Economy , Ethnicity and International Migration . The Comparison of Finland , Hungary and Russia 1

Abstract The focus of this paper is to compare present migration situation, history, economy and migration regulation in an European Union country (Finland), and, an EU accessing country (Hungary) and a major non EU country (Russia). Our material and methods base on literature survey, policy analysis and analysis of the existing statistics and legislation. The results show that even in the era of globalisation that is often claimed to erode states’ regulatory power over the fl ows of capital and people, some regulatory power still exists. Instead of developing their policies in accordance with the largely self-regulating migration process, according to our data, the countries sought to regain political control through reproducing economic, ethnic and national hierarchies.


Introduction
The focus of this paper is to compare present migration situation, history, economy and migration regulation in an European Union country (Finland), and, at the time of analysis, an EU accessing country (Hungary) and a major non -EU country (Russia).
The main focus of this study is the social and historical development of international migration -in particular labor migration -and economy.We understand this development as a part of globalization, which affects even the more peripherical areas of the world economy in the form of increasing mobility of people and capital.Our aim is to reveal how closely embedded migration is with the economy: mechanisms of international migration cannot be understood in a vacuum, but the social and economic context of the particular country has to be taken into consideration.
Our material and methods base on literature survey, policy analysis and analysis of the existing statistics and legislation.
The chosen countries are of different sizes and social and economic backgrounds, and how they have been affected differently due to their history and varying position within the hierarchy of the world economy.However, the interaction between migratory processes and the economic globalization within these three countries make them interesting subjects for the study of embeddedness of the social and economic processes.
These similarities and differences are analyzed by looking at the history of globalization in terms of creating spaces for foreign investment and international migration.In all the three countries ethnicity and ethnic belonging play an important role in their history and self-understanding, and is therefore refl ected also in their immigration policies and consistence of their immigration population.The second part we analyze how the legal and administrative mechanisms have been implemented to regulate and channel immigration, and how economic and social developments, as well as ethnic belonging are refl ected in migration regulation in the respective countries.In the third part we defi ne further to the role of ethnicity being one of the crucial cultural and social factors in facilitating migration and selecting migrants in all three countries.The major role of ethnicity and policies of favoring immigration of co-ethnics show how legal and administrative processes regulating immigration are far from being neutral, but are embedded to specifi c social, historical, cultural and economic context of a respective country.

Embedded mobility of people and capital
The interrelation of migration and economy: conceptual background The basic neoclassical migration theory claims that economic disparity drives international migration, and when a country reaches an advanced stage of economic development, the rate of migration slows down.This thesis is criticized in the modern literature on international migration issues.For instance, Richmond argues that: "Contrary to the view that economic growth will itself remove the need for migration, it must be recognized that the emerging global economic and social system is one in which population movements will continue to increase rather then declaim".(Richmond 1994, 217; see also Borjas 1994;Hiebert 1997;Portes 1995.)Economic globalization determines the movement of capital, money, technologies and labor through national borders.This trend serves as a basis for world system theory fi rst introduced by Immanuel Wallerstein (1974) and globalization theory, which seem to explain the general regularities of world migration (Sassen 1991;1995;1998;Castles 2000;Staring 2000).For instance, the Finnish case shows that investment in growth and intensifi cation of the economy are bound to migration growth (Forsander et al. 2004).The majority of European countries with rapidly growing economies are challenged by the process of globalization and faced with the necessity to change their immigration policies in order to attract highly skilled labor (Forsander et al. 2004;Geddes 2003;compare with examples from Silicon valley: Saxenian 1999).Indeed, Iredale (2001, 16) believes that "industry-led" migration has become the most signifi cant motivation, and applies to situations where transnational corporations (TNC's) are the major force behind selection and migration of high skilled workers.
Despite the fact that the process of capital globalization does not always coincide with the process of intense migration in a historical perspective, these two aspects serve as the principal features of the open economy and its ability to compete in the world market.However, currently the Russian economy cannot be characterized as a highly open economic system.In the current economic situation, a mechanical understanding of interrelations between investment and foreign labor migration processes is slowing down the effectiveness of the Russian immigration policy.The process of growing foreign investments has its own stages linked to the existing economic structure and the current stage of economic development of the country.Both Hungary and Finland can provide historical illustrations for such processes.
The labor market regulates relationships between investments and immigration.At initial stages in the development of industrially developed countries, investment growth is stimulated by conquering new sales markets and by the development of business.For example: "Increased inward FDI 2 in Finland during the 1990's is characterized by take-overs in many relatively low-tech industries and the services sector, such as construction and manufacturing of construction products, manufacturing of food and beverages, transport and forwarding, and security services.Most of older and more recently established foreign affi liates in the wholesale and retail trade sectors also fi t into this category.In these sectors, foreign companies rely on their own company's specifi c knowledge to compete in the host market, and FDI is motivated by the prospect of increasing market share."(van Beers 2003, 40).
Economic development based on such investments does not need highly skilled labor.Economic growth caused a bifurcation of labor markets.Whereas jobs in the primary sector provide high pay and relatively steady work, those in the secondary sector supply low pay and little stability.Jobs in the secondary sector repel natives and produce structural demand for immigrant workers.The bifurcation of the labor market is a specifi c feature of global cities (e.g.Moscow in Russia), where the concentration of wealth leads to increasing demand for low-wage services (Sassen 1991;1995;1998).Unable to attract native workers, employers start recruiting immigrants, thus often initiating immigration fl ows.
At the next, post-industrial stage of economic development, domestic research and development systems funded by TNC capital attract high-skill labor forces.
"Second, relatively intensive knowledge and technology investments since 1989 have made Finnish fi rms attractive targets for asset-seeking MNEs3 , which have acquired many promising technology-based Finnish fi rms e.g. in electrical engineering.In the ICT4 sector, foreign companies have acquired innovative fi rms that have advanced knowledge in some technology or business area.Strategic asset seeking appears to be the dominant motive."(van Beers ibid.)At this stage of economic development, the country is faced with the necessity to correlate regulations of immigration policy with the development of inward investments.The main conclusion is that investments defi ne the labor market segments which are attractive for immigrants.This perspective has been the basis for our additional research on the regional characteristics of foreign labor migration and foreign direct investment.

