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Sunday May 16, 2010

Tracing the brain drain trend

Between 1960 and 2005, the world’s registered migration increased to an average of 919,302 per nation, an increase of 2.4 times. However, Malaysia’s emigration numbers rose to 1,489,168, an almost 100-fold increase over the 45-year period.

THE recent report by the National Economic Advisory Council (NEAC) on the New Economic Model (NEM) laments that “we are not developing talent and what we do have are leaving”.

The report says that currently, some 350,000 Malaysians are working abroad with over half of them having tertiary education.

Worrying numbers: While our local hospitals are experiencing shortages of nurses and doctors, we had 7,431 Malaysian nurses and 4,129 doctors working in the OECD countries in 2000. – AFP

This leaves us with over 80% of our workforce with SPM-level qualification, and their wages are being continually suppressed by the easy availability of foreign workers and other barriers like subsidies and price controls.

The focus of this article is to trace some of the worrying brain-drain trends which underlie the severity of our setbacks to move up to a high-income economy, and the steps we should immediately undertake to overcome these challenges.

Beginning of brain drain

Out-flow of talent is not a new phenomenon but globalisation and rapid IT global communications have just speeded up the process. Malayans (and since 1963, Malaysians) began to seek overseas tertiary education soon after independence in 1957 when it became part of the British Commonwealth.

University education at home then was elitist, being confined to the University of Malaya at Singapore and Kuala Lumpur. Many bright young Malaysians, aided by their fluency in English, had to seek tertiary education abroad (with or even without their parents’ financial support) in Britain, Australia and other English-speaking societies.

This trend was further accentuated by the various aid schemes, such as the Colombo Plan and Commonwealth Scholarships and later our own Mara, Public Services Department, Tenaga Nasional Bhd and Petronas scholarships, through which tens of thousands of bright Malaysian students have been sponsored for overseas tertiary studies since the early 1960s.

After completing their education, some choose to remain because of better job opportunities, some also choose to stay because they prefer the new life-style and social environment compared to that at home, while others such as the Malaysian women who married locally have to stay behind because their children, under Malaysian law, are not entitled to become Malaysian citizens or even permanent residents (PR).

100-fold increase

According to the World Bank, Malaysians residing overseas numbered only 9,576 in 1960 while the world’s total registered migration was 382,912 per nation. By 2005, the world’s registered migration increased to an average of 919,302 per nation, an increase of 2.4 times. However, Malaysia’s emigration numbers rose to 1,489,168, an almost 100-fold increase over the 45-year period.

In 1981, the number of Malaysians residing in Australia was 31,598 and this increased to 92,337 in 2007 (see Table 1). Those who resided in the UK in 1981 numbered 45,430 and this went up to 61,000 in 2007.

The United States was a laggard with only 11,001 in 1981 but due to the country’s very aggressive move to attract top talents, the number of Malaysians who took up residence there shot up to 54,321 by 2007.

Similarly, our Singapore neighbour has also been absorbing large numbers of Malaysians, from 120,104 in 1981 to 303,828 in the year 2000.

While the total figure is a matter for concern, further analysis of the migration numbers is even more worrisome.

The World Bank’s report indicates that in 1990, the number of Malaysians with tertiary education residing in the Organisation for Economic Co-operation and Development (OECD) countries totalled about 72,649 with a majority of them in Australia (34,716), followed by the US (12,315) and then the UK (9,812) (see Table 2). The latest available data shows that in 2000, the number of Malaysians with tertiary education residing in OECD countries went up by 40.84%. The 102,321 Malaysian graduates that stayed in OECD countries in year 2000 make up 77.2% of the total Malaysians (132,468) that decided to domicile in these countries (See table 3).

And who are these graduates that we are losing?

An example is given by the data on foreign-born medical personnel in OECD countries. While our local hospitals are experiencing shortages of nurses and doctors, we had 7,431 Malaysian nurses, 4,129 doctors, 652 dentists and 798 pharmacists working in the OECD countries (see Table 4) in 2000.

