The serious brain drain problem

Alarm bells have been ringing for years over the issue of the brain drain and how it impedes competitiveness. Many skilled Malaysians leave to work in other countries. Some move back on retirement while many stay away permanently. What are the consequences of this talent haemorrhage for Malaysia, and what are the possible solutions?

MALAYSIA SUFFERS a voluntary emigration of people of different races and religions who possess talent, skills and knowledge. Their decision to settle in other countries brings high economic costs to Malaysia.

There is a paucity of statistical data available, yet anecdotal evidence suggests that the flight of human capital from Malaysia is serious and widespread. This was acknowledged in the New Economic Model (NEM) recently launched by the Prime Minister, Datuk Seri Najib Tun Razak. Some aggregate and crude numbers have been bandied around to back the common perception that the outflow is serious. But quantity is one thing. Equally of concern is the quality inherent in those who leave. Even when the numbers are not large, the problem of brain drain can still be serious, especially if those who leave possess skills, knowledge, creativeness, innovativeness and enterprise that could have contributed towards Malaysia's economy.

In reply to a question raised in Parliament on Monday, November 30, 2009, and reported by Bernama, the Deputy Foreign Minister Senator A. Kohilan Pillay claimed that 304,358 migrated to other countries from March 2008 till August 2009. Of these, around 200,000 left during the first eight months of 2009. This implies that the number of emigrants more than doubled between 2008 and 2009. The figure for 2007 was 139,696. There was no breakdown by race, skills profile and destination countries in the answer given by the Deputy Minister. A study done by Winters et al (2007), which was initially quoted by the Ministry of Science, Technology and Innovation at a Brain Gain Workshop organised by the United Nations Development Programme in 2009 estimated that in 2000, there were already 785,000 Malaysians residing overseas. However, according to the World Bank, the number of emigrants from Malaysia rose from 9,576 in 1960 to 1,489,168 in 2005, an almost 100-fold increase over the 45-year period (as quoted by Dr Fong Chan Onn, 2010)1.

The numbers are alarmingly large, but of even greater concern, however, is their skills profile. Already in 2000, the number of Malaysian with tertiary education working in OECD countries was 102,321, which represents a 40.8% increase over the 72,649 recorded in 19902. In the same year, there were 7,431 nurses, 4,129 doctors, 652 dentists and 798 pharmacists of Malaysian origin working in these countries. In 2,003, 7,955 researchers of Malaysian origin were employed in science and technology in the us. This was not far from the 10,419 engaged in similar work in Malaysia.

Quoting from the United Nations Global Migration Database (2010), Dr Fong found that for 2007, 92,337 Malaysians had settled in Australia,14,547 in New Zealand, 54,321 in the US and 61,000 in the United Kingdom.

Quoting foreign sources, Cecilia Kok and Tee Lin Say (The Star, February 6, 2010) claimed that the total number of researchers, scientists and engineers of Malaysian origin currently working overseas could probably have exceeded 20,000, with about 4o% of them found in the us and 10% in Australia. Singapore perhaps has the heaviest concen-tration of Malaysian talents. Anecdotal evidence suggests a large pool of skilled and educated Malaysian professionals such as doctors, lawyers, scientists and academics settled there.

Although most of the Malaysians who have migrated overseas are of Chinese origin, there are Malays and Indians who have emigrated abroad as well. Many aspects have contributed to the considerable flight of human capital, and can be categorised as either a push and pull factor.

Push factors

Institutionalised racism Among these is the loss of hope in those who have migrated that there ever will be fair and just treatment for all Malaysian citizens, irrespective of race and religion. This sense of helplessness has been induced in large part by the state's promulgation and practice of a whole host of policies and legis-lations ostensibly aimed at restructuring society, but which in effect favour Bumiputeras and discriminate against non-Bumiputeras.

Nowhere is this more blatant than in the practice of recruitment and promotion in the public sector; the giving of scholarships for overseas education; the recruitment and promotion of academic staff; and the enrol-ment of students into public universities. The feeling is strong that racism has been deeply embedded and institutionalised in all our state institutions. Such racism no doubt influences the nature and implemen-tation of policies in all these institutions. The outcome is of course an erosion of confidence among those who are victims of racial discrimination.

Declining quality of Malaysian education

Another major push factor is the declining quality of education in Malaysia. Education is generally acknowledged to be a vehicle for social advancement for the poor across generations. When opportunities for education at all levels are democratised, life chances of the poor are considerably improved, and earnings across the productive life span are enhanced.

