While many policymakers continue to debate whether developing countries are damaged by the loss of skilled workers, others simply want to know how best to manage the flow. For even if the emigration of some highly skilled professionals and promising students can rebound to a country’s favour, it is fairly clear that a large-scale, one-way exodus can threaten economic growth. The real challenge is to put in motion policies that work in everyone’s best interests.
Significant losses, significant gains
There are two opposing, and often strongly held, views about the impact of skilled people leaving a developing country. One is that it depletes an already scarce resource. The other is that emigrants generate resources abroad that are then shared in their homelands.
With few highly trained workers, developing nations are understandably concerned about the phenomenon. In 1996, enrolment in higher education stood at 5 per cent in low-income countries, compared with 58 per cent in high-income countries. Moreover, there has been little change in enrolment levels since 1980 in both low- and middle-income countries, so there are few highly skilled people to spare.
Now consider the United States, the world’s single largest skills magnet. From the Caribbean alone it absorbs nearly 60 per cent of university graduates – as well as 44 per cent of people with a secondary education, precisely where these countries have made the most progress over the past two decades. Jamaica, and the nursing sector, have been particularly affected. But Caribbean governments are now taking a proactive approach to dealing with emigration from the region. For example, in 2001 a regional accord set out a plan to share assets to meet demand.
At the other extreme, the United States absorbs only about 4 per cent of India’s graduates from higher education, and no significant fraction of those less educated. But the United States does admit roughly 60,000 Indians working in information technology (IT) a year – only slightly fewer than the total number of India's most advanced IT students. The Indian media has raised alarm over this, but the government continues to forge ahead to expand training. There is evidence, in turn, that with Indian efforts to create a favourable environment for IT investment, American companies increasingly turn to Indian contractors, a development Indian expatriates are facilitating. These emigrants are also investing back home, while others are returning with new skills and a taste for entrepreneurism.
These examples demonstrate that while many are emigrating from developing countries and challenges still exist, collaborative efforts and targeted governmental policies are also generating economic returns and bolstering business creation, technology transfers, innovation, exports and earnings for those countries.
The 'six Rs': responses to skilled migration
The policies devised over the years to address the emigration of highly skilled people can be thought of as the "six Rs". The most widely touted prescription in the 1970s was for reparation to be made by taxing 'recipient' countries for redistribution to developing economies. The idea never had much traction. Restrictions on emigration were, of course, commonplace in the former Soviet Union, but have now been mostly abandoned, being seen as an infringement of human rights.
Yet restrictive immigration policies remain the norm. European countries have minimised the entry of skilled workers until recently, but so too have some Asian nations and South Africa. There, debate is rife over whether or not to seek skilled workers to offset the loss of South Africans to the Commonwealth and other African nations.
Policies of recruitment rarely mean an open door, however. Rather, they are targeted to attract particular skills such as software programming or medical personnel. Recently, developed countries including Australia, the United Kingdom and Germany have enacted policies to recruit such skilled workers. It's an aggressive shift that is both boosting the mobility of the highly skilled and generating concern over the consequences.
International bodies and developing nations have taken note. Getting skilled emigrants to return seems like an obvious gambit, and the International Organization for Migration’s "Return of Qualified Nationals" programme is the most significant attempt so far. The often small number of returnees is offset by the importance of the skills they bring back. Mexico, Canada and Malaysia are among those countries that have tried incentives for returnees, such as writing off student loans, tax exemptions, or awarding permanent resident status to partners married while abroad.
In a similar vein, resourcing policies seek to capitalise on expatriates' knowledge or income by reaching out through the expat networks known as “diasporas”. Home countries have been actively trying to attract money back from expats by offering foreign currency accounts, or incentives for investment such as tax breaks. For example, Mexico is seeking to lower the transaction costs that emigrants have to pay when making dollar remittances to family members. All in all, combinations of knowledge or technology transfers and direct investment are proving to be a powerful means of profiting from skilled emigration.
Policies of retention that target certain sectors of the economy hold promise for reducing emigration in the short term. An obvious focus is improving academic and research institutions, especially by drawing on regional and international cooperation: the regional University of the South Pacific in Suva, Fiji, is one such example. The development of IT infrastructure and education has become an equally obvious area of development, although as the recent collapse of the "dotcom" boom attests, betting on single industrial sectors is risky. Multiple targets of excellence need to be balanced with efforts to increase all levels of education and to diversify the skills available.
What the can developed world do?
Policies on admitting foreign workers and international trade agreements are the most readily available options. Admissions policies need to achieve a balance between protecting domestic labour markets and looking after the economic interests of developing countries. In a global economy, a fluid movement of labour serves everyone’s best interests. Facilitating mobility, however, does not necessarily mean an open door, but migration policies that are flexible, efficient and transparent.
Research shows that migrants who return home inject a substantial boost to the economy. But the longer migrant workers stay abroad, the less the chance that they will return, so there are strong reasons to encourage skilled migrants to return at the end of fixed-term contracts. One example is the American “cultural exchange” or J-1 visa, issued for varied periods of time for work in healthcare, research and development and other areas. After the permitted stay, the worker is required to return home for a two-year period before applying for re-admittance. This could be adapted, tailoring the length of stay to the type of skill, as one way of encouraging migrants to return.
It is also possible to create a list of attractive donor countries and/or 'at-risk' occupations, as the United Kingdom is doing, and restrict admissions accordingly. An alternative would be to list recommended source countries for employers seeking to fill posts in an under-resourced area. But such lists require often elusive statistical reliability, and constant revision. At the least, developed nations should recognise that international recruitment agencies are widely used to source staff from developing countries and are all too often exploitive. Recipient governments should ensure that their employers abide by ethical guidelines in recruiting foreign workers, or use accredited recruitment agencies. The UK Department of Health Guidelines on the International Recruitment of Nurses is one example of good practice.
At the same time, developed nations can positively affect the flow of skilled labour through bilateral and multilateral agreements on the mobility of workers. Such agreements have long governed the movement of everyone from temporary farm workers to medical personnel. Formal agreements permit authorities in developed countries to liaise directly with countries wanting to send highly skilled workers on a temporary basis. However, these agreements may be less appropriate for meeting the short-term or cyclical shortages typical of many highly skilled occupations in the global marketplace.
The General Agreement on Trade in Services (GATS) is the most promising approach for establishing a broader framework. Liberalising international trade in services should provide a major opportunity for developing countries with a large, highly-skilled workforce. Possible improvements include expanding and standardising the definitions of occupations; specifying standard time frames for stays and extensions to clearly distinguish between temporary transfers and permanent migration; and creating a new category for small teams and self-employed foreign specialists.
Over the long run, far-reaching policies that increase universal education and boost economic development appear to be the best response to large volumes of highly skilled emigration. Only the reduction of wage differentials and improved living conditions can dampen the incentives that lead to high levels of skilled emigration in the first place. But economic development takes time.
The policies reviewed here will not work in all settings, but they offer a range of options that developing countries can implement. Developed countries, especially those that seek to attract the best and brightest from low-income nations, need to take their responsibilities, and their own self-interest, seriously. Many of the steps suggested here are low cost, and serve to protect both domestic labour markets and developing countries with potential migrants. Managing the flow of scarce human capital offers the most promising way to give both sides a chance to benefit from the mobility of skilled labour.
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