Adding to a laundry list of strategic and demographic problems for the Russian Federation, Reuters reports, based on official government statistics, that Russia is experiencing a serious case of emigration and brain drain. According to the report, five times as many Russians are emigrating now, during Vladimir Putin’s third term, than in the early 2000s. The demographic issue is also compounding Russia’s severe capital flight problem, which has grown worse since Russia’s international isolation over its actions in Ukraine, including annexing the Crimean peninsula earlier this year. According to Reuters, most Russian emigrants are leaving the country for a handful of reasons: “Most just want a better life, with some seeking more political freedom than under President Vladimir Putin and others keen to escape an economy that has been hit by Western sanctions over the Ukraine crisis and is on the verge of recession.”
Russia’s official statistics service, Rosstat, states that 186,382 Russians left the country in 2013 and 122,751 in 2012. These numbers represent a significant increase over the 36,774 that left in 2011 and the 33,578 in 2010. Furthermore, some experts doubt the veracity of Rosstat’s numbers, alleging that the actual numbers could be much higher. The sharp uptick in emigration is likely due to Russia’s growing international political isolation under Vladimir Putin. Although the Russian state continues to reap the benefits of being a rentier state with vast natural resource reserves, its citizens are increasingly starting to feel that their economic futures could be best served outside of Russia. This demographic trend echoes the brain drain that followed the collapse of the Soviet Union in the early 1990s. Almost 20 years later, Russians are leaving their home country for similar reasons.
The brain drain problem is perhaps best typified by well-known Russians that have left the country recently: “Pavel Durov, the founder of Russia’s top social networking site VKontakte, prominent economist Sergei Guriyev and world chess champion turned opposition activist Garry Kasparov.”
The emigration problem is particularly severe because it is primarily affecting Russia’s middle-class. It appears that what remains of the middle class after the emigrants have left the country are bureaucrats and others with connections to Russian state-operated enterprises (SOEs). The small sliver of good news is that despite the common meme that Russia faces a shrinking population, its population growth rate actually appears to be picking up based on the latest data. Furthermore, according to estimates, 68 percent of the Russian middle-class are state employees. Putin does have a somewhat robust support base here that he has been nurturing via populist schemes, including pay increases for public sector employees. Additionally, Putin’s assertive stance against the West over the Ukraine crisis has actually boosted his domestic support to new highs within this group. The emigrants thus are primarily from the entrepreneurial and intellectual sections of the Russian middle class.
On one level, this emigration could be a boon for Putin. It may leave Russia’s private sector worse off than it would have been had many of these middle class entrepreneurs stayed in the country, but the upside for Putin is that it will leave behind a Russian middle class dominated by Putin-friendly bureaucrats on the state payroll. Whether this is a robust enough middle-class backbone for a prosperous Russia remains to be seen.