Evaluation of Brain Drain in South Caucasus:

Reality or Imminent Threat?

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Evaluation of Brain Drain in South Caucasus

Reality or Imminent Threat?
Rashad Alakbarov

August 2018

Abstract:
Although a number of surveys and studies about migration in the South Caucasus have been conducted,
empirical researches about brain drain from the region is limited, especially after 2015, which is a
breakpoint for regional states due to the falling oil prices and slowdown of Russian economy. In this
regard, the aim of this study is to discuss the brain drain in the region, analyse the stimulating factors for
human capital outflow from Azerbaijan, Armenia and Georgia separately. Moreover, this study argues
that currently the brain drain over the professional groups vary in South Caucasian states. For instance, if
political scientists, economists and IT specialists are more likely to emigrate in Azerbaijan, it is more
about architects, construction specialists and engineers in Armenia, professionals in the health sciences,
education, construction, and agriculture sectors in Georgia. In addition, there are some unwritten
guidelines in the labour market of South Caucasian states, such as connection, which is an “old and
gold” rule of the recruitment process.
The hypothesis and the research questions of this study are the followings:
H1: After 2015, there is a convenient environment for brain drain in the region, and if in the case of
Georgia, the major concern for Georgian educated people is economic difficulties, in the case of
Azerbaijan and Armenia, the determinant factor for deciding to migrate is not only the economic matters,
but also the social-psychological, as well as at some point the political matters take a role.
RQ: Is there a positive correlation between the educational levels and intends to emigrate in South
Caucasian states?

Introduction
Since the turn of the century “brain drain” or “brain mobility” phenomenon gained serious importance,
which means movement of highly qualified specialists from developing or less developed countries to
developed ones. There is a common view that mobility of professional groups presents a bottleneck for
 Evaluation of Brain Drain in South Caucasus:
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the development of origin country. In this regard; World Bank noted, “What should be done in order to
prevent the exodus of qualified workers from poor countries?”.1
If until 1980 immigration trend in the world, mainly characterized by the movement of poor, low
educated and unskilled people, currently well-educated and highly skilled people of middle – class also
join in this movement. About the negative impacts of brain drain, the OECD suggests the following
policy recommendations: “Concerns about brain drain could be overstated. Taking into consideration
that a large share of professional groups eventually returns to home, however, to overcome the brain
lose, developing countries should establish their own innovation and research centers.

Literature review
Representative survey carried out among the urban population of South Caucasian states revealed that in
Azerbaijan respondents prefer the destination countries not only for the high-level income opportunity,
but also for economic stability and presence of democratic climate, where integration and adaptation is
desirable and the possibility to build a future for the family is guaranteed. 2 Education becomes to be a
determining factor for migration in Baku, where the level of education is positively associated with the
probability of becoming a migrant more than two times for males and more than six times for females.3
For some researchers, “oil curse” is one of the leading obstacles to the future career growth of
Azerbaijani youth. Weak development of non-oil sectors and limited opportunities for private business,
as well as the existence of connections as a vital factor in recruitment process leaves few options for
educated young people and stimulate them to emigrate to the Western countries where they can get
higher income and opportunity to develop their skills.4
A 2013 CRRC-Caucasus Barometer survey reveals what sorts of “values” are dominant in the domestic
labour market of Azerbaijan. According to this survey, personal connections are much more important
factor for getting a relevant job than hard work or professional abilities. Highly skilled professionals,
particularly those who are educated abroad are not likely to internalize such sort of game rules and as the
result the probability to emigrate becomes higher.5
Unfortunately, personal linkage demonstrates its importance and validness not only when the question is
about the job, but also about property rights, legal disputes or doing a business. It is very difficult to
solve these matters only through formal institutions.6

Azerbaijan
The collapse of the Soviet Union in 1991 resulted in three re-independent countries in the South
Caucasus: Azerbaijan, Armenia and Georgia. However, that time was also starting point of ethnic
conflicts, within Georgia, in separatist autonomous regions of South Ossetia and Abkhazia, and
territorial dispute between Armenia and Azerbaijan over Nagorno-Karabakh, an internationally
recognized de jure part of Azerbaijan. All of UN Security Council Resolutions (822/853/874/884) on the
Nagorno-Karabakh conflict adopted in 1993 reaffirming the sovereignty and territorial integrity of
Azerbaijan as well as demanding immediate withdrawal of all occupying forces from the areas of
Azerbaijan, could not do much on the ground (1993 UN Security Council Resolutions on Nagorno-
Karabakh). Therefore, after the fall of the Soviet Union the ethnic dimension was the main explanation

1 Egbert, H., & Esser, C. (2007). Migration and Labor Market in the Social Sciences. Berlin: LIT.
2
Gugushvili, A. (2011). Democratic Discontent and Emigration: Do Political Attitudes Explain Emigration Intentions? Bazaleti, Georgia.
3 Dermendzhieva, Z. (2011). Emigration from the South Caucasus: Who Goes Abroad and What Are the Economic Implications? UniCredit & Universities

Knight of Labor Ugo Foscolo Foundation.

