Russians Go West

Khristina Narizhnaya

OSCOW—A seven-story cube of creative workers are expected to fill the of glass, concrete, and solar Hypercube’s offices, ice rink, and nearby Mpanels rises out of a grassy field cafes. The original plan even provided for on the outskirts of Moscow. Dubbed “the a weather-controlled dome rising over the Hypercube,” it’s the first completed build- complex, though it was eventually deemed ing of the Skolkovo Innovation Center, too expensive and scrapped. intended to serve as Russia’s version of Sil- The Skolkovo Fund president, billion- icon Valley. In less than two years, throngs aire Viktor Vekselberg, hopes the project

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will stop the brain drain of the nation’s most People leave when they perceive talented individuals. “Many of our leading societies have failed or seem likely to scientists and specialists work abroad and do so, when citizens don’t feel like not in Russia. With the face of Skolkovo, stakeholders in the future of their country. let’s put an additional buffer, a barrier to this Modern buildings, no matter how big or process,” he said in 2011. comfortable, will not create a dynamic Today, 850 companies operate in the economy—only the nation’s best and unfinished Skolkovo Innovation Center. brightest working in a free and open The Skolkovo Institute of Science and environment can do that. High oil prices Technology, still under construction, has can conceal deep economic problems, and sent its first class of 20 master’s students Russia’s 4.3 percent annual GDP growth to colleges abroad to gain experience. rate isn’t fooling its citizens. Emigration of Skolkovo is a small step that shows Russia top talent is the crucial index of a country’s recognizes the problem. But the outflow of current social mood and an important “brains” has not been contained, nor will it indicator of future economic potential. be anytime soon. And right now, Russia is failing. Although the economy is growing, While the total number of Russians an accelerating number of elite Russians who leave for good remains relatively small, are leaving the country. The total number the profile of the typical emigrant has of Russian emigrants hardly compares to changed. When the Soviet Union dissolved, the hundreds of thousands who left in the most common emigrant was a poor, the aftermath of the USSR’s collapse in unskilled young man. Today, it is a well- 1991, but the tens of thousands leaving off professional, says Anton Nossik, a high- today are entrepreneurs, writers, and tech entrepreneur and emigration expert. scientists. Any family that can afford it “People who have it good are starting to is likely to send their children to study leave,” Nossik says. abroad, hoping they’ll find work and According to Russia’s Federal Statistics settle outside of Russia. Service, the number of emigrants peaked at No matter how many technology 145,720 in 2000. By 2009, that number villages the government builds, there had eased off to 32,458, but it has been will never be enough if the country’s creeping back up ever since, reaching social fabric remains weak. Emigration 36,774 in 2011. Over 1.25 million is a measure of how well the Kremlin is Russians have left the country from 2000 addressing the needs and desires of its to 2010 according to Sergei Stepashin, people. In the Soviet years, this metric the head of Russia’s Audit Chamber. Even was less effective since few were allowed to more striking is the number of those who leave. Now, with relatively open borders, say they would leave if they could. One out the ebbs and flows of those who can afford of every five Russians wants to leave their to leave track closely with the effectiveness country, according to a June 2012 survey by of the Putin regime. the Levada Center, an independent pollster.

Khristina Narizhnaya, a former reporter for The Moscow Times, writes for the Los Angeles Times and other publications.

