Russia@War — Human Capital and Soft Power (part 3)

In the first article, I commented long term effects and consequences on the Human Capital that Russia might suffer because of the current war against Ukraine. In the second one, it was possible to already connect it with the loss of many international companies and brands who are at least in the short term leaving Russia.

At the moment of writing the second article, Coca-Cola was deciding to remain in Russia, but also as predicted, soon after it seems they also confirmed that they are leaving, along with many other brands.

Coca-Cola joins brands that leave Russia

Cost of employment as mentioned in the first article, coming from a very simple “Employee Value Proposal” is rising significantly for the Russian companies, at home and abroad. There will be many consequences of those trends, and one is already now visible and connected and intertwined with the loss of Russia’s soft power. About the History of Power, I wrote an article with my friend historian, and we discussed some aspects of Soft Power. That concept was proposed in 1990 by Joseph Nye. According to Nye, soft power is, simply defined, an ability to be attractive in the eyes of others (but also of its own people?). The soft power of a country rests primarily on three resources: ‘its culture (in places where it is attractive to others), its political values (when it lives up to them at home and abroad), and its foreign policies (when they are seen as legitimate and having moral authority)’. About some aspects of morality and ethics, I also wrote in the article about the History of Ethics.

It is interesting to note that before the Ukrainian crisis, the international consulting company Ernst & Young ranked Russia third among the emerging markets and tenth among the top global soft powers. All of that “capital” is in danger to be lost now. Years of efforts to position itself as an attractive economic power — the source of investment, a reliable energy supplier, a promising market for foreign consumer goods and labor force, etc will be lost.

First of all, if we are speaking about Russian domestic Human Capital — a number of skilled and educated people in many fields is the question — how many of the Russians will leave the country. We know that at the moment 2 million Ukrainians have left the country, but the same trend might happen in Russia, and for different reasons than danger for their lives.

Still too early to tell, but there are some indicators suggesting it might already be happening (and just to note that the war started only 3 weeks ago). Some already noted rising queries about emigration in google trends or for example search for terms — “emigration” or “international flights” and “how to leave Russia”.

Emigration search
International flights
Leaving Russia

The market is reacting quickly, so all flights to Istanbul or Belgrade or Dubai, or Helsinki, were completely sold out for 10x of the usual price. As I mentioned before, the higher class is first to leave the country, because they obviously have more opportunities and resources.

But the damage to Russia’s image and attractiveness doesn’t stop there. Similar trends are visible in the whole spectrum of soft power-connected areas. From scientists and scientific projects to sports and entertainment.

A number of academic institutions are considering cutting ties with their Russian counterparts, and some already did it (like MIT, Australian National University, or UK-based Warwick and University of Edinburg).

Roscosmos declared that it had canceled joint scientific experiments due to be conducted on the ISS in collaboration with Germany — a statement that arrived just days after Russia signaled that it may not continue to help operate the ISS. On the other side, ESA stated it would be “fully implementing sanctions imposed on Russia by our Member States.” As such, the agency admitted that the ExoMars program — a collaboration with Roscosmos to look for signs of past life on Mars — will likely be delayed.

Regarding entertainment and sports, as major multipliers of soft power, FIFA and the Paralympic Games have banned Russians from participating in this year’s competitions. Eurovision did the same.

As one expert stated: “This is an asymmetric struggle, in every sense, with the speed of a cruise missile pitted against the slow grind of cultural isolation and economic stagnation.” One of the consequences could be Russophobia and there is a chance that these cancellation campaigns directed at ordinary Russians could backfire. “Contrary to expectations, making life harder for the population can bind them to the rulers who blame outside interference,” writes Samuel Goldman, an associate professor of political science at George Washington University.

In any way, long-term effects, especially visible on the dimensions of Human Capital, and Soft Power, might be visible for a long time. Because, as Friedman warns: While nation-states may choose to lift their sanctions at some point for realpolitik reasons, everyone else may not.

The minds of the common people will take much more time to change their perception and newly formed habits and attitudes, especially their emotional dimension.

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Aco Momcilovic

Aco Momcilovic

Ph.D. Student. National AI Capital Researcher. Human Resoucres, Psychology, Entrepreneurship, MBA…