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METHODS IN BUSINESS RESEARCH

Factors Causing Brain Drain in Pakistan and its Long Term Consequences
TERM REPORT
COURSE INSTRUCTOR: PROF. S. M. SAEED RESEARCHERS: FATIQ BIN KHURSHEED MUHAMMAD TALHA ANSARI TALHA AMEER KHAN DATE: 15/06/2011

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 2

TABLE OF CONTENTS S. NO.


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

TOPIC
ACKNOWLEDGMENT PART ONE INTRODUCTION PART TWO LITERATURE REVIEW RESEARCH GAP PART THREE PROBLEM STATEMENT RESEARCH OBJECTIVE RESEARCH APPROACH SAMPLING PART FOUR RESEARCH FINDINGS & ANALYSIS PART FIVE DISCUSSION RESULTS REFERENCES

PAGE NO.
03 04 04 05 05 08 09 09 09 09 10 12 12 18 18 20 21

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 3

ACKNOWLEDGEMENT
We owe special thanks to all those people who assisted and supported us in this research. We would further like to express deepest sense of gratitude to our course instructor Professor Syed Mohammad Saeed who was always ready to offer his support and guidance at any time. His lectures were of extreme help to us in the making of this research report.

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PART ONE INTRODUCTION


The migration of skilled human capital from developing countries to the developed countries is a global phenomenon. The country that has suffered the most from brain drain is Pakistan. On average, annually 3,500 medical college graduates are added to the jobless list and thus most of them move to abroad in search for better career opportunities. This was stated by the Chairman Denmark Pakistan Chamber of Commerce (DPCC) and Research Economist Abid Ali Abid while delivering a lecture the impact of brain drain on Pakistans economy to the members of Lahore Economic Journalist Association (LEJA). Those who consider the movement of skilled human resources to abroad as a source of remittances for Pakistan have a myopic view. They fail to realize the fact that absence of highly qualified doctors, engineers, scientists, business managers etc. would hurt long term economic growth of the country. All economists agree that any doctor who leaves his poor country leaves a hole that cannot be filled. This is extremely harmful for the country as it is badly in need of skilled human capital which is migrating at a very high rate in search of better jobs and educational opportunities. No country can achieve long term economic growth by exporting its human resource. According to the facts of Pakistans Overseas Employment Corporation, 36,000 professionals have left Pakistan and settled abroad in last 30 years. This number is an official one which is very small proportion of the actual number migrants as most of the emigrants do not register. This figure is expected to increase to 45,000 in recent years. Many reasons for this brain drain have already been identified. The biggest problem is the lack of attractive opportunities for highly skilled labor. Educated unemployment is at its peak. Moreover, remuneration levels are also relatively low. The compensation level of skilled labor is 30-40 times higher in developed countries as compared to Pakistan. But money is not the only for moving abroad. Lack of respect of professionals is another highly rated factor. The purpose of this study is to identify the factors causing brain drain in Pakistan and its consequences on Pakistan economy in the longer run. This study is divided into five parts. Second part discusses the literature review, third part highlights the research methodology, fourth part delineates the graphical analysis and the last part discusses the findings of the study and conclusion.

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PART TWO 2.1 LITERATURE REVIEW


The greatest asset of any country is its highly trained and educated manpower. The contribution that one creative and skilled labor can make can be greater than a thousand unskilled labors. The loss of human resources, especially of skilled and intellectual workers from a country, is referred to as the Brain Drain or the Brain Migration. Brain drain is also commonly referred to as Human Capital Flight. Generally the reasons for brain drain include two aspects which come from both countries as well as individuals. When it comes to countries, the reasons may be: In source countries: lack of opportunities, political instability, economic depression, and health risks. In host countries: rich opportunities, political stability and freedom, developed economy, and better living conditions. Individual reasons include family influence (overseas relatives) and personal preference for a better and improved career and life. The term brain drain was initially limited to the migration of technology workers only but with the passage of time its radius has widened and it now includes the departure of educated and professional people from one country, economic sector, or field for another, usually for better pay or living conditions. Brain drain or human capital flight is considered an economic cost since individuals take with them the value of education or training provided to them by host country. Human capital flight is similar to the concept of Capital Flight which refers to the movement of financial capital. Brain Drain is a global phenomenon. Third world countries have suffered the most from this monstrous phenomenon. Africa has been the worst hit. It is said to have lost 60,000 professional doctors, university lecturers, engineers, surveyors, etc between 1985 and 1990 and to have been losing an average of 20,000 annually ever since (Oyowe, 1996). Iran, Pakistan and Turkey are included among the top-30 skilled emigration countries of the world. In 2000, the stock of skilled emigrants was 0.308 million for Iran, 0.222 million for Pakistan and 0.174 million for Turkey (Ozden and Schiff, 2006).

