Wikipedia article

A brain drain or human capital flight is an emigration of trained and talented

individuals ("human capital") to other nations or jurisdictions, due to conflicts, lack of
opportunity, health hazards where they are living or other reasons. It parallels the term
"capital flight" which refers to financial capital that is no longer invested in the country
where its owner lived and earned it. Investment in higher education is lost when a trained
individual leaves and does not return. Also, whatever social capital the individual has
been a part of is reduced by his or her departure. Spokesmen for the Royal Society of
London coined the expression “brain drain” to describe the outflow of scientists and
technologists to Canada and the United States in the early 1950s. Its counterpart is brain
gain in the areas to which talent migrates. Brain drain can occur either when individuals
who study abroad and complete their education do not return to their home country, or
when individuals educated in their home country emigrate for higher wages or better
opportunities. The second form is arguably worse, because it drains more resources from
the home country.

This phenomenon is perhaps most problematic for developing nations, where it is

widespread. In these countries, higher education and professional certification are often
viewed as the surest path to escape from a troubled economy or difficult political
situation.

Brain Drain

The departure of educated or talented persons for better pay or jobs elsewhere, as in The
repression of free speech in Germany triggered a brain drain to Britain and
America. The term originated about 1960, when many British scientists and intellectuals
emigrated to the United States for a better working climate.

Brain Drain Hits Philippines

By Douglas Bakshian
Manila
29 June 2006

Airline pilots and mechanics, and electrical linesmen and engineers are among the
skilled workers leaving the Philippines for higher paying jobs overseas in a brain drain
that raises questions about the nation's future. While the estimated eight million
Filipinos working abroad make a huge contribution to the economy from the money they
send home, services in the Philippines are starting to suffer.
People who fly airplanes and those who maintain them are exiting the Philippines. The
air industry estimates that since 2000 more than 120 pilots, out of 700 who are qualified
to serve as captains, have left.

Philippine Airlines, the largest carrier in the country, has lost almost 20 percent of its
pilots since 2003. It has 450 pilots - but at least 80 have left - many of whom had at least
10 years experience, making them difficult to replace. Captain Johnny Andrews, vice
president for flight operations, says the company's expansion plans face cutbacks as a
result.

"If this is not stopped our aviation industry will be in trouble," Andrews said. "If you base
it on the demand … there is a chance that our aviation industry will collapse."

Captain Andrews says the bottom line is money. Foreign carriers offer pilots salaries of
up to $10,000 a month. Senior pilots at Philippines Airlines receive about $4,000,
although that can be boosted to $7,000 by benefits and productivity pay.

He says Philippine Airlines has increased benefits and pay and raised the retirement age
for pilots. The government has imposed a six-month waiting period on senior pilots who
plan to leave their jobs. But, Andrews says, the trend continues, and while training of
new pilots has been increased, it cannot fill the gap at the top where the experienced ones
are leaving.

Much of the new demand is from low-cost Asian carriers in nations including South
Korea, Sri Lanka and Singapore. In addition, Captain Andrews says with the air industry
expanding in China and India, the demand for pilots and mechanics will continue to grow
in coming years.

There are problems on the ground, too. The Philippine Overseas Employment
Administration says almost 1,500 aircraft mechanics have left since 2000.

Currently about 1500 mechanics are working in the local industry. About 900 of those are
senior, requiring five to six years to be trained. Metal fabricators who cut metal for
aircraft bodies are also being poached by overseas companies.

Aviation is not the only industry suffering. The power sector is taking a hit. Meralco, the
Manila electric power distributor, says it is losing linesmen who construct, operate, and
maintain power lines. Ruben Sapitulla, head of the company's human resources, says
experienced workers are hard to replace.

"If you are talking about a first class linesmen (it takes) about five or six years, or even
more before they can be as skillful as these linemen who are leaving now," Sapitulla said.
"It's really a problem for the company, because replacing these linemen is costly."

