Whither Malaysia’s brain drain?

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)

Comments

Where the brain

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.

Brain drain is the issue here

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.

It's all about WHERE THE BRAIN IS!!!!

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.....

Thank you / Malaysia as a Crèche

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.

Opposite flows

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.

Malaysian Brain Drain

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.

Recurrent problem

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

Obvious Answers

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.