Russia's Demographic Crisis and Ass-backward Immigration Policy

As some of you may know, about a month or so ago, I received a job offer from Deutsche Bank. The firm urgently needs an analyst for a new department they just openned, and fortunately, that's going to be me. The department's main tasks are advising on infrastructure projects and raising capital for them. Since the fall of the Soviet Union, Russia has not had the budget to significantly invest in infrastructure projects. As a result, the crumbling roads, ports, rail lines and airports have been retarding the Russian economic activity. I am really happy with the job, because as many of you know, I do truely love this country and it seems t0 me that out of all of the aspects of finance, I would be able to serve Russia in an extremely beneficial role.

Nevertheless, over a month after getting my job offer, I am still sitting on my ass, fucking around on the internet every day until 4 in the morning, hence the blog, because the Russian government has not yet issued me a work permit. I understand that part of the problem is that I am caught in the middle of growing tensions between Russia and the West. Quite naturally, I am part of the first group of people to feel the strain, people caught in between countries. However, in the context of Russia's broader demographic problems, it seems idiotic to restrict immigration, especially for young, educated people who love this country and want to make it a better place.

Unquestionably, there are a number of fly-by-night Western Ex-pats in Russia, who are merely here to make a quick buck and don't have much regard for their host country. Nevertheless, from my experience, these people tend to be in the minority. An enormous portion of expats that I come across in my day-to-day are English teachers, people providing an essential service to Russia's business class. Additionally, many of the expats in Russia who work for Russian and multinational companies are able to leverage their skill-set and experience to the benefit of Russia as a whole. While working at Renaissance, I noticed that the heads of just about every group in the company were foreigners, much to the chagrin of the Russians who worked below them. This is not to disparage the Russians, but many of them had plain and simply lacked the work experience and knowledge, which a western expert with 20-plus years working in a given field, could provide. As one manager put it, "We are here to teach and help out this country." Plain and simply, right now, there is a lack of Russians with the experience to fill these roles. In 20 years, I am sure the situation will have changed, but right now, that expatriot instruction is useful.

Russia's strict immigration policy is also trouble from a different perspective. As is well reported, Russia's population is gradually declining right now. Following World War II, Russia had a baby boom of its own, however, as the life expectancy for Russians is significantly lower than for Americans, many of Russia's baby-boomers are dying off. Additionally, since the fall of the Soviet Union and poverty and humiliation suffered, Russia's birth rate has plummeted. While I never lived in the Soviet Union, and most of my friends were too young to have a coherent view of society in those days, from what I gather, the moral foundation of society was destroyed in 1991. Back before 1917, the Tsar and the Church were the foundations of Russian society. Morality was largely defined in relation to those two things. During the revolution and the following civil war, belief in God and the Tsar was torn from the Russian narod. In their places, the Russians were given communim. From what I understand, in the Soviet Union, people were kinder to each other and most people lived by a code of honor, because there was a moral foundation based on beliefs. However, when 1991 rolled around, and the Soviet Union dissolved, the party bosses merely threw their hands up in the air and said, "Sorry, we lied to you." People had dedicated their whole lives to the ideals of communism and over night, they were forced to realize everything they gave their lives to was in vain and all of the beliefs they held sacred were false, leaving them feeling humiliated and powerless. Since then, nothing has really moved in to fill the void. The Russian population has rebelled against the communal message of the Soviet Union, replacing it with short-term self-attainment. When compounded with the economic stability following the crash, the past 17 years have taken a horific toal on the Russian family life. Divorce rates have sky-rocketed. Due to the idiosyncricies of Russian society, Russian women rarely remarry after they've given birth, even to one child. Additionally, memories of financial hardships have made many couples unsure of their ability to provide for more than one child. Consequently, birth rates in Russia have plummeted, and the Russian population declines every year as new births cannot compensate for the deaths of the baby-boomers.

The Russian demographic problem is likely to pose significant problems for the economy in the coming century. Constrictions in the country's labor markets are likely to significantly stunt growth as there will not be enough people to fill jobs. It is estimated that Russia would need a million immigrants a year to shore up the gap between deaths and births. Nevertheless, many Russians are reluctant to relax immigration restrictions as it would significantly change the demographic mix of the country in the coming century. Alright defensive and humiliated from the fall of the Soviet Union, many ethnic Russians fear becoming a minority in their traditionally white-as-driven-snow homeland.

Russia's defensiveness following the collapse of the Soviet Union is understandable. However, for the long term health of the company Russians need to overcome this. Hopefully a few years of stability and a less aggressive US foreign policy will help them assuage these fears.