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Almost a third of Russian urbanites want to daughter, Yekaterina, a legal a resident of emigrate, according to a survey by Romir, Monaco, an $88 million crash pad in New another independent pollster. York, where she can stay on breaks from “Conversations these days start and end studying at Harvard’s Extension School in with the topic of emigration,” says Masha Cambridge. Both billionaire Sergei Plas- Gessen, a journalist and author of the Putin tinin and mining mogul Sergei Anisimov biography The Man Without a Face. “Where bought their daughters multi-million dol- are you going? Should we all go together? lar apartments in New York City. Israel, Australia, America, Britain, Western Russia’s first president, Boris Yeltsin, Europe ... What is the first step? What, you was the first government official to scan- have not made plans yet? dalize Russians by sending Do you at least have a valid his grandchild, Boris, to visa? This is the banter with faced with the study at an exclusive British which people sit down for criminal chaos school in 1996. Others fol- supper,” she says. lowed. Kirov region gover- and staggering nor Nikita Belykh sent his The Rich Thrive poverty of the son to study in England, and Only hard-line patriots nev- 1990s, russians former Moscow mayor Yuri er think of leaving. “There is Luzhkov sent his children no feeling that life is improv- left their new to study in London, alleg- ing,” says Dmitry Oreshkin, democracy by edly to protect them after a senior political researcher the hundreds he was fired in 2010. There at Moscow’s Institute of are even reports that Putin’s Geography. “In the 1990s, of thousands. daughters, Mariya, 27, and there was a feeling of democ- Yekaterina, 25, are living racy, [a hope] that Russia was becoming a abroad. The trend is so common that a new normal European country. But now it’s dif- bill forcing government officials to edu- ferent. There is more potential for the indi- cate their children inside Russia is under vidual in the West.” A recent Moscow State review in the Duma. Vyacheslav Lysakov, Pedagogical University poll shows that 80 the author of the bill, is confident the bill percent of graduates of elite Moscow high will become law after Putin announced his schools would like to study abroad, at least support for it. But if the bill does become temporarily. Another poll by Russian news- law, Oreshkin says, it will likely be redraft- paper Rossiskaya Gazeta claims that only 9 ed to include loopholes so officials can get percent of parents say their children will around it. Ironically, Duma deputy speaker continue to study in Russia and almost 70 Sergei Zheleznyak, a vocal patriot and sup- percent of parents would like their children porter of the bill, sent his daughters to to study and work abroad. study in England and Switzerland. Vekselberg’s own children, Irina and Alexander, studied at Yale University. Not Just Billionaires Business tycoon Roman Abramovich’s Studying abroad is no longer the exclusive daughter, Anna, is studying at West- privilege of billionaires. Professionals with minster University in London. Fertilizer annual salaries of $100,000 are sending magnate Dmitry Rybolovlev bought his their children abroad. All Nossik’s friends

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either sent their children to study abroad in Russian banks, as long they declare it. or are preparing to send their children to Since Putin’s United Russia party controls a foreign school. His five-year-old son lives the Duma, it will likely become law. “They in the seaside Indian town of Goa with his have to make it appear as though they are mother. In just a few years, the boy will fighting corruption,” Oreshkin says. begin school. But it won’t be in Moscow with its deteriorating education system, Living High Abroad pollution, and other urban ills. Nossik It’s not news that Russian elites live says he can relate to the officials that send abroad. Even Vekselberg, who bankrolled their children abroad. “They don’t want Skolkovo Center, lives in Switzerland with their children to live in this system that his family. Billionaire and Chelsea Foot- they built,” Nossik says. “I don’t see any- ball Club owner Roman Abramovich lives thing bad in that. They just want the best in London. Gennady Timchenko, an en- for their children.” ergy businessman and good friend of Putin, Faced with the criminal chaos and stag- lives in Switzerland. Writer Boris Akunin gering poverty of the 1990s, Russians left began spending more time in his house their new democracy by the hundreds of on the French Riviera since Putin took office. thousands. But in the first eight years of the The way Russians emigrate today has new millennium, the outflow slowed; some changed considerably since the Soviet era even began to return. Over the last 12 years, and the 1990s when people left the country economic growth, fueled by oil revenue, has forever, severing all ties to Russia. Today, raised salaries and living standards. Along many keep residences in Russia where they with the returning emigres, capital began continue to make money but live abroad flowing back into the country. But now the with their families. “You have another nest mood has shifted again, especially among but don’t give anything up here either,” the best educated. Capital outflows reached Nossik says. “The world is global. You live a record high of $80 billion in 2011 after a where you like.” wave of protests set off by widespread alle- Putin’s announcement in September gations of rigging in that year’s parliamen- 2011 that he would run again for president tary elections. While such outflows have and nominate then-president Dmitry slowed in 2012 to $56.8 billion, according Medvedev for prime minister escalated the to the Central Bank, the number is still desire of many Russians to leave. After the the fourth highest amount of capital flight “castling” of Putin and Medvedev, the theme since the breakup of the USSR. Lysakov’s of emigration arose by popular demand, says bill restricting education abroad includes Nossik, who taught seminars on emigration clauses prohibiting or limiting officials at City Class, a Moscow school that provides from having foreign bank accounts or own- courses on everything from business to ing property abroad. Another similar bill health to entertainment. Every class, with is also under review in the Duma. Only a about 80 spots each, always filled quickly. few Duma deputies openly oppose the bills, In addition to advice for those planning to but that does not mean the bills are widely leave, Nossik’s seminars included debates on supported. In January, Putin submitted a whether or not emigration was a good idea. bill to the Duma that would allow officials But for Nossik, after the first 100 days of to have bank accounts abroad, but only Putin’s latest term as president, there was no

