RIGA - The issue of emigration may be the toughest barrier to face for Latvia on its thorny road to economic recovery. The outflow of young people, searching for better prospects abroad, is gradually turning from a simple migration of low-skilled labor into a significant brain-drain. An incurable one, too, since these potential rebuilders of Latvia’s future economy are not keen to come back.
Dreams do come true. In the last few years Latvia has gained considerable renown in the world press in terms of its economic and political performance. Unfortunately for this former “Baltic Tiger,” it is now generally mentioned as the brightest example of how not to run a country. The free-fall of the Latvian economy, with milestones like a GDP drop of 18 percent in 2009, or a current unemployment rate of 20 percent, has led the country to the edge of bankruptcy, brought on a rescue IMF loan package and severe austerity program aimed at cutting the budget deficit to a whopping 8.5 percent this year. While the newly elected government of the scissor-handed Prime Minister Valdis Dombrovskis obediently chops government expenditures, the Latvian population proves to be less and less disciplined. The declining trust of people in the state is not demonstrated through powerful riots, but is shown through the quiet, but quick stream of emigration, which may prove to be more dangerous than the flashy economic indicators.
It all started back in 2004, when Latvia proudly entered the EU as one of the best performing candidates from Eastern Europe. With the borders being opened, young people from the newly joined Baltic states rushed abroad to satisfy the thirst for adventure and income at the farms, construction sites and factories of the prosperous EU neighbors. The United Kingdom and the Republic of Ireland were at the top of the list of most popular destinations. The majority of Latvians taken by this first wave of emigration were the low-skilled workers from the country’s poorest regions. They were quite enticed by the arisen opportunity to earn considerably more than a middle-level manager in Riga by doing cheap manual work in England.
“When I moved to the UK in 2005, it was merely to make enough money to buy an apartment back in Latvia. I got a job at a chicken factory as a meat processing operator. Of course, the job was hard, but the money was worth it. For doing the most basic work I was earning about £1,000 a month (1,183 euros), in contrast to the equivalent of £200 that I was paid as a security guard in Latvia,” says Alexey Koltnev, who has been living in the UK for over four years and is now a quality manager at a meat factory in West Midlands.
According to data from the Central Bureau of Statistics (CSB), 10,446 people emigrated from Latvia in 2004-2006. However, the majority of commentators estimate the unofficial number to be three to five times higher. Even though the outflow of labor thinned slightly during the boom year of 2007, it then gained even more momentum once Latvia dived into recession back in 2008. In the first three quarters of 2010, 7,714 people declared their emigration from Latvia, which is a 73 percent increase comparing to the same period in 2004.
“I left for the UK in 2009, when I lost [my] job due to the recession and know at least 30 people who have done the same. I miss my friends and family a lot, but will not come back unless I get the same salary in Latvia. Unfortunately, I cannot see that happening in the next five to ten years,” says Armands Murnieks, a shop assistant at Trago Mills mall in Newton Abbot.
Such lack of confidence for the motherland’s future is something that most Latvian emigrants share. And they pass their views to close friends, relatives and whoever else is interested. This turns into a snowball that consumes more people every month. By March 2010, about 75,000 Latvians registered for National Insurance in the UK. Also, Latvia is now one of the three leaders in terms of supplying applicants for the Worker’s Registration Scheme, which is used by the British government to monitor emigrants from the states that joined the EU in 2004. The other two frontrunners are Poland and Lithuania. Altogether, the trinity comprised 81 percent of approved WRS applications in the year to June 2010.
The growing numbers of emigration look particularly troublesome in light of the poor demographic situation in Latvia. With the birth rate about 30 percent lower than the death rate, the Latvian population shrinks every year. A constant outflow of people at prime working age adds considerable insult to the injury.
If this trend continues, the only thing that will keep Latvia from becoming a pensioner state will be the high death rate of the elderly, due to extremely low pensions and a lack of social security and medical care.
Stone around the neck
Still, some may argue that under current economic conditions, emigration of low-skilled labor is more advantageous than harmful, since it helps to bring down unemployment. A source from the government, who requested anonymity, said that some Latvian politicians believe that it is better for some people to go abroad for a few years and earn some money, instead of just sitting home and living off benefits. This point is quite ambiguous. Firstly, the unemployment benefits in Latvia are often lower than heating bills in the winter. And secondly, the emigrants, who remember the sweet joys of being without a job back home, aim to stay abroad for longer periods of time.
