Trends in Brain Drain from Developing Nations - Case Study Example

THE SIGNIFICANT PROBLEM OF BRAIN DRAIN FOR DEVELOPING ECONOMIES Name Course Tutor Date Introduction Over the last five decades the international migration has been significantly been amplified following the development of policies that are less strict to immigration. The number of migrants had increased to 216 million by 2010 compared to the 75 million in the year 1960 (Docquier, 2014). There is a plethora of factors that can be attributed to international immigration such as the expanding gap between the living standards and the wages as well as demographic factors that is existent between the developed and the developing nations. This has also further been attributed by the increase in political instability, high unemployment rates, lack of resources that is the order of the day in the least developing nations (Docquier, 2014). With the immigration, the issue of brain drain has become prevalent with most developing nations formulating policies to prevent the brain drain that has had impacts on the economies of such fragile and developing nations. Brain drain, a term that is identical to the human capital flight, refers to the movement of high educated individuals as well as skilled experts internationally from less developed nations to the developed nations (Docquier, 2014). This paper evaluates brain drain and looks at its significance to the economies of the developed nations taking two model countries Nigeria and India. Trends in Brain Drain from Developing Nations Statistics by the United Nations Global Migration Database indicate that, by year 2010 alone, the number of international migrants had increased to 2014 million compared to the 75 million of year1996. The rate of international immigration therefore increased from 2.5 to 3.1% (Wahab, 2014). The international migrants that reside now in developed countries increased by 60%. Most of the migrants into the developed nations come from the non-OECD countries (Johnson, 2009). The migration of individuals from the developing nations to the developed nations as of between 2000 and 2011 stood at 72.6 million representing 45% of total world migrants (Wahab, 2014). The emigration rates of the skilled and educated individuals exceed that of the least skilled or educated individuals. The most affected countries in terms of such migration that is experienced are from least developed include Haiti, Jamaica, the sub Saharan African countries and Asia (Johnson, 2009). Such countries have been estimated to be losing one-third to one-half of the higher institution’s graduates. Causes of Brain Drain in Developing Economies There are very many reasons why brain drain has become rampant in the developing nations. They can be classified as country based factors and as personal based factors. The country based factor includes the social environment such as lack of opportunities, political instability, health risks and insecurity among others (Brock, 2015). On the other hand, the personal factors include influence from family and friends, personal preferences such as career development and ambitions, the need to pursue higher education in developed nations and job placement especially when one gets a job with the multinational corporations (Brock, 2015). The other factors that are also likely to propagate brain drain is the increase in favourable immigration policies, the increase in the economic integration and the globalization of production, marketing, knowledge creation and consumption patterns (Kainth, 2009). The causes of brain drain can be referred to as push factors (Ngoma & Ismail, 2013). There are many push factors that exist in the least developed and developing economies. First off, underemployment has been the major cause of people moving from one nation to the other (Wahab, 2014). This is because of the harsh labour laws in the host nations (Ngoma & Ismail, 2013). In this case, the individuals move to areas they are very sure have the best labour laws that are favourable (Kainth, 2009). Secondly, the developing nations lack facilities and have staggering economies that would make individuals move into developed nations where they are able to find better resources and thus career fulfillment (Wahab, 2014; Kainth, 2009). In most of the developing nations the conditions of work are harsh compared to the wages that workers are given (Wahab, 2014). Consequently, the skilled labour force such as engineers and doctors as well as lecturers mostly prefer moving to nations that match the living standards with the wages (Grossmann & Stadelmann, 2013). International organizations and multinational corporations also have a hand in propagating brain drain (Kainth, 2009). This is because when they recruit from one nation the skilled individuals identified are sent to developed nations so as to increase the suitability of such companies (Wahab, 2014). The need for higher education has made students, especially in higher learning institutions to seek for colleges and universities abroad, especially in developed nations (Ngoma & Ismail, 2013). Once they are through with their study, these students often opt for employment in the developed nations considering the fact that most of them excel and get to work while studying. The political instability in the developing countries has made the making of labour laws and their corresponding implementation hard (Wahab, 2014). The result of this has been the denial of labour freedom leading to skilled professionals seeking to work in developed nations where they are free. Rampant discrimination especially through favouritism as in the case with Middle East nations, can also lead to the unidirectional flow of labour to the developed nations where diversity is