Further, the current global high-tech consumer boom has created a huge demand for science and technology (S&T) researchers in the US, accentuating the migration of talents from the developing world (including Malaysia) to that country. Table 5 shows that in 2003 there were 7,955 Malaysian S&T researchers working in the US compared to 10,419 such researchers working at home.

Talent export

However, in this highly competitive global environment, it must be pointed out that Malaysia is not alone in losing the best talents to the OECD countries.

As Table 3 shows, South Korea, a member of the OECD, has 885,885 of its citizens residing in other OECD countries, with 652,894 (73.7%) of them being graduates, and this constituted about 1.39% of the total South Korean population!

India has 1.5 million of its citizens living in OECD countries with 69.0% of them being graduates.

Even Singapore, a richer but much smaller country than Malaysia, saw 67,560 Singaporeans taking residence in OECD countries in 2000 with 50,019 of them being university-educated. It is only slightly behind Malaysia with 74% of its emigrants into the OECD countries having tertiary education.

On the proportion of graduate migrants to total population, Singapore appears to be losing out more than us, with the number of Singaporean graduates in OECD countries standing at 1.24% compared to our 0.44%. Little wonder the city-state is working its hardest to attract bright Malaysians over the Causeway!

Further, Table 3 shows that though Thailand and Indonesia may “export” a much higher number of their workforce to the OECD countries, only about 40% of their own nationalities have tertiary education. This is mainly due to a lower proportion of their tertiary-educated workforce having a good command of English, and hence may have greater difficulty fitting into the high-level jobs there.

Table 4 also shows that we are not alone in losing medical talents. The Philippines have 110,577 of its nurses and 15,859 of its doctors residing in the OECD countries! There are also 5,332 doctors from Taiwan, 2,798 doctors from Hong Kong, and even 1,356 Singaporean doctors working in OECD countries.

In terms of S&T researchers, Table 5 shows that in 2003 there were 158,524 Chinese researchers (17.5% compared to such researchers at home), 44,236 Vietnamese researchers (4.5 times the number of S&T researchers at home) and 26,602 Hong Kong researchers (2.1 times of such scientists at home) working in the US. The 7,000-odd Malaysian scientists among these hundreds of thousands of foreign scientists is actually a small figure; but that is, of course, no consolation in our losing them in the first place.

What Tables 3, 4 and 5 have highlighted is that in the global environment of the 21st Century, OECD countries, with their advanced infrastructure, robust social institutions, numerous world-famous universities and R & D institutions as well as booming markets, are powerful natural magnets for the developing world’s professionals.

Gaining the illegals

We have about 2.5 million unskilled legal (and illegal) foreign workers in the country. Some 650,000 of them work in the manufacturing sector, followed by about 300,000 in construction. Domestic workers make up another 220,000. The balance is in the services, plantation and agriculture sectors.

The services sector alone hires about 400,000 foreign workers mostly as waiters, security guards, general workers and cleaners.

Our addiction and dependence on these unskilled foreign workers has deepened to the extent that many of our manufacturing plants and the main-stays of our palm oil exports (plantations such as Sime Darby, IOI and KLK) will have to stop operation in their absence.

According to a One Utama executive, as high as 90% of workers in the food and beverage sector are now made up of foreigners. Therefore, we should no longer be surprised at not being able to order our meals in Malay, Mandarin, English or any other commonly spoken language known to Malaysians anymore!

And who are we gaining instead?

As Table 6 shows, in year 2000, we have 627,700 Indonesians working in Malaysia, followed by 124,600 from the Philippines, 55,200 Bangladeshis, 53,500 Chinese, and 48,000 Indians. Though the skill level of these workers is not stated in the database it will be naive to assume that many of them are graduate professionals.

Table 6 also shows that in 2000 there were only 5,750 US citizens, 8,800 Japanese, 3,100 Australians and 1,250 New Zealanders (all members of the OECD) residing in Malaysia. Again, though it is not stated in the database, it can be assumed that most of them would be expatriates or professionals working in the manufacturing or services sectors.

