Get ready for a brain drain

By Santo Koesoebjono

WASENAAR, The Netherlands (JP): As western European countries are looking vigorously for qualified workers to meet their shortages, developing countries should be on their guard. The most appropriate place to recruit skilled migrant workers are undeniably developing countries which are rich in people but lacking in skilled manpower. The announcement of policies in developed countries to allow and encourage the recruitment of qualified workers ushers in a period of brain gain for receiving countries and a brain drain for sending countries.

More developed countries of the European Union, Northern America and Japan are facing the crucial problem of an aging population, lack of skilled manpower and a decreasing population in the coming decades. The continuing low number of births per woman is reducing the number of youngsters entering the labor market. Only the population of four countries will increase during the first half of this century. The other 11 countries will experience a decline in population.

The United Nations publication Replacement Migration states that the European Union of 15 member countries (with more than 375 million inhabitants) will need some 219 million immigrants from now until 2025 to maintain the ratio between aged persons and working persons at the level of 1995 -- meaning one senior citizen against four persons of working age.

Shortage of manpower leads to declining productivity, and in turn a strong push for wage increase that will spur inflation and lower international competitiveness. To meet the same level of welfare in the coming decades EU members will have to import the required number of appropriate manpower.

Recently the governments of Austria, Germany, Italy, the Netherlands and Spain said they would have to recruit workers from overseas. Germany (population 82 million) stated recently that the country needed specific types of immigrants according to the need of its country's economy at a given time.

Immigration is expected to secure its international competitiveness and shape the future of Germany's economy and society. This policy is a radical change in the current immigration policy. Germany officially acknowledges that it is a country of immigration although its immigration flow since the early 1960s was already considered excessive.

Without immigration, estimated at an average of 200,000 a year, the country's population would have already decreased.

Similar to its neighbor, the Netherlands has also expressed its need of importing skilled manpower. For Italy the yearly quota of 63,000 immigrants from outside the EU is insufficient to meet the demand. Spain suggests inviting Latin Americans of Spanish origin to enroll in the army. In Austria, immigration will be more restricted and selected according to skills.

Western European countries will most probably scout for migrant workers in developing countries. There will be tough competition in the market of scarce skilled workers in those countries. Indonesia is among such target countries as illustrated by the export of nurses and recently also other workers. The expected brain drain will be detrimental to developing countries, which share the blame for lack of planning regarding manpower. Moreover these skilled persons leave their country to gain more, rather than to get out of their state of unemployment.

The benefits to migrant-sending countries are of course the remittances which can help to improve the living standards of workers' families. However, experience and literature on migration reveal that these funds are mostly used for short-term consumption purposes and temporary job creation, such as when the family decides to build a house. Nevertheless remittances remain a welcome source of foreign exchange for many developing nations. Governments encourage their nationals to go abroad and are even reluctant to facilitate their return because of these flows of funds.

Encouraging people to migrate is also due to the expected richer working experience from their temporary stay -- but will this experience be used to the advantage of the home country? Here again experience teaches that migrants, especially when accompanied by families, will remain for a long time in the receiving country. Just think about the education of their children that will last around 12 years. They will then be contributing to more developed countries and return only after retirement. All in all it is debatable whether emigration of skilled manpower is to the advantage of the sending, developing countries. One can start by evaluating the effect of sending nurses abroad for the health sector in Indonesia.

In international migration there are two sides involved, the sending and the receiving countries. Cooperation is needed if sending countries want to really benefit from this migration. Various alternatives can be proposed, such as temporary recruitment by countries in need of manpower, payment to sending countries for each departing skilled man or woman, sending workers between similar institutions in sending and receiving countries, binding agreements requiring qualified persons to return by reimbursing the premium paid for social security and pension in the host country upon return, paying part of the salary upon return, employing returned migrants in companies investing in sending countries, etc.

Divergences in population growth and standards of living lead to flows of people to places where there is a shortage of workers, where wages are higher and where living is easier. But in a not a too long time developing countries will face similar problems of aging and shortage of skills. The fertility rate of many developing countries is declining steadily. A country like Singapore is experiencing the consequences of low fertility and rising population aging and the need of care for elderly persons. More skilled persons are required to maintain the living standard of such countries and to support their elderly.

It is time for developing countries to draw up their outlines on a more efficient use of their own skilled manpower. Developing countries must take care of their talented people as they will be the target of the immigration policy of more developed countries.

The writer is an economist-demographer based in Netherlands who is currently conducting research on international migration.