4 Guliyev, F. (12 December 2016 г.). The Quality of Education in Azerbaijan: Problems and Prospects. Caucasus Analytical Digest.
5 Ibid.
6
Meisnner, H., & Leitner, J. (2016). FDI in Azerbaijan: A Structural Analysis of the Business Environment. Caucasus Analytical Digest .
 Evaluation of Brain Drain in South Caucasus:
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of emigration trends in Azerbaijan, as well as in the region. However, if ethnic considerations and
security matters characterized the early stages of migration in regional states, later economic factors
gained higher importance.7
During the Soviet period, external migration was prohibited in general. Migration flows from and to
Azerbaijan were allowed only within the territory of the USSR. As mentioned above, after 1991
Azerbaijan became a country of emigration. The key challenges for the country were undesirable welfare
system, territorial resettlement, re-integration of refugees and internally displaced persons (IDPs) from
the Nagorno-Karabakh, as well as Meshkhetian Turks who were coming to Azerbaijan from Georgia due
to the conflicts in the latter. Previously, known mainly as an origin of emigrants, Azerbaijan attracted
labour force from developing countries, particularly from Afghanistan, Pakistan, Iran, and Central Asia
after 2008 due to stimulation of oil and gas sectors. Currently, the major destinations for Azerbaijani
migrants are Russia, OECD countries and the USA.8
According to Human Capital Index 2016, the total number of tertiary educated people is 1,448 million in
Azerbaijan. Despite the lack of empirical studies on highly educated people outflows from the region,
the following table explains the level of brain drain in the South Caucasian states since the first years of
independence until beginning of the new century (Table 1.).

Table 1. Emigration rate of tertiary educated (% of total tertiary educated population)

Source: Docquier, Lindsay, & Marfouk, 2009

Time Azerbaijan Armenia Georgia

Units % % %
1990 0,4 9,1 1,4
2000 1,8 8,9 2,8

Table 2. Stock of Azerbaijani emigrants by destination and by educational attainment, in 2000

Destination Low Medium High Total

USA 542 3,090 7,471 11,103
Europe (including EU-15) 3,654 1,143 2,894 7,691
EU-15 3,572 1,002 2,748 7,322
Asia and Oceania 3,119 2,591 3,726 9,436

Note: Low – primary or 0-8 years of education; Medium – secondary or 9-12 years of education; High
–tertiary or 13 years or more of education. This data is for migrants above 25 years old in most cases.
Source: Docquier & Marfouk, International Migration by Educational Attainment (1990-2000) -
Release 1.1, 2005

According to Table 2, the highest number of people who emigrated to the USA were highly educated
people in 2000, not surprisingly. In general, the USA is one of the preferable destination countries for
professional groups coming from Azerbaijan. The similar destination trajectory can be observed among

7 Gugushvili, A. (2011). Democratic Discontent and Emigration: Do Political Attitudes Explain Emigration Intentions? Bazaleti, Georgia.
8 Migration Facts Azerbaijan. (2013). Retrieved fromMigration Policy Centre: www.migrationpolicycentre.eu
 Evaluation of Brain Drain in South Caucasus:
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IT specialists as well. Moreover, the second highest number of emigrants is also in the category of
highly-tertiary educated people who prefer to migrate to Asia and Oceania.
It is noteworthy to mention that the brain drain of professional groups vary in South Caucasian
countries. For instance, although the unemployment rate for IT sector is 20% in Armenia, IT specialists
are less likely to migrate from the country compared to the other professional group; the probability of
finding well-paid jobs in IT sector is higher than the other fields in Armenia.9 Global Innovation Index
placed Armenia 60th out of 128 in 2016, the highest number in the region, with Georgia 64th and
Azerbaijan 85th.
There is a deep interest among foreign companies, predominantly by US companies in IT sector in
Armenia, which leads to high-level investments. Hasmik Hovhanesian and Heghine Manasyan explain
that the competitiveness of Armenian IT sector is based on the following reasons:
1. Armenia was considered a “Silicon Valley” during the Soviet period.
2. Armenia had many developed schools for IT specialists with more than a 50-year history.
3. The existence of a 7-million diaspora all over the world, mainly in the USA and Russia.10
Unlike Armenia, Azerbaijan observed emigration of highly skilled IT specialists particularly after the
2015 oil crisis.
There is no enough foreign direct investment in Azerbaijan`s IT sector, therefore, local IT companies
formulated their activities and businesses, mainly based on state orders for a long period. For saving,
the government should call an attention for developing this field, rather than mitigating IT costs.
Another study shows that Azerbaijani IT professionals mainly emigrate to the USA, Baltic countries,
and Poland, where the income level is much higher, while the pushing factor is limited opportunities
and inconvenient environment for career growth in Azerbaijan. Virtually all of them in short as well as
in medium term do not intend to return to home country which could be evaluated as a “brain lose” for
Azerbaijan. In fact, before leaving the country, almost all of them were employed, but still they decided
to emigrate.11 The motivation for deciding to migrate could not be explained solely by the desire of
high level of income or career growth in abroad or eagerness to learn technological innovation and
practice of developed countries in the related field, but also by less optimistic views about the future.
Therefore, they do not want to return at least in short or medium-term. Many specialists who migrated
with family members prefer to grow their children in the host country.
According to Economic Freedom of Index 2017, although the indicators of tax burden and fiscal health
is good, the sub-topics of rule of law, judicial effectiveness and government integrity are still weak.
Corruption is considered a fundamental challenge. It should be noted that low level of transparency
does exist not only in Azerbaijan, but also in other regional states.12
The Global Competitiveness Index 2016-2017 ranked Azerbaijan 37th out of 138 countries, the highest
rating for the region, while Georgia was 59th, Armenia 79th. There, however, some problematic factors
for doing business exist. (International Monetary Fund; World Economic Outlook Database April
2016).