He says some foreign companies pay up to 30,000 pesos a week, or about $560, which is
more than Meralco pays in a month.

Health care also is suffering. Experts estimate that more than 100,000 nurses have left the
Philippines since 1994, and thousands of doctors have left over the past six years. Most
of the doctors work as nurses overseas, because it is easier to get a license and they still
make more money than at home.

The Philippines is one of Asia's poorest countries, but it has an educated population.
Thirty years ago, Filipinos began leaving home to work overseas, taking jobs around the
world.

Now, more than eight million Filipinos work overseas and they make up a big part of the
economy, sending home nearly $11 billion last year. While the government encourages
and supports the overseas workers for the money they bring in, the policy is starting to
have painful costs.

Economics professor Ernesto Pernia, at the University of the Philippines, says it is a

delicate balance.

"On the one hand, it's a relief from the high level of unemployment and the low incomes
that they could get here given the weakness of the economy," Pernia said. "And on the
other hand, there is a brain drain and a skills drain occurring from the Philippines. The
counterpart to that is that these migrant workers remit substantial amounts to the
economy representing close to 10 percent of G.D.P."

To fight the drain, the government has begun to declare certain workers, such as pilots
and senior aircraft mechanics, as having "mission-critical skills." That means they must
give six months notice before they can take a job overseas.

Danilo Cruz, Undersecretary of Labor, says more training also is needed to make up for
the losses.

"Our workers have the right to gain full employment but if this will be detrimental to the
national interest and the economy the government has the power to control the outflow of
these skills overseas," Cruz said. "Aside from that, we should encourage the training of
people on these critical skills."

But business and other analysts are skeptical. They say global economic growth will
consume needed skills and the government of a developing nation like the Philippines is
no match for the power of the international job market.

Brain drain is killing local industries

 Friday, March 10, 2006
Exchange Rate Phisix
Closing: Mar 09, 2006 Closing: Mar 09, 2006

US$=P51.40 2109.77
Up 0.02 centavos Up 10.51 points

We often hear government officials praising our overseas Filipino workers (OFWs) for
their vital contributions to the economy and hailing them as the country’s new heroes.

What we do not hear from these officials are the adverse impact of the exodus of
Filipinos abroad and we’re not talking of not just the social cost of children growing up
without one or both their parents but the detrimental effect on the economy of the brain
drain of what has been called “mission-critical skills.”

We are all aware of the effect of the migration of mission-critical skills in the health care
sector. Hospital administrators have long been complaining about hospitals which have
already closed or in danger of closing down because of lack of doctors, nurses, medical
technicians and other key personnel.

Our loss has been the gain of hospitals in the US, Europe, and the Middle East. Many of
our hospitals are understaffed and some of the smaller ones in the provinces do not even
have a doctor, while foreign hospitals have Filipino doctors working as nurses.

An editor who visited Saudi Arabia a few years back said that a hospital the media group
she joined visited had such a large staff that signs in the hospital were in Arabic, English
and Filipino.

Like most people, I thought that the mission-critical skills brain drain was affecting only
the health care industry until I got hold of the eye opening privilege speech of
Zamboanga del Norte Rep. Roseller Barinaga where he talked of “The silent crisis: The
hemorrhage of mission-critical skills.”

In Barinaga’s Jan. 20 speech, he talked about the crisis caused by the “unchecked and
unregulated outflow of mission-critical skills and talents affected the few remaining but
strategic industries” and he mentioned the aviation, electronic, shipping, steel,
petrochemical and telecommunications as among those being threatened by the brain and
skills drain.

He said the viability of these key industries are threatened if they continue to lose key
people like commercial pilots, aircraft mechanics for the airline industry, IT engineers
and technicians for the electronic industry, ship engineers and technicians for the
shipping industry, metallurgical and plant engineers for the steel industry, chemical
engineers for the petrochemical industry, radio frequency engineers for the
telecommunications industry among others.

