The cost of Pakistan's brain drain

By YesPakistan.com Staff Writer

Ask most educated Pakistanis today what they want for their future, and you'll find a large number will say: to settle down in America. Pakistanis, especially the professionals, have been leaving the country at an alarming rate in the last three decades as they look for opportunities and benefits outside of their home country.

According to official estimates of Pakistan's Overseas Employment Corporation, close to 36,000 professionals, including doctors, engineers and teachers, have migrated to other countries in the last 30 years. Interestingly, this number is indicative of only a small proportion of actual migration, since the majority of emigrants do not register.

This trend is not particular to Pakistan though. Other South Asian states face the same shortfall. For example, India is the world's biggest exporter of doctors. The impact of the brain drain can be seen in this disturbing statistic: there is one Indian doctor in the Untied States for every 1,325 Americans. However, there is one Indian doctor in India for over 2,400 Indians.

Overall, estimates from the late 1980s placed the number of South Asians in the United States between 525,000 and 800,000 permanent US residents. Of the migrants who have entered the US in the 30 years, two-thirds are college graduates.

Once migrants reach here, they tend to do much better on average financially than even locals. For example, the median income in the late 1970s of Pakistanis was $20,000, which is well above the US national average of $17,000. For Indians, it was $26,000. The annual aggregate income of Indians living in America in 1993 was estimated to be over $3 billion.

Although American immigration policy since 1965 claims to open up the country's doors to the world's "poor and huddled masses", most of those it accepts as migrants do not fit this bill. Instead, entry into America has often been biased in favor of the best and brightest, highly educated professionals from places like Pakistan. This of course only fuels the brain drain from a country which needs all of the skilled manpower it can get, to one in which there is comparatively little shortage of such individuals.

Interestingly, .most skilled emigrants arriving on America's shores have studied in educational institutions in their home countries, where subsidies are often higher than 90 percent. Thus, the benefits of these subsidies, in the end, go to industrialized countries who have not invested a penny into the education of these skilled individuals.

Apart from a loss of skilled manpower, the brain drain also negatively affects the local economy, in particular, national salary structures. The 'demonstration effect' of foreign salaries artificially inflates local salaries, despite the lower average productivity of labor in the system.

One proposal that has been suggested to offset the repercussions of the brain drain is for developing and industrialized countries to consider a tax policy that compensates developing countries for their loss of manpower, while discouraging further emigration of skilled labor. This could be done by imposing a special income tax on Pakistani and other South Asian professionals working in Northern countries. This would be would be collected by the governments of Northern countries and handed over to developing countries through the UN (Bhagwati and Dellalfar, 1973).

In the late 1970s, researchers Bhagwati and Dellalfar calculated that a uniform tax rate of 10 percent on migrants from the 1960s would lead to a tax collection figure of over $62 million. When other countries in North America, Europe and East Asia were included, their yearly sum came out to over $150 million. An updated estimate today would probably yield over $1 billion .

But while the danger of the brain drain to Pakistan is clear, a large part of the problem is that there are not enough opportunities offered to the country's highly skilled labor for contribution and advancement opportunities. Educated unemployment is very high and salary levels for skilled workers (relative to unskilled workers) are often kept forcibly low by governments to maintain an egalitarian income policy.

An additional problem is that advancement for the highly skilled is limited in a system where individuals often gain jobs and other opportunities through personal contacts versus merit. This also fuels a frustration with the system. This also leads to Pakistan's professionals leaving the country for one in which their skills and talents will be rewarded properly, based on what they do, not who they know.

If Pakistan is serious about stemming its alarming brain drain, it must provide better job opportunities that properly remunerate workers based on their skills and talents. Otherwise, it will continue to lose its skilled labor to countries where benefits and opportunities are plentiful and a system based on merit versus contacts is in place.

Date/Time Last Modified: 6/17/2002 3:44:38 PM

© 2004, Human Development Foundation. All rights reserved.
1350 Remington Road, Suite W, Schaumburg, Il. 60173
Toll Free: (800) 705-1310 | Email: info@yespakistan.com | Privacy Policy