9 Avetikyan, L. (2013). Brain Drain in Armenia: The Impact of Education on Migration Intentions. Yerevan : American University of Armenia.
10 Hovhanesian, H., & Manasyan, H. (20 March 2016 г.). Foreign Direct Investment in Armenia: Opening the Doors is Not enough to Attract Investment.
Caucasus Analytical Digest.
11 Talibzade, M. (2017). Azərbaycanı tərk edən İT mütəxəssislər - Onlar haradadır? Bakı, Azərbaycan.

12
The Heritage Foundation. (2017). 2017 Index of Economy Freedom Azerbaijan. Retrieved from: http://www.heritage.org:
http://www.heritage.org/index/pdf/2017/countries/azerbaijan.pdf.
 Evaluation of Brain Drain in South Caucasus:
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Table 3. Most problematic factors for doing business in Azerbaijan

Name of Problem Rank

Note: In a World Economic Forum’s
Corruption 16.6
Executive Opinion Survey respondents were
Inflation 10.3
asked to select the five most problematic
Foreign currency regulations 10.3 factors from the list of factors for doing
Tax regulations 9.7 business in their country and to rank them
Tax rates 9.2 between 1 (most problematic) and 5 (least
Access to financing 8.7 problematic). The score corresponds to the
Inadequately educated workforce 8.1 responses weighted according to their
Inefficient government bureaucracy 7.0 rankings.
Poor work ethic in national labor force 6.0 Source: World Economic Forum, Executive
Inadequate supply of infrastructure 4.4 Opinion Survey 2016
Crime and theft 2.7
Restrictive labor regulations 2.2
Poor public health 2.1
Policy instability 1.7
Insufficient capacity to innovate 0.6
Government instability 0.3

The country’s GDP per capita grew from 655$ in 2000 to 7,886$ in 2014 according to World Bank data.
However, in 2015 that number sharply dropped to under 5,500$. In other words, 2015 is a breakpoint for
Azerbaijan economy.
A 33.4% devaluation of national currency by the Central Bank on December 21, 2015 sparked new
social concerns. Low oil price reduced public investments, which concurrently undermined the
construction sector. The gradual drop in oil prices revealed how the economic model of Azerbaijan,
particularly the bank-financial sector and macroeconomic policy framework was vulnerable and less
developed.
In addition, it would be worth to note that country’s economy has been affected not only by an oil factor,
but also it was adversely influenced by a slowdown of the Russian economy, which is the biggest import
and export partner of Azerbaijan, simultaneously a common traditional destination country for South
Caucasian migrants.
The explanation for the sharp decline in export to Russia, by 40.6% could be found in hindering
consumption behaviour of Russia, plus the rouble devaluation that left Azerbaijani small business export
products vulnerable in the price competition.13
Taking into consideration that empirical research on the mobility of highly skilled labors of Azerbaijan is
limited and the latest data are not available, an online survey has been conducted among Azerbaijani
tertiary educated nationals living abroad in order to analyze the current trend. The conducted survey
reveals main motivations of Azerbaijani tertiary educated nationals and their preferred destination

13 Allahverdiyev, N. (21 May 2015 г.). The Impact of Russia's Economic Crisis on Azerbaijan. Baku, Azerbaijan.
 Evaluation of Brain Drain in South Caucasus:
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countries, as well as professional groups, who are more likely to migrate. The focus group for survey
was narrowed to 91 respondents: 44 females and 47 males.
As displays Table 4, professional groups representing economics, political science, and IT sector are
more likely to migrate.

Table 4. Professional groups leaving Azerbaijan

List of the professions grouped into categories

N %
Economics 28 30.77
Political Science 14 15.38
IT 10 10.99
Engineering 6 6.59
Health Science 4 4.40
Linguistic 4 4.40
Other 25 27.47
Total 91 100

The survey reveals that nearly half of respondents (45,56%) left the country over the last 2 years,
which explicitly emphasizes that 2015 was a breakpoint for labor market of Azerbaijan in the context
of brain drain.