Unfortunately for Malaysia, the quality of our education has dropped precipitously over the years. A shift in emphasis from meritocracy and academic excellence to race-based affirmative action in staff recruit-ment and promotions as well as student enrolment has in part contributed to this fall. This has been further exacerbated by a policy to equalise academic outcomes as practiced by the predominantly Bumiputera academic and educational community.

The overall end result of all these policy actions is to create race, but not merit-based, barriers that deny educational and training opportunities to many non-Bumiputera Malaysians, especially at the tertiary level. The declining quality of education has led many to seek higher education opportunities abroad.

Lack of public space

An increasing lack of intellectual, civil and human liberties that continuously restrict the space for intellectual discourse is another factor that causes some of the brains to leave. This has been further exacerbated by religious intolerance within the state bureaucracy. In contrast, most of the countries that Malaysians emigrate to have a culturally and religiously liberal and tolerant milieu.

An unfriendly bureaucracy

Bureaucratic inefficiency and the embracing of jingoism have led to many talents and skills being either left abroad or unutilised. Stories have been told of academically high-achieving Malaysian students on scholarships granted by the Public Services Department being discharged from their bonds upon successful completion, often with flying colours, of their undergraduate studies overseas. These scholars either stay back to pursue their post-graduate studies or migrate to Singapore, which gleefully welcomes them.

Another category of Malaysians forced to migrate are those who marry foreigners, especially Malaysian women whose foreign husbands and children cannot settle in Malaysia as permanent residents. This gender biased ruling has led most of them to stay overseas or cut short their stay in the country. Malaysian men who are married to foreign wives have their problems, too. Often their wives have difficulty getting permanent residency status and hence work permits. And so, although many of them are well qualified, their talents are left idle, when these can potentially be utilised by the country. Frustrated, these Malaysian men and their wives often choose to migrate overseas, where the productive potential of both can be better utilised.

Pull factors

The first such factor is the aggressive approach taken by many countries to draw in intellectuals and professionals. Packages are drawn up to lure foreigners, including Malaysians, to migrate there. These include employer-sponsored visas (H-iB) in the US; the Skilled Migration Programme in Australia and the very liberal granting of permanent residency and citizenship to skilled Malaysians in Singapore.

Some countries even attract talent from among students as young as those in Form 3. Singapore's long-running Asean scholarship draws in academically bright Malaysian students to study in secondary schools and universities. Even those who do not get scholarships but are from financially able families are sent there by their parents to study from Form 1 onwards. Singapore, dubbed the "Global Schoolhouse", offers a high standard of education. Often, many of them do not return, preferring to stay on and work there after graduating with university degrees. Under this scheme, much Malaysian talent has been lost to neighbouring Singapore. I dare say that Singapore is today a high income country in part because of the huge pool of skills and knowledge drawn there from other countries; among these, Malaysia must count as one of the largest contributors to this talent pool.

Negative effects of emigration

The large scale flight of human capital overseas is costly in economic terms to Malaysia, given that most who emigrate are highly skilled and talented professionals.

For some time now, Malaysia has been trapped in the middle income level. It is increasingly unable to compete in the low value-added, high volume and labour-intensive manufacturing activities. It wants to move into high value-added, low volume and knowledge intensive manufacturing operations such as research and development (R&D) and design engineering in the key electronics and electrical machinery (E&E) sub-sector; new high technology industries such as green technology, renewable energy, oil and gas, biotechnology, pharmaceuticals; large scale commercial plantation agriculture and agro-based industries and services such as Islamic financing and tourism.

While there is a long wish list, the country has been unable, with few exceptions, to move into most of these. This is because all these require a huge pool of skills and knowledge, as well as a big class of creative and innovative entrepreneurs which we lack. As if this is not bad enough, the country suffers a haemorrhage of talent. Besides losing much precious Malaysian talent overseas, Malaysia has been unable to draw in highly skilled expatriates. The NEM has admitted as much to this talent crunch and the country's inability to effectuate a brain transfusion, where brains lost are replaced by brains gained.

How does Malaysia arrest the brain drain?

The Malaysian Government is aware of the considerable economic loss and cost to the nation resulting from human capital flight abroad. It has in fact earlier responded to the problem through promulgating several programmes to draw Malaysian talents back from overseas. Among these were the Returning Scientists Programme (1995); the Returning Expert Programme (zoo].) and the Brain Gain Programme (2006). However, very few Malaysians abroad took up the offers. But given that a huge return of talent will help the Economic Transformation Programme (ETP), one of the key pillars of the NEM, efforts to lure talents back should continue. This is what the NEM says it wants to do, though the specifics have not yet been spelled out.

