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Whither Malaysia’s brain drain?

Philip Schellekens's picture

Brain drain—the migration of talent across borders—has an impact on Malaysia’s aspiration to become a high-income nation. Human capital is the bedrock of the high-income economy. Sustained and skill-intensive growth will require talent going forward. For Malaysia to be successful in its journey to high income, it will need to develop, attract and retain talent. Brain drain does not appear to square with this objective: Malaysia needs talent, but talent seems to be leaving.

Brain drain is a subject of intense debate and controversy, but surprisingly few studies have characterized the phenomenon in the Malaysian context—be it in terms of magnitude, impact or policy response. What complicates matters further are the statistical discrepancies that limit the quality, availability, timeliness and comparability of international migration data.

In our most recent Malaysia Economic Monitor (available April 28, 2:00 pm Malaysia time), the Malaysian diaspora—the group of skilled and unskilled Malaysian-born women, men and children living overseas—is estimated conservatively at 1 million worldwide as of 2010. A third among these represent brain drain—those with tertiary education among the diaspora. This is not to suggest that others are not ‘brainy’, but educational attainment is the only available proxy that is consistently available across recipient countries.

To put the numbers in perspective two factors are important: the size of the skills base and the profile of immigration.  Because of the narrow skills base, brain drain is intense in Malaysia and is further aggravated by positive selection effects, as the best and brightest leave first. Further, brain drain is not alleviated by compensating inflows, since migration into Malaysia is mainly low-skilled with some 60 percent with primary education or less and the number of high-skilled expats has fallen by a quarter since 2004.

How can policymakers address the brain drain? The challenge for Malaysia, as for many other countries, is to embrace the global mobility of talent. As Malaysia needs talent, it will need to turn the brain drain to its advantage.

Malaysia needs to tackle the underlying determinants of brain drain. Brain drain is a symptom—an outcome of underlying, more fundamental factors. Identifying the factors that drive people to migrate is the first step towards formulating policy responses to brain drain.

Among the factors that matter in Malaysia are differences in earnings potential, career prospects, quality of education and quality of life, relative to overseas locations. However, discontent with Malaysia’s inclusiveness policies is a critical factor too—particularly among the non-Bumiputeras who make up the bulk of the diaspora.

The productivity and inclusiveness agendas are well understood and policy frameworks have been well-articulated in Malaysia’s transformation programs. Forceful implementation of these programs should assist in strengthening both the demand and supply side of the market for talent, so that productivity and wages levels can rise in tandem. This will also reduce the incentive to emigrate and help attract talent from abroad. Progress on updating Malaysia’s inclusiveness strategies will be equally important as this is perceived by the diaspora as a key push factor that fuels the incentive to leave and serves as a deterrent to return.

Once the enablers are in place, targeted measures are helpful to further facilitate the flow of talent and engage with the diaspora in other ways than through the physical flow of people. However, these targeted measures cannot substitute for more comprehensive measures outlined earlier. Malaysia’s Talent Corporation is developing new initiatives and recent measures, such as the Residence Pass and Returning Experts Programme, are encouraging. The challenge going forward will be to also find effective ways to connect with the diaspora—as interest is more easily raised than sustained. One immediate example of engaging might be to seek the diaspora’s input on how Malaysia can make a leap forward in embracing the globalization of talent and turning brain drain to its favor.

Photo courtesy of Syafiq Sirajuddin (Pheeque)


Submitted by Anonymous on
As for Malaysia the issue is not the brain drain. To me doesn't matter where the brain located. The important thing, be it in US, UK, Australia or Singapore, the 'gone' brain must be able to contribute to their 'country' through their diasporas. Secondly, how to measure that the 'gone' brains were really a lost of opportunity to Malaysia. In other word, can we measure that the development of Singapore is partly contributed by large number of Malaysian brains in the Republic? If yes, how much? If we didn't know the number, the whole story about Malaysian brain drain is merely a theoretical.

Submitted by Anonymous on
Brain drain is the issue here pal. It happens to every developing country even more so for Malaysia because we happen be a largely English speaking background. How will they contribute to a country if they are not serving its people and economy? You have made no mention about it. There is no way to calculate the effects of brain drain. Talent and qualifications cannot be calculate as it is merely a potential. If a country is able to utilise that potential, it will reap the benefits exponentially. Say if you want to get a building up, you go to Samsung. If you want a propeller built, you go to Hyundai. If Malaysia wants to compete with countries with these specialities, they must have the resources to do so, in terms of money and skilled manpower. Malaysia has neither but it would be comforting to know that they at least have the manpower. So brain drain is not a myth as such you have put forward but rather a grieve problem facing a lot of countries in the developing world. It should be tackled.