"By one stroke of the pen we can immediately enlarge significantly our talent pool"- DATUK SERI DR FONG CHAN ONN

This is consistent with the recent NEAC report on the NEM, which says that the numbers of expatriates have fallen from nearly 90,000 in 2000 to nearly half of that by 2008. The net result is a “shortage of dynamic talent to push Malaysia into higher added value activities”.

The trends illustrated in Tables 3 to 5 are indicative that our brain drain is serious, while Table 6 shows that the brains we are trying to attract are not coming in. Of course, Tables 3 to 5 also show that we are not alone in losing out.

But is that a sufficient consolation? I think not. It will be shown later that while other countries have taken steps to remedy the problem, we are still far behind in trying to resolve the challenges we are facing.

Losing the talents

This issue has been discussed extensively, but let me try to summarise why we have been losing our talents.

> Legislative issues

As I have elaborated at the beginning of this article, under Malaysian law, a child born overseas to a Malaysian mother, whose husband is a non-Malaysian, is not entitled to Malaysian citizenship or even permanent resident (PR) status. This large pool of talent is just kept out of our shores.

I vividly remember Datuk Syed Norulzaman (a retired Malaysian ambassador) lamenting to me last month over dinner about how his daughter, a JPA medical scholar at Dublin, worked hard over the years to qualify as a medical specialist. She unfortunately could not return to serve Malaysia because she married her Norwegian classmate, and their children are classified as non-Malaysians. With tears in his eyes, he said he had never felt so helpless as an ambassador because he could not explain to his daughter why Malaysia does not accept her children.

And of the thousands of talented foreign spouses who have returned to Malaysia with their Malaysian husbands, what is happening to them? Medical experts, top-notch scientists or experienced teachers they may be, but they are not even accorded PR status and are not allowed to work here, their adopted home.

> Educational Opportunities

Up to the late 1990s, a large number of Malaysians migrated for their children’s education. University education opportunities for Malaysians (particularly the non-Malays) were limited by the quota system and financial aids. However, the implementation of the 1996 Private University Act saw rapid expansion of opportunities for tertiary education in the country. And with the establishment of the Government University Loan Scheme (PTPTN), providing financial aid to all students including those from Independent Chinese Schools, as well as the opening up of JPA scholarships to all excellent students, all Malaysians who aspire for tertiary education can now pursue their dreams within our shores.

Although many Malaysians still go overseas for their education, they now go by choice and not out of necessity.

> Domestic social-political issues

In this global-village world, Malaysians are being continuously exposed to the world environment. We see, feel and hear first-world lifestyles, first-world civil society structures, and first-world social institutions over TV and the media all the time. Many Malaysians felt disillusioned, or even short-changed, by the non-optimal functioning of our social-political institutions which seem always constrained by the many sensitivities of our multi-religious and multi-ethnic background.

Last year, pop star Beyonce Knowles was scheduled to perform in KL, but the concert was put off when some groups protested against it. She then went on to perform to record crowds in Jakarta.

Many of us cannot accept unwarranted constraints like this on our social lives and feel that the grass is greener on the other side of the fence (or Causeway?).

Of course, the fact that Malaysia has never taken public relations with the rest of the world seriously, and consequently is always reported negatively in the world media, does us even greater damage especially in the eyes of the Malaysian professionals abroad.

Prime Minister Datuk Seri Najib Tun Razak, fortunately, understands these concerns clearly. The radical reforms he is currently pushing through under the NEM (including emphasising needs-based over race-based policies), the Key Performance Indices, and the all-inclusive 1Malaysia programme will hopefully bear fruit in the next one year, and will result in a significant increase in the “feel-good” factor with a corresponding reduction in our social-political environment being a push factor for Malaysians to migrate.

First-world pull

With the current high-tech boom, many first-world nations realise that to capture the global markets with new innovative products and services (iPads, smartphones, nano-products, etc.) they have to take aggressive steps to build their talent pool “by instant” rather than through natural organic growth. These advanced nations (I am including Singapore and Hong Kong in this category) have introduced talented-immigrant attraction policies as follows:

The US: Employer-sponsored visas (H-1B) given liberally to immigrants who have at least a Bachelor’s degree in arts, science, education, and other disciplines.

