by adapting technical and vocational education and training to the actual needs of companies and businesses.

We should also mention the growth of informal employment. According to the estimates, its share increased from 20 per cent in 2000 to 25 per cent in 2010. This is because people in many parts of the country have difficulties in finding an adequate job in the formal sector.

3. What are the prospects for job creation in Russia?

This topic is currently high on the political agenda in Russia. On 7 May 2012, President Vladimir Putin signed the Executive Order on “Long-term state economic policy”. It calls, among others, for a rise in investment by at least 25 per cent of GDP by 2015 and by 27 per cent of GDP by 2018. Another objective is to increase labour productivity by one and a half between 2011 and 2018. Already in June 2011, in his address to the 100th Session of the ILO’s International Labour Conference in Geneva, Mr. Putin referred to the ambitious goal of creating “at least 25 million modern, high paid positions” in the Russian economy.
In creating labour conditions that correspond to the needs and requirements of a modern worker, we are acting in line with the ILO’s Decent Work Agenda."
V. Putin

“That is a challenge, but it can be met. I am referring to the creation of new jobs and the restoration of old ones”, the then Prime Minister of the Russian Federation said.

4. What has been the role of the state in employment promotion?

The Russian government has been very active in this area. Dynamic labour market policies are currently being implemented all over the country. The portfolio of programmes and services includes support to job seekers and employers, information on the situation on the regional labour markets, job fairs, vocational guidance, as well as training, retraining and skills upgrading courses for the unemployed.

During the crisis, new additional measures were taken. These included the promotion of public works programs, the creation of temporary jobs for youth, support for self-employment and facilitating labour mobility to rural areas.

It should be stressed that labour market policies are implemented in consultation with the social partners. Social dialogue is key for the success of any labour and social reform, particularly in this challenging post-crisis period that Russia is currently facing.