Economic Development reverses the Brain Drain

Phnom Penh, Cambodia

June 16, 2011

by Dr. M. Bakri Musa

A recent World Bank Report concludes that Malaysia risks jeopardizing its economic development if it does not ameliorate its “brain drain” problem.  The Bank singles out the country’s affirmative action program as a major contributor to the problem.

Brain drain, as the Bank rightly acknowledges, is a universal problem.  For the Bank to conclude as it did, it must present comparative international data showing that Malaysia’s problem is worse off than those without similar affirmative action programs.  Alas, this is precisely the glaring deficiency of the report, its lack of comparative data.

The Report nonetheless contains a wealth of valuable data.  However, as the information sage Edward Tufte observed, nature’s laws are causal; they reveal themselves by comparison and difference.  This absence of comparisons makes the report’s conclusion not credible.

The Bank has its head backwards.  Brain drain does not impact economic development rather the other way around.  Have a robust economy and then watch talent – and not just native ones – flocking in.  We saw this with Japan of the 1960s, South Korea in the 1980s, and Ireland in the 1990s.  Ireland is a particularly pertinent example.  Today with its economy sputtering, Ireland is again suffering a brain drain.

There is no indication that Malaysia’s problem is worse off than that of China, India, or Singapore.  On the contrary those countries may suffer even worse, and they do not have any domestic affirmative action program, except for a perfunctory one for India’s “untouchables.”

In California there are more émigrés from Singapore than from Malaysia.  Nearly all my college mates in Canada in the 1960s who were from Singapore are now émigrés.  Considering the republic’s much smaller population, we can infer that it has a bigger brain drain problem.  Heck, even its former head of state emigrated!  Yet that does not impact its economic development.

China suffered through massive “brain drain” for the past few decades; it still does.  Yet it continues registering spectacular economic growth.  Only now with greater opportunities as a consequence of that growth is China seeing an improvement to its brain drain problem.

Despite that, China now has a new problem.  According to a China Merchant Bank’s report, those Chinese with assets in excess 100 million yuan, a stunning 27 percent have already emigrated while another 47 are considering it.  In Malaysia, at least according to the World Bank Report, only the smart Chinese are emigrating; the rich ones stay put.  I let readers conclude who really are the smart ones!

 Snared by the Race Trap

The Report’s other major disappointment is its less-than-rigorous teasing out the race factor in its analyses.  Consequently its authors, like many commentators both native and foreign, get unnecessarily entangled with the nation’s sensitive race issue.  No surprise then that the report succeeded only in unleashing suppressed chauvinism and resurrecting ugly stereotypes.

Consider its findings that the overwhelming majority of emigrants are Chinese and those with tertiary qualifications from or recognized by foreign (specifically Western) institutions.  Only those not attuned to the Malaysian scene would miss the redundancy to that statement.

To tease out the delicate race factor, you must present data that show Malays with similar qualifications as non-Malays do not emigrate, at least not in comparable proportions.  The Bank does not have that data. Anecdotal evidence may indicate otherwise.

When I visit American campuses, the one frequent question posed to me by Malay students is:  How do I get to stay back?  Most Malays are on scholarships and tightly bound to their contracts.  Emigration is not an option for at least ten years; that alone would skew the figures, race-wise.

The West is a magnet for the talented.  Outstanding athletes and artists excepted, talent to the West means those conversant in English and have qualifications issued by its institutions.  In Malaysia that means non-Malays.  They may hate Malaysia’s affirmative action program but that is not enough for them to emigrate to Australia or America; they have to have the needed qualifications.

Now if Malaysian Chinese were to emigrate to China and Indians to India, then that would really indicate something rotten in Malaysia.  I do not see that happening – as yet.  This salient fact indicates that the “pull” of the West far exceeds the “push” out of Malaysia.

In China and India however, the “push” factor is overwhelming, reflecting their general economic status and not because of any domestic social policies a la affirmative action.  There the prime consideration is to get out; regardless whether you are among the rich, talented or the unskilled, hence the all too frequent tragedies of their poor citizens caught in abandoned rusty trawlers on the beaches of the Pacific and Atlantic.

The Bank noted that Malaysia’s brain drain is worse only within the last decade, a period that coincides with Malaysia’s less-than-robust economic performance.  Affirmative action however, has been a fixture for over half a century.  If it were to be the reason for emigration, as claimed by the Bank, then we would expect the rate to be constant all these years.