appreciated (Wahab, 2014). Last but not least the need for health services that are well developed in the developed nations has made most skilled and educated personnel to prefer developed nations when it comes to employment. There has therefore been migration of individuals on this basis leading to brain drain in the developing nations. The developed nations have pull factors that cause the human capital flight from the developing nations (Grossmann & Stadelmann, 2013). The factors include higher salaries and better career advancement opportunities, political stability, better research and educational facilities, better employment opportunities, diversification of workers, better labour laws, cultural tradition and better living style (Grossmann & Stadelmann, 2013). Additionally, the developed countries have god government governance, intellectual freedom, modern educational systems, better working conditions, stable economies, and better living styles as well as established health systems (Ngoma & Ismail, 2013). These assortments of factors have been the cause of brain drain from the least developed nations. Most governments in the developing economies have been in the forefront in mitigating the push factors as well as investing in some of the pull factors identified above. Brain Drain as a problem in Developing Economies Brain drain is very detrimental to the growth potential of the host countries from where the flow of labour is beginning from (Brock, 2015). The development capacity of such economies is always slow at a rate slower than that of the developing countries that develop faster due to a larger talent pool (Iravani, 2011). The underdeveloped nations experience economic instability that always have consequences as this causes inflation of goods and services. Additionally, when there are more unskilled workforce and little skilled workforce, the gap between the skilled labour demand and supply expands leading to higher cases of unemployment (Ngoma & Ismail, 2013). The increase in unemployment rates because the rise of insecurity in the least developing economies (Gibson & McKenzie, 2010). There are loses for the countries of origin since the costs of subsidized education incurred by the governments in developing countries is not recovered (Brock, 2015). This is because the highly skilled individuals in the developed nations do not pay taxes to their mother countries once they have exited for the developed nations (Iravani, 2011). Such economies will shift into funding some skills that are not portable to the developed nations (Gibson & McKenzie, 2010). This leads to too much skills in the country that cannot actually help the developing nations (Iravani, 2011). Additionally, there is likelihood of high taxes that are pushed on the residents of a country at the cost of those that emigrated (Iravani, 2011). Consequently, there is elevation of the costs of living and little economic developments in the developing nations. The shortage of manpower in the developing economies means that the nations will have to spend too much in developmental activities through import of labour when the need calls for (Gibson & McKenzie, 2010). Such countries are therefore unable to make necessary advancements in different fields that require the innovative brains of the skilled and educated individuals (Iravani, 2011). For example, in Africa the disproportionate migration of skilled and educated individuals has made the continent lag behind in the development of treatments for most tropical diseases and is thus reliant on the developed nations (Iravani, 2011). The movement also widens the technological gap between the developed nations and the developing nations as the human capital in the developed nations is highly innovative. The Case of India India has been ranked among the top Asian countries that is experiencing a brain drain at a higher rate than ever seen (Raveesh, 2013). For the past 30 years India has lost 36000 professionals such as engineers, doctors, computer programmers, teachers, managers and lecturers in the recent statistics given by the Indian Overseas Employment Corporation (Raveesh, 2013). India has been regarded as the world’s largest exporter of doctors in the whole world. The ration of an Indian doctor to American patients is 1: 1325 while the ratio of a doctor in India to Indians in 1: 2500, a clear indications that there is the suppression of health systems in India compared to the US that benefits from the labour supply from India (Raveesh, 2013). India as a result of emigration do not enjoy the 90% subsidies it offers the students in higher learning institutions (Raveesh, 2013). Raveesh (2013) points to the reasons as to why India is suffering from brain drain to be higher education, poor labour laws, lack of opportunities and favourable migration policies. Most of the professionals who leave for better opportunities outside India leave a gap that is not easily filled immediately (Brock, 2015). Consequently, India has been losing a lot of expertise and taxes combines leading to higher costs of living (Grossmann & Stadelmann, 2013). The cost of living has been hiked to compensate for the unpaid subsidies experienced when students move abroad for further studies (Grossmann & Stadelmann, 2013). However, much the health sector of India is stable the other sectors that support it have felt the effect of brain drain to an extent that the government has laws in place to prevent emigration of skilled personnel (Brock, 2015). India is known to have resources that if well utilised are able to bring economic progress. However, despite investing heavily on the students, India still lacks the proper capacity and personnel to explore such resources (Raveesh, 2013). Consequently, the economic progress