Data and methods
The study uses both quantitative and qualitative data.Statistical data describes developments in migration trends and related aspects in the economy, while qualitative data focuses on developments in the policy context, such as legislation and the implementing level of both policy and of legislation.This connection binds together with the theory both the data and the method.The use of different types of data provides a fi rm empirical base for analysis.
Using the same formula in data collection and analysis in the three countries made possible to perform the comparative analysis that delivers basic results of the study.The results are applicable to the macro level, but are based on precise empirical comparative analysis on the micro level.In other words, despite the results may be put in a wider theoretical context, the data and the method that is used in analyzing it, make this more like a case study.

Economic, social and political transitions: historical parallels
Hungary, Russia and Finland had different social, political and economic histories in the 20 th century, but in terms of economy and immigration it is possible to observe parallels.Four historical periods can be outlined which help to give an overview of the historical development of the movements and policies of investment and migration: The results of the comparative analysis are presented in table form in more detail in appendix 1.The basic content of the table is presented below as well.

1950-1970: the state over capital
In Finland and Hungary the extremist nationalism of the 1930's and the Second World War had little effect on the restrictive migration policies.This was because after the war all countries experienced new waves of ethnic migration, not very different compared to the processes that were seen in 1990's in the Balkans.The interests of the (socialist or capitalist) state were seen as the guidelines for controlling the borders and citizenship.In this era foreigners and ethnic minorities were considered as a threat.
Interests of the state were still primary, and the international movement of capital and people was very restricted.Hungary was occupied by Soviet forces and between 1948 and 1956 it was almost completely sealed off from the surrounding world.In 1956 it experienced an exodus of younger and educated people.After the political changes in the mid 1950's emigration restrictions to capitalist countries were in force in both Hungary and Russia, whereas Finland experienced a large wave of emigration in the 1960's lasting until the beginning of 1970's.For a short period of time Hungary also experienced a large exodus of people during and shortly after the 1956 revolution.Till the 1960's, both the Russian and the Hungarian state were mainly concerned about having a large enough labor force to supply the needs of centralized industrialization and thus controlling emigration.In Finland and Hungary, some foreign investments began to emerge in the 1960's.Finland had begun the long process of building up a strong Nordic social democratic welfare state as early as the 1930's, and this process continued into the 1990's.

1970-1990: gradual change and emigration
The 1970's were marked by a gradual shift towards greater tolerance with regard to foreign investment and migration.In the Russian case industrial development needed labor, labor migration emerged within the socialist community and the socialist republics, and there was an infl ux of labor from Vietnam, Bulgaria and Cuba.Finland and Hungary were still countries of emigration -some 200 000 Finns emigrating to Sweden, and a couple of thousand people illegally emigrating to West from Hungary.There was also some bilateral labor migration taking place mainly between Hungary and East Germany, Poland, the Soviet Union and other socialist countries.
Russia saw the onset of yet another ethnic emigration process, as emigration from Russia to Israel started, with some 360 000 people leaving Russia for Israel during these two decades.Even a very brief review of the history of migration exchange between Russia and other countries gives reason for concluding that the migration processes were shaped by political reasons.
Hungary became severely internationally indebted after the oil crisis of 1973-4, which gave a push for the economic policy to include more and more "Western" market elements (trade, investment, increase of private ownership).This means that Hungary had started to demolish the state socialist economy as early as the period following the oil crisis and became more and more interested in Western investment.The oil crisis had its impact on Finland as well, but the whole Finnish economy was sustained by the Soviet markets to such an extent that when the Soviet economy collapsed in 1991, this had a massive impact on the Finnish economy as well.

