The New Brain Drain

Two crowds of young people gathered outside the U.S. Embassy in Moscow as Russia erupted in indignation over the Kosovo crisis. One group--mostly scruffy, poor and loud--chanted "Yankee go home," set fire to American flags and bombarded the building with beer bottles and inkwells. The other group--better dressed, wealthier and more subdued--cowered quietly nearby at the entrance to the immigration department, determined not to let a few flying bottles come between them and their objective: interviews with immigration officers and a shot at new lives in the West.

For Irina Kozlova, the chants and missiles actually helped her make a decision she'd been contemplating ever since the ruble collapsed and she lost her job as an investment analyst. "Since August it's been hard to be optimistic about finding work and living normally in this country," says Kozlova, 26, who speaks fluent English and made $2,500 a month before the economic crisis demolished Russia's fledgling financial markets last year. "But now I'm not just pessimistic--I'm scared about what is happening in this country. I want to leave."

Capital flight has sapped Russia's strength since the Soviet Union collapsed eight years ago. But the flight of young, talented people--the country's human capital--could prove even more damaging. Kozlova is one of the thousands of young Russian professionals who have lost their jobs or had their salaries slashed over the last eight months as the ruble's value has plummeted. Now many of the best-educated and most ambitious are seeking better lives abroad. Though the total number of those looking to leave is impossible to tally, officials from many of the top-choice destinations of Russian emigrants have reported a dramatic rise in interest. Immigration to Israel jumped 100 percent during the first two months of this year over the same period last year, from 1,676 to 3,347, according to the Jewish Agency, an organization that facilitates Jewish emigration worldwide. Spokesman Michael Jankelowitz says that this year Israel could absorb as many as 68,000 Russian Jews. The Canadian Embassy in Moscow reports a 30 percent rise in immigration applications, to between 200 and 300 a month, and a threefold increase in people inquiring about immigration procedures.

The visa seekers are generally part of a small but economically crucial class of young professionals who have recognized that their best prospects no longer lie at home. Their ranks include teachers, scientists, doctors and engineers, as well as executives from the country's newly created financial, marketing and advertising industries, which have been especially hard hit by the ruble crash. "A year ago, there was no better place for a young Russian professional than Russia," says Anya Shakh-Nazarova, 24, who returned to Moscow last summer after getting a postgraduate diploma in accounting and finance at the London School of Economics but has since been unable to find a job. "[Before the ruble crisis], I could expect a salary of $3,000 per month, and have a much higher standard of living than in the West. But since the crisis, the best I've been offered is a third of that--and there's no certainty that the company won't close down in a couple of months."

The shock is worst for those graduating from Moscow's elite universities with degrees in subjects that were alien to most Russians a mere decade ago, like management and finance. They quickly learned to expect the highest salaries and got accustomed to the idea of having cars, decent apartments and two foreign holidays per year just like any other European Yuppies. But even these modest expectations are now unrealistic in Russia's contracting economy. Thanks to the ruble's devaluation, managers and accountants can expect to receive a starting salary of $100 per month, roughly a quarter of what was offered last year, says Artur Savelov, organizer of this year's Moscow Job Fair. Many high-paying Western companies like Procter <&> Gamble have had to scale back recruitment as the ruble's devaluation cuts both Russian consumers' spending power and profits. Russian industrial- and oil-sector companies are still hiring, but at miserly salaries. Every one of the young graduates and college seniors interviewed by NEWSWEEK at last week's Career Fair in Moscow said that they had at least considered emigrating. "I'm a patriotic Russian, sure, but I also want to live normally," says 22-year-old Sergei Kharchenko, a final-year student at the State Academy of Management. "I want to go to Britain or Germany, at least until things improve over here."

But just because these young Russians want to start new lives in the West doesn't mean they necessarily can--not legally, anyway. Entry criteria are often strict, and immigration and work-permit quotas are tight. And Russians no longer have a good excuse to leave; in the last mass emigration in the late 1980s and early '90s, aspiring emigres could claim political asylum. Western organizations jumped at the opportunity to find jobs and housing for these "refugees of communism" and Jewish refuseniks. No longer. Despite a boom in the U.S. economy, potential immigrants now have to fit a rigorous set of professional criteria or join a lottery for "green card" and work permits. European regulations are stricter still--not even marrying a European citizen guarantees immediate right to work. "It's strange--for years the Soviet government wouldn't let you leave, and now the West won't let you in," laments Kozlova.

Russian computer experts and scientists have the best chance of making it out, thanks in large part to student visas arranged by sponsoring universities. Rustam Turakulov, 24, is one of the lucky ones. With a Ph.D. in molecular biology, he was welcomed into the University of California, Berkeley, for a two-year postgraduate program. When he completes that, he can expect a lucrative job offer somewhere in the United States. "I don't have much choice--Russia doesn't seem to want people like me," says Turakulov, who made up his mind to apply for the Berkeley scholarship last fall. "Things have gotten worse and worse for Russian science, especially since the ruble fell. Salaries are tiny, and we rely on Western grants for research. The government takes no interest in funding science."

So far, the brain drain of Russia's brightest and best is only a trickle. But with the economy showing no signs of recovery, it could easily turn into a tide. Analysts expect the ruble to lose half its value by the end of the year. "If you take a census, about 70 out of every 100 young professionals want to leave," says Felix Kugel of Manpower, a leading recruitment agency that specializes in senior-management headhunting and has seen a sixfold rise in job-seekers since the crisis. "There's still a market in Russia for highly qualified people, but the pay is much lower and the prospects are more limited than before."

That's especially true of Western-style industries that have come into existence only in the last eight years. When it appeared that Russia was going to embrace capitalism back in the early 1990s, professionals like banking analysts, marketing managers and advertising executives were suddenly in hot demand. But once the bubble burst, the bankers and product-pushers were the first to go. And given the competition, the language barrier and the fact that most Russian professionals of this type are a relatively new breed, they're not exactly top candidates for jobs abroad, either. "Unfortunately, a Russian marketing professional who would be considered at the top of his or her profession in Moscow doesn't stand a chance against someone with a Western background," says Anna Kirin, a U.S. citizen of Russian origin who used to manage a financial-software company in Moscow.

In other words, the West doesn't need people like Anya Shakh-Nazarova or Sergei Kharchenko. But Russia desperately does. How can the country straighten out its banking crisis without accountants, or build a service economy without marketing executives? The trouble is that the new values that make Russia's young professionals so important to their country's future also make them all the more prone to leaving. Freedom of choice, not the stoical patience of their parents' generation, is what Russia's Yuppies have learned to value over the last decade. And at the moment, the members of Russia's new generation are increasingly choosing to stand outside the U.S. Embassy--not as protesters, but as visa applicants.