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hitting the road

ST. PETERSBURG, Russia—Olja Vo- “Even if you have documents, they won’t ronenko is a shy 16-year-old violinist with let you [travel with your instrument] until a passion for music. She spends her days you pay bribes,” she says. playing music, reading, and attending Once Olja is a professional musician, tutoring sessions instead of high school the ability to travel abroad freely will be classes—an effort to accommodate her de- a financial necessity. St. Petersburg ranks manding practice schedule. among the most expensive cities in Europe, While Olja has few close friends, the so the salary Olja would make as an orches- bonds with her parents and her brother tra member would be difficult, if not im- Dima, who just started college, are unmis- possible, to live on. Olja explains that if she takable. So when Olja announced in 2011 were to play in a first-class Russian orches- she needed to leave Russia to pursue mu- tra, she would earn about 63,000 rubles sic, it was not a month, or a decision that $2,000. At the had been made same time, her lightly. “I hope violin teach- to move to er’s daughter, France and ap- who plays in a ply to a good French orches- orchestra,” she tra, earns four says, “because times as much. I think I have Eventually, more oppor- Olja hopes she, tunities away her parents, and from Russia.” her brother will Yet, this is be able to move not even the to France to- most immediate motive behind her push gether, though this will prove difficult. Her to emigrate. Right now, she cannot trav- brother, like all young men, is required to el freely with her instrument. When her serve in the Russian military, and her parents family takes vacations abroad, Olja’s par- have to care for her aging grandparents. So ents do not allow her to bring her violin. for now, Olja is left with the most difficult Border guards often question anyone with decision of her life: leave her family or aban- an instrument as to whether it was stolen. don her dream of a professional music career.

—Hallie Golden

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arguing about whether to leave or not. Nossik cancelled his August seminar and told people they should cut and run. Vlast, a Russian word that means power overlaid with corruption, appears ingrained in Russian society for at least another quarter century, Nossik says.

Leave or Revolt Talented young people are faced with two options—emigrate or fight the system, Oreshkin says. The ambitious, who want to real- ize their professional goals, leave. Those who don’t, fight. But fight- ing the system is keeping a gen- eration of professionals from career Dmitry Medvedev meets with Russian ex-patriots development. Scientists, who should be in Silicon Valley. performing valuable research, instead take to the streets in protest alongside artists

who should be painting, sculpting, or mass riots. Russia’s Investigative Committee u r writing. But there is no other way. The charged Udaltsov after a pro-Kremlin .

brightest young people devote their ener- documentary allegedly showed him meeting mlin e gies and talents to battling election fraud, with Georgian politicians to plan a coup. r attending sit-ins and protests, not tending The political protests have inspired some

to business. “It’s a citizen’s obligation. You young people to work toward changing the www.k write texts, declarations,” Oreshkin says. system, rather than emigrating. Among In the wake of waves of protests that those wanting to stay and improve Russia swept Russia after alleged fraud in the are Andrei Guryanov, the editor of Slon.ru, a 2011 elections and Putin’s victory in the popular business-themed online magazine, 2012 presidential election, Putin passed and his staff, including Vera Kichanova, a score of repressive measures restricting a 20-year-old who recently won a seat in non-governmental agencies, the Internet, her Moscow district’s municipal council. and the media. Members of the punk band Indeed, the CEO of Slon.ru is Maxim Pussy Riot were jailed for two years after Kashulinsky, the former editor of Forbes performing an anti-Putin song in Moscow’s Russia, whose predecessor at the magazine, Christ the Savior Cathedral. Opposition Paul Klebnikov, was gunned down in the leader Alexei Navalny faces up to 10 years streets of Moscow in 2004 after reporting in prison after embezzlement charges, which on Chechnya’s and Russia’s elites. Those are widely seen as politically motivated. who want to stay and fight the system are Another opposition activist, Sergei Udaltsov, typically young, well-educated, and tech has been put under house arrest and faces savvy. Guryanov hopes more people will similar jail time if found guilty of starting join the fight for a better future in Russia.