Some possible effective measures are:

Shedding race-based affirmative action

The Malaysian Government should immediately do away with its race-based affirmative action and replace it with a needs-based approach. Again, the NEM claims it wants to do precisely this over the next decade during the implementation of the loth (2011—2015) and nth Malaysia Plans (2016-2020). However, it also says that affirmative action should be market friendly. No doubt, the government needs to correct market failures, but such intervention should be based on class and needs and not race. In the process, not only will there be greater social egalitarianism but the frustrations that come from racial discrimination will also be eliminated. This will remove one of the causes of human capital flight abroad.

Acknowledging merit and excellence

It is also time for the Malaysian Government to acknowledge merit and excellence as the basis for recruitment and promotion and for the allocation of resources, particularly within the institutions in the public sector. When the behaviour of Malaysians is driven by these criteria, the result will be hard work, creativity and innovativeness. These are the very factors that are needed to transform Malaysia from a middle income country to a high income country. They will also lessen the motivation of Malaysians to move abroad.

"Besides Losing much precious Malaysian talent overseas, Malaysia has been unable to draw in highly skilled expatriates"

The Public Services Department (PSD) must find appropriate positions within the public sector to productively employ all PSD scholarship holders who have been sent abroad. These scholars should not be discharged so readily from their scholarship bonds.

A liberal ecosystem that stimulates creativity

As a start, the Malaysian Government must abolish all acts and legislations that curb basic freedoms such as the Internal Security Act, the University and University Colleges Act, the Printing Presses and Publications Act, etc. These draconian laws restrict intellectual discourses and disallow dissent, especially against official positions, when in fact dissent, when institutionalised, is an important source of knowledge. Intellectuals want a liberal and democratic system that can provide space for research and discourses without fear of being penalised or incarcerated. Failure to provide such a space will lead them to move to countries that can provide it.

Major institutional reform

Reforms to Malaysian institutions such as the police, the Malaysian Anti-Corruption Commission, the judiciary and the bureaucracy must be instituted so that the abuses that some of them have committed in recent years and that have caused a great deal of anxiety to the general public can be eliminated.

When the professionalism of key state institutions is in doubt and under threat, confidence in their ability to provide security, protection and justice will be considerably eroded. A sense of hopelessness and deprivation will set in, causing many of them to migrate. However, once their independence and competence have been restored, Malaysians will feel secure and protected. This at once removes one more source of frustration that can lead to an exodus of talent. At the same time, Malaysia will also be able to attract highly skilled knowledge workers from abroad, further enriching the talent pool so much needed for the ETP.

One of the key institutions that needs overhauling and revamping is the country's educational system. Essentially, there must be a return to meritocracy and academic excellence, which must be embedded in place of racism, in the governance of all levels of education. At the same time, non-academic barriers to entry, such as financial ones, must be removed in order for access to be further democratised and life chances, especially of the poor, further improved.

Attracting brains

Malaysian experts currently working abroad should be appointed to appro-priate senior positions in scientific and technology-based organisations owned by the government. Generous grants should be given to them to conduct their research, while venture capital should be provided them to put creative and innovative ideas to work.

Permanent residencies (PRs) or even citizenship should be given generously to spouses of Malaysians married to provide security, protection and justice will be considerably eroded. A sense of hopelessness and deprivation will set in, causing many of them to migrate. However, once their independence and competence have been restored, Malaysians will feel secure and protected. This at once removes one more source of frustration that can lead to an exodus of talent. At the same time, Malaysia will also be able to attract highly skilled knowledge workers from abroad, further enriching the talent pool so much needed for the ETP.

One of the key institutions that needs overhauling and revamping is the country's educational system. Essentially, there must be a return to meritocracy and academic excellence, which must be embedded in place of racism, in the governance of all levels of education. At the same time, non-academic barriers to entry, such as financial ones, must be removed in order for access to be further democratised and life chances, especially of the poor, further improved.

Attracting brains

Malaysian experts currently working abroad should be appointed to appro-priate senior positions in scientific and technology-based organisations owned by the government. Generous grants should be given to them to conduct their research, while venture capital should be provided them to put creative and innovative ideas to work.

Permanent residencies (PRs) or even citizenship should be given generously to spouses of Malaysians married to foreigners. At the same time, these spouses, especially the very qualified ones, should be allowed to work and contribute to Malaysia's economy.

