Eastern Europe faces a serious crisis – The Economist

The countries of Eastern Europe over the past 20 years, experiencing an acute shortage of qualified personnel, primarily because of the “brain drain” and emigration of the labour force in more developed countries, and in the near future the situation can only get worse, writes The Economist.

“Former Communist countries in 2004 joined the EU, hoping to become a Germany or Britain, but instead a significant part of the labor force just moved into the rich Western countries. The situation is even worse in the post-Soviet countries that have or are still in the orbit of Russia, or actively fighting for a way out of it, such as Ukraine”, – notes the edition.

The working population of Latvia has shrunk by a quarter since 2000. A third of those who graduated from universities from 2002 to 2009 emigrated in 2014. A survey among Bulgarian medical students indicate that 80-90% of them plan to emigrate after graduation.

Economist stasis Janeliunas said that Lithuania is constantly losing workers. The money from the EU to upgrade the infrastructure of helped, but the reduction of the workforce discourages investment and harms economic growth.

According to the IMF, some countries in Eastern Europe lost annually 0.6-0.9% of GDP over the period from 1999 to 2014. By 2030, GDP per capita in Bulgaria, Romania and some Baltic countries will be lower than it would be without emigratsii.

All of this hits the budget of the country, because, for example, pensions, which account for half of public spending in Eastern Europe remain the biggest concern. In 2013 in Latvia was 3.3 working-age adults for every retiree.

The same level in the UK and France. By 2030, this proportion will be reduced to only two working-age per retiree. Britain and France are not threatened until 2060. Raise the country’s retirement age. Revenues have already started to decline, leaving less scope for reductions.

Like GDP, social expenditures in Bulgaria, Romania and the Baltic States to be about half of that spend in the rich countries of Europe. After failing to convince people to stay, governments are trying to lure them back following the success of Ireland and South Korea.

For example, the program “Create for Lithuania” returned home only a little more than 100 Lithuanians for 5 years. Among those who returned, the Deputy, the Deputy mayor, several councilors of the Prime Minister. But to attract Lithuanian doctors and engineers more difficult.

Research has shown that skilled workers from Eastern Europe makes you move abroad the quality of institutions in rich countries, such as the educational system. Unskilled workers are attracted to social conditions. Data on migrants who have returned, is very modest.

Economist at Danske Bank Rokas, Grajauskas said that the high costs for employees is pushing companies to automate. Work is already doing some work recently done by the people.

Some countries are looking for another way out, encouraging the immigration of citizens of poor neighbors. The population of Estonia declined rapidly during the 1990-ies. But the last two years it has grown thanks to immigrants from Ukraine, Belarus and Russia.

“However, immigration can fill the gaps that have arisen because of the “brain drain”. Almost all of the 400 thousand Ukrainians who have received a permanent residence permit in Poland in 2015, work in agriculture or construction,” – notes The Economist.

At the same time, about 30% of emigrants from Poland have higher education. For those who left Eastern Europe, freedom to live and work wherever they want, was a big advantage. 2NO native countries of the immigrants appeared before a serious challenge. They need to learn how to attract workers, or will have to sacrifice its economy”, – sums up edition.