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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

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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

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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

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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

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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

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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)

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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,
November, 2000 17

) .The poll indicates that not only qualified professionals and university ). About 62% of the adults

graduates, but even semi-skilled or unskilled workers want to leave Pakistan in search of better prospects. (Zaffar Abbas,
17 November, 2000

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, ) .And it goes on to say that only one per

says the survey, nearly 90% of the people still take pride in being the citizen of the country. (Zaffar Abbas,
17 November, 2000

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

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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.

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