"Weighing" Brain Drain

Brain drain is once again a subject of discussion among UK graduates, according to a recent Star report. Among two of the reasons cited by that report include "peanut salaries and an obsession with world-record breaking".

In any discussion of brain gain, one needs to clearly delineate our parameters. For example, when discussing the costs of brain gain, we are often assuming a 'national' perspective, rather than a personal perspective. An overseas graduate who works at Goldman Sachs in London, goes on to do an MBA at Stanford, then goes to work for Google in California before leaving to build his or her own start up might have achieved the best career path for himself or herself but our country might have lost in terms of reaping the benefits of this person working in Malaysia (foregone taxes, new businesses created etc...)

For the purposes of this discussion, I'll take on the 'national' perspective and I'll focus only on overseas students choosing not to come back home rather than those who leave Malaysia to search for better work opportunities overseas.

Firstly, when counting the 'national' costs, we need to break it down according to occupational sectors. If 100 students decide to stay back and do their CPA in London, the national costs would be lower if 100 students doing medicine decide to practice in the UK. The latter category is much harder to replace compared to the former category. Having this breakdown also helps us reach out to target groups and find out the specific factors which are keeping these students from coming back home.

For example, many doctors who are trained overseas might find the housemanship requirements back home excessively strenous. I had a friend who graduated from Melbourne University with a medical degree and wanted to try out the local system. He was sent to Kota Bahru where he lasted for only 2 weeks primarily because of poor working conditions. He's now a happy father and GP in Singapore.

Out of all the peers that my wife and I know who studied medicine overseas (Singapore, UK and Australia), probably 95% did not return to Malaysia.

I don't know the stats for other key occupational sectors such as software engineers, biologists and other PhD holders but the returning statistics (from my impressionistic 'study') for medical students is certainly a cause for concern especially since we are currently facing a shortage of doctors.

Secondly, we have to ask where these students are not returning from. In other words, is there a higher likelihood of students not returning if they have studied overseas in certain countries? My sense is, yes. Those who studied in NUS or NTU in Singapore are very unlikely to come back to Malaysia. There are a few reasons for this. For one, many Malaysians studying in NUS or NTU receive scholarships of one sort or another from the Singapore government. One of the requirements of these scholarships is that upon graduation, these students must work in Singapore for a minimum of 3 years. Compare this to the UK where it is very difficult for a non-EU citizen to obtain a work permit. After working for 3 years in Singapore, the Singapore government is hoping that these students would have married, settled down and be too used to living in Singapore to want to move back to Malaysia.

Again, from my experience, almost all of my friends who studied in NUS or NTU ended up staying, working and settling down in Singapore. Many of my friends who did their O levels and A levels in Singapore but pursued their undergraduate and post graduate education overseas also ended up going back to Singapore to work. Many of them, incidentally, are doctors. One went to Melbourne, another to Sydney, another to New South Wales, another to Edinburgh, but all of them ended back up in Singapore.

Knowing your target 'markets' will help you identify the reasons why they are not coming back, whether this is a concern and possibly find remedial measures.

Thirdly, we have to ask whether those not returning are predominantly scholarship or non-scholarship holders. For example, the national costs for JPA sponsorees not returning is higher compared to a non-sponsoree. This problem is exacerbated when JPA and other scholarship boards are not vigilant in tracking down these non-returnees and asking them to pay back their bonds. I'm supportive of the crackdown on those who have taken PTPN loans and have refused to pay them back even though they have decent paying jobs. Many of my friends who have gone overseas on JPA scholarships also don't seem to feel the urgency to pay back these bonds, partly because of the presumption that JPA won't crack down on them.

If many JPA sponsorees are not returning, then perhaps the terms of these scholarships need to be re-examined. Maybe means-testing for the eligibility to receive these scholarships need to take place. Or the terms of the bond tightened e.g. market based interest rates and collection of bonds enhanced.

Fourthly, we need to start collecting data on longer term brain drain trends. We talk about this year in year out but nobody, at least to my knowledge, has done anything close to a comprehensive study of this subject. Government ministries such as the Human Resource Ministry, the Public Service Commission and the Higher Education Ministry would clearly have an interest in conducting such studies but sadly, none have been done. Instead we have to rely on voluntary bodies such as the UKEC to do their own straw polls (Incidentally, when I last looked at the UKEC website, they have only received 50 responses (which presumably is what their initial report is based on) to their straw poll.

My sense is that the brain drain problem is not so serious among graduates with engineering, economics, business or accountancy degrees. Most of my peers in the UK with these degrees have come back to work in Malaysia, partly because it is not easy to get a work permit to work in the UK (other than doing a CPA). There are other reasons such as family and being bonded to an organization. I think that poor pay is not as big of a deal as some UK graduates make it out to be. You don't earn big bucks by working for one of the Accountancy firms (E&Y, Deloitte, etc...) and doing your CPA at the same time. Living in London is very expensive. You don't get to drive a car. You live in a small, cramped appartment. If you come back home to work, you can live in a bigger place, drive a car, be around your friends and family and so on.

The career path argument is perhaps more valid. But there are many things which one can achieve by coming back to Malaysia. Tony started his own company. There are more opportunities now in both the public and private sector. Khazanah is employing many bright business types (including some of my ex-colleagues from BCG) and paying them decent salaries. Consultancies such as BCG and McKinsey have offices in the region. I-banking outfits such as CIMB and boutiques such as ECM Libra also provide competitive salaries and corporate exposure. Many multinational companies have an operational and marketing presence in Malaysia including Microsoft, HP, Dell, P&G, Motorola, HSBC and so on.

Where I think there should be greater concern is the lack of returnees in certain occupational sectors. I've already identified the medical field as one of them. I'm not sure how serious the problem is among software engineers or those involved in the hard sciences. I think that the lack of returnees among PhD holders is also a concern especially given the sad state of our local universities. So if the government is concerned about brain drain, I hope they can think through the issues systematically and asses the key areas of concern and find specific remedial measures rather than aim for more general strategies (such as making it easier for students to bring back luxury cars that they've bought while overseas) which are poorly targetted.