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 6 The literature also highlights major areas of reasons for Brain Drain in third world countries. Most of these reasons can be related to Pakistani Scenario to get a better understanding. 1) ECONOMIC REASONS Researchers argue that a highly qualified professional opts for emigration generally for economic reasons, for example, job satisfaction, progressive environment, higher salary, better living conditions etc. It is apparent from the history that countries that have provided these attractions have experienced the largest number of professional migrants. Furthermore, these migrants have made significant contributions to the economic growth of host countries. The movement and interaction of skilled personnel is considered to be productive but the cost of losing intellectual minds to the home countries can never be calculated in terms of both opportunities and investment.

Poverty, ignorance, war against terrorism, and financial instability has resulted in poor living standards in the country which has forced professionals to run away from their country. Furthermore, lack of facilities, resources, technology, infrastructure and opportunities force these skilled professionals to move abroad where these facilities and advanced technology is available.

2) LACK OF ACADEMIC RESOURCES According to prior researchers, foreign countries, especially the United States and those in Europe have been green pastures for scientists, engineers and doctors because payment at home is negligible in comparison. The education system in Pakistan is not well structured and developed and thus students leave for abroad for higher studies and most of them never return since they are offered better job opportunities after completing their education. These students think that the degree obtained from a developed country is much better than Pakistans.

The Pakistani Government has never paid much attention to re-engineering of its academic institutions especially higher education universities. This is the reason why none of the Pakistani universities was ranked among top 25 Universities of the Islamic World. Among the top 25 most productive institutions in the Islamic World, 10 are in Turkey, 5 in Egypt, 3 in Saudi Arabia and 2 in Malaysia. The three most productive institutions which contributed higher

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 7 number of papers belong to Turkey and are: University Hecetteppe (8979 research papers), University of Istanbul (6488 research papers) and Ankara University (5982 research papers). The three most productive scientists of past ten years are: Fun, HK (729 research papers) of University Sains Malaysia, Ng,SW (530 research papers) of University Malaya and Shamsipur M. (322 research papers) of University of Tehran (Naim and Atta ur Rahman, 2005). It is so unfortunate to see none of Pakistani universities in these lists.

3) ROLE OF POLITICAL FACTORS Literature on factors causing brain drain shows that political factors have a crucial role to play in defining the trends of migration/brain drain. The reasons for the deteriorating environment are the weaknesses we are still confronting in various areas of governance which need to be given a strong priority and commitment on the part of the government. There is a dire need in Pakistan to promote and practice good governance by stemming out corruption, conflicts and tribal clashes. It is necessary to ensure unbiased and uniform distribution of resources to make certain political stability. Diplomacy should be given a top priority to resolve conflicts rather than going in conflicts or wars to decide disagreements. Ensuring good governance would result in a better political stability and encourage professionals to stay in their home countries. No prior research information was available through secondary sources on this topic in Pakistan. A research report similar to this one was available which was conducted on the brain drain in OIC countries. The report brought to light almost similar reasons for brain drain in OIC countries including Pakistan. Moreover, the research also pointed out some measures that could help prevent loss of intellectual minds of these countries. These preventions include: Improvement of working conditions in private sector Investment in research and development Development of technological capabilities Identification of job opportunities for educated individuals Facilitation of social insurance benefits Development and strengthening of operating institutions

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2.2 RESEARCH GAP


The main purpose of this research is to fill the gap in knowledge between the previous researches regarding the main factors that cause job dissatisfaction among employees in small organizations. Most of the researches point out factors influencing employee satisfaction and motivation in developing world and their preventive measures. But no meaningful research has been conducted specifically relating to Pakistan. This study aims to study reasons that demotivate employees to perform better and leave organizations in the context of small organizations in Pakistan. This purpose will be achieved by studying IBA Grads as sample organization.

