At the St. Petersburg International Economic Forum (SPIEF), a number of experts — including RANEPA Rector Vladimir Mau — discussed Russia’s brain drain and the impact of the Ukrainian crisis on human capital outflow.
A participant of the 2015 St. Petersburg International Economic Forum. Photo: RIA Novosti
One of the most pressing issues discussed at the 2015 St. Petersburg International Economic Forum was Russia’s brain drain.German Gref, a prominent Russian economist and the head of Sberbank, raised the problem at the opening panel of the Forum.
“We are discussing what was yesterday, but don’t think about the future,” he highlighted, pointing to the “terrific outflow of human capital.” According to him, this challenge should be a top priority.
Amidst the Ukraine crisis and Russia’s potential isolation from the West, Russia Direct has already warned against triggering another “brain drain” of the type that occurred after the breakup of the Soviet Union in the 1990s. And some businessman and experts at the St. Petersburg forum shared these concerns.
For example, Bernard Sucher, a member of the board of directors at Aton Group, who also attended the St. Petersburg International Economic Forum this year, agreed. He argues that — one year on — the Ukraine crisis has had an impact on the dynamic of human capital outflow in Russia.
“I know specific cases of people — close to me and people not too close to me — who have left the country not because of the sanctions as such, but [because of] the environment in Russia which discourages or scares people, who have a different way of thinking than the current mainstream,” he said.
Between January and August 2014 (the period when the Ukrainian crisis was in full swing) more than 200,000 people left Russia, according to Russia’s Federal Statistics Agency (Rosstat). This number is much higher than for the first eight months in 2013, which saw about 121,000 people emigrating from Russia. In 2014, Russians were most often emigrating to the U.S., Germany, Canada and Finland.
Economists and businessmen attending the forum, including Sucher, agree that the Russian authorities should create a system that encourages both private business and young people to stay in Russia.
Some Russian influential economists, however, have a different take on the human capital outflow. They argue that the Ukraine crisis has not resulted in any fundamental changes to the human capital dynamic for Russia.
At the St. Petersburg International Economic Forum, Russia Direct sat down with Vladimir Mau, Rector of the Russian Presidential Academy of National Economy and Public Administration (RANEPA) and a Gazprom board member, to discuss some of the broader economic themes being discussed by participants at the event.
Below, Mau talks about Russia’s view on the brain drain, as well as the link between human capital and political stability.
Russia Direct: When we are talking about the implications of the Ukraine crisis on Russia’s economy, it’s important to keep in mind sanctions and human capital outflow. From your point of view, what is to be done to prevent the brain drain?
Vladimir Mau: Well, the outflow of human capital is not related to sanctions at all. Moreover, our recent research indicates that there has been an abrupt decrease in the desire to emigrate [from Russia]. In this sense — even though some people could find this strange — I would not try to find any links between the outflow of human capital and either Ukraine or sanctions. There is a much more complicated process going on regarding this issue.
RD: What kind of process?
V.M.: There is the other problem, which, from my point of view, is more important and not related to Ukraine. Russia has a very negative immigration trend. Usually, we have those who live much worse [in their countries] coming to Russia.
Unskilled immigrants are coming to our country, but skilled professionals are leaving it. And this is part of a broader perspective, not the problem of Ukraine and sanctions or whatever. But it seems to me that in the current situation, the outflow might be slowed down, at least in the short-term perspective.
RD: What about the long-term perspective?
V.M.: What is more important is the long-term need to provide political stability and human capital development. When we say that the top priority of government policy should be investment in human capital, education, healthcare — this is not only a humanitarian issue, but also it is a problem of attracting and saving human capital in the country. If the rich and smart people invest money to get education abroad, this is a very serious factor of outflow.
The problem is not only if they are leaving physically — if they study and get medical treatment abroad this means more skilled human capital will be there. In this regard, development and increasing efficiency of these sectors [education and healthcare] are the most important long-term factors of attracting people to Russia.