Submitted by shchoy on
Anonymous, We can debate/argue about needing more measurements and data, it still doesn't deny the fact that there's a 1 million + of our brightest people leaving and contributing to other countries every year. It is an obvious shallow comment to say that it doesn't matter where the "brain" is located. It's really all about where the brain is located !!! Do you think companies such as Microsoft, Intel, HSBC, Citibank, etc... will setup shop here to provide job/growth to Malaysians if the "Brains" and skills are not available locally? Even looking at a more grass-root level, it's obvious that "local" talent is important. Imagine if we have no "local brains" for basic medical surgery. We're going to need to constantly fly doctors and patients overseas! Arguing that it doesn't matter where the "Brains" are is like saying it doesn't matter that all Malaysians only have primary school education, and Malaysians will still be more competitive that say Singapore.....

Submitted by Unemployed Insipired on
First of all, thank you for this article - it has inspired me to get off my unemployed arse and try harder to get a job in Singapore or elsewhere. After all, the biggest motivation one can have to try harder is to see hard numbers of others (> 1 million !!!) succeeding where one has yet to. The other point i'd like to raise is whether this "brain drain" is necessarily a bad thing - the "character building" circumstances facing many Malaysians today might be the same set of circumstances that give rise to future, productive Singaporeans or Australians or Brits / Yankees formerly of Malaysian origin that rise to the top of their respective fields. There is no shame in Malaysia being a crèche of talent to this world. Of course those left behind still (including yours truly) might have something to be bitter about. But it is what it is.

Submitted by Anonymous on
Very interesting report but having just moved my family from Singapore to Malaysia, I am amazed at the number of Singaporeans living in KL, especially Malays. And of course there are many living in JB as well. I wonder how many have moved north in recent years due to the huge rise in the cost of living in Singapore. The media always focus on the brain drain from Malaysia to Singapore but nobody ever mentions the flows in the opposite direction.

Submitted by Singapore Son on
Thanks for this insight however similarly in Malaysia I do not think that we will be overly concerned on seeing a Malay migration to Malaysia. On our part we have even less to worry about as the quality coming in is better than that going to Malaysia. What I am concerned about is the number and quality exiting to other countries than Malaysia.

Thanks again to World Bank for an excellent study. The various works under the Malaysia Economic Monitor series provides rigorous analysis on the state of the Malaysian economy. As I have noted, these issues have been know to the government and to those who follow Malaysia closely. The WB reports correctly brings it to the fore in a timely fashion. However, I doubt if the present administration has the capacity to undertake the necessary reforms. Dr. Mahathir, when in power, had at his disposal all legitimate and illegitimate means of power - and yet he failed to institute relevant reforms fearing the vested interests that keeps him in power. I doubt Mr. Najib or anyone from the current ruling coalition can do better. I would strong recommend that the WB in its next publication focus on the types of institutional arrangements that are needed to move Malaysia into a high income economy and sustain it. It would demonstrate in the clearest manner, that the present arrangements - political, economic and social arrangements are incompatible to driving Malaysian into a high income economy. Best Greg

Submitted by Abel Ahing on
Thank you, World Bank. This report underscores the pervasive lack of political will of the ruling coalition to address the perennial issue of quality education. One obvious answer to this is for each of the 13 states in Malaysia to have complete autonomy over its own education system. Autonomy would be especially beneficial for the state of Sarawak which is rich in natural resources, but continues to be the second poorest state in Malaysia and its youth continue to leave in droves to seek employment in other states. Autonomy will give Sarawak the freedom to stay the course to a high performing education system and to create growth of high value jobs in the state. The policies of the Federal government will continue to suppress Sarawak's progress.