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PART THREE RESEARCH METHODOLOGY


3.1 PROBLEM STATEMENT
Pakistan has been going through the worst period of its more than 63 years of history. There is a lot of uncertainty and instability in the country in the areas of economy, politics, justice, technology, infrastructure, security etc. One of the most significant reasons highlighted for these problems is Brain Drain or Human Capital Flight. The skilled personnel, which are like the guardians of this country, leave their homeland and serve host countries. The migration of these skilled and educated individuals is a huge economic loss to the country as well as nation. There are quite many causes of brain drain from Pakistan. Search for a better life and career is the primary reason identified for professionals migration. This research paper aims to identify other causes of brain drain and their level of contribution to skilled personnels migration in comparison to primary one recognized.

3.2 RESEARCH OBJECTIVE


To solve a problem, a problem must be completely defined. Brain drain is a symptom and not the problem. The problem lies in the reasons causing human capital flight. To stop brain drain from Pakistan, all causes of migration must be identified so that it is easier for the policy makers to formulate strategies to bring an end to this monstrous phenomenon. This research paper aims to fulfill this objective. The paper intends to highlight all the factors causing migration of professionals and thus help policy makers in their objective.

3.3 RESEARCH APPROACH


The researchers make use of both types of researches i.e. qualitative and quantitative research. The researcher makes use of the qualitative techniques first to understand and define the problem and afterward they use the quantitative approach to substantiate the responses. The research was done in three different stages which are discussed below: i) Desk Research, ii) Focus Groups and iii) Surveys.

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3.3.1 RESEARCH DESK


To better understand the topic various studies were skimmed. The secondary research helped us in designing the questionnaire for focus group and as well as for the survey.

3.3.2 FOCUS GROUP


Conducting focus groups is one of the qualitative techniques used by the researcher in order to gain insights about the researched topic. They basically guide the proper direction to follow in the entire course of the research. In our research, after the literature review we took help of the insights gained in the focus groups. We conducted only one focus group which was in Institute of Business Administration, Karachi. The moderator of the focus group was Fatiq Bin Khursheed. The participants of focus group were both male and female undergraduate students of IBA. The reason for selecting students for focus group was that these students are future leaders and guardians of this country.

3.3.3 SURVEYS
After focus groups, a proper questionnaire was formulated keeping in view the insights gained from the respondents. Then a survey was conducted covering the youth segment of Karachi from all the fields of interest. We distributed Two Hundred and Fifty questionnaires throughout, however due to non-response error and missing responses, the total number of questionnaires used in the research was cut down to Two Hundred.

3.4 SAMPLING
We have used stratified sampling technique to define our sample. The sample comprised of Two Hundred respondents all of which were undergraduate students. In order to get responses from all the fields, the questionnaires were distributed in business schools, engineering universities, and medical colleges. For that matter we covered IBA, NED, SSUET, AKU, Dow Medical College, and Bahria University. The distribution is graphed as follows:

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Sample Distribution

22%

Business Students (125) 50% Engineering Students (70) Medical Students (55) 28%

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PART FOUR RESEARCH FINDINGS AND ANALYSIS


We have selected the sample from universities of Karachi, like IBA, NED, NUST, SIR SYED UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DUHS, and KMDC etc. We have only observed the behavior of Medical, Engineering and Business Students, because we want to narrow down our target population, in order to make the conclusion as concise and accurate as possible. This sample is defined to fill up our questionnaire as well as for focus group. Our sample has 200 students, all at the undergraduate level and has the following
Business Engineering Medical

Sample Distribution

composition; as shown in pie chart 1. 80 students from Business Schools 70 from Engineering Universities 50 from Medical Universities Our sample participants/respondents are from diverse educational background, and the following disintegration; as in pie chart 2. 120 students have done intermediate 80 students have done Advanced Levels After conducting the survey, we have observed that out of the sample of 200 students, 160 students want to move abroad. These 160 students include; 60 business students, 60

Sample Educational Background


intermediate A levels

Students willing to move abroad


Business Student Engineers Medical Students

engineers and 40 medical students, as shown in pie chart;

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Students who prefer to stay in Pakistan


100% 80% 60% 40% 20% 0% Financial/Job Constraint No Relatives Abroad Entrepreneurship Family Business Parents Business Students 0 0 4 16 0 Engineers 4 2 0 0 4 Medical Students 2 4 0 0 4

Students, who are planning to stay in Pakistan, identify the varied reasons, as shown in chart. We have already mentioned that there are 40 students do not want to move abroad, out of 20 business students, 16 are staying because of family business and 4 students are because they are planning to start their own business. Out of 10 engineers, 2 students are staying only because they do not have any relatives abroad for the purpose of accommodation, while 4 are saying that they have some financial constraints or cannot find job abroad and remaining 4 prefer to live in Pakistan only because of their parents. Out of 10 medical students, 4 students are staying only because they do not have any relatives abroad for the purpose of accommodation, while 2 are saying that they have some financial constraints or cannot find job abroad and remaining 4 prefer to live in Pakistan only because of their parents. As a result of these 40 students preference to live in Pakistan, our sample for rest of the research reduced to 160 students. Out these 160 students (respondent), there are almost 50% engineers who want to migrate to Middle East.

