RESEARCH PROPOSAL BY IMRAN, FAIZAN, IBRAR, USMAN

INFLUENCE OF PROFESSIONALS BRAIN DRAIN ON THE

DEVELOPING ECONOMIES LIKE PAKISTAN

Introduction
The term "brain drain" designates the international transfer of resources in the
form of human capital i.e., the migration of relatively highly educated individuals
from the developing to developed countries. This phenomenon, in the
terminology of development economics refers to the loss of high quality
manpower, which was once productively employed in the native country. The last
decade has seen an increase in the international mobility of highly skilled,
talented individuals in response to the expansion of the knowledge economy
accompanying globalization. (Nadeem and Ashfaq, 2006)

This international movement of human capital can be identified, in practice, as

the movement of scientists, doctors, educationists, engineers, executives, and
other professionals across frontiers. These are people with special talents, high
skills and specialized knowledge. The irony of international migration today is
that many people who migrate legally from poor to richer lands are the ones that
the Third World Countries can least afford to lose: the highly educated and
skilled. Since the great majority of these migrants move on a permanent basis,
this perverse brain drain not only represents loss of valuable human resources
but could prove to be a serious constraint on the future economic progress of
Third World nations. (Nadeem and Ashfaq, 2006)
Unfortunately, in Pakistan we have not paid due attention to the general
education of the masses and as a result, the country is far behind than others of
the region in education sector. According to official sources, the current literacy
rate in Pakistan is 51.6 per cent where female literacy rate is 39 per cent while
that of male is 64. It means that two women out of every three and one man out
of every three men are illiterate. (Nasir Nadeem and Dr. Muhammed Ashfaq,
DAWN – Business, 18 October, 2006)

Currently, Pakistan is also facing the problem of brain drain. The migration of
professionals to other countries such as the US, Canada, Australia, New Zealand
and particularly the Middle East has increased considerably in recent years.
Young, educated, and skilled Pakistanis, particularly engineers, doctors, IT
experts, scientists and other professionals have either left the country or are
planning to do so. This situation hinders the government from achieving its
proposed goals. To date, no serious efforts have been made to stop this
disastrous brain drain. And one of the main reason of for that brain drain is lack
of proper career planning that’s why people don’t see their career flourishing in
the futer and so they move across borders.

Significance of the Study

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. (YesPakistan.com, June 17, 2002)
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. (YesPakistan.com, June 17, 2002)
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

2
of the skilled manpower it can get, to one in which there is comparatively little
shortage of such individuals. (YesPakistan.com, June 17, 2002)

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. (YesPakistan.com, June 17, 2002)
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. (YesPakistan.com, June 17, 2002)
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 collected by the governments of Northern countries and
handed over to developing countries through the UN (Bhagwati and Dellalfar,
1973). (YesPakistan.com, June 17, 2002)
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. (YesPakistan.com, June 17, 2002)
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

3
skills and talents will be rewarded properly, based on what they do, not who they
know. (YesPakistan.com, June 17, 2002)
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. (YesPakistan.com, June 17, 2002)
The main purpose of this research is to explore and critically examine in a
descriptive and analytical manner causes and implications of brain drain on the
Pakistan’s economy and decreasing rate of skilled man power and know ledged
minds as well as educated minds.
The main reason is to find why people prefer going abroad rather then benefiting
their own nation and help making Pakistan more developed as it is a third world
developing country so the brain drain is unaffordable here.
The loss of a significant mass of educated people from any given economy
implies the reduction in average levels of productivity precisely because it is the
most talented that are likely to migrate. Moreover, given that educated workers
are likely to be on higher incomes, the erosion of a significant component to the
tax base following migration has important welfare implications (Desai et al,
2001).
Both traditional models and the new growth models present a strong case for the
net loss to the donor country which is particularly severe if the donor country is
poor. The evidence suggests that whilst the brain drain is not a new phenomenon
by any means, the number of educated people leaving developing countries is
now much greater than in the 1960s and 1970s. Although the emphasis in the
immigration literature tends to focus on low-skilled and often illegal immigration,
Lowell and Findlay (2001) suggest a greater degree of migration for skilled
workers. A key question is whether the migration of the most talented brings any
benefits to the donor country. Mountford (1997) and Stark and Wong (2001) both
argue that a brain drain in itself may not have adverse effects if it encourages
more people to pursue an education. That is, as long as the number of people

4
acquiring an education exceeds the number leaving there is no long-term loss to
the donor economy.