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“If more people will say that they want to Next September, secondary schools will change the situation, a strong civic society start charging students for all but the most will gradually grow up,” he says. basic subjects. A reform law passed with the Individuals like Guryanov, however, support of the ruling United Russia party are still a minority. Andrew Ryvkin, 30, is provides, without fees, two hours per week a columnist for the Russian version of GQ apiece of Russian, English, mathematics, magazine. As a child in the early 1990s, he and physical education as well as an hour of moved to Boston with his mother. At 19, he history. Fees must be paid for all addition- returned to Russia after his affluent father al subjects, costing families an average of bought him an apartment in St. Petersburg, about $200 per month. The law has where he studied history. Ryvkin loved sparked public outrage since the average the glamour, excitement, and beautiful income outside Moscow is $300 to $500 women of Russia. After graduation, he per month, putting all but a skeleton of briefly worked as a teacher, but soon a an education system out of reach for most friend helped him land a job writing for Russians. Other policies that persuade Rus- “Honest Monday,” one of the most popular sians to emigrate include cutbacks in gov- political shows on Russian TV at the time. ernment spending on health care and infra- It’s easy to advance and earn a high salary structure, coupled with new restrictions on in Russia for those motivated enough, but non-governmental agencies, the Internet, professionalism is hard to find, Ryvkin and media. Doctors in government-fund- says. Top journalists have restrictions on ed public health care facilities and public what they can say, and businessmen have school teachers receive notoriously low pay. to hire security to protect their wealth. Doctors want their salaries raised by 70 per- Abramovich, the oligarch and football club cent, while teachers are seeking 60 percent owner, is said to have 40 security guards. increases, according to an August survey Now, Ryvkin is planning to emigrate to the by the Federal Statistics Service. The aver- United States and sees no signs of progress, age monthly salary for scientists is about or even hope, in Russia. As soon as a person 20,000 rubles ($634) per month. Scientists wants to develop himself professionally, must look for side jobs and grants, which insurmountable obstacles arise. “In Russia, are very hard to come by. “Most people we see progress only in entertainment, but are ruled by salaries,” Oreshkin says. “Our I can’t live in a restaurant,” he says. “There specialists can make much more in Cana- are nice restaurants, art exhibits, but 20 da or the U.S. You can count the amount meters down the road you can meet a troop of young academics on your fingers. We of OMON [Russia’s riot police].” cannot offer them competitive conditions.” About 70,000 specialists left to work PoLIcy Pushes PeoPLe out abroad in 2011, according to a Federal A host of failures by the current Kremlin Migration Service statement earlier this administration is responsible for the exo- year. Sergei Uchaikin is a senior scientist dus of Russia’s most promising and capable researching cryogenics at D-Wave Systems talents. The nation’s education system, for in Burnaby, a Canadian city near Vancou- all its ideological rigidity, used to be one of ver. He left Russia for a job in Germany the world’s best. But since the collapse of in 1996, when there were few opportuni- the Soviet Union, the system has declined. ties for scientists in Russia. He continues

