This is a huge problem for Russia and other countries that rely on cronyism and corruption.
When he was 17 years old, Alexei Terentev, then a bookish high school student in Moscow, created what the Russian government has been desperately trying to engineer — a start-up with some of that Silicon Valley–style magic. It was innovative, cleverly marketed and could be run out of his parents’ apartment. By June of last year, when Terentev got his diploma from one of Moscow’s elite universities, his company was on its way to making him a millionaire. But it was also getting big enough, he says, “to get the wrong kind of attention from officials.” So Terentev, now 22, took no chances. One day after graduation, he packed up his laptop and emigrated to the Czech Republic, taking his company with him. He doubts he will ever return.
The reasons for his move, as well as his haste, are the typical worries of the young entrepreneurs Russia is currently hemorrhaging: corruption and bureaucracy, the forces that are driving the biggest exodus since the fall of the Soviet Union. In the past three years, 1.25 million Russians have emigrated, most of them young businesspeople and members of the middle class, according to data released in February by the head of the state’s Audit Chamber. That is about a quarter million more than left the country during the first few years after the Soviet collapse, when Russia was a political and economic basket case. Now the country is stable and the cities are thriving. But small-business owners seem to feel less safe than ever.
Russians are paying the price for the thuggish atmosphere create by Vladimir Putin and his cronies. This is one reason why fears about the decline of America are overblown.