There are many good reasons to jettison the current corrupt and ineffective affirmative action program, but hoping that it will solve our brain drain problem is, well, just hope. Surprisingly, the Report’s many nuggets of information escape comments both by the report’s authors as well as by the mob of commentators.  The latter is no surprise as any issue that parallels (or seem to) the racial divide inevitably invites such Pavlovian race-tinged responses.  That the report’s authors who are experts would fall into the same trap is a surprise.

Consider the report’s findings that fewer than 10 percent of its respondents (Malaysians who emigrated) spoke our national language.  If you were born and raised in Malaysia you have to be literally an idiot or a hermit not to know our national language, as it is widely spoken.  Both idiots and hermits have their place, but they are not regarded with esteem in any workplace.

Their lack of fluency in Malay reflects their commitment to Malaysia.  To them Malaysia is only a staging ground, to prepare themselves for subsequent migration to greener pastures.  There is nothing wrong with that; it is only human.  The error is in imputing evil motives on those they leave behind and who have kindly provided them their launching pad.  They should be grateful, not spiteful to Malaysia.  The quota lines (yes, America has quotas too!) for green cards for those from China and India are closer to infinity; not so for those Malaysian-born.

Focus on Retaining Talent

It is futile to tailor your policies in the hope of attracting people who have long ago decided to emigrate.  Instead, the emphasis should be on two areas.  One, treat your present personnel so well that they would not even consider leaving.  Two, attract talents worldwide without regards to whether they are Malaysians, former Malaysians, or complete foreigners.  The market for talent is truly global; there is no place for nostalgia, insularity, or misguided notions of nationalism.

Contrary to popular perception, pay is not the only consideration, but a decent one would help smooth out the many other frustrations, including those of affirmative action.  Once you treat your current talent well, word will quickly spread out and you will be inundated with enquiries.

Disband Talent Corporation

Stop tinkering with the tax code or hiring expensive foreign consultants to produce yet another thick report that would soon be forgotten.  Disband the costly Talent Corporation; it is just another bureaucracy whose budget for foreign travel rivals that of the Foreign Ministry.  Divert those funds to compensate the highly talented you have at home.

You do not have to match exactly the global pay rates to attract talent.  A modest increase in the current pay scale in the range of 30 to 50 percent would go a long way in encouraging Malaysians to stay put.  We all know the variables of purchasing power and the cost of as well as standard of living even within a country.  If you make US$100,000 and live in San Francisco you may be lucky to afford a one-bedroom condo.  In Wyoming you could live in a “McMansion.”  For that same pay, in Malaysia you could live in a real mansion, with maids, drivers and gardeners to boot.  Salaries in Singapore may be considerably higher but try finding a house with a yard for your children to play.  Yes, you can readily afford a car so you can drive around the island in half an afternoon.

Retain Local Talent

Focus on attracting talent from wherever; practice meritocracy on a global scale.  All things being equal, I would choose talent already in Malaysia.  You cannot beat local knowledge and perspective.  My next choice will be a complete foreigner; I prefer that over a Malaysian émigré, especially one who cannot speak our national language.

My rationale is simple.  The one trait I value most in an employee is curiosity, for with it comes the eagerness to learn.  The complete foreigner has demonstrated his adventuresome by wanting to work in a foreign country.  He considers that a challenge; his learning curve will be steep.  He is also enthused about his new assignment.  A Malaysian who cannot speak our national language clearly shows his lack of interest in his surroundings.  He is not even curious enough to learn a language that is widely spoken.  An uncurious worker is rarely an asset.

A returning émigré also carries with him his old baggage; he may find it difficult or unwilling to re-adjust.  When faced with a problem his only response would be, “Back in old England …. ”  If he were to be reprimanded by a superior who is other than his own kind, he would more likely dredge up his old prejudices.

Malaysia should not have any hang-ups about recruiting talented foreigners. Its priority, however, should be on retaining the talents it already has and on producing more.  Not too long ago Malaysia commissioned the same World Bank to review our universities on improving their performance.  Few could recall that report now.

Najib’s Penchant for Foreign Consultants

Najib has a penchant for employing legends of foreign consultants.  Unlike his predecessor Abdullah Badawi, Najib at least reads those reports.  However, if you do not have handle on a problem to begin with, calling in the various experts would only confuse you.

Consider this World Bank report.Just a month after its release, the Bank published another study, “Eight Questions About Brain Drain,” prepared by yet another set of its experts.  This second report essentially questions the findings of the earlier one.  Dismiss these expensive consultants and divert the money to reward the talents you already have.

The executive talent of a leader is inversely related to his penchant for calling in consultants. Meaning, the more inept he is, the more likely he is to call in various experts.  Najib reaffirms my conviction.  If he is not already befuddled, this latest World Bank Report would do it for him.

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