Table 5. Employment status of tertiary educated people before migrating from Azerbaijan

Employment status of tertiary educated people before migration

Status %
Employed (with a good salary) 41.11
Unemployed 28.89
Employed (with low or medium salary) 26.67
Retired 1.11

Other 2.22

Total 100

As Table 5 shows, the highest share of respondents was employed while realizing migration decision,
which means employment status does not mean deep sense to give up, even the good salary could not
be an obstacle in their migration path.
According to the survey results, education (61,54%) is the main determining factor for intention to
migrate. The importance of career growth (58,24 %) was regularly sounded by already emigrated IT
specialists, however, lack of career growth opportunity seems to be a common issue for different
professional groups. Low level of transparency (51, 65 %) in some sectors remains as an important
element for deciding to migrate. These are three popular reasons to leave the country for the
respondents. Furthermore, the survey results indicate that democratic institutions are important
segments of socioeconomic life of Azerbaijani citizens. Individual responses to the question regarding
 Evaluation of Brain Drain in South Caucasus:
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major push factors for migrating constitute the following aspects of life “insufficient medical care”,
“dissatisfaction with the political and social life”, “lack of future prospective”, “post-devaluation
economic situation,” and “experience of new cultures”. Moreover, the results revealed that Germany,
Canada, and USA are the top three desired destination countries for Azerbaijani permanent migrants
by tertiary education attainment.

Armenia
Armenia has one of the highest emigration rates in the world. According to UN data, there were
937,000 Armenian migrants in 2015, which makes up 31.1% of the country’s total population
(OECD/CRRC-Armenia 2017). Therefore, remittances sent home by emigrants establish a significant
source of income for many households in Armenia. In terms of remittances, 2015 came out as a
breakpoint for Armenia. If in 2014, the amount of remittances was USD 2,079 million, the next year
observed a sharp decline – 1,491 million, constituting 14.1 % of GDP; in 2016 it followed again by
decline – 1,339 million. (Source: World Bank calculation based on data from IMF Balance of Payments
Statistics database and data releases from central banks, national statistical agencies, and World Bank
Country desks. See Migration and Development Brief 27, Annex A for details). Although, in Armenia
the remittance flows to households are considered a potential source of income, the negative effects of
remittances should not be underestimated, such as severe impact on national income in the long term,
decreasing competitiveness within the Armenian economy, discouragement of remittance receiving
household members to work, as well as the state’s social expenditures, implementation of macro-
economic policies, the threat of inflation and the most important - reduction of the political will to
perform policy reforms.14
The explanation could be found in the slowdown of Russian economy affected by falling oil prices and
Western sanctions in late 2014. Since, Russia remains the most common destination country for
Armenian emigrants (56%) due to geographical proximity as well as lack of the language barrier,
remittances are the predominant channel of transmission of shocks from Russia to the CIS countries.
Although, Armenia announced “open door” policy for Foreign Direct Investment in the beginning of its
independence, the lack of transparency, corruption, as well as dependence on Russia (e.g. membership
in Eurasian Economic Union) brought some uncertainties to Armenia’s business environment, which
discourages foreign investors (Hovhanesian & Manasyan, 2016) In 2014, there were estimated USD
404,3 million FDI inflows to Armenian, while the next year this figure constituted only USD 180,5
million. (Source: UNCTAD, FDI/MNE database www.unctad.org/fdistatistics).
It should be noted that in general, dependence on Russia in different sectors is clear-cut, even in
Migration Policy Concept. Although, Armenia adopted the Action Plan for Implementation of the
Policy Concept for the State Regulation of Migration in 2012-2016 and its main core was harmonizing
Armenian Legislation with EU legislation, as well as the key UN documents; joining Russia-led
Eurasian Economic Union in early 2015 resulted in the reformulation of Migration Policy Concept.
Consequently, the Armenian Government adopted the Action Plan for 2014-2016 on the Alignment of
the Legislation of the Republic of Armenia Regulating the Area of Migration in the Republic of
Armenia to International Standards, including the Approaches and Principles Established in the
European Union and the Common Economic Space in 2014. The new action plan focuses on
coordination Armenian legislation with EU standards, concurrently to show willingness relating to
Armenia’s entry into the Eurasian Economic Union, which eventually constitutes a hybrid policy
concept for migration. (OECD/CRRC-Armenia 2017)