of the country had slowed down for some time and is slowly picking though at a slower rate than it should. India has turned to be an importer of most goods that it could produce on its own (Raveesh, 2013). Consequently, the taxes of the country have increased to cover for the expenses of importation taxes. The technologies of India are also benefiting other nations at the expense of the country. This is because the students and skilled personnel who leave the country end up being assets in the developing countries (Raveesh, 2013). There is therefore a huge technological gap that is making the nation have less competitive advantage compared to other Asian nations. The Case of Malaysia Malaysia has the ambitions of becoming a developed nation by 2020 (World Bank, 2011). However, just like any other developing nation or economy globally, the country has been hit by brain drain (Hoo, 2014). Some of the factors that have resulted into the increased brain drain in Malaysia include high cost of living, expensive costs of property, lack of intellectual freedom, poor work conditions, and unfavourable labour laws as well as favourable emigration law and regulations (World Bank, 2011; Hoo, 2014). Additionally, the wage structure in Malaysia is disproportionate with the living standards that are existent in the country (Winston, 2014). Most of the Malaysian citizens prefer to work outside the country so as to enjoy. The largest proportion of skilled workforce from Malaysia is in Singapore. According to Winston (2014) the ICT industry has been the one that is facing a lot of risks as the Malaysian IT professionals are opting for other countries where there are better wages and good career prospects. The number of skilled Malaysians working abroad tripled in the last decade (Wahab, 2014). This represents about 2 out of 10 Malaysians with tertiary level education opting to work in the Organization Economic Cooperation and Development Countries such as Australia (World Bank, 2011). The country has therefore lost and continues to lose the human capital which is the foundation of any economy (Wahab, 2014). Consequently, the country is likely to have a low competitive advantage compared to its neighbouring countries. The cost of importing labour is likely to increase in Malaysia (Winston, 2014). Additionally, the few remaining skilled and semi-skilled individuals are not likely to fully explore the resources that are widespread in the country. The country has also turned into investing more in non-portable skills that is causing this saturation of the labour market (World Bank, 2011). This has led to the rise technological gap of Malaysia compered to its neighbouring countries that are beneficiaries of the workforce (World Bank, 2011). The country has also lost much of its national income that when it funds students through subsidization of fees (Wahab, 2014). Consequently, most of the pressure has been pushed to the citizens through taxes leading to high costs of living. The growth of Malaysian economy has been low compared to that of its peers such as China and Singapore (World Bank, 2011). The country has also lost professionals that otherwise would have been important in the development of the nation. This includes engineers, lawyers, technicians and teachers (Ngoma & Ismail, 2013). This has led to the stagnation of infrastructural developments as well as the slowing of economic progress. The economic progress of Malaysia reduced to 4.6% compared to the 7.2% economic development rate experienced a decade ago (World Bank, 2011). The country has come up with solutions for the probe further taking in more of the tax payer’s money. This has further raised the living standards to compensate for the intervention programs meant to curb brain drain in the country. Conclusion Brain drain is a global phenomenon that is experienced by the developed and developing nations alike. However, the scope of this paper was the brain drain that takes place in unidirectional manner from the developing nations to the developed nations. As has been seen in the paper, there are a myriad of factors that cause brain drain. The factors could be personal or country based. Based on the countries in question, the host country bears the push factors while the benefiting country bears the pull factors. As have been shown in the paper, collectively the two factors combined with the personal factors elicit brain drain. There are very many social and economic impacts of brain drain as have been outlined in the paper. The paper uses India and Malaysia as the model countries to further emphasize on the negative impact of brain drain. The two countries have topped the list of the most affected nations in relation to brain drain. The two cases have met the objective of clearly showing that brain drain is detrimental to the developing economies through elucidating some of the real facts and issues that are prone in the two countries. The global arena has experienced a laxity in the laws of immigration leading to brain drain that is a problem to the developing economies as have been seen in the paper. Bibliography Brock, G. 2015, “Debating brain drain: May governments restrict emigration?” Oxford; New York: Oxford University Press. Docquier, F. 2014, "The brain drain from developing countries". Retrieved from http://wol.iza.org/articles/brain-drain-from-developing-countries.pdf Gibson, J., & McKenzie, D. 2010, “The Economic Consequences of Brain Drain of the Best and Brightest: Microeconomic Evidence from Five Countries”. Economic Journal, 122(560), 339 - 375. Grossmann, V., & Stadelmann, D. 2013, “Wage Effects of High-Skilled Migration: International Evidence”. World Bank Economic Review, 27(2), 297-319. 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