Submitted by boongah on

I am a Malaysian, and proud and feel so great to be born here - absolutely! I went to local public schools during the era of Dr. Mahathir and earned degrees from both local and from the UK universities. I'm sure our education system among the best and I'm sure the policy makers will continue to formulate policies which will further enhance the quality of life here.
See, developing countries need to educate themselves about what is brain drain is all about, why it has to happen now, what implication and etc. Just like people learn to know what is HIV and do not fear to let them live among us as usual. All SEA countries are facing brain drain issues at the moment; be it Malaysia, Singapore, Thailand, Indonesia etc. So, it is not really about which country will gain more brainy people going into their country or vice versa.
Countries shouldn't be continued debating about it - no point, should stop. They (through the existing community example ASEAN), they could collaborate how they can maximize and craft our own definition of brain drain; find ways to mould the strategy or stimulation package. An absolute example, as such as Talent Corp of Malaysia; but the current program which they are doing just need to make it a little global friendly. Remember.. Today’s global organization is about being Green-friendly. Well same principle applies to Brain Drain. Many government today perceive Brain Drain as something they fear and disadvantage to their administration. How to tackle this then? Very simple indeed.. Blue Ocean is about how McDonalds could craft magnificent value meals around the world but they still can be rich and pay back tax to their own country. Some of a basic example, maybe if you a Malaysian working for an Indonesian company, you will get a free car, free insurance etc. Travel to Indonesia with no visa.
Let the brainy brains floating within the boundaries that we as the policy makers, the capitalist, the economist, the managers decide where it should benefit, then we can be powerful and enrich each other not to fear living next to each other, like some country does. One must remember and learn this one thing ( i learnt this from Winston Churchill, Hikayat Hang Tuah and Doctor in the House) that... last time who has more lands / owns more natural resources is the Man of the time. But today, you need to duplicate your 'natural resources' which is your brain so that you will win the battle (Winston Churchill) and will never go misguided because religion ask you to share your knowledge and be thankful to your idea makers (Hang Tuah) so that you could live rich by first making sure others who lives around you can also get rich too (of course by maximizing opportunity, flexibility and promote a balance life while not to fear about losing brainy workers). It will be a new approach on how capitalist system should be manipulated today. In fact it can be administered rightly for our own benefit and for the world). Do not fears change (Tun Mahathir).
To all, I am a brain-drainer, I work for a company which owns 30% by a leading Bumi company (thank you for such policy, we learnt from the Brit unwritten constitutional) and contribute works for an international publication (if that is to be called as brain drain, perhaps). I would say, may my kids will live anywhere in the world he likes, marry any Muslims anywhere in the world he loves and paying e-tax to a country he felt his patriotically faith is belong. So live no fear to Brain Drain. To Muslims - it's already written in the Quran, Allah asks you to Hijrah and see the world and be kind to all humans.. He already introduced globalization and Brain Drain policy...indeed and it is here now that’s for us to admit His Almighty and He is just all around.

Submitted by Daniel on

Your comment is like seeing the mote in other's eye, but not seeing the beam in our own eye. Obviously, you're Malaysian Malay or Malaysian Muslim citizen that know nothing about true democracy. The main problem is that the government isn't democratic but religious-fascist. Malaysian Malay people (muslims) are totally spoilt by their government so if you all wanna know about the true Malaysia, you should listen what Malaysian intellectual from Indian, Chinese and Aboriginal races have to say about this topic.

Submitted by boongah on

Thank u for ur opinion. Im not sure what is ur understanding of our malaysian democracy n constitution n which part of the world u r from or from which type of democracy practise u been rising from. But please let me know whether is it a good democracy or not in a country such as Malaysia... we have 10 billionaires, 8 are Chinese, 1 is indian, 1 is Malay. We have independent for almost 60 years now. And chinese n malay still can live with each other with us the 'spoilt' without hesitation...without anyone starvings. 3.4% is our unemployment rate. Who administer this.. sorry to inform you.. the malaysian muslim n yes most of us themalay, chinese n infdian. Can u tell me any chinese school with chinese school name that can be found in indonesia or maybe in the UK where officially they recognise the chienese education ...such as Malaysia do? Who allow this?.. obviosly the one that u refer to the 'spoilt' malaysia muslim? Your comment dont sound you have good grade in history or in economic study. Study more then. Take care.

Submitted by Chandra on

In the mobile world there will always be a 'brain' drain. Malaysia is made up of Malays and Non-Malays. Which half makes the major part of this drain. Majority are from the latter grouping. Whilst many leave for financial betterment, there are large numbers from the latter group leave because of the discriminatory policies of the Government, in favour of the Malays, so-called Bumiputras or Sons of the soil in education and opportunities. Eg. nearly all top civil service jobs are the preserve of the Malays. Only by changing this pro-Malay policy will the country reverse the brain drain.

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