14
Karapetyan, L., & Harutyunyan, L. (2013). The Development and the Side Effects of Remittances in CIS Countries: the Case of Armenia. CARIM-East
Research Report.
 Evaluation of Brain Drain in South Caucasus:
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Human Capital Index 2016 placed Armenia 37th out of 130 countries, by estimating unemployment rate
16,2%. However, this figure sharply increased for the working age group 15-24 years old and
constituted 36,05% of the tertiary educated population by 543,000.
In general, unemployment is the dominant pushing factor for emigration, notably in rural areas of
Armenia. However, social injustice, negative perceptions of economic governance and development
uncertainty also play a crucial role for the decision to migrate.
In the case of Armenia, if the economic motives, unemployment and poverty are the primary reasons
for emigration decision among rural inhabitants who are less educated, the reason of urban households
with higher education to leave the country, is not only guided by high unemployment rates or a better
level of income, but also by social-psychological factors.15
It is worth to mention that household members who obtain qualification abroad are more likely to
emigrate and less likely to return than other emigrants.16 However, if the young people decide to return
from abroad as usual, they face challenges towards finding jobs relevant with their knowledge and
skills.17

Analyses of CRRC-Armenia’s Caucasus Barometer 2015

The Caucasus Barometer Survey reveals that the most important issue that face the country is
unemployment by 42% of respondents, follows by poverty 17% and corruption by 7%. However,
according to Armenian households second most important issue is again unemployment by 23% of
respondents, follows by poverty 22% and emigration 12%. According to the Armenian household
connection is the most important factor for finding a good job – supported by 29% of respondents,
whereas only 23% of respondents believe that education is more important. The analysis of following
data reveals the unemployment rate of tertiary educated Armenians.

Table 6. Employment Status by Level of Education in Armenia

Highest level of education % Employed % Unemployed %

Secondary or lower 32 68
Secondary technical 42 58
Higher than secondary 55 45

Note: Answers ‘Don’t know’ or ‘Refusal’ excluded.

As we see, almost half of the tertiary educated respondents are jobless (Table15).

Table 7. People Interested In Temporary Migration by Level of Education

Highest level of education % Yes % No%

Secondary or lower 62 38
Secondary technical 60 40
Higher than secondary 68 32

15 Marzpanyan, H., Astvatsaturov , S., & Markosyan, R. (2015). The Interrelation Between Migration and Human Capital Reproduction in Armenia.
Yerevan: YSU Press.
16 Makaryan, G., & Galtsyan, M. (2013). Costs and benefits of labour mobility between the EU and the Eastern Partnership Partner Countries: Country

Report Armenia.
17
Manasyan, H., & Poghosyan, G. (2012). Social Impact of Emigration and Rural-Urban Migration in Central and Eastern Europe, Final Country Report
Armenia.
 Evaluation of Brain Drain in South Caucasus:
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Note: Answers ‘Don’t know’ or ‘Refusal’ excluded.

As we see, there is a positive relation between the level of education and intention to migrate (Table 7).
According to ArmStat, the total number of economically active tertiary educated people was 422,2
thousand in 2014, that figure sharply decreased and constituted 379.5 thousand in 2015 (Statistical
Yearbook of Armenia 2016). In addition, comparing to 2014, the reduction of economically active
tertiary educated people was observed for both genders in 2015, which explains hardness of job finding
for educated people in the Armenian labour market without any difference between male or female job
seekers.
Although, the number of private universities in Armenia is more than eight dozen, the possibilities to
get a job for graduates is not so high, because their qualification is not adequately valued by employers;
it eventually leaves three options, either joining to the growing group of unemployed university
graduates, accepting jobs for which they are overqualified or migrating. According to official figures,
the unemployment rate in Armenia has been gradually increasing since 2013 estimated at 16.2%,
followed by 17,6% in 2014 and 18,5% in 2015, which leaves not much options rather than emigrating
(Statistical Yearbook of Armenia 2016).
As mentioned above, migration in Armenia is motivated not only by economic matters such as high
unemployment rates and poverty, but also by social-psychological factors that eventually lead to
absence of faith for a successful future of the country and stimulates pessimistic expectations. The latter
characterizes highly skilled groups, particularly those who educated in abroad.
The result of sociological surveys carried out in Armenia reveals that social-psychological motives are
well founded among Armenian households.18 The ineffective way of management and unfair decisions
of Government in regard with social issues; the price of transport or electricity, introduction of funded
pensions as well as taxes trigger emigration decision among households, particularly among youth.
According to Transition Index 2016, the status of democracy and market economy as well as
management performance of Armenia was worse than 2014.
During the period of 1991-2001, about 300,000 well-educated migrants left the country; they were
mainly specialized in engineering and sciences.19
The increase of unemployment rate among different professional groups in Armenia could be explained
by excessive supply of certain professional groups in the domestic labor market, which especially
grasped from professional groups related to economics and social sciences. It is worth noting that
economists are the largest professional group, who often face challenges concerning job finding due to
excessive supply over the demand of labor market. However, the emigration rate among economists is
not high despite the rate of unemployment. Specialists in architecture and construction sectors are more
likely to emigrate due to lack of employment opportunities in Armenia. For the professional group of
mechanical engineers, the decision to migrate completely coincides with employment opportunities in
the destination country. In general, the USA is the most desired country for well-educated households
of Armenia and followed by Canada. And as the survey results display, the main factors for deciding to
migrate among professionals could be listed as career growth in abroad, good payment, and future of
children. In addition, during the focus group decisions views, such as admiration of Western culture,
feeling oneself free in a society with a certain set of attached values, lack of adequate value of highly
specialists in the society, and unsatisfied societal realities were frequently expressed among others.20