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Students who prefer to go abroad


100% 90% 80% 70% Axis Title 60% 50% 40% 30% 20% 10% 0% Middle East U.S Europe Canada Business Students 6 18 14 22 Engineers 28 10 14 8 Medical Students 6 24 8 2

These days most of the engineers pursue their future in Oil and Gas sector and in Construction sector, and since Middle Eastern countries are rich in petroleum reservoirs therefore, mechanical, chemical, electronics and petroleum students prefer to move these oil rich countries. Among the remaining 60 Business students, almost 35% students are willing to move to Canada, mainly because most of highest rating business schools are in Canada. Medical education of Pakistan is given greater importance in America; therefore almost 60% of medical students of DUHS and KMDC are willing to provide their services to Americans. Only 12.5% of these 160 undergraduate level students are willing to come back to Pakistan. The reasons, that forced these students to pursue their future in their motherland include; patriotism, family business, social life abroad, parents etc. as shown in figure;

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Students who will come back to Pakistan


100% 80% 60% 40% 20% 0% Social life Abroad Family Business Parents Patriotism

Business Student 0 2 0 4

Engineers 4 0 4 0

Medical Student 2 0 2 2

According to our research, 6 business students, 8 engineers and 6 medical students are willing to come to Pakistan. As it is sown in the figure, 4 engineers and 2 medical student are willing to come to only because of parental pressure and unfavorable social life abroad, while only 2 out 60 business student is willing to come because of family business. On the other end, 2 medical students out 40 and 4 business student show love for Pakistan, and are raring to do something for the country and nation. Almost 75% students are staying abroad only because of friends and teachers pressure, it means these two factors seem to be the most determining factors for the student to migrate abroad and serve there. Parents are the least effective factor forcing the students to cause huge human capital loss.

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Inernal Influencial Factors causing Brain Drain


100% 80% Axis Title 60% 40% 20% 0% Sibling Parents Teachers Friends

Business Student 8 6 22 18

Enineers 10 8 18 16

Medical Students 4 0 16 14

Keeping external factors apart, internal factors which includes; sibling, friends, family and teachers also influences the students to migrate from Pakistan. Out of 54 business students, who decided to stay abroad, 22 students are influenced by their teachers, 18 students by friends 8 by siblings to serve people who are not living in Pakistan. Similarly, out of 52 engineers, who decided to stay abroad, 18 students are influenced by their teachers, 16 students by friends and 10 by siblings to serve people who are not living in Pakistan. Finally, out of 34 medical students, who decided to stay abroad, 16 students are influenced by their teachers, 14 students by friends 4 by siblings to serve people living abroad. Only 5% students do not acknowledge the fact that this human capital loss is hurting the national welfare, economic conditions and social life in Pakistan. Only 2 business students and 2 medical students do not admit that current plight is due to this flight of human capital, but the rest says that if they stay in the country situation will improve. Consequently, 90% of the students said that
Yes 95% No

Loss Recognition
5%

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 17 Government is not realizing the severity of problem and have not taken any significant steps to curb this ever growing issue of Brain Drain. Other than internal factors as mentioned above, there are enormous external influences forcing potential future leaders to pursue their future life and future in the country other than their homeland. Following are the rating given by the undergraduate students to 10 external factors responsible for Brain Drain.

