The Rise of Prison Labor in the Russian Economy

Moscow’s war against Ukraine has resulted in serious military and economic losses for the Russian Federation. The Kremlin has tried to mitigate the effect of stringent Western sanctions through a combination of non-compliance with the oil price ceiling, evading sanctions via third parties, and high commodity prices. The Russian economy is facing harsh structural challenges, including the lack of a qualified workforce. This is a long-term problem for Russia that has been profoundly aggravated by increased emigration and human casualties on the frontlines in Ukraine (see EDM October 19).

The Kremlin has sought to integrate prison labor with certain sectors of the domestic economy to solve this issue. Moscow has tried to veil these efforts by silencing experts and activists who have been vocal about the re-emergence of prison labor in the economy. For example, in early October 2023, the Russian Ministry of Justice declared Olga Romanova, head of the nongovernmental organization Russia Behind Bars, as a “foreign agent” (Sibreal.org, October 13). This means Romanova is one step away from becoming the newest member of the Russian penal system.

This is not the first time Russia has used prison labor to account for increasing manpower shortages. Human rights activists first voiced serious concern on the matter in a 2013 article in which they discussed the terrible conditions of forced labor in Russia (Imrussia.org, October 9). A new milestone in integrating prison labor with the domestic economy was reached in 2021, when a Russian-language report estimated the economic profits for the Russian state budget between 2021 and 2024. At that time, the Russian Federal Penitentiary Service (FSIN) proposed dramatically increasing the “use of prison labor in areas where there is a visible lack of foreign migrants” (Vedomosti.ru, September 25, 2021). The Russian Ministry of Justice also proposed increasing reliance on prison labor for strategic infrastructure projects in the Arctic and Siberia. Specifically, Russian officials proposed employing convicts for work along the Baikal-Amur Magistral (BAM), where several major projects are planned to be completed by 2030. Moscow has further explained the need to increase the use of prison labor for major infrastructure projects based on the COVID-19 pandemic and a deficit of migrant workers (Lenta.ru, May 2, 2021).

Despite assurances from the Kremlin that prison labor would be “just and fair,” Russian human rights activists have expressed their doubts and concerns. Dinar Idrisov, a member of the human rights initiative Observers of Saint Petersburg, stated that the FSIN’s idea would result in “another Gulag and the abuse of human rights.” Idrisov also pointed out that major state corporations (goskorporatsii), including Rosatom, Rostec, Rosnano, and Roscosmos, are behind the initiative. These entities hope to capitalize on a cheap and easily accessible labor force (Lenta.ru, June 16, 2021).

The use of prison labor in Russia for other matters acquired a new meaning after the invasion of Ukraine began in February last year. In August 2022, the All-Russia Public Organization’s Business Russia began testing Russian businesses for their readiness to increase the use of prison labor in their work. According to the project’s findings, some businesses could increase participation by between 100,000 and 180,000 convicts. Business Russia concluded that prison labor could be more effectively used in the areas of construction, agriculture, forestry, mining, and clothing manufacturing(RIA Novosti, August 9, 2022).

Some government officials have become directly involved in promoting these efforts. The two main proponents of the increased use of prison labor by Russian businesses are Arkady Gostev, head of the FSIN and Boris Titov, presidential commissioner for entrepreneurs’ rights. Gostev has actively lobbied the head of Rostec, Sergey Chemezov, offering convicts for the state corporation’s labor needs. Titov has described convicts as “a disciplined workforce” (RIA Novosti, August 9, 2022).

Two large Russian enterprises began integrating prison labor into their business operations in 2023. First, AvtoVAZ asked the FSIN in June to provide “more than a thousand convicts” to fill personnel gaps in its workforce (Lenta.ru, August 18). Second, Ozon and Russian Railways have increasingly relied on prison labor during the construction of the Vostochny Polygon initiative (The Moscow Times, August 11).

As of August 2023, more than 26,000 convicts have been reportedly employed by Russian businesses. The reported total for all of 2022 was 9,300 (Dw.com/ru, August 10). That said, the Kremlin and the central management of the largest state corporations, including Rostec, have claimed that convicts are not being used in the production of weapons and military equipment (Dw.com/ru, March 29). Other sources, however, challenge these claims. According to some reports from November 2022, more than 200 convicts were involved in the operations at Uralvagonzavod, a Russian machine-building company located in Nizhny Tagil and the world’s largest producer of main battle tanks (Itsmycity.ru, November 29, 2022). Similarly, British intelligence reported that forced prison labor in Russia is being actively used in producing arms for the war against Ukraine (The Insider, January 13). There is also considerable evidence that convicts have been used on the Ukrainian battlefield as early as summer of last year (see EDM, August 18, 2022).

The recent uptick in the use of forced prison labor in Russia is not merely the transient trend of a post-COVID, economically troubled, or war-hurt Russia. In the event that the Vladimir Putin survives the war in Ukraine, the use of prison labor in Russia might evolve into a system similar to the Soviet period. The Gulag system performed the role of “manager” in assigning convicts to the most dangerous and lucrative parts of the Soviet economy, including work on major infrastructure projects. The ongoing para-militarization of Russian society and the Soviet experience of using prisoners on behalf of the Russian state suggest that the prison workforce will continue to be used by Moscow in Ukraine and for matters outside the scope of civilian projects in the domestic economy.