18 Marzpanyan, H., Astvatsaturov , S., & Markosyan, R. (2015). The Interrelation Between Migration and Human Capital Reproduction in Armenia.
Yerevan: YSU Press.
19 Yeghiazaryan, A., Avanesian, V., & Shahnazaryan , N. (2003). HOW TO REVERSE EMIGRATION? Armenia, 2020.
20
Avetikyan, L. (2013). Brain Drain in Armenia: The Impact of Education on Migration Intentions. Yerevan : American University of Armenia.
 Evaluation of Brain Drain in South Caucasus:
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Georgia
Many people born in Georgia have left the country since 1991 when the country regained its
independence. Although, the state opened its borders to international trade and aimed integration into
the world economy, lack of stability in the economy throughout the 1990s and conflicts led to the large
waves of emigration. It is estimated that more than one in every five people born in Georgia lives
outside the country (OECD/CRRC-Georgia 2017).
Unlike the early years of 1990s, when the ethnic sorting was the main explanation for migration, later
during the 2000s severe economic conditions played an important role for deciding to migrate in all
South Caucasian states; the migration trajectory would usually lead to Russia.21
Emigrants have become a major cause of decline in Georgia’s total population since from 4.37 million
in 2002 to 3.71 million in 2014. It should be added that after 2015, a slight fluctuation in the number of
the population was noticed: the population was estimated at 3,713,700 in 2015, with little increase it
reached 3,720,400, in 2016, but declined to 3,718,200 in 2017.22
Unemployment is the main pushing factor for emigration in Georgia since more than 80% of emigrants
left the country to find a job. According to official figures, now unemployment rate is around 12% in
the country. However, the youth unemployment rate in Georgia increased to 32% in 2015 from 30.51%
in 2014.23
The major advantage of Georgia from neighbouring countries is a better performance in the context of
development and democratic transition. According to Transformation Atlas 2016, unlike Azerbaijan
and Armenia, Transition Index results of Georgia were better when comparing with two years earlier.
In 2014, Georgia was ranked 52nd in Democracy Status, 57th in Market Economy Status, 41st in
Management Index; the relevant rankings for 2016 were 40th, 53rd, and 39th respectively.24
Although the relevant data demonstrate that the government has been on the right way since the late
2003, overthrowing corruption and inefficient political regime, the following neoliberal policies such as
putting down public sector and liberalizing the economy eventually led to growing unemployment rate
and heavy socio-economic conditions.25
The 2008 Georgian-Russian war made the socio-economic circumstances in Georgians even worse,
which concurrently produced incentives to migrate.
However, there are some positive elements in emigration from Georgia. The positive outcome of the
large-scale emigration reflects on the amount of remittances, since money inflows to the country
constitute a significant part of the Georgian economy. In 2015, the remittance inflows reached USD
1,459 million made up of 10,4% of the national GDP (Source: World Bank staff calculation based on
data from IMF Balance of Payments Statistics database and data releases from central banks, national
statistical agencies, and World Bank Country desks. See Migration and Development Brief 27, Annex
A for details).
Unfortunately, the declining trajectory is represented not only in the number of the total population, but
also in the GDP, the amount of remittances and FDI inflows as well. While the amounts of remittances

21 Dermendzhieva, Z. (2011). Emigration from the South Caucasus: Who Goes Abroad and What Are the Economic Implications? UniCredit & Universities
Knight of Labor Ugo Foscolo Foundation.
22 National Statistics Office of Georgia. (2017). Population Statistics . Retrieved from: GEOSTAT:
http://www.geostat.ge/index.php?action=page&p_id=152&lang=eng
23 Trading Economics, & National Statistics Office of Georgia. (2017). Georgia Youth Unemployment Rate 2007-2017. Retrieved from:

tradingeconomics.com : https://tradingeconomics.com/georgia/youth-unemployment-rate

24 Transformation Atlas. (2016).Transformation Atlas 2016 Countries. Retrieved fromhttp://www.bti-project.org: http://www.bti-project.org/en/home/.

