Migration and Brain Drain - Part II
Politicians in some countries decry this trend and deride those
emigrating. In a famous interview on state TV, the late prime
minister of Israel, Yitzhak Rabin, described them as "a fallout
of the jaded". But in many impoverished countries, local
kleptocracies welcome the brain drain as it also drains the
country of potential political adversaries.
Emigration also tends to decrease competitiveness. It increase
salaries at home by reducing supply in the labour market (and
reduces salaries at the receiving end, especially for unskilled
workers). Illegal migration has an even stronger downward effect
on wages in the recipient country - illegal aliens tend to earn
less than their legal compatriots. The countries of origin,
whose intellectual elites are depleted by the brain drain, are
often forced to resort to hiring (expensive) foreigners. African
countries spend more than $4 billion annually on foreign
experts, managers, scientists, programmers, and teachers.
Still, remittances by immigrants to their relatives back home
constitute up to 10% of the GDP of certain countries - and up to
40% of national foreign exchange revenues. The World Bank
estimates that Latin American and Caribbean nationals received
$15 billion in remittances in 2000 - ten times the 1980 figure.
This may well be a gross underestimate. Mexicans alone remitted
$6.7 billion in the first 9 months of 2001 (though job losses
and reduced hours may have since adversely affected
remittances). The IADB thinks that remittances will total $300
billion in the next decade (Latin American immigrants send home
c. 15% of their wages).
Official remittances (many go through unmonitored money transfer
channels, such as the Asian Hawala network) are larger than all
foreign aid combined. "The Economist" calculates that workers'
remittances in Latin America and the Caribbean are three times
as large as aggregate foreign aid and larger than export
proceeds. Yet, this pecuniary flood is mostly used to finance
the consumption of basics: staple foods, shelter, maintenance,
clothing. It is non-productive capital.
Only a tiny part of the money ends up as investment. Countries -
from Mexico to Israel, and from Macedonia to Guatemala - are
trying to tap into the considerable wealth of their diasporas by
issuing remittance-bonds, by offering tax holidays,
one-stop-shop facilities, business incubators, and direct access
to decision makers - as well as matching investment funds.
Migrant associations are sprouting all over the Western world,
often at the behest of municipal authorities back home. The
UNDP, the International Organization of Migration (IOM), as well
as many governments (e.g., Israel, China, Venezuela, Uruguay,
Ethiopia), encourage expatriates to share their skills with
their counterparts in their country of origin. The thriving
hi-tech industries in Israel, India, Ireland, Taiwan, and South
Korea were founded by returning migrants who brought with them
not only capital to invest and contacts - but also
entrepreneurial skills and cutting edge technologies.
Thailand established in 1997, within the National Science and
Technology Development Agency, a 2.2 billion baht project called
"Reverse the Brain Drain". Its aim is to "use the 'brain' and
'connections' of Thai professionals living overseas to help in
the Development of Thailand, particularly in science and
technology."
The OECD ("International Mobility of the Highly Skilled")
believes that:
"More and more highly skilled workers are moving abroad for
jobs, encouraging innovation to circulate and helping to boost
economic growth around the globe."
But it admits that a "greater co-operation between sending and
receiving countries is needed to ensure a fair distribution of
benefits".
The OECD noted, in its "Annual Trends in International
Migration, 2001" that (to quote its press release):
"Migration involving qualified and highly qualified workers rose
sharply between 1999 and 2000, helped by better employment
prospects and the easing of entry conditions. Instead of
granting initial temporary work permits only for one year, as in
the past, some OECD countries, particularly in Europe, have been
issuing them for up to five years and generally making them
renewable. Countries such as Australia and Canada, where
migration policies were mainly aimed at permanent settlers, are
also now favoring temporary work permits valid for between three
and six years ... In addition to a general increase in economic
prosperity, one of the main factors behind the recent increase
in worker migration has been the development of information
technology, a sector where in 2000 there was a shortage of
around 850,000 technicians in the US and nearly 2 million in
Europe..."
But the OECD underplays the importance of brain drain:
"Fears of a "brain drain" from developing to technologically
advanced countries may be exaggerated, given that many
professionals do eventually return to their country of origin.
To avoid the loss of highly qualified workers, however,
developing countries need to build their own innovation and
research facilities ... China, for example, has recently
launched a program aimed at developing 100 selected universities
into world-class research centers. Another way to ensure return
... could be to encourage students to study abroad while making
study grants conditional on the student's return home."
The key to a pacific and prosperous future lies in a
multilateral agreement between brain-exporting, brain-importing,
and transit countries. Such an agreement should facilitate the
sharing of the benefits accruing from migration and "brain
exchange" among host countries, countries of origin, and transit
countries. In the absence of such a legal instrument, resentment
among poorer nations is likely to grow even as the mushrooming
needs of richer nations lead them to snatch more and more brains
from their already woefully depleted sources.