Indeed, there may be some optimal outflow of migrants that is necessary

precisely for the development of human capital in the donor country. Moreover,
some migrants may return and bring back crucial skills and experience acquired
abroad. Johnson and Regets (1998) refer to this as a “brain circulation”, which
may result in increased average productivity in the donor country. Remittances
could also provide the means by which people can invest in technology thereby
creating the potential for increased economic growth. However, the extent to
which remittances can result in significant growth crucially hinges on whether
they are used mostly for consumption or investment purposes. The evidence for
developing countries is not promising in terms of investment levels. Significantly,
there has been no effective study of the remittance behavior of the highly skilled.

An important explanation for the brain drain lies in the very large wage
differentials that exist between rich and poor countries, particularly for the highly
skilled. However, in the absence of a well-defined modern sector in the donor
economy, educated workers who remain may find that the only place of
employment may effectively be the traditional sector, thus rendering redundant
the costs of education they have borne. Migration, therefore, may represent an
optimal choice for educated workers to exercise their skills in a modern sector. In
the long run, this individually optimal decision may not necessarily have an
adverse effect on the home economy.

Contributions
Our research will help in understanding the fact of higher investment in human

5
Capital by the younger generations. If the second generations work force
observe that the older migrants have done well in the host country this may
increase the incentives of the talented young to invest in education.

This study will also promote higher investment in the domestic economy. The
success of the older generation abroad may provide the necessary impetus in
the donor country to invest in the creation of its own modern sector once the
distribution of talents has been revealed.

Research Objectives
The main purpose of the research is to explore and critically examine in a
descriptive and analytical manner the reasons of brain drain and its affects on
Pakistan’s economy and find ways on how to handle this problem.
a) To explore study and analyze the critical factors of brain drain.
b) To discuss critically the relevance of brain drain in the socio-economic
Context of Pakistani environment.
c) To examine and explore the job opportunities in Pakistan.

Literature Review
According to IMF, the migration rate (from Pakistan to the OECD countries) of
individuals with a tertiary education is more than seven per cent, while for India it
is about 2.7 per cent; these figures, however, fail to take into account the sizable
flow of professionals from the subcontinent to Bahrain, Kuwait, Oman, Qatar, and
the United Arab Emirates and therefore neglect an important component of the
brain drain from the relevant source countries. The estimates show that there is
an overall tendency for migration rates to be higher for highly educated
individuals. (Engr Husasin Ahmad Siddiqui, DAWN - Business; October 14,
2004)

The latest Gallup survey indicates that not only qualified professionals and

6
university graduates want to leave the country, but even semi-skilled and
unskilled workers want to migrate in search of better prospects. About 62 per
cent of the adults interviewed for the survey expressed the desire to go abroad to
work, while 38 per cent say that they would prefer to settle permanently outside
the country. This shows that many Pakistanis are gradually losing faith in the
country's economic future. (Engr Husasin Ahmad Siddiqui, DAWN - Business;
October14,2004)