However, the biggest danger of emigration is not in the movement of low-skilled workers, who struggle to find a job in Latvia. The real threat is the increasing number of school and university graduates, who leave the country to pursue further education and a long-term career abroad. This strips Latvia of the youngest, most talented and capable people, those who are supposed to sustain the country through the crisis and be the architects of its future.
And again, the UK is the prime destination for high-tier emigrants. Nonetheless, the motivations that drive the Latvian elite away from their fatherland’s holy borders often differ from those of the mainstream.
“It was the low ceiling that bothered me most. I only started to build my career in the UK two years ago and my income has been increasing substantially. Reaching the same salary in Latvia would take me at least ten years and it would probably be the maximum threshold possible. I can afford a good car, expensive travel and am rarely bothered about my expenses. Such financial stability, coupled with almost unlimited growth opportunities, is something I could never hope for in Latvia,” says Eugene Baranov, a software developer at Soundmouse in London. He left Latvia just over two years ago after graduating from the Transport and Telecommunication Institute in Riga with a top degree. He is not planning to migrate back to Latvia. Not before his retirement, at least.
A hole in the head
In the last few years, Latvian universities have been suffering from a drop in the number of enrolments. This, however, does not indicate a decreasing interest of young people towards higher education (HE). They simply prefer to pursue a degree abroad. The universities in the UK offer much better conditions for talented students from the EU. All it takes to be accepted to a high-ranking university are good results in school exams in English and math as well as the IELTS certificate, with six points or higher. The accepted student can then apply for a government loan, which will pay his/her tuition fees. The loan is only repayable once the graduate gets a full-time job with a salary above a certain threshold. Low interest rates as well as an extended repayment period of 25 years make the education almost free for a young professional with a well-paid (in the UK standard) job.
As a result, Latvian HE institutions are continuously losing the brightest heads to UK rivals. According to CSB, the total number of accepted students to colleges and universities in Latvia in the academic year 2009/10 equalled 31,529 people, which is a 24 percent drop from 41,557 students in 2008/9. In contrast, the number of Latvians getting a higher education in the UK has soared by 58 percent in the same period and continues to grow rapidly. According to a number of sources, the total number of Latvian students, enrolled in both undergraduate and postgraduate HE programs in the UK is close to 2,500 people.
“I left to study in the UK for very simple reasons. I wanted to get an internationally acknowledged, high-quality degree that would allow me to compete for high-profile graduate jobs in any country. Also, I wished to have lectures relevant to my program, read textbooks that are less than ten years old and study in a comfortable and helpful learning environment. Can you get all that in Latvia? I believe not,” says Viktor Vasvari, who recently got his BA degree in maritime business in the University of Plymouth and is now pursuing an international shipping career. He does not wish to come back to Latvia due to a lack of career perspectives back home.
All of the above makes the overall picture look quite dire for Latvia. More than ever, the Latvian economy needs capable, young professionals to help it out of the pit, but they are leaving. Despite the fiery speeches from local politicians and recent dodgy campaigns on YouTube, demonstrating “horrible” life stories of Latvian emigrants abroad, people continue to flee.
“I just stopped being home at some point. Even though, back in Latvia I was a young professional with a relatively high income, I constantly felt like a lower class citizen. When capable people, no matter what they do, feel like they are not respected nor needed by their own state, they will leave. Even if they were ready to tolerate everything else. There is a thin line between being a motherland and simply a country of origin. Latvia has crossed this line and there is no going back,” says Kira Savcenko, who used to be a senior reporter at a Latvian business daily and TBT, and currently is a master’s student in the City University London. Like many others, she is not keen on coming back to Latvia after getting a degree in the UK.
Despite the evident issue of a brain leak through growing emigration, the Latvian government fails to take any visible steps to tackle it. The situation calls for a strong reform program that would introduce radical changes to Latvian higher education and create a better economic and social environment for high-tier workers. This should be primarily aimed at persuading people to stay, not luring back the ones who left, since the latter have already made up their minds about their home country. An effective system for monitoring emigration would also be necessary, since it is quite hard to solve the problem if you have so little knowledge about it. Unfortunately, if this does not happen in the nearest future, then once the austerity program is finished, Latvia will be no more than a thin, pale and quite dead state.