Among these industries, the most threatened are the airlines and is the airline sector.
Already local airlines are talking about stopping service in the so-called missionary
routes and cutting flights even in key cities as early as this year if they continue to lose
senior pilots and mechanics.

As early as Nov. 24, 2005, officials of airline companies from Air Philippines, Asian
Spirit Airlines, Cebu Pacific Air Inc., Philippine Airlines and SEAIR together with the
service provider companies Aviation Partnership (Phils) Corp., Lufthansa Technik
Philippines, MacroAsia Corp., MacroAsia Eurest, MacroAsia Menzies and Miascor
Aircraft Maintenance Corp. wrote a joint urgent letter to Labor Secretary Patricia Sto.
Tomas “to arrest the intervention of the Department of Labor and Employment (DoLE) to
arrest the drain of highly skilled mission critical staff in the Philippine aviation industry.”

They warned that “If the current exodus of these highly skilled mission critical staff
continues, the impact on the operations of the local aviation industry as well as the
subsequent loss of the sector’s contribution to the national economy would be severe and
irreparable.”

We already know what will happen if local airlines stop or reduce their domestic
operations. We already had an actual experience of this when Philippine Airlines
grounded all its planes for a couple of weeks during the Estrada administration because of
financial and labor problems. The economy was hit hard and losses to businessmen must
have run into billions during that time. The Estrada administration brought in Cathay
Pacific to service some key routes as a stop gap measure but it did not work out. The fare
and cargo charges of Cathay Pacific were simply unaffordable for the local market.

Do we want the same thing to happen? This is a real and looming possibility and all the
predictions of the government of an economic takeoff would crash if and when domestic
commercial airlines are forced to cut down their operations.
The joint letter to Sto. Tomas of the affected airlines and service support companies
painted the grim picture facing the industry because of the unabated drain of mission-
critical staff. The letter said in just a one-year period from 2004 to 2005 “the records of
the Philippine Overseas Employment Administration (POEA) report that more 200
aircraft mechanics and aviation staff left the country.”

The letter further pointed out: “Pending with the same agency are job orders from
overseas airlines for more than 200 pilots and more aircraft mechanics from the
Philippines. With the expected growth in passenger volume and fleets throughout the
region, the problem is likely to remain. The loss of these personnel means that the
maintenance requirement of the fleet of Philippine Airlines, other foreign and domestic
airlines would be impaired with dire consequences to domestic aviation and airline
industry.”

The letter said regulatory agencies might force airlines to cut down or stop operations if
the drain in their mission-critical staff continues. It said: “The continued survival and
viability of this industry depends on the stable number of mission-critical staff such as
aircraft pilots, mechanics, planners, and engineers as required by such regulatory
agencies as the Federal Aviation Administration (FAA) of the United States; the European
Air Safety Agency (EASA) of the European Union; the Civil Aviation Department (CAD)
of Hong Kong; and, the Air Transportation Office (ATO) of the Philippines.”

The aviation industry stakeholders asked DoLE “to declare these skills as vital to national
interest and pursuant to Sec. 5 of Republic Act 8042, to consider a ban on the overseas
deployment of the said occupation and skills in pursuit of the national interest for a
period of three (3) to five (5) years, effective immediately.”

They said: “The ban will provide the domestic aviation industry a breathing space which
would allow current intervention being pursued such as aggressive manpower training
programs to provide a buffer when the time to lift the said deployment ban comes. At
present, the exodus far outpaces whatever efforts are taken by the industry both in
training replacements since there is a long lead time involved or in formulating retention
programs.”

There had been no concrete response from the labor department since the letter was sent
last November and it’s good that Barinaga has reopened the issue and urged his
colleagues to pass a resolution asking the labor department and POEA to study the
imposition of the ban on the deployment of “mission critical” staff of various industries
including the airline industry.

Barinaga also proposed the holding of hearings and consultation by the House committee
on labor and employment to find out what legislative and other remedial measures can be
undertaken to stop the brain drain of critical skills and ensure the survival and
development of the affected vital industries.