The Immigration Department should also grant speedy approvals to applications from employers for foreign skilled and knowledge workers. They should be liberal in granting PRs to these skilled personnel and their family members from abroad. Malaysian civil servants need to be reminded that the market for talents is now global. The competition to hire these talents is extremely intense. Their speedy response is key to enhancing Malaysia's competitiveness.

Conclusion

Malaysia is currently caught in the middle income trap, unable to compete in the low end of the value chain but neither has it the technical and scientific capability to move into the high end of the value chain or into high technology and knowledge-intensive industries. Recently, Prime Minister Datuk Seri Najib bin Tun Razak expressed the government's desire to move out of this trap and transform the country into a high-income country, through launching the NEM. This objective is indeed noble. However, it faces, among others, the key human resource constraint, which if not overcome, can frustrate the government's ETP.

This constraint is manifested in two ways. One is a shortage of scientific, creative and innovative skills. The other is the flight of whatever scarce human capital we have, overseas. While large-scale human resource development is important, equally vital is to attract home the many skilled and experienced talents we have abroad. How successful we are in transforming our economy depends vitally on our success in carrying out these two key tasks. Some essential ingredients for this success are the ejection of racism from our core institutional structures, an improvement in the quality of our education and a return to merit and excellence in governance.

Toh Kin Woon was an elected three term state assemblyman in the Penang State Legislative Assembly, and served as a senator from 1993 to 1995. He is now a senior research fellow at SERI.

HERE TODAY, GONE TOMORROW
Compiled by Jeffrey Hardy Quah and Rosalind Chua

The brain drain issue is not just a national concern but one that also affects Penang, as more and more Penangites leave for better pastures within Malaysia. The drain is also occurring from the public sector to the private sector. What causes these leaks and what are their consequences?

“WE HEAR many stories about the pheno-menon described as 'brain drain' in Malaysia but are there evidence based data that this is indeed happening? If there are how much do we know of its many causes? Based on the anecdotes we hear in the popular press we have impressions of it happening. In any case it is not unique to Malaysia; India, China i and many African countries have all experienced this phenomenon. Sadly in Malaysia we have merely described the issue and perhaps not addressed the problem in any meaningful way if the fear expressed is warranted.

From the staffing aspect, to my know-ledge public universities experience to a lesser degree this concern of 'the brain drain. It is the private sector education that is signalling that the recruitment of better staff is a serious challenge. It is. While recruiting capable Malaysian academics is one issue, another is attracting experienced international academics. The current immigration regulations and the practice of it have shackled academic growth in this country. Wawasan Open University could definitely benefit from the introduction of more diverse academic talent; it would enable us to be more innovative, to explore new ways of teaching and so forth. Diversity is so much more enriching!

If we are to create a vibrant environment that attracts Malaysian and international academics, significant changes in higher education need to take place. As a nation we need to place more value on academia itself, on the generation of new thoughts and ideas. Once we restrict 'thought' we are removing half of the value of an academic, in effect we are just producing `teaching machines. Not really what we want. We also need to have a clear way of defining what academic quality is (this is a global issue) and reinforcing this in a practical way; I do not think that at the moment we are doing a clever job of it.

Finally, the nature of governance of institutions needs to change. Universities are too driven by bureaucracy that is then reinforced by the nation's legislators. We can't handcuff our academics and then expect them to perform to global standards.”

Tan Sri Prof Gajaraj Dhanarajan (top)

Chee Beng Kean.
Courtesy of Open University Malaysia

Tan Sri Emeritus Professor Gajaraj Dhanarajan

Hon. Director, Institute for Research and Innovation and founding Vice Chancellor of Wawasan Open University "KL IS THE FAVOURED spot for IT man-power drain away from Penang. It has a larger market space, better pay and better options. After KL is Singapore, perhaps due to the location being further away. However, market opportunities for both locations are way better compared to Penang. Penang Island is for the oldies.

With minimum basic wages it is almost impossible to hire experienced workers. But even if you offer increased salaries, they still prefer to head over to KL, or Singapore. Penang seems to be a training ground for fresh graduates and after getting experience they will most definitely move on to the bigger cities. If we cannot maintain experienced workers then it's not even possible or probable to be thinking of expansion.

I don't see this trend changing anytime soon. No better opportunities are being created as we speak. Fresh graduates are flocking to the big cities in search of better opportunities and growth. However, Penang is slowly chugging along with its majority of businesses, not coping with the extensive growth in the IT industry. In short, Penang is not spending on IT infrastructure. Where is the growth that the younger generation needs?

