brain gain vs. brain drain: a case study of pakistan safwan a. khan, vaqar ahmed
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BRAIN GAIN vs. BRAIN DRAIN:
A CASE STUDY OF PAKISTAN
Safwan A. Khan, Vaqar Ahmed
Migration and Development: Emerging Debates
•Balanced growth theory (Haas, 2012)▫Migration development of human capital▫Reverse transfers of money, knowledge, best
practices, technology etc.
•Asymmetric development theory (Haas, 2012)▫Migration underdevelopment of the
sending country▫Brain drain
•Migration and development: no relationship (Skeldon, 2012)
The Case of Pakistan• Average growth in annual emigration flows
(1970-2011): 7%
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
Emigrant Numbers
Emigrant Numbers
Year
Em
igra
nt
Nu
mb
er
Research Approach
• Data▫Pakistan Economic Survey▫World Development Indicators▫Bureau of Emigration & Overseas Employment
• Theory triangulation▫As on previous slide
• Methodological▫Qualitative methods (Key informant interviews)▫Quantitative methods (Time-series analysis)
Migration Patterns in PakistanGDP growth and emigration (% change)
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
-60
-40
-20
0
20
40
60
80
GDP Growth (%)
% Change in Emigrant Numbers
Year
%
Pakistan: Consumption, savings, and remittance flows
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
0
20
40
60
80
100
120
Gross domestic savings (% of GDP)Final consumption expenditure, etc. (% of GDP)
Year
%
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
0
2000
4000
6000
8000
10000
12000
Remittances (Million US$)
Year
Mil
lion
US
$
Top emigrant destinations
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
50000
100000
150000
200000
250000
300000
Saudi Arabia. U.A.E. Oman
Nu
mb
ers
Migration by labor type
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
50000
100000
150000
200000
250000
Highly Qualified Highly Skilled Skilled Semi Skilled Un-Skilled
Year
Nu
mb
ers
Migration by province
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
0
50000
100000
150000
200000
250000
300000
PUNJABSINDHK.PakhtunkhawBALUCHISTANAZAD KASHMIRN/AREATRIBAL AREA
Year
Nu
mb
er
The number of overseas Pakistanis (2010)
Source: Bureau of Emigration and Overseas Employment (2010)
Africa2%
Americas 19%
Asia and Far East3%
Australia and New Zealand
1%
Europe28%
Middle East47%
Region-wise percentage of overseas Pakistanis (2010)
Time-series Analysis
•3 SLS estimation (Foldvari et. al, 2012)
•Variables used▫GDP per capita (lny)▫Physical capital stock (lk)▫Annual emigration numbers (ltm)▫Literacy rate (lr)
•Period covered▫1972-2011
Model specification
lnyt = β10 + β11lnkt + β12tmt + β13lrt + u1,t
lnkt = β20 + β21lnyt + β22tmt + β23lrt + u2,t
tmt = β30 + β31lnyt + β32lnkt + β33lrt + u3,t
lrt = β40 + β41lnyt + β42lnkt + β43tmt + u4,t
Regression Results
•Effect on GDP per capita
•Effect on capital stock
•Effect on migration numbers
•Effect on literacy rate
Migration & Development: Cross-cutting Themes• Overseas exposure and training: qualified diasporas
• Japan: Knowledge and technology transfers due to increased migration
• Globalized citizenry
• Lack of economic opportunities migration away from the country
• Pakistani exports 20% higher owing to Pak diasporas
•1970s and 1980s: Loss in production quality as qualified personnel moved abroad
• The case of illegal migrants: over 33 million in EU
• Bilateral readmission policies being undertaken by EU to address illegal migration
• The EU model of increased labor mobility and increased economic activity
• Two-way migration for reverse transfers and development
• Malaysia: improved markets lower migration
Labor Mobility and Development
•Cluster phenomenon: concentration in sectors of comparative advantages rather than subsidies
•Exchange programs can be more beneficial for brain gain
•EU reintegration support fund: to facilitate migrant settlement in home country; run by NGOs instead of the GoP
Remittances & Development•Higher remittances inflationary pressures
poverty
•Remittance flows only second to export earnings
•Remittance spending consumption goods and investment goods
•Use of remittance flows: financing of CAD less available for expenditure on social services
•Positive effect of remittances (Ahmed et al., 2010)▫GDP growth▫Household expenditure▫Real investment▫Poverty▫Income inequality
•But need to be aware of ‘Dutch Disease’
Conflict & Migration
•Push and pull effects of migration
•Karachi: conflict push migration flight of capital
•FATA: conflict pull migration source of livelihoods
Case Studies on Returning Migrants•Faculty at various public and private
educational institutions
•Shifa International
•Omar Saif (SMSall)
•Centaurus
•Rozee.pk
Future Outlook•2014 withdrawal of US troops from
Afghanistan influx of Afghan migrants
•Push migration likely over the next 5 years flight of talent
•Competitive markets opportunities for commercial investments by diasporas▫China▫India
Policy Implications• Skills training for manpower export high end skills
• Too narrow a focus on remittances alone engaging Diaspora in knowledge, ideas and technology transfer
• Easier transition for returning migrants conducive business environment
• Diasporas opportunities for export markets
• Competitive markets where Diaspora can enter into Joint Ventures: ASEAN economies, China, India