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to work abroad and has no plans to return. Russia because those with wealthy parents Although science in Russia is improving, often take advantage of their privileged he says, many youths who came to work position. His children, ranging in age from with him abandoned science for more prof- nine to 26, are growing up in America and itable careers once they returned to Russia England. “I’m really happy that my kids because of low salaries and lack of research don’t know that you can pay to get a good funding. grade on an exam,” says this co-owner of Corruption and poor law enforcement a large furniture company in Moscow, who are also large factors in pushing profes- lives in London with his family but returns sionals out of Russia. Even Skolkovo be- to Russia for work. came embroiled in a fraud In any society, corrup- scandal in February when tion stifles competition and news broke of an investi- “the main law innovation. Liberal politics gation into an embezzle- in russia is the with fair elections, a level ment scheme involving playing field to run business- the financial director of constitution, es, and independent courts the innovation hub’s fund. and it’s the and media need to be sup- Anti-corruption watchdog ported, Oreshkin says. Laws Transparency International first law that is must be designed to per- Corruption Index ranks ignored.” suade people to remain here. Russia 133rd out 174 coun- More money, he says, needs tries and found that extortion by officials to be spent on social infrastructure like hos- is an increasingly common form of graft. pitals, schools, housing, and roads. A small-time official with a few connec- tions or rubles can influence the police or We, the Government the courts to force individuals to hand over Twenty years after the fall of the USSR, half their shares in a business. “The main the Soviet legacy remains. “Here, the gov- law in Russia is the constitution, and it’s ernment exploits its citizens,” Oreshkin the first law that is ignored,” Nossik says. says. “It’s still the communist mentality, Business owners constantly have to pay the collective. If you want to move up bribes to the tax inspector, the fire safety yourself, it’s not looked at in a good way.” inspector, and other government officials. There is still a hostile attitude toward in- All spheres require personal connections dividually attained success. to move up professionally. Despite the Many are forced to join political government’s very vocal fight, corruption organizations to keep their jobs. In July continues to proliferate. In 2011, the 2011, conductor and opposition figure average bribe to a low-level government Mikhail Arkadyev lost his job with a official tripled from the year before to philharmonic orchestra in Vladivostok. The about $8,000, according to the Interior official reason was that the contract period ran Ministry’s economic security department. out, but Arkadyev and his supporters claim Even the education system is awash with his long- standing contract was not renewed graft. One wealthy businessman, who because he refused to support United Russia refused to be identified for fear it might and join the National Front, an umbrella harm his business, took his children out of organization that supports Putin.

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The government has mounted several such as laws restricting nongovernmental feeble initiatives designed to keep educated organizations and the media, suggest people in the country. A $428 million that the government is securing an ever “mega-grant” program provides funding for firmer grasp on power, rather than serving scientific research projects. The Skolkovo an increasingly dissatisfied population. Innovation Center and schools were built With Europe’s dependence on Russian oil to foster technological innovation. The and natural gas, Western countries don’t projects are baby steps, but they will appear to have much leverage. Rising change few of the fundamental problems. oil prices have masked the economic While Silicon Valley is the best of what underdevelopment of Russia over the last America has to offer, Skolkovo is an attempt 12 years. Entrepreneurs and scientists to build something that doesn’t exist in think: Why would I want to waste my Russia—a space where companies compete time here? So increasingly, they go west. in a lawful environment without bribes and Russian-born Nobel Prize-winning a stifling bureaucracy. The recent scandal, physicist Andre Geim told a Russian in which a group of suspects, including radio station that he would never work in financial director Kirill Lugovtsev, used Skolkovo. “I am not at all interested,” he fraudulent tender to steal nearly $800,000 said. “I don’t have a Russian citizenship. I from the Skolkovo fund, underscores the am a citizen of Holland, did everyone go challenges of doing business in Russia. completely insane over there?” In the last 12 years, corruption flourished People are leaving because they believe under the bureaucracy of Putin’s regime, the government is not interested in listening and competition has been all but killed off. to them. The fundamental question is how Even if Skolkovo does become a long can the Russian system run by Putin corporate oasis, it won’t be enough to and old-line apparatchiki keep failing and stem the tide of emigration. In order for remain viable? Putin and his supporters innovation and business to develop and must address the core problems of graft, encourage Russians to stay, policy needs to inefficient justice, health care, housing, and protect property—physical, financial, and education systems. Rising oil prices can’t intellectual. Laws need to be developed hide the deep structural problems with and enforced, so that there is one law for Russia’s economy. If the brain drain cripples everyone—not just for ordinary citizens, Russia’s economy, unrest will spread, but also for Putin’s friends. Until then, and Putin will fall. The key metric, little the government’s promises to modernize observed until now, is elite emigration— the Russian economy will be just rhetoric. Russia’s best and brightest vote with their “Where there is no law, there is no freedom. feet as they have been unable to do at the You don’t know what will happen tomorrow, ballot box. you can’t plan,” says Valery Solovei, a “The Soviet Union didn’t collapse all at professor at the prestigious Moscow State once. It slowly submerged into the swamp,” Institute of International Relations. Oreshkin says. “Money is leaving. Why is Given Putin’s record, no truly Akunin living in France? Why do our significant policy change is likely to scientists live in the U.S.?” arrive in the near term. Recent policies, The answer is all around us. l

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