July 12th, 2011

Half of all Russian businesspeople and students want out (but the bureaucracy keeps growing)

Half  of all Russian businesspeople and students want to flee the country, according to the Levada Center, an independent, non-governmental Russian polling and research organization, and as reported in France’s daily financial newspaper, Les Echoes.

Almost a quarter of the entire Russian population would like to emigrate, according to the poll. The principal reasons: the high cost of living (67 percent); corruption (49 percent); and criminal activity (48 percent).  As it is, more than 100,000 Russian are leaving the country each year, according to a number of sources.

Meanwhile, Charles Clover writes in today’s Financial Times about “ascent and dissent,” how with rising wage disparity in Russia comes rising dissatisfaction with the economic status quo, where the children of civil servants are more likely to score high paying jobs than more qualified, less well-connected individuals. That inequality only feeds on itself, as those locked out of the upper echelon have little chance of breaking in:

While income distribution in Russia creeps towards Latin American levels of inequality, having widened notably since the turn of the millennium, the state has incubated an ever more entrenched and inaccessible elite that now controls government and business, and jealously guards its privileged domain.
The effect of the burgeoning bureaucracy, which President Medvedev has promised to cut by 20 percent but thus far has failed to do so, has bred discontent in Russian business and intellectual circles. What happens on account of this malaise (Clover also quotes Mikhail Prokhorov here, who says no one in midsummer 1991 was predicting the August coup) could be more of the same — or a drastic change. Clover concludes:

[W]ithout comprehensive economic reforms, aimed at creating more skilled private sector jobs, social mobility in Russia will probably continue to decline. The consequences are anyone’s to guess – but they are unlikely to be joked about.

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