1991-2000: transition and restructuring
The 1990's were marked by a sudden switch from state-centered economic policy to a more open economy in all the analyzed countries.Both capital and people begun to move more actively, but the primary reason was the fact that state control was loosened.Therefore, the correlation of these two processes is probably affected by an external or third factor.Some examples may be needed to illustrate this point.
Even though Finland did not have a socialist system, till the 1990's it relied on the Soviet market demand, and as this demand more or less ended in 1991, the Finnish economy faced its deepest depression since the Second World War.At the same time, immigration began to increase, mostly for reasons unrelated to labor.New immigration and integration acts were passed, and the welfare state sought to integrate the newcomers into the society.Finland implemented an ethnic immigration scheme for the Ingrian Finns living in the former Soviet area, which resulted in the migration of approximately 25 000 people.
Just like Finland, Hungary also got into a very severe economic and fi nancial crisis in the early 1990's and the level of GDP went down to the level of the mid 1970's.The same kind of ethnic immigration took place in Hungary as well, and in addition the country received massive amounts of war refugees from the Balkans, and some 40 000 foreign workers during the 1990's.Hungary became engaged in bilateral labor migration agreements with several Western European countries and at the same time continued to receive labor migration from surrounding countries.(Poplar 2003).
Russia sought to keep the most vital parts of its industries in the ownership of the state, and kept some restrictions on foreign investment.Foreign direct investment (FDI) fl ows remained small, and GDP dropped dramatically. 5After the collapse of the Soviet Union, interrepublic administrative boundaries assumed the status of international borders and the situation changed sharply.Over the period of 1992-2001 about 6.4 million persons arrived to Russia from ex-Soviet states.70 per cent of these immigrants were ethnic Russians.Failure in managing the migration processes in this period was related to an inconsistent attitude towards forced migrants -mainly Russians who wanted to reside in Russia, as well as to other forms of population infl ux, mainly of labor migration.
Hungarian and Finnish States sold much of the state-owned enterprises, which also enabled foreign capital to enter the countries.The Hungarian economy rapidly became dependent on FDI, whereas Finnish companies mostly hooked up with foreign companies, forming many Nordic alliances in fi nancing, media and the wood/paper industries. 6inland joined the European Union in 1995.This meant integration into the economic policy of the European Union, whereas the development of common migration policies within the EU has been very slow due to the weaknesses of the EU policy methods (e.g.Niessen 2001;Geddes 2003;Harris 2002).At this time Hungary was already taking into account EU legislation and the Schengen agreement in its legislative reforms.Hungary entered the EU in 2004.
After 2000: capital over the state Currently it seems that the global fl ow of capital is an imperative in the policies that states adopt and local elites are becoming increasingly involved in this process (Sassen 1998;Mittelman 2000).Economic, fi nancial and migration policies are designed to meet the challenges that follow from the increased transnational nature of capital, which shows an increasing international movement not only of capital itself, but also of jobs and labor.This is refl ected in immigration policies (see the section on institutional arrangements, economic policies and taxation) which again have an impact on domestic social policies.
However, economic globalization has not been a one-way process.FDI from these countries has increased rapidly, too.The intra-EU patterns in the movement of capital and labor seem to be growing very important for both Finland and Hungary.However, since most industrialized countries are facing severe demographic problems, countries outside of the EU are expected to become important suppliers of labor, both for skilled and unskilled positions.

Governmental policies in channelling and regulating immigration
Policies applied to immigration and immigrants are not an independent phenomenon, but are embedded to the social and economic development of a respective country as a part of an international community.In relation to foreigners -defi ned as those who are not citizens -state produces and reproduces hierarchy of rights and privileges, and on the other hand hierarchy of discrimination and marginalization.Legislation defi ning the rights and obligations of foreigners and interpretations of legislation in administrative practices are a manifestation of hierarchy of different immigrant groups.Therefore state upholds juridical attitudes towards foreigners.The expression of these attitudes differs depending on nationality and presumed reasons for immigration (Silverman 1991).
Attitudes of the state towards foreigners also refl ect self-portrait of a nation state, nature of its national identity and positioning in the global society.Nature of each country's nationalism takes its form in relation to the others: who are included, and who are excluded from the national entity?Those excluded are controlled, because their existence is considered to present a threat to the national cohesion (Brubaker 1992;Janoski 1998).