RATINGS BY STUDENTS
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Law and Order plight Dry job market 22 19 15 14 18 5 6 18 0 20 12 15 6 0 0 0 10 0 19 0 25 19 17 10 19 11 11 20 17 0 22 4 13 16 0 0 9 0 9 14 0 16 2 17 0 9 0 2

19 0

15 1 0

Poor economic condition in Pakistan 11 15 Future of Pakistan Political instability Fast diminishing nationalism Population explosion Bad governance Corruption Lack of motivation 0 19

21 20 0 0

10 10 17 14 14 6 22

10 0 18 12 0 0

14 0 0 8

15 16 19 13 3 5 2 0

14 17 10 0 0 4

19 22 15 9 9 10 19 22

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PART FIVE 5.1 DISCUSSION


After using different tools for conducting research to achieve research objective, we have observed that 20% of our sample students want to pursue their career in Pakistan. Assuming no Sampling Error, we may conclude that 80% of undergraduate students in Business, Engineering and Medical universities want move in a foreign country and around 70% students want to live abroad for rest of their life. Business Students prefer to live in Pakistan in order to become the successor of their family business or to set up their own business. These two motives exhibit by business leader are laudable, because it will not only provide the employment but also improve the economic conditions as it will increase the GDP by some small amount. If Only 25% of total business students can make an impact on our economy, imagine increasing this amount to cent percent and impact will be enormous. Almost all Engineers and Medical Students are staying because family issues and financial constraints. It means they are staying willingly to serve the nation, but if provided with an opportunity they will fly abroad. Most of the Business Students are willing to move to U.S, Canada and Europe, and very few want to move to Middle Eastern countries, only reason we can assumed out of it is that countries like U.S, Canada and Europe are rated highly business wise globally. Since U.S is providing both job and higher studies opportunities to Medical Students therefore, half of them are enthusiastic to go there. Similarly, since most of the Middle Eastern are giving prospective jobs to engineers like Civil, Mechanical, Electrical and Electronics students therefore half of engineers are seeing Middle East as potential markets for them. Though very few students are willing to come to serve the nation, but again business students are coming to Pakistan only to improve the economic conditions of Pakistan, and engineers and medical students are returning just because of social and family reasons. There are number of external factors which are forcing the students to migrate, these factors includes;

Factors Causing Brain Drain in Pakistan and its Long Term Consequences 19 Worst law and order situation in the country, which is not apt for doing business or even to have a peace of mind Presence of both frictional and cyclical unemployment, which bring agitation among the students Economic state is not going from bad to worse day by day, leaving no hope for students Political instability also brings discourage, our political leaders are oblivious of plight in the country as there are more involve in corruption Our government always takes dictation from others, and leaving no trust for people. Ever growing population, with depleting resources and supplies in the country, giving hint to have greater import with decreasing export. Our bureaucrats, politicians and government personnel are all involve in bribery, leaving nation in enigma. Fast diminishing nationalism Bleak future of Pakistan Lack of motivation to pursue future here in Pakistan, after taking into consideration above mention issues. According to our research, 22% students rate the poor law and order condition as the most influential factor for capital flight. After taking into consideration the ratings given by students, we may state that factors like poor law and order, fast diminishing nationalism; dry job market, bad governance and Poor economic condition in Pakistan are the most responsible factor for Brain Drain. Moreover, we may also conclude that factor like, lack of motivation, political instability, and future of Pakistan are the least influential factor for capital flight. Keeping above mention external factors apart, there are also few internal reasons responsible for this problem as well. Teachers at the university level forcing their intelligent students to move from Pakistan, and in addition to this, friend are also playing their part significantly in forcing the potential future leaders to leave their motherland. Though 95% of students recognizing loss, Brain Drain are causing but they are very dejected by the government seriousness in acknowledging this issue.

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5.2 RESULTS
Huge chunk of students at the undergraduate level are planning to leave Pakistan, and there are number of internal factors teachers and friends and external factors poor law and order, fast diminishing nationalism; dry job market, bad governance and Poor economic condition in Pakistan persuading these prospective students and potential leaders of tomorrow to leave their motherland forever. Brain drain is the serious dent to our economy as number of future doctors, scientists and businessmen are flying away, without returning back to society all benefits they have taken during the time period they were in Pakistan. It means the taxes taken from the poor people to fund the higher level of education in Pakistan are basically transferring to foreign country.

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REFERENCES

Brain Drain. (2011, April 4). Retrieved May 2011, from Skills Info Blog: http://skillsinfo.wordpress.com/2011/04/04/brain-drain-21-articles-chosen-by-skillsinfo/ Brain Drain in Pakistan to hurt long term growth. (2008, August 12). Retrieved May 2011, from http://www.defence.pk/forums/economy-development/13447-brain-drain-pakistan-hurt-long-termgrowth.html Pakistan - the worst country hit by brain drain. (2009, July 05). Retrieved May 2011, from Daily Times: http://www.dailytimes.com.pk/default.asp?page=2009\07\05\story_5-7-2009_pg5_8