25
Gugushvili, A. (2011). Democratic Discontent and Emigration: Do Political Attitudes Explain Emigration Intentions? Bazaleti, Georgia.
 Evaluation of Brain Drain in South Caucasus:
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were USD 1,945million and USD 1,986 million in 2013 and 2014 respectively, the relevant figures
went down to USD 1,459 million and USD 1,491 million in 2015 and 2016 respectively.
Although Georgia left behind a serious distance in the context of liberalizing market economy and
attracting FDI, the measures such as maintaining liberal business environment, simplifying tax and
administrative legislations, privileged trade regimes, and establishing equal opportunities for domestic
as well as foreign investors were carried out, the lack of ability to coordinate FDI with institution
building and ineffective initiatives to form foreseeable and reliable business environment remain as
major concerns.26
The total of FDI inflows was USD 1.75 billion in 2014 but declined to USD 1.35 billion the next year
(Source: UNCTAD, FDI/MNE database www.unctad.org/fdistatistics). Relevantly, Georgia`s GDP was
around USD 16.51 billion in 2014 but saw a clear-cut reduction, thus declining to USD 13.98 billion.27
The explanation for downturn of Georgian economy in 2015 could be found in the slowdown of
Russian economy which had been effected mainly by falling oil prices and Western sanctions.
Although the 2008 war deteriorated the bilateral relations, Russia still remains as a one of the top
import (USD 571 million in 2016) and export (USD 183 million in 2016) partner country for Georgia.28
Furthermore, for Georgia Russia is a top country by remittances since 65% of total remittances come
from Russia; it is followed by Greece (9%), Italy (8%), USA (7%), Ukraine (5%), Turkey (3%) and
Spain (3%).29 Therefore, Russia`s role in the socio-economic life of the Georgians could not be
underestimated.
In addition, there is certain interconnection among the economies of South Caucasian states. For
example, Azerbaijan is the top export destination country for Georgia (USD 249 million), while one of
the main export products of Georgia is refined petroleum (USD 218 million), the drop in oil prices and
the eventual shrinking of Azerbaijani economy negatively affects Georgian economy as well.
According to 2017 Index of Economic Freedom, Georgia is the leading country in the region with an
overall score of 76. Armenia and Azerbaijan scored 70, 3 and 63,6 respectively.30 Although
Government of Georgia could achieve serious successes related to fiscal policy, regulatory efficiency
and open markets, property rights, judicial effectiveness, as well as government integrity are the main
concerns. According to The World Bank Doing Business 2017, Georgia is the leading country among
South Caucasian for doing easy business, ranked 16th; Armenia and Azerbaijan come 38th and 65th
respectively.31
The IPPMD research revealed that four key sectors, health, education, construction, and agriculture, are
more affected by emigration than others. Another explanation of the lack of adequate educated
workforce is the fact that even university graduates do not have the necessary skills required in the
inner labor market. Major available jobs do not require higher education, and eventually tertiary
educated workers who have less skilled jobs get lower salaries than people specialized in a particular
job field (OECD/CRRC-Georgia 2017).

Analyzes of CRRC-Georgia’s Caucasus Barometer 2015

26 Guruli, I. (20 March 2016 г.). Foreign Direct Investment Trends and Policies in Georgia, Tbilisi. Caucasus Analytical Digest.
27 Trading Economics, & World Bank. (2017). Georgia GDP 1990-2017. Retrieved fromtradingeconomics.com: https://tradingeconomics.com/georgia/gdp.
28 Transformation Atlas (2016). Retrieved fromhttp://www.bti-project.org/en/atlas/
29
Economic Policy Research Center. (December 2011). The Role of Remittances in Georgian Economy.
30 The Heritage Foundation. (2017). 2017 Index of Economy Freedom Azerbaijan. Retrieved from: http://www.heritage.org:
http://www.heritage.org/index/pdf/2017/countries/azerbaijan.pdf.

31
The World Bank Group. (2017). The World Bank Doing Business Economy Rankings. Retrieved from: The World Bank:
http://www.doingbusiness.org/rankings.
 Evaluation of Brain Drain in South Caucasus:
Reality or Imminent Threat?

The Caucasus Barometer Survey points that the most important issue that the country faces is
unemployment (55% of respondents); it is followed by poverty (15% of respondents) and unsolved
territorial conflicts (7% of respondents). However, according to Georgian citizens the second most
important issue is poverty noted by 30% of respondents. Then come unemployment (19%) and inflation
(12%). It should be noted that like Georgians, Armenian respondents also think that unemployment and
poverty are the major concerns.
According to Georgians, connections are the most important factor for finding a good job. It is
supported by 32% of respondents, whereas only 27% of them believe that education is more important.
It seems having a connection is the “old and gold” rule of the recruitment process or finding a good job
in South Caucasus.
The analysis of the following data reveals the unemployment rate of tertiary educated Georgians.

Table 8. Employment Status by Level of Education in Georgia

Highest level of education % Employed % Unemployed %

Secondary or lower 25 75
Secondary technical 33 67
Higher than secondary 46 54

Note: Answers of ‘Don’t know’ or ‘Refusal’ excluded.

As we can notice, more than half of the tertiary educated respondents are jobless. However, there is a
positive association between the levels of education with employment status in the labour market of
Georgia (Table 8.).

Table 9. People Interested In Temporary Migration by Level of Education

Highest level of education % Yes % No%

Secondary or lower 45 55
Secondary technical 46 54
Higher than secondary 64 36

Note: Answers of ‘Don’t know’ or ‘Refusal’ excluded.

As seen, there is a positive correlation between the levels of education with the intention to migrate
(Table 9).

