Friday, April 15, 2011

Window on Eurasia: Absent Modernization, Russia Faces Massive Brain Drain and Exodus of Business, Kremlin Advisor Says

Paul Goble

Staunton, April 15 – If modernization does not take place over the next few years, a senior Kremlin advisor says, Russia will suffer a massive “brain drain” and the departure of much of its businesses, the largest to the West and the small and mid-sized to Kazakhstan, leaving it an “uninteresting” bridge between China and Europe.

But despite that prospect, Aleksandr Auzan, a member of the Presidential commission on modernization and technological development of the economy of Russia, concludes sadly, the possibility that Russia will choose to modernize is relatively small, a reflection of short-term thinking and confusion between inertia and stability (

Auzan, a professor at Moscow State University, says that this brain drain is already starting: “half of his students, elite specialists, are leaving to work abroad and not even thinking about returning.” In their wake “business is departing, big business toward the West and small and mid-sized toward Kazakhstan.”

In this case, the economist says, Russia will have a future like the one described in Vladimir Sorokin’s novels: It will be a country “across which will pass a 15-lane highway between China and Europe.” That won’t be a complete tragedy, he adds, but Russia will “simply be a country of little interest,” one from which all talented people will leave.”

Moreover, in the absence of modernization, “if Russia begins to improve the quality of education, then even more specialists will leave.” If they are to be retained, then there need to be places of interest for them. “The oil pipeline doesn’t need smart and qualified people,” or at least “it needs few of them. And this is the tragedy of the country.”

“Who must change the country?” Auzan asks rhetorically. “The majority of citizens,” he points out, “do not want any modernization; a minority wants it but doesn’t believe in it,” with “all pointing to stability as the achievement of the Putin era.” But economists like himself, Auzan continues, don’t see this stability as firm or long-lasting.

“There are undoubted results,” he concedes. In the first five years of this century, Auzan notes, Russians experienced a 11-12 percent growth in their incomes. “But now they aren’t: inflation is eating everything quite quickly.” As a result, “the economy of the country is becoming ever worse.”

“It is worse than at the start of the 2000s,” Auzan says, “because it is still more completely based on raw materials exports … We are ever weaker in an international sense [and] we are slowly-slowly sinking.” Indeed, World Bank experts now say that “Russia is the weakest of the developing countries.”

What success Moscow has had in maintaining stability, the economic advisor says, is based on “a miracle of not very divine origin.” Indeed, he says, “for this [stabilitiy] it was necessary to conclude a pact with the devil.” Such a pact can by inertia work for five to 20 years, but then “problems will begin and very rapidly.”

Auzan says that countries which have successfully passed through the process of modernization have had several specific characteristics. They have seen “a growth in the values of self-realization over the values of survival, an orientation to results rather than process, a growth in individualism, that is, a willingness to act despite what others say.”

“But the chief one,” he says, “in countries which have successfully passed through modernization, the distance of the powers [from the population] has fallen. That is, people begin to relate to the state as something not distant from themselves but toward which they have a relationship and in which they can get involved.”

Auzan suggests that “the chances for modernization in Russia in generally are not very high at present.” Because of high oil prices, “we are condemned to stagnation” because modernization does not begin when people feel they are doing well but rather when they conclude that they are not.

Moreover, he says, “Russia is not ready for modernization and for technological leaps and a storm of innovations.” For that to be the case, there would need to be what “already exists in a number of developed countries: effective laws, judges, patents and the like. Everything which does not exist in Russia.”

For Russia to modernize, even when a commitment to doing so finally emerges as a result of a recognition of the threats ahead, Auzan says will require “not less than 20 years” because as many forget, “modernization is a process that is economic in its outcome but socio-cultural in its content. Therefore, it is a lengthy one.”

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