Iran brain drain in reverse? Why some young professionals are going home.

For years, Iran's academic elite has headed for the exits. But some foreign-trained youth are returning, hoping President Rouhani can revive the economy.

Scott Peterson/The Christian Science Monitor/Getty Images
An Iranian man passes a toy and gaming shop near Vanak Square in central Tehran, Iran, on Dec. 8, 2013. US-led sanctions over Iran's disputed nuclear program have helped cripple Iran's economy.

The Leon restaurant, which sits atop a luxury mall in Tehran, features large paintings, a faux fireplace, and jazz, all to complement its fusion menu and fabulous, thick steaks.

It’s a place one goes to be seen. So when the check comes, Salar – oozing confidence and sporting a wild shock of gelled hair, a stylish plaid shirt, and a leather wristband – knows just what to do.

The 31-year-old British-educated Iranian investor hands the waiter his debit card. He then tells him his PIN, raising his voice so anyone within earshot can hear he has embraced a practice common in Iran but unthinkable anywhere else.

“When I first came back, I couldn’t believe people in Iran shared their PIN numbers like that. Now I sometimes shout it out,” says Salar, a pseudonym.

His move back to Tehran is part of a reverse brain drain encouraged by the June 2013 election of President Hassan Rouhani. Shouting out PINs is just one of many quirks embraced by those young professionals educated abroad who have spurned good prospects in the West to return to live and invest here. 

It’s a bet on the future, and for many a bet on the presidency of Mr. Rouhani, the relatively moderate regime insider who has promised to resolve Iran’s nuclear issue with world powers and revive an economy crippled by sanctions and tumbling oil prices.

Sustained brain drain

To be sure, returnees like Salar are still a minority. Despite a decade of official efforts to woo home an Iranian diaspora of perhaps five million – to tap their cash and expertise, but not any Westernized political thinking – the brain drain continues.

Rouhani favors an open-door policy for returnees, whom he calls a “huge asset” who have “love for their country.” But security officials who often oppose the president have pushed back, causing a chill among would-be returnees, with a number of high-profile arrests and detentions among those who have returned.

“Now 85 percent of my friends I grew up with are not here, they are in Australia, France, the US, Vienna,” says Salar, adding that he still wonders if he'd be better off in Dubai. “But to be honest, are all of them happy? The number is miniscule.”

Salar asked that his real name not be used so he could speak more freely; his chosen pseudonym means "great man." He moved back here in August 2014 after nearly six years in the UK studying finance and accounting, and investing with his brother in an asset portfolio that paid off all school debts.

But he felt the tug of home and family in Iran, including the Tehran house where he was born and now lives. “The political landscape [in Iran] didn’t matter. I came to a decision I wanted to come back, to be close to the country. The election acted as a stimulant," he says. 

Moreover, he saw an economic uptick in Iran after Rouhani’s victory that he says now requires careful handling – and probably a nuclear deal in order to offset low oil prices and the impact of US, European, and UN sanctions.  

A costly exodus

“The Rouhani election, and opening of this dialogue with the US, is having a huge psychological impact on the country,” says Rouzbeh Pirouz, a Harvard-educated Rhodes scholar and founder of the Iranian Business School, an elite mid-career MBA program in Tehran.

“Toward the end of the Ahmadinejad period [2005 to 2013], I really got the sense people were quite bleak, there was a great sense of hopelessness,” he adds. 

An exodus of young talent since the 1979 Islamic revolution has proven costly to Iran. Statistics from the Migration Policy Institute published by the IREconomy website indicate that some 67,000 Iranians left the country in the 1970s and another 281,000 in the 1980s. That became a cascade in the 1990s, with another 2,100,000 leaving.

Emmigration eased in the 2000s. But the International Monetary Fund often puts Iran near the top of countries losing their academic elite, at a cost, government officials estimated in 2006, of $40 billion each year. World Bank figures show Iran's net migration to be 300,000 from 2010 to 2014.

Fear of legal complications

“It’s paradoxical. A lot of the young people who grew up here, who never left the country, are actually quite keen to leave,” says Pirouz. Those ready to go are often from middle-class backgrounds with a “very pronounced lack of opportunity, and have a quite romanticized notion of life in the West.”

On the other hand, there are Iranians from privileged backgrounds educated or raised abroad making the reverse trip. “They have realized the West has advantages and disadvantages, but is not the be all and end all, either," says Pirouz. 

To ease the fears of potential returnees, the Rouhani government has set up a website where people can inquire about whether it is legally safe for them to come back. Iran's disputed 2009 election, and the months of Green Movement street protests afterwards – with scores of deaths, cases of rape in detentions, and thousands of arrests – prompted a spike in departures, say officials. 

Officials would “resolve the unreasonable fear for people who have committed no crime [in 2009],” Intelligence Minister Mahmoud Alavi said in August 2013. He said the government would “guarantee” no problems for the innocent.

But within days, in a typical riposte, Mehdi Taeb, a cleric and head of a hardline organization called Ammar Strategic Base, asked the intelligence minister “not to interfere in issues that he might not have any specialty in.” 

One big challenge: uncertainty

In short, economic opportunity alone can't reverse Iran’s brain drain. “It’s not enough to just [issue] sweet invitations and to make nice speeches,” says Pirouz. “The circumstances obviously have to be right.”

Making that happen is not easy, even for those who decide to take the plunge. For starters, Salar misses London's vibrant nightlife. “Problems like this are chronic,” he says.

And the Iranian market is challenging, even for financial professionals like Salar, because so much is driven by politics and political events. 

“The problem is the uncertainty.… It grows under your skin, it makes you flinch,” says Salar. “The only balancing act of this is the nuclear deal, because the optimism that would come from it – that could balance it.”

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