By using CRRC – Georgia’s Caucasus Barometer 2015 survey results, Tamuna Khoshtaria portrays the
common features of people, who want to leave home country and describes their type as a “person who
is well educated, aware about western culture and democratic values/norms, more tolerant, in general
has positive attitudes towards foreigners and Western Institutions such as NATO and EU, strongly
supports democracy, has rich world outlook, is favour of traveling and exploring the world”.32

32 Khoshtaria, T. (2016). Who Wants to Emigrate from Georgia? Caucasus Barometer 2015 Survey Results. Caucasus Analytical Digest.
 Evaluation of Brain Drain in South Caucasus:
Reality or Imminent Threat?

Table 10. People Interested In Permanent Migration by Level of Education

Highest level of education % Yes % No%

Secondary or lower 12 88
Secondary technical 9 91
Higher than secondary 13 87

Note: Answers of “Don’t know’ or ‘Refusal’ excluded.

The results show that well educated people tend to leave the country and less likely to return (Table 10.).
Another survey carried out by Zurab Laliashvili in Czechia among 117 Georgian citizens, who is
officially registered there explains this picture in more details. 117 respondents, with 65% of them being
male and 35% female, left the home country during the period of 1989-2010. 83% of respondents were
tertiary educated, which confirms the view that highly educated Georgians are more likely to leave the
country. Before emigrating from Georgia, only 40% of men and 19% of women had a work experience
that matches with their educational field. The rest of the respondents did not work ever in a job that
matches with their knowledge and skills, which supports our view that the probability for tertiary
educated to find a relevant job is limited. Regarding residence status in Czechia, 32% of respondents
reported that they had residence permits, 68% long-term stay visas, 32% student visas, 26% entrepreneur
visas, and 10% visas for family reunification.
By merging the number of respondents with permanent residence (32%) and student visa (32%), the
result shows that 64% of respondents want to stay in Czechia for a long period. 77% of respondents
replied that they were not planning to return home. 24% of respondents mentioned that their motivation
to emigrate was the undesirable socio-economic conditions of Georgia, 4% due to political situation, and
major part of respondents, 49% reported that unemployment, less social support of state, employment
insecurity, low salary, the dominant position of the employer as psychologically, as well as legislatively,
lack of stable national economic development and prospects for future were the main reasons for
migration.33
Considering the fact that 83% of respondents who migrated were tertiary educated and 77% of them
were not likely to return home, these people should be evaluated as a brain loss for Georgian economy.

Conclusion
Several factors such as declining oil prices, slowdown of the Russian economy, and the interconnection
among the economies of South Caucasian states make 2015 a breakpoint in the context of brain drain. I
believe that the reason why professional groups, particularly those who are foreign educated prefer to
emigrate stems not only from economic issues, such as good income level, but also from socio-
psychological issues. While being abroad, they noticed how set of values, norms effectively work in the
society and by obtaining high qualification they wish to return and serve home country. However, when
they face unwritten guidelines of the domestic labour market, they became discouraged. To behave
according to the rules of the game means loss of respect to himself and obtained qualification.

33 Laliashvili, Z. (2012). Expectations and Realities of Brain Drain from Georgia. Prague.
 Evaluation of Brain Drain in South Caucasus:
Reality or Imminent Threat?

This study revealed that brain drain movement does exist in South Caucasian states and if in Azerbaijan
the labour market is more affected by emigration of specialists in political science, IT, and economy, in
Georgia Health, Education, Construction, and Agriculture and in Armenia Architecture, Construction,
and Engineering sectors are more affected by emigration. Furthermore, there does exist an unwritten
guideline in the labour markets of regional states, and connection is an “old and gold” rule of the
recruitment process and it is difficult for tertiary educated people to find a relevant job, which matches
with their knowledge and skills. While the determinant factor for the emigration of tertiary educated
people in Georgia is economic matters, such as unemployment and poverty, in the case of Azerbaijan
and Armenia the motivation to migrate among highly educated people does not stem only from
economic issues, but also socio-psychological and political matters. In order to prevent brain loss for
long term, measures such as liberalization and diversification of economy, establishment of necessary
state building infrastructure, modernization and development of educational centers could be used to
prevent brain drain mobility from the region.
 Evaluation of Brain Drain in South Caucasus:
Reality or Imminent Threat?

About the author:

Rashad Alakbarov is an independent researcher and currently doing his PhD in Political Science at
Near East University. He holds Bachelor diploma from Azerbaijan University and received Master
degree from Near East University in International Relations. He worked as a lecturer in the Near East
University and Azerbaijan University. His main research interests cover Migration studies and protection
of vulnerable groups, EU migration Policy, Security studies, Political Islam, the geopolitics of the
Middle East.

Citation for published version (APA): Alakbarov R. (2018). Evaluation of Brain in South Caucasus:
Reality or Imminent Threat. Topchubashov Center. Retrieved from:
http://top-center.org/essays/581-evaluation-of-brain-drain-in-south-caucasus-reality-or-imminent-
threat.html

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