According to a study the ratio of researchers and scientists, who opted for
working in foreign companies, is higher in the research wing and breading and
genetics institutions of the agriculture department. In some departments of
agriculture research institutes, over 30 per cent seats are vacant, mainly due to
the fact that the researchers left the country for better opportunities. And, due to
ban on recruitments, since 1993, these vacancies could not be filled. (Engr
Husasin Ahmad Siddiqui, DAWN - Business; October 14, 2004)
No doubt that we are getting foreign remittances as a result of brain drain. But
could we think that the money they send could be a better substitute in exchange
of the services what they are extending for others and becoming a source of their
rapid economic, scientific and technological development. If proper infrastructure
is provided to them within the country, Pakistan could earn manifold than the
money is received as foreign remittances. (Engr Husasin Ahmad Siddiqui, DAWN
-Business;October14,2004)
The available information shows huge disparities in the distribution of resources
for science and technology, between developed economies and developing
countries' GDPs. According to UNESCO (2001), the developing countries that
account for 78 per cent of world population (and 39 per cent of world GDP) only
contributed to 16 per cent of global research and development (R&D)
expenditure in 1996-97. In contrast, the developed economies with 22 per cent of
world population account for some 84 per cent of global R&D expenditure. (Engr
Husasin Ahmad Siddiqui, DAWN - Business; October 14, 2004)

7
The latest survey has strengthened the widely-held view that there has been a
continuous brain drain from the country in the past decade. (Zaffar Abbas, 17

November, 2000 ) .The poll indicates that not only qualified professionals and university
graduates, but even semi-skilled or unskilled workers want to leave Pakistan in
search of better prospects. (Zaffar Abbas, 17 November, 2000 ). About 62% of the adults
interviewed for the survey said they would like to work abroad. (Zaffar Abbas, 17
November, 2000 ). And as many as 38% said they would prefer to permanently settle
outside the country. (Zaffar Abbas, 17 November, 2000)

The report says that a similar survey carried out by the same organization in
1984 had showed only 17% in favor of settling outside the country. (Zaffar
Abbas, 17 November, 2000 ). Analyzing the survey statistics, Gallup-Pakistan says the
marked change is mainly the result of local economic conditions. (Zaffar Abbas, 17
November, 2000 ). But despite this diminishing confidence in Pakistan's economic future,
says the survey, nearly 90% of the people still take pride in being the citizen of
the country. (Zaffar Abbas, 17 November, 2000 ) .And it goes on to say that only one per
cent of the 1,500 people interviewed from across the country said they feel
ashamed of calling themselves a Pakistani. (Zaffar Abbas, 17 November, 2000)

Theoretical Framework
According to our research the independent variable is the “lack of industry” and
lack of career planning in Pakistan and the dependent variables are “low job
opportunities” and “low economic growth”.

Lack of industry in Pakistan creates unemployment amongst skilled labor. When

professionals step into the market they feel annoyed to know that the kind of
skills and expertise they are capable of is something that is not even required
and thus they fail to get the right kind of a job.
Due to lack of industry, people tend to migrate to other country which affects the
economy of the donor country. Consequently, skilled labor falls in number bring

8
the industry down and eventually causing damage to the economy. And lack of
career planning always desperate these skilled person to think of their future in
Pakistan, so they prefer going to developed countries where there is good career
management and planning for these specialized persons.

Hypothesis to be investigated
The key questions being proposed or hypothesis tested in the thesis. In this
study we are going to frame the following hypothesis:

H1: It is expected that increasing job opportunities will decrease the rate of brain
Drain.
H2: The better the infrastructure of jobs the lesser the brain drain.
H3: It is expected that more stability of economic growth/ conditions the better
the attraction to professionals to stay in Pakistan.
H4: In order to have a strong economy it is expected that to lessen the effects of
Brain drain better job opportunities must be created.
H5: it is expected that better steps towards career management and planning
would drop the rate of brain drain in Pakistan.

Methodology
Research Design
A survey based primary data will be used to examine the relationship between
the dependent and independent variables. The survey will be done from people
that fall between the age group of 25 – 50 years. It will include:
• Executives/senior professionals working abroad and in Pakistan.
• Young professionals who are working in organizations.

Instrument

9
The questionnaire will be used and administered to the respondents directly and
via email. The available instruments concerning related variables will be explored
for proper reliability and validity or will be developed indigenously. This will guide
us in understanding the causes of brain drain and explore more and better job
opportunities in order to build strong economic infrastructure within the country.

Data Analyses
After data collection and coding, the appropriate data analytic techniques
including descriptive and multivariate analyses will be carried out keeping in view
the objective of the study.

10