Legal hierarchy of different immigrant groups
All three countries maintain some kind of privilege for certain 'related' ethnic groups, showing that globalization and such preferences come together very easily.In the solutions and in the strength of these privileges, however, we do fi nd substantial differences. 7he countries differ in the extent to which the offi cial, legislation-based grounds of these policies are made public.This issue was not a core question in the study, and thus we did not perform a systematic analysis on the matter.However, it seemed that the migration and ethnic minority policy histories in the countries were refl ected in their current policies.
According to our glimpse on the matter, Finland had the most transparent system; Hungary had a very confused system in which migration was also embedded into a general 'minority policy' toward Hungarians living outside the country, while Russia is the most 'egalitarian' in terms of ethnicity in the case of people coming from the former Soviet Union.In Finland there are three different categories in all permits, for Nordic Citizens, for EU/EEA citizens (so-called second country nationals) and those from other countries (third country nationals) which categories could be found also in the Hungarian regulation.For Hungary these categories are the following: foreigners with Hungarian descent from the neighboring countries (Status law on Hungarians living in neighboring countries8 ), the citizens of the European Economic Space (EES), and those from other countries (third country nationals) (Hegyesi-Melegh 2003).
Thinking in the framework of the nation state both Finland and Hungary ensure favorable position for the persons of Finnish or Hungarian descent.For example Finland has special rulings on Ingrian Finns, and Hungary has an act on Hungarians living in neighboring countries, which guarantees Hungarians with a Hungarian Identity Certifi cate an exception to some rules on entering the country and working there.In Russia there is no 'ethnic preference', only migrants coming from CIS countries9 enjoy certain privileges as compared to citizens of so called 'other countries'.These privileges are related to the historical process.Representatives of various nationalities lived in the Soviet Union and live now in the Russian Federation.Certain nationalities formed their ethnic states within the historical territory of Russia (e.g., the Tatars).Nonetheless the process of gaining legal status in Russia itself contains some advantages for those migrants who have family members and relatives already living in Russia and thus it might include some ethnic imbalances.

The conditions of entering the territory of the country -residence permits typology
Formally the analyzed countries follow rather uniform policy measures in terms of visa and residence categories.The conditions of entering these countries are very similar from a legislative point of view.The variety of permissions and their periods of validity are more or less the same.There are visas to permit short-term residence, and permits for long-term residence in the country.As a general rule, the longest stay based on visa may not exceed three months in a six month period in all countries.However, there is an exception in Hungary where a visa for residence in the country allows single and multiple entries and provides for the person staying within the country from three months to one year with a determinate aim.The category of seasonal workers is affected by this type of visa which is issued for use in seasonal work, and allows for a six month period of residence within one year.On the detailed Finnish scale of visas there are six kinds of visas for the cases of special reside. 10In Finland there is a four-step scale (Group A-F) in residence statuses11 depending on whether residence is permanent or fi xed-term or the applicants are refugees or asylum seekers, and there is another category for the short-term residence which includes all visas.Hungary has a similar terminology for residence statuses, but there are six kinds of permission for entering the country12 in which the status of refugees and asylum seekers are treated by the Refugee Act and they aren't considered as immigrants, but they are counted as refugees and asylum seekers.
Nonetheless, looking at the policies more closely, sharp differences can be found which have emerged due to social, political and historical reasons.In the process of globalization Finland has developed an integrated policy which tries to cover all incoming foreign citizens, including refugees within a unifi ed system.In this system aims, time periods, migrant categories and ethnic preferences are all linked to each other, which shows that the Finnish state tries to 'imagine itself' as a well-regulated entity which is capable of controlling its relationship toward the 'outside' world.Nevertheless it is to be noted that the so called Nordic countries do represent a special region with which Finland has developed a special relationship in terms of the movement of people.
The Hungarian state has developed a much more diverse policy in which we cannot fi nd an integrated policy with regard to migrants.On the one hand from a legislative point of view policy criteria in case of refugees (Act on Refugees) differ from the policy criteria targeted for Hungarian minorities in neighboring countries (so called 'Status Law' and even recently there have been failed attempts to build up pressure for the provision of double citizenship for Hungarians living in neighboring countries).To this respective group Hungarian legislation provides extra privileges and also handles separately the policing of 'aliens' and their admission into the country (Act on Entering Hungary).This, and especially the Status Law, indicates that Hungary does not 'imagine' itself as a completely separate entity.There is a lack of coherence in legislation and especially the state maintains 'organic' links toward ethnic Hungarians living in neighboring countries.This post-imperial attitude links Hungary to Russia as being the inheritor of the Soviet Empire.The great difference is that Hungary is 'interested' in ethnic Hungarian citizens of other countries, while Russia is egalitarian with regard to CIS countries in terms of ethnicity.Russia imagines itself as a closed entity with regard to countries outside the CIS, including some of the former Soviet republics (the choice seems to be geopolitical) and all the other countries of the world.

