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Romania: The Human Capital Flight Phenomenon

Romania: The Human Capital Flight Phenomenon

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The brain drain of highly trained and otherwise qualified professionals is increasingly felt in all industry sectors of Romania. We have lost people from all professional backgrounds and levels, low- and high-skilled alike. Statistics are disconcerting: in 2017, nine Romanians left the country every hour and we were second in the world after war-stricken Syria in emigration rankings. In the space of only ten years, about 17% of Romania’s population left the country. How many of them will ever come back? Romania needs a strong country project, sustained, ongoing efforts meant to encourage return migration, and policies to dissuade those who consider leaving the country. In 2018, the centenary year of Romania’s Great Union, I wish for a stronger, more united Romania, looking for ways to entice the next generations away from emigrating and into returning to their home country.

Any Romanians that were to return to their home country and start a business here could contribute significantly to the economy, and this would already be a huge gain in itself. It is of utmost concern that half of the young people surveyed recently said they would like to emigrate and most of them do not even consider returning. The human capital flight is deeper than we realize now. Media wailings aside, it is a fact that, in the absence of skilled workers, a number of businesses face the risk of disappearing and this will have a knock-on effect on the economy. In addition, the unsustainability of the current pension and social security system is likely to cause a deep system crisis in the years to come. 

I do not believe in immediate solutions such as the import of an Asian workforce. I would rather go for a long-term solution, combining policies to entice back the Romanian diaspora with recruiting professionals from countries with which we have cultural, historical, and linguistic affinities, such as the Republic of Moldova. We also need policies to foster, support, and maintain the labor force in Romania. Romania may overcome the current crisis by increasing wages, making investments in health, education, and infrastructure, and by creating real opportunities for professional development, raising living standards, and encouraging local entrepreneurship. 

The legal market is no exception when it comes to the workforce crisis, though there has been no mass exodus of Romanian lawyers, primarily as a result of the jurisdictional-specific requirements of the legal profession. Nevertheless, there are many Romanian law students attending prestigious foreign law schools who prefer to forge a career abroad, while others, after graduating, will return to Romania and take over their parents’ businesses or start their own businesses. With this in mind, I was delighted to talk to Romanian students in the UK recently on the current opportunities that Romania has to offer in a gathering hosted by the Romania Speaking Society in Warwick. 

Moreover, I am proud and honored to have joined the Re-Patriot initiative, which is a project of the Romanian Business Leaders Foundation encouraging repatriation through entrepreneurship. Re-Patriot is an inspirational, counselling, and information platform seeking to facilitate the access of Romanians from abroad to opportunities in their home country. I had the chance to take the floor at this year’s Re-Patriot Summit held in Alba-Iulia, an event which brought together 200 entrepreneurs and top-level managers from Romania and the diaspora to share their success stories and experiences. In addition, on the 1st of December (the National Day of Romania), over 150 participants launched the “New Alba-Iulia Declaration” to reunite the Romanian diaspora with the home country and to instruct the authorities to consider the diaspora a national priority. According to various polls conducted by Romanian Business Leaders, a number of successful Romanians living abroad would like to return or further support the development of their country by various entrepreneurial initiatives. With the right access to information and guidance/counselling, I believe that everything is possible.

With centennial celebrations almost over, I realize that 2019 could bring some major challenges, such as a new global financial crisis or a technical recession in Romania. However, there could also be some opportunities laying ahead, such as taking the Presidency of the Council of the European Union or even Brexit. In addition, let’s not forget that 2019 is a presidential election year for Romania, and a year of EU Parliamentary elections. All in all, I think investments are the key to future development. Economic growth cannot be supported by the private sector only. Public investments, currently at a low, are sorely needed.

Against this backdrop, it would be great to bring back talented Romanians who can create value, including by setting up entrepreneurial businesses. Romania needs people with initiative, who love their country, and the diaspora could play a significant part in the development of their home country in the years to come. 

By Gabriel Zbarcea, Partner, Tuca, Zbarcea & Asociatii 

This Article was originally published in Issue 6.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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