Russia: The economy is “bleeding” from the pandemic, war and brain drain – Serious demographic crisis

Russia: The economy is “bleeding” from the pandemic, war and brain drain – Serious demographic crisis

Intensified by the effects of the conflict in Ukraine, the demographic crisis affecting Russia, exacerbated by the Covid-19 pandemic, represents a major difficulty for an economy in full restructuring.

The alert was given in mid-April by experts from the Higher School of Commercial Sciences (HSE) in Moscow: according to the scenarios, Russia should receive an average of 390,000 to more than one million immigrants each year until at the end of the century, if it does not want to see its population irremediably reduced.

The results are alarming but echo “a general demographic situation which is really not very good,” Arnaud Dubien, director of the Franco-Russian Observatory in Moscow, told AFP.

“The problem is that the trend is downward in the number of births, due to the low number of girls born in the 1990s”, explains Alexei Raktsa, an independent Russian demographer.

Life expectancy in Russia has dropped by around three years in the two years of the pandemic

Yet it is this same generation – born during the economic, social and moral crisis that followed the collapse of the USSR – that is now of childbearing age.

To this underlying trend in 2020 was added the Covid-19 pandemic, which hit Russia hard, with around 400,000 dead according to the official count, a number which, according to observers, is largely underestimated.

“Life expectancy in Russia fell by about three years during the two years of the pandemic,” explained another demographer, Igor Efremov, before returning to its level, close to 73 years on average.

A sign of this deep demographic crisis, the Russian giant lost a total of 600,000 inhabitants in 2022, 1.04 million a year earlier and nearly 688,700 in 2020.

The “great exodus” of Russians since the start of the war in Ukraine

A priority issue for Vladimir Putin since he came to power more than 20 years ago, in particular with the establishment of a bonus for the birth of a second child, the demographic question now seems to have taken a back seat.

For more than a year, the Russian state apparatus has been oriented towards a fundamental mission: to contribute to the war effort in Ukraine, in particular with the “partial” conscription decided by decree last year in September.

Since September, “more than 2% of citizens aged 20 to 40 have been recruited, and about 3% more of this generation have left Russia because of the situation”, estimated Alexei Rakcha, today at the foreigner after working for the Russian statistical agency. Rosstat.

In total, “at least half a million people have left, maybe more, mostly men”, including “many people with many qualifications”, he estimated. “And maybe 100,000”, others in February-March 2022, when the conflict broke out.

Not to mention the great losses – which are not disclosed – in Ukraine.

This bloodbath is further undermining Russia’s economy at a time when a less populous generation is entering the workforce.

“Russia lacks manpower. It’s an old problem, but it got worse because of conscription and mass exodus,” Raktsa said.

Russia: Severe Labor Shortages

Under these conditions, unemployment, at the very low level of 3.5% in February, reflects not an enviable situation but a contraction of the active population, which is creating difficulties in many sectors to find staff.

Published on April 19 by the Central Bank of Russia (BCR), a study conducted among more than 14,000 companies confirmed the “increased” pressures in many sectors, such as transport.

And not everyone can compensate for this deficit with immigrant workers or even with a salary increase.

Natalia Zubarevich, an economist at Moscow State University, told AFP she believed that among Russians who had been abroad for more than a year, “some will return”, allowing for a partial assessment.

Igor Efremov says ‘influence’ of brain drain, mass immigration of skilled professionals, is ‘overstated’ as debate over fate of Russians who have left the country has agitated country’s elites for months .

Thousands of Russians who left continue to work remotely for Russian companies, sometimes taking trips to Russia and returning to the country where they now live. But this financial relationship can be broken.

A recent law limits the financial opportunities of those who try to avoid a new wave of conscription. This could encourage those who have gone abroad to settle there indefinitely, at the risk of further aggravating demographic difficulties.

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