Favored groups in terms of eligibility to work permit -work permit typology
Similarly to the general conditions for entering the country, in case of labor permits we can also observe great uniformity between Hungary and Russia.These countries have two kinds of work permit.There are individual and collective permits while Finland issues only individual permits.The aim of the collective permit in Hungary is to help employers who need a greater number of foreign employees.This allows the employer to get a frame-permit which includes the nationality, activity, qualifi cation and the number of the employable foreign citizens.On the basis of this collective permit the employer may claim individual permits for the foreign employees.The aim of this policy is to simplify administrative procedure.The validity of the work permit is mainly one year in all three countries.We can also note the deliberate attempts to establish a special category for seasonal workers: in Finland the new Immigration Act freed seasonal workers with a work relationship up to three months from the obligation of obtaining a work permit.
In spite of the overall uniformity of the general immigration policies, there are some interesting differences which show the different positioning of these countries within the globalization processes.Finland and Hungary have developed special regulations to attract certain groups of highly skilled, representatives of foreign investors and some other groups involved in education, the arts and sports.The categories of favored groups, i.e. people who are exempted from the work permit obligation, or can receive one without diffi culty, are very similar in Hungary and Finland 13 .Nonetheless in the frame of Finnish policies more foreigners are allowed to work in the country without formal permission than in Hungary.For example, while Finland doesn't require a permit from persons who work for a foreign employer in Finland, who temporarily visit Finland as e.g.lecturers, teachers, athletes or performing artists, or persons working on missions related to the bilateral or multilateral cooperation of states.Hungary obligates such persons to apply for a work permit, although applying a simplifi ed procedure.There are several favored groups in Hungary14 and in Finland15 whose work permit procedure is simplifi ed by not demanding the monitoring of the labor market.
In addition, relationship between labor permit and residence permits also varies.In Hungary a labor permit seems to be a basis for gaining a residence permit in the sense that it secures the required fi nancial background -if the conditions for granting a work permit are fulfi lled, a residence permit follows easily.A work permit is not enough to reside in the country, it is available only with a residence permit, and a residence permit can also be applied independently from a work permit.In Russia, however, we can observe a reverse relationship between a labor permit and a residence permit.If somebody gains permission for long-term residence, then that foreign citizen also has the right to work.Similar policies are applied in Finland for those groups immigrating on grounds of refugee status, and family, or ethnic ties.For those immigrating for the basis of the need of their labor force, a so-called laborer's residence permit can be granted 16 .

Work permit application policies
All three countries try to keep their domestic labor market balanced and attempt to forecast imbalances by monitoring the labor market needs and supply of the domestic or EU-based workforce.For instance, Hungary set a limit to the employment of foreigners by defi ning the maximum number of foreigners allowed working in Hungary.The work permit policy is based on the general evaluation of the domestic labor supply.Russia has set up regional quotas on the basis of the demand for foreign labor in every region.EU nationals may stay in Finland and in Hungary without residence permit for three months, and even beyond this if the person seeks work and has reasonable odds for fi nding a job.
In terms of application procedure Finland differs from Russia and Hungary.In the latter two countries the employer applies for the permit for its future foreign employers.In Finland it is the employee to whom the residence permit is granted on grounds of the need of labor-force permission.However, the initiative comes from the employers' side.We can suspect that it is the socialist past of the previous two countries -the inclusion of the companies into a centralized system -that plays its part in the background to differences in work permit policies.
There are also differences in the time-period designated for making decisions.After receiving a work permit application, in both Hungary and in Finland, the labor administration decides whether domestic or EU-based workforce is available for that specifi c job within a reasonable timeframe, which is 60 days.
Seasonal workers have a special status in Hungary and Finland.In the proposal of the new Finnish Act on Aliens, seasonal workers and several other groups be made exempt from the obligation to procure a work permit as such a permit is almost automatically granted for foreigners and in year 2003, more than one third of work permits were granted for seasonal agricultural work.
The next table 1 shows the overall picture concerning the annual stock of immigrants in respective countries compared to the data on whole world.

The role of ethnicity in immigration
The structure of immigrant population: Russia In Russia, the number of immigrants from the Asian CIS-countries and from the countries of South-East Asia has grown considerably over the last decade.The major precondition for the existence of the multiethnic communities are the common political past re-emerging in the frame of the organization of the Commonwealth of Independent States, the survival of social-economic and cultural relations formed during the Soviet period and the existence of national diasporas and public national-cultural organizations all over Russia.However, mass migration in the last decade has produced an additional burden on the social-cultural institutions of the Russian regions and has lead to competitive relations in the public sphere.Social-economic problems are perceived by the public through the prism of interethnic relations, and therefore they are linked to migration which fact results in non-tolerant behavior.17 The different types of immigration and the adaptation of migrants vary according to the hosting region.Three types of hosting regions have been identifi ed: the Russian territories bordering CIS and other countries, inner Russian territories and large cities.Border regions both on the Russian territories and abroad have similar social and economic structures and maintain mutual social-cultural communications.These features foster excellent adaptation on behalf of immigrants and enhance genuine competition in local labor markets and in the social sphere.The geographical closeness of the ter- ritories stimulates mass migration and creates the preconditions for forming ethnic enclaves.The situation is perceived as a threat by the local population and provokes inter-ethnic confl icts. 18he inner regions are situated far from the state borders and inhabited mostly by an ethnically homogeneous population.Immigrants are dispersed over these regions.The inner regions are characterized by a defi cit in human resources and segmented labor market like in Siberia.
The majority of immigrants are attracted by the large cities.The high level of social competition in major cities, the considerable size of the migrant population and the differentiation of immigrants according to their social-economic status and ethnic-cultural composition determine public attitude towards immigrants, which is characterized by growing inter-ethnic tension and xenophobia, especially among young people.
Several variants of ethnic-social stratifi cation and segregation can be identifi ed as slavery and traffi cking, ethnic corporative unions, ethnic enclaves, and ethnicity related criminality.These ethnically defi ned social phenomena have fed hostile attitudes towards all the representatives of the respective ethnic group.Public hostility towards temporal migrants has been transferred onto other ethnic population groups, which have inhabited these regions since long ago.
Migration processes lead to the transformation of existing patterns of inter-ethnic behavior and create ethnic-cultural instability.In general, the situation in the sphere of interethnic relations in Russia remains within the standards of civic behavior.However, it is still possible to identify several zones of potential confl icts: large Russian cities Moscow and St. Petersburg, the Stavropol and Orenburg Regions and the Far East Territories. 19The situation in these areas can be characterized by growing social tension, the development of ethnic phobias together with the growing autonomy of the migrant population.
The above noted tendencies towards the aggravation of interethnic tension hinder the elaboration of strategies of politically correct public behavior.On the other hand, economic growth makes the infl ow of labor necessary.Migration will play its important role in the formation of economic and labor potential in the Russian regions under the conditions of the problematic demographical situation.Hence the strategies of intercultural communications have to be developed.