A major overhaul is needed for many Penangites' IT mindsets. There are not enough Penangites willing to stay behind to rebuild our weak IT infrastructure that we sorely need. Everywhere you go, it's the oldies that you have to deal with, alongside the ancient mentality of 'Our businesses survived the past 20 years without IT. We don't need it now Our market is ridiculously small compared to KL or Singapore, however we can do better. What we need are brilliant ideas to spark the need for our IT industry. It's an entire demand and supply chain life cycle actually. People need to change."

Chee Beng Kean
Director
Quentissal Solutions (M) Sdn Bhd

"ONE OF Acres subsidiaries that has been affected most by the brain drain is the division offering asset-based total logistics solutions (including the management of material hubs, procurement centres, distribution centres, material repair operations, reverse logistics and document management) locally and regionally.

It is extremely difficult to find candidates with logistics experience at the executive and managerial levels. The higher the level of vacancies the more difficult the positions are to fill. It isn't a case of the company being too choosy because the aggregate number of applicants today is relatively smaller than what it was just five years ago. On average I find that most of these applicants have less relevant logistics experience than applicants five years ago.

The quality of applicants for junior positions involving young graduates has also declined. The graduates today seem to have less initiative and poor basic language and communications skills, and they need to be spoon-fed with SOPS. Despite all of this, they still demand more pay, incentives, etc!

Another related phenomenon is the increase in employee turnover rate. Whilst the employment remuneration package increases from year to year, the turnover rate has increased by as much if not more. Our company actually has an average employee tenure of 20 years but this figure has been achieved by the significant pool of employees who have worked for our company for 20 to 40 years! Most of the turnover rate is contributed by employees recruited over the past five to 10 years.

This phenomenon has resulted in the company having unfilled vacancies for a relatively longer period of time and during such periods the senior management assumes such responsibilities. The current recruitment process takes a longer time even with fewer applicants due to the need to advertise more and for a more careful selection process to identify potential employees.

Jason Tan

Ho Kam Yoke

There are many factors that might have contributed towards the brain drain in the logistics industry. The overall industrial, employment and education policies are possibly the main reasons behind Malaysia's brain drain. In terms of Penang, the state loses out to Kiang Valley for a number of reasons. First of all, Kiang Valley has more higher education institutions. It is naturally convenient for fresh graduates to commence their career close to where they studied. More and more youngsters also prefer the Klang Valley's more vibrant and happening lifestyle. Fortunately, Penang still attracts those who choose a more relaxed, less hectic way of life without major traffic congestion."

Jason Tan
Group General Manager
MTT & Priority Group

"WE ARE FORTUNATE in that we have our I own nursing college, so we are not that badly affected.

We sponsor girls and boys, school leavers after Form 5, if they meet our qualifications. We give them three years' training, then they are contracted to work for Lam Wah Ee for five years.

On average, we have 10-12% attrition rate. The countries of choice would be the Middle East and Singapore; most of them go to these two places. Some go to other states in Malaysia to follow their husbands on transfer. I think it's the same with every hospital.

Salary is one big consideration. Also, they want a change of environment. When they are contracted, they feel that they are bound. When the contract is over, there is this idea that they are released, so they want to go out.

A staff nurse, by the time she reaches five years, will get Rm2,000-plus. There, it's something like Rm10,000. Some of them get even more with overtime. Who wouldn't want to go?

The government has reemployed their retired staff on contract, so many of them are staying back. They get very good perks, they get the same salary they were drawing, they get bonuses at the end of it, and so on. There are still government nurses who go overseas, but I'm not sure of the figures.

We replace the nurses who leave with our new graduates, and we also take in some foreign nurses from India, and a few from Myanmar. We have to put in a lot of training, to 'top up. Some of the Indian nurses come from pretty advanced hospitals, so it's less of a problem. But if we take in Myanmar nurses, then we have to do more topping up, unless they have experience in Singapore, so they would be easier to train.

A lot of these foreign nurses find that it's advantageous to come to us, then go abroad, because they are treated as lower-grade staff nurses when they go from their home country to the Middle East or wherever. But once they get two years or more experience from our hospital, then they get employed at par with our nurses abroad. They would get a very high salary. Our standard of nursing is equivalent to that of British or Australian-trained nurses. Lam Wah Ee nurses are highly sought after. (laughs)

It is difficult to pit Rm2,000 against RM10,000. Like my staff tell me, 'My car belongs to the bank, my house belongs to the bank’. I think the brain drain problem will be with us for some time.”

Ho Kam Yoke
Director of Nursing
Lam Wah Ee Hospital



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