An opportunity to fix the brain drain?

By DANIEL OOI BOON YANN.

BRAIN drain, or human capital flight, refers to the emigration of Malaysians who have received advanced training at home.

It occurs for various reasons – better standard of living, higher salaries, better work conditions, among many others. Lately, the issue has resurfaced, with the Malaysian government banning Malaysians from applying for the Australian farm work visa in order to retain sufficient labour in the country.

In essence, there is much complexity behind the issue. If there are too many professionals locally, then some leaving the country can ease the conditions for those who remain, for example, by increasing wages and improving living standards.

This is because the oversupply of professionals will inevitably depress wages.

In contrast, if there is a shortage of professionals, brain drain will only exacerbate the problem by worsening the shortage.

It has been argued that Malaysia currently has a shortage of professionals and therefore, brain drain must be stemmed.

However, if we think of the Malaysian economy, especially the labour market, as a swimming pool, then brain drain is the leakage.

One way to prevent the pool from being completely drained is to plug the leak. In other words, preventing locals from leaving. The government recently tried to do this through the Australian visa ban.

Another possibility is to attract talent back to Malaysia, which using the swimming pool analogy is to redirect the leaked water back to the water inlet.

The government has tried this through various means, most prominently through TalentCorp, an agency under the Human Resources Ministry, that aims to attract, nurture and retain Malaysian talent.

In order for Malaysian talent to return, there must be incentives.

While appeals may be made on the grounds of patriotism and nostalgia, economic factors play a very important role in people’s decisions to emigrate.

E. Chacko (2007) studied the phenomenon of Indian reverse emigration, which refers to the return of talent from abroad. Focusing on the cities of Hyderabad and Bangalore, the author found reverse emigration to these cities driven by their rise as global cities of information technology and biotechnology research.

Crucially, these cities have increasing densities of transnational links, taking the form of business and industrial parks, multinational firm offices and research institutions. These translate into excellent career prospects, which – combined with lower costs of living compared to the West – make it very attractive for returning professionals.

Furthermore, the globalisation of Hyderabad and Bangalore created Western-style work environments and business culture that ease the transition process of returning to India to work.

The same thing needs to happen for Malaysia. Preventing emigration is a stop-gap measure at best. Ultimately, to preserve the Malaysian talent pool, our talent abroad must be attracted back through better career prospects and economic incentives.

If anything, the skills mismatch and underemployment so prevalent in the Malaysian labour market illustrates why Malaysians leave and why those abroad do not return.

This is where the Belt and Road Initiative can come into play as a catalyst for economic reform. Through increased connectivity with other Belt and Road countries, Malaysia will gain improved access to global supply chains.

This generates growth for domestic firms and allows them to specialise in sectors in which Malaysia naturally has advantages.

In turn, this creates demand for Malaysian talent and with the higher demand, salaries will increase.

Compared to some neighbouring countries, Malaysia still has a comparatively low cost of living, which translates into higher purchasing power, making it even more attractive for Malaysians to return.

Simultaneously, increased connectivity promotes cultural exchange. As multinationals establish operations in Malaysia under the Belt and Road Initiative, they bring with them global working cultures.

At the same time, local firms and businesses that employ outdated work practices would be forced to improve their work environments due to the competition created by these multinationals.

Together, these factors ease the return of talent from abroad to the Malaysian labour force. Malaysians who have worked abroad can return without fear of a reverse culture shock, as perhaps one day working in Kuala Lumpur will be no different from working in New York, Shanghai or Frankfurt.

While the preceding factors may attract talent back from abroad, the same factors may also give local talent reasons to remain in Malaysia.

If local career prospects improve under the Belt and Road Initiative to the extent they are comparable with other major cities around the world, then local talent will have no incentive to leave.

Therefore, both local talent and talent from abroad are drawn to remain or return because the incentives are there, rather than forcing their choices through policies that limit emigration.

Thus, in a globalised world, movement of talent is inevitable, and nations are now competing for talent worldwide.

Malaysia should, therefore, take advantage of the Belt and Road Initiative to create an economic environment conducive for talent.

People will always be moving but rather than seeking to dam the river, rerouting and guiding the flow of talent would be a more sustainable and beneficial solution to the problem of brain drain.

Daniel Ooi Boon Yann is a Lecturer at Tunku Abdul Rahman University College. The views expressed here are entirely the writer’s own.

The SEARCH Scholar Series is a social responsibility programme jointly organised by the South-East Asia Research Centre for Humanities (SEARCH) and the Centre of Business and Policy Research, Tunku Abdul Rahman University College (TAR UC), and co-organised by the Association of Belt and Road Malaysia.

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