The structure of immigrant population: Hungary
In terms of citizenship, Romania is by far the most important country of origin for labor permit holders in Hungary: almost half of the total foreign laborer population of Romanian origin (HCSO 2003).Also the other neighboring countries, Slovakia and former Yugoslavia, and the former Soviet Union, mainly Ukraine are important countries of origin.In addition China and EU-countries play signifi cant roles in the transnational movement of labor.Most of the people from neighboring countries are of Hungarian ethnic origin.It is important to note that previous links between state socialist countries have broken down or have been reconfi gured, which can be exemplifi ed by the decline in the number of Polish industrial workers in Hungary.
Eastern neighboring states are the prime sources of immigrants, like in the case of labor permits.On the Western side, Germany plays an important role.The end of the 1990's was a peak period of foreigners arriving from EU countries and Germany.Besides the European citizens another signifi cant group are Chinese (more than 5,000) and Vietnamese (above 1,500).
Concerning questions related to ethnomigration we rely on a Hungarian survey on immigrants carried out by Irén Gödri et al. (Poplar 2003).In 2001 7000 people from neighboring countries gained immigrant status in Hungary, 69 percent of them came from Romania, 18 percent from the Ukraine, 10 percent from the former Yugoslavia, 2 percent from Slovakia and a negligible percentage from Croatia and Austria.This survey, carried out among this immigrant population in the summer of 2002, was based on data from a representative sample of 1 015 people over the age of 1820 .Among migrants from Romania and Slovakia more than 90 percent have an exclusively Hungarian identity, but in the case of the Ukraine the relevant fi gure is only 78 percent. 22 The ratio of immigrants without Hungarian identity or not mastering Hungarian is low with regard to Slovakia and Romania.

Countries of origin
The data described above show that the co-ethnic element is characterizes to Hungarian immigration.The question of ethnomigration can also be raised from the point of view of the motives of migration.In this respect the motivation to use the mother tongue or experiences of ethnic discrimination in the country of origin play an important but decreasing role among immigrants from neighboring countries.In the early 1990's and in the mid 1990's the large movement of people with a Hungarian identity was largely due to this factor.The survey has revealed that more than 50 percent of the immigrants had a family member who settled down before the arrival of the respondent, and this ratio is signifi cantly higher among immigrants with a Hungarian identity.Therefore ethnic identity, the attraction of the "mother country", and the existence of networks as pull factors, and the experience of ethnic discrimination as a push factor, smooth the way of migration.In the Hungarian case these social and ethnic factors coincided with economic factors, like restructuring of the labor market: collapse of the heavy industries and a slow readjustment to the service economy.In this case ethnicity and economic inequalities together catalyzed a self-generating process (see also Gödri & Tóth 2005).The structure of immigrant population: Finland The composition of Finnish population in terms of nationality is homogenous: 2,2 percent of the population had a nationality other than Finnish, and 3,1 percent were foreign born in 2005 (Statistics Finland 2005).Linguistic composition is slightly more varied because of a language minority of Swedish Finns, small traditional ethnic minorities, and indigenous people in the north, the Sámi.
The most common reasons for immigration to Finland have been family ties.Employment as a primary reason for migration covers only 5-10 percent of all immigration.However, the number of granted work permits has increased sharply under the last fi ve years, and this development is expected to continue because of the structural changes in the labor market, and the retirement of working population.The largest groups of foreign citizens come from the neighboring countries, Russia, Estonia and Sweden, and from Somalia, whereas most labor permits, over 60 percent were issued to citizens of Russia and Estonia.
Similarly to Hungary and Russia, Finland has also been a recipient of so-called ethnic "return" migration from the 1990's onwards.When fi rst launched in the early 1990's, return migration policy targeted Ingrian Finns, who have Finnish family ties.However, since immigration of Finnish population to Ingria -now located on Russian territory -traces back to 17 th century, grounds of calling Ingrian Finnish immigration as return migration can be questioned.Criteria for claiming ethnic Finnish ties have been made stricter and a requirement of competency in the Finnish language has also been added during the 1990's.As described above similar governmental efforts to reduce ethnic immigration are also launched in Hungary.In Finland, unlike in Hungary and Russia, ethnic "return" migration did not become a dominant feature characterizing immigrant population.It is interesting to note, how ethnicity is understood in this context, since being and "ethnic Finn" in administrative or political terms is defi ned through biology, not through culture.The recent shift towards required competency in the Finnish language balances the defi nition slightly, but still the defi nition of ethnicity is strongly defi ned in terms of jus sanguinis (descent), not in terms of jus soil (culture, language and factual country of residence) (Laari 1998).
Ethnicity does play a role however, through immigrant communities and chain migration patterns.So far these have also been fairly limited, since immigrant communities are still quite small.However, within Finland, ethnic communities seem to attract the migration of co-ethnics; for example a vast majority of ethnic Somalis live in the capital area of Helsinki.