The UK: Tier-1 Point-based migration under which immigrants have to score at least 75 points based on age, experience and qualification.

Australia: Skilled Migration Programme, under which applicants are assessed on a point system again based on age, experience and qualification.

Singapore: Employer-sponsored (Scheme 1) working visas are issued within three working days on receipt of application. And under its Scheme 4, top-notch professionals are “purposely” sought from all over the world and attracted to reside in Singapore.

Hong Kong: Working visas are readily given out on a points system; the points are again assessed based on age, experience and qualification.

Many Malaysians have gone to these countries on these programmes, and in the process contributed to these societies’ development.

Retain, recruit talents

What can we do to retain the talents we have in the country, as well as encourage our talents from overseas to return; besides trying to recruit non-Malaysian experts to enrich the pool of our expertise? This is obviously a tall-order question which I will attempt to answer.

Firstly, besides pushing on with the reforms needed under the NEM and the 1Malaysia programme, we need to immediately abolish all the gender-biased legislative impediments preventing the husbands and children of our female talents, who have married non-Malaysians, from becoming citizens or even PRs. Unless this is done, and done retroactively, the thousands of these Malaysian talents will be forever lost from our shores.

Further, the thousands of wives of Malaysians who have returned should be immediately given PR or even citizenship so that their expertise can be harnessed by the nation.

By one stroke of the pen we can immediately enlarge significantly our talent pool.

Secondly, we need to negotiate more country-to-country youth exchange programmes with OECD nations, like the Malaysia-New Zealand Youth Exchange Programme. Our youths have been going over to their shores for decades, and now with these exchange programmes we can at least begin to attract some of their youths to our shores, first as guests, and later maybe as experts.

Thirdly, we should get away from our cold-war seige mentality mind-set, bite the bullet and immediately reform our working permit, PR and citizenship policies. Working permits for expatriates should be quickly approved for applications from employers for bringing in the expertise that they need to run their businesses or factories. PR status should be accorded to the top experts that we want to recruit. Their coming into our midst will result in new innovations and thousands of new high-paying jobs for our people.

If we can approve the hundreds of thousands of unskilled labour, why can’t we allow the engineers, scientists, and other experts required by the multi-national corporations to enter?

Fourthly, we need to relook our own incentive schemes implemented to attract the return of our professionals. Under the Human Resources Ministry’s “Return of Experts Programme”, an approved returnee is entitled to bring back two cars tax-free (as well as the applicant’s accumulated income, also tax-free). This is hardly an incentive as in OECD countries there is no such thing as Approved Permits or prohibitive taxes on imported cars.

We need to follow on the successful examples of other countries, such as the Taiwanese Hinshu Science Park established in the 1980s for returning scientists from the US, under which returnees are given R&D grants for start-ups and educational assistance for their children. Out of this, Taiwan emerged to be a major exporter of IT appliances.

Or the Korean Institute for Science and Technology (KIST) set up to provide research grants and managerial autonomy for talented returnees, mimicking the US research environment; and now South Korea has a 96% broad-band penetration rate.

Even China has established its “Freedom to Come and Go” Policy and Special Development Zones for its talented returnees.

Through our embassies, we need to identify and directly engage our professionals world-wide and make them part of our global ambassadorial network. With their support and goodwill, we can greatly improve the image of our country. Some of them can even be persuaded to set up base at home. If they have good ideas, venture capital and R&D grants should be provided so that they can be assisted to transform these ideas into products and services.

It is already quite late in the day for us to start these policies to attract talents.

My meetings with many of our professionals abroad indicate that they are still very much Malaysian at heart. They miss the nasi lemak, our colourful multi-ethnic lifestyles, and the relatively stress-free nature of our work environment. Similarly, many Japanese, US and Korean expatriates will prefer to work in KL compared to other Asian cities.

Though it may be late in the day to attract and recruit them back to Malaysia, at least we know we are starting on a reservoir of goodwill. But let us implement these Attract and Recruit Programmes with the fullest commitments now, so that our plan to emerge as a high-income economy can become reality in the not too distant future.

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