SA`s future? Russia bleeds skills as emigration of professionals hits peak

Source: by Irina Reznik, Ksenia Galouchko and Ilya Arkhipov, 21/09/2015

A few depressing things have hit me hard while engaging with South
Africans now living in London. You wonder how a small developing
country can afford to lose so many highly skilled individuals, high
earning, law abiding taxpayers. Even more depressing, though, is
hearing how few of those who have moved up the career ladder even
think of returning to their homeland. Not necessarily because of
jaundiced perceptions of politics or crime, but because their horizons
have expanded. They now possess a broader world view, are prepared to
travel to grab opportunities everywhere they appear – and say they
think less and less about the land they came from.

Developing
countries rely heavily on what economists call "the home bias" –
mankind`s comfort of staying around familiar people and places. It
serves as a brake on mass emigration to greener pastures and only when
circumstances become extreme is home bias is overcome.

Which
means that growing emigration acts as a warning sign to competent
leadership that they should urgently address the issues causing it. As
this story below unpacks, SA`s ally in BRICS, Russia, is bleeding
professionals at an unprecedented rate. But will Putin pay attention?
Does Zuma? – Alec Hogg


(Bloomberg) — For most of the last decade, Igor Gladkoborodov worked
his way up in Moscow`s vibrant high-tech scene, going from web
developer to co-founder of an online-video startup that drew $3.5
million in local funding.


Last month, he abandoned Moscow for Menlo Park, California, joining a
growing flow of professionals leaving Russia amid recession, deepening
international isolation and tightening regulation of the
Internet.


"Five years ago, there was still hope that things would change for the
better," says Gladkoborodov, 32, who moved with his wife and two young
sons. "Now it`s clear that Russia is facing a long systemic crisis,"
he adds. In Silicon Valley, he says he regularly meets others from
Moscow who`ve left.


Official statistics show the number of Russian citizens leaving
permanently or for more than nine months reached 53,235 in 2014, up 11
percent and the highest in nine years. Germany, the U.S. and Israel
all report increases in the numbers of applications for immigration
visas from Russia.


`Vacuum Cleaner`
Publicly, the Kremlin has dismissed concerns about any "brain drain."
Still, the subject is sensitive in a country with deep scientific
traditions now looking to educated workers and advanced technologies
to help diversify its slumping economy from dependence on natural
resources. In June, President Vladimir Putin called for a crackdown on
foreign groups he accused of "working like a vacuum cleaner" to lure
scholars into emigration. Departures of academics have spiked in the
last year and a half, Vladimir Fortov, president of Russia`s Academy
of Sciences, told state television in March.


The outflow goes beyond the high-tech sector, which was showered with
Kremlin attention and support under former President Dmitry Medvedev
but has seen tightening restrictions since Putin returned to the
presidency in 2012. Financial and legal professionals also are
leaving, according to lawyers and consultants.


`Putin`s Aliyah`
Eli Gervitz, a Tel Aviv lawyer who has helped Russian Jews to get
Israeli citizenship since the late 1990s, says interest in his
services surged after Russia annexed the Ukrainian region of Crimea in
March 2014, setting off the worst conflict with the West since the
Cold War.


"More than 90 percent of those who now come to us for help obtaining
Israeli citizenship are successful, wealthy people," he says, calling
the latest tide "Putin`s Aliyah," using the Hebrew word for Jews
returning to the homeland.


While the flow of immigrants to Israel won`t ever match the peaks of
the post-Soviet flood of the 1990s, he says, "we`re already well
beyond that level if we measure in terms of money" — the wealth of
those leaving.


The Israeli Ministry of Absorption says applications for citizenship
have doubled since the early 2000s and are up 30 percent since the
last time Russia fell into recession in 2009.


Russia`s financial sector, hit by U.S. and European sanctions amid the
Ukraine crisis, has seen a major exodus, according to industry
officials. Vitaly Baikin, 32, gave up a job at Gazprombank, one of the
sanctioned institutions, to go to business school in New York City
this fall.


"Capital markets in Russia have ceased to exist," he said by phone
the day before his departure. "I don`t see how this situation can
improve in the coming years."


Political Refugees
The number of political refugees has also grown as the Kremlin has
cracked down on political opponents and independent media.


"Kremlin policy is forcing the educated class to choose: either line
up under the banner of war with the West or leave," says Alexander
Morozov, a Moscow political scientist who this year dropped plans to
return to Russia after a temporary assignment in the Czech Republic
and moved to Germany.


In the high-tech sector, official pressure ranged from laws allowing
regulators to block access to websites to criminal probes into alleged
financial misdeeds at Skolkovo, a start-up incubator set up under
Medvedev.


Skolkovo is becoming an "incubator of emigrants," says Maxim Kiselyov,
a former top official there. Igor Bogachev, head of the Skolkovo`s
information-technology cluster, is philosophical about the outflow.
"We can`t destroy the market mechanism and go back to the Soviet Union
where they didn`t let the hockey players from the national team leave
to play in the NHL," he says.


For Gladkoborodov, the economic slowdown and limited growth prospects
for his company in Russia contributed to his decision to leave. As a
high-tech entrepreneur, he says the tightening regulation of the
Internet was particularly alarming.


"It`s silly to be focusing just on the Russian audience since our site
could get shut down without a court order," he says.


The atmosphere in Russia since the start of the Ukraine conflict and
the rise of conservative and religious groups have added to fears, he
says.


"I wouldn`t want to raise my kids in a country that`s moving fast in
the direction of an Orthodox Taliban," he says, referring to religious
activists who have attacked modern-art exhibits in Moscow as
blasphemous.


He says he can`t yet afford to bring the rest of the employees of his
company, Coub, to the U.S., but hopes to soon. "Nobody will refuse to
move," he says.