Conclusions
Focus of our study was to describe how fl ows of people and capital are embedded in social development: the collapse of the Soviet regime and the socialist system, as well as enlargement and membership in the European Union have had a major impact on migrations and fl ows of foreign capital both in Hungary and Finland.Migrations and fl ows of foreign capital do not just happen, but political, social and economic circumstances shape national attitudes towards transnational processes, which are also embedded in frameworks of legislation and national policies.
Popular globalization paradigm claims that states are losing their sovereign positions in shaping national social and economic policies.Globalization is seen as a process where national economies are deliberated from state regulation, were capital was constrained in the name of "political reality".During the Soviet regime and in circumstances of Cold War, the argument of "political reality" was powerful when restrictions towards fl ows of capital and people had to be justifi ed.Popular globalization paradigm has created argumentation of its own: in the name of "economic reality" state regulations constraining fl ows of capital and labor have to be demolished.However, there seems to be evidence that globalization is not destroying national sovereignty.Regulatory power of states still exists, but it has taken new forms in a new context.The way how states regulate immigration policies, and monetary policies of EU provide examples of this.
In Russia, Hungary and Finland foreigners immigrated on other grounds than solely the need of their labor and populated the target country more evenly than migrant laborers.However, capital areas attract the greatest number of migrants of various statuses in all three countries.In this respect capital areas of all three countries follow the same trend: globalization is a restructuring process in which the most urbanized regions become entangled in transnational social and economic networks.This, in turn, loosens the most urbanized regions from realities of the other regions of a respective country.In terms of attitudes and institutionalized social practices towards the ethnic hierarchy of immigrants, shaped and reproduced by national legislation and administrative practices, seem to follow the same pattern in all the countries studied.In Finland, Hungary and Russia so called ethnic remigration takes place: in Hungary immigrants from neighboring counties of Hungarian origin, in Finland immigrants from Russia of Finnish origin and in Russia immigrants from CIS-states of Russian origin have privileged status in immigration policies.In Hungary and Finland EU-membership shapes hierarchy of immigrants on a basis of nationality even further: EU-nationals and so-called third country nationals have different rights and obligations what comes to their status as immigrants.
The political and legal frameworks developed by the individual countries have a lot of common elements, but we can observe clear differences.Finland has developed a system which aims at protecting cohesion of the Finnish Welfare State, while Hungary has developed an institutional system in which different aspects, including ethnic ones are combined without a coherent framework.Russia being on the way of developing an integrated system still struggles with the legacy of the dissolution of the Soviet Union.
All in all it is clear that globalization does not lead to a more open and egalitarian international system of transnational movements of people but reproduces new economic, ethnic and national hierarchies with severe implications on the movement of individuals or migrant groups.

Political and Institutional Framework
Investment Processes

1917)
Foreign entrepreneurs accelerated the rate of industrialisation and brought knowhow Many of today's largest and well-known Finnish companies were founded during this period by foreigners; for example the brewery Sinebrychoff (Russian), the departments store Stockmann (German), and Enso-Gutzeit (Norwegian) in the forest industry, Fazer's (Austrian) bakery, cafeteria and chocolate business In 1888, all people entering the country had to have a valid passport Foreign entrepreneurs and artisans could immigrate to Finland; statutes, control over foreigners Residence and practicing trades were regulated by permits, also in the case of Russians Class divisions of the estate system also applied to foreigners: the treatment of foreigners was irregular and unequal.The Roma and Jews were under special control Nationals of other countries were seen as a national security risk Large-scale emigration mainly to North America

First decades of independence (1918-1950)
In 1939, a law was passed to restrict the rights of foreign ownership: this law remained in effect for over 50 years A majority of the most significant foreignowned enterprises were transferred into Finnish ownership in the early years of independence In 1918, Tartars and Jews were granted citizenship and freedom of trade The Aliens' Act of 1938 created the foundation for rules in current legislation on controlling foreigners, and the statutes for preventing entry into the country and deportation The main motive was: "preventing the activities of revolutionary movements" Foreigners were monitored with the help of state police.

Political and Institutional Framework
Investment Processes

Late 1970s and 1980s
From assembly lines to high skills.
Gradual growth of foreign-owned companies Motive: desire to obtain special knowhow from Finnish companies In 1984, the first alien legislation in the history of Finland was passed, including permit statuses related entering and residing in the country, legal protection for foreigners in accordance with the obligations contained in international conventions Most immigration occurred as a result of marriage; return migration of Swedish-

Finns
The But numbers were low and there was a net annual outmigration of several thousand.
Hungary became severely indebted internationally after the oil crisis.It had an impact on the economic policy, which was more and more market oriented.
Foreign investment was more and more encouraged.New forms of foreign investments were introduced.At the end of the 1980s there was a radical move toward the total opening up of the economy in all aspects (trade, investment, the increase of private ownership and the decomposition of the state socialist economy) Some increase in volume of foreign direct investment, but it was rather low till 1990, when there was a radical shift.
Hungary had an increasing burden of debt services and there was a continuously huge negative balance of payments.The debt service ratio with regard to total export of services and goods was above 35 percent and sometimes it reached 70 percent.
From the early 1970s gradually a central office was created for policing foreigners.(theregistration of address within 24 hours, Further liberalisation of the access to passports and opportunities of travelling 1989: New act on emigration and immigration.
1989 and 1990: Bilateral treaties with Germany on employment.
Till the late 1980s there was a continuous small-scale illegal emigration In the mid 1970s Germany started a new policy of inviting labor force from Central and East European countries.Hungary participated in this.

Investment Processes Political and Institutional Framework Migratory Processes 1990s
The complete legislation for the free flow of capital and privatisation.

Subsidies for certain foreign investors
The take-over of EU legislation for the sake of EU integration.Quick privatisation of state assets, within 8 years most of them were sold mainly to foreign investors.Time lag between the collapse of state socialist industry and the appearance of foreign capital.Huge increase in foreign direct investment till the end of the 1990s.Foreign subscribed capital increased by 6-7 times.In certain sectors (chemical, food, manufacturing, postal and telecommunication services) the ratio of foreign subscribed capital was well above 50 percent.In its export Hungary was extremely dependent on transnational corporations.
Hungary developed a legislative framework for accepting larger number of immigrants, foreign labourers: employment act including employment of foreigners in Hungary; the gradual implementation of the Geneva Convention.
Hungary also entered into bilateral agreement with regard to Hungarian citizens working outside Hungary: From 1996 the country signed bilateral treaties on employment with some EU countries (like Austria, Holland, Ireland, Luxembourg, France) and some non-EU countries (like Switzerland, Slovakia, Czech Republic, Romania).
1988: Almost thirteen thousand Romanian Hungarian immigrant nationality-migrated to Hungary.From 1989 their number was about 29 thousand annually until 1992 when it decreased to a level of four thousand and then their number started increasing again.
In the mid 1990's Hungary received around 50 thousand temporarily protected people from Bosnia.
The numbers of foreign workers with labor permit increased from 20 thousand to 40 thousand between 1994-2000.

2000-
The completion of EU-conform legislation The maintenance of subsidies toward large foreign investors.
The country joins the EU in 2004 with some temporary restrictions on the free flow of labor.
Relative slow down in the inflow of foreign capital Some labor intensive foreign investor (including IBM, Philips) leaves the country for other countries with cheaper labor force.Some huge Hungarian companies (including the Hungarian Oil Corporation) invest in neighboring countries.2000: Establishment of the Office of Immigration and Nationality, which has got national competence on law enforcement of foreigners.
Hungary starts preparing the implementation of the Schengen Treaty.
The number of foreign workers increases to 50 thousand.The number of refugees decreases.

Table 1 .
Total population, migrant stock and annual migration in Hungary, Finland, Russian Federation compared to world fi gures in 2005.: International Migration 2006.United Nations, Department of Economic and Social Affairs, Population Division. Source

Table 2 .
Population of foreign origin by the country of birth in Russian Federation 2002.
Source: Russian Federal State Statistics Service, Census 2002.

Table 3 .
Population of foreign origin by the country of birth in Hungary.2001.

Table 4 .
Population of foreign origin by the country of birth inFinland.2002.

Characteristics of foreign investment Characteristics of migration Political and Institutional Framework Investment Processes Political and Institutional Framework Migratory Processes Austro-Hungarian Monarchy (1867-1918)
After 1948 the country was almost sealed off by the "iron curtain" till 1953.The opening of borders during and after the 1956 revolution.Several attempts(between 1956-1963)to legalise the 1956 exodus and to invite emigrants back to Hungary The setting up of a separate department in 1958 at the Ministry of Interior for "screening" "hostile" and "unworthy" Hungarian elements in order to control their immigration and emigration.The : National Central Authority on Supervising Foreigners was integrated into the Ministry of Interior Affairs Introduction of a policy of allowing emigration to "capitalist countries" only above the age of 55. 1970: Gradual easing of control on migration.Every Hungarian citizen was given a right to get passport and to travel abroad.Almost no migration till 1956.In 1956 around 200 thousand Hungarian citizens left the country mainly for Austria, France and the United States.After 1956 there was a continuous illegal emigration, and a net emigration balance.