Structural reforms needed to prevent brain drain in Malaysia

Office workers are pictured during lunchtime in Kuala Lumpur June 5, 2020. — Picture by Choo Choy May
Office workers are pictured during lunchtime in Kuala Lumpur June 5, 2020. — Picture by Choo Choy May

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KUALA LUMPUR, Jan 11 — Malaysia’s long-awaited mission to join the coveted developed nations club seems to have been further derailed.

The country’s brain drain is intense relative to a narrow skill base, with one out of ten graduates migrated in 2000 — this is twice the world average and including Singapore would make this two out of 10, according to the Organisation for Economic Co-operation and Development (OECD).

According to the World Bank in 2011, brain drain is aggravated by a lack of compensating inflow, and Malaysia is a major receiving country but most immigrants are low skill while the high-skill expatriate base has shrunk by a quarter since 2004. 

Today, nearly 1.7 million Malaysians are employed outside the country, with Singapore being the most favoured country (54 per cent), followed by Australia (15 per cent), the United Kingdom (5.0 per cent) and the United States (10 per cent).

Many skilled migrants have spent their formative years overseas, which not only lowered the fiscal cost of migration but also the chances of return migration.

Lack of career prospect in Malaysia is a detrimental issue as the domestic job market is not ready for non-traditional jobs as it only exclusively caters for traditional jobs such as doctors, lawyers, and engineers, said Universiti Malaya’s Department of Business Policy and Strategy head Associate Professor Dr Norizah Mohd Mustamil.  

"Those with niche subject areas such as arts or pure sciences are given questionable looks, simply because they have diverted far from the mainstream job market. 

"Hence, to survive, these talents are forced to seek opportunities abroad where their unique skill sets are actually valued. These countries are where they actually have a decent opportunity to earn a living," she told Bernama in an interview recently.

How large is Malaysia’s brain drain?

Highly knowledgeable, adaptable, skilled and experienced individuals are often the most valuable asset for any country.

These talents are the nation-builders, the drivers behind every progress of the nation. In fact, Malaysia has built a large local talent pool over the years.

"But yet, we have also noticed increasing rates of talent migration," said Norizah, noting that there is still a lack of willingness to address the issue of low wages and the inability to proceed with structural reforms is undeniably contributing to such a decision.

For example, she noted that entry level positions in Canada starts at US$38,000 per year (equivalent to RM150,000 annually) whereas in Malaysia fresh graduates earn about US$7,000 (equivalent to RM30,000 annually). 

"You don’t have to be a math expert to figure out the apparent pay difference. It is therefore sufficient to state that being paid marginally in relation to payment that they could get from a developed country and unattractive fringe benefits have pushed Malaysians to emigrate (for career opportunities)," she said in an email.

The World Bank said Malaysia’s journey to become a high-income nation will also depend on how it handles brain drain -- the emigration of high-skill human capital. 

In its 2011 "Malaysia Economic Monitor" report, the bank estimated the Malaysian diaspora in 2010 at one million, with brain drain at a third of this. 

The monitor said by boosting productivity and strengthening inclusiveness, Malaysia can address the brain drain comprehensively and it recommends a revamp of the education system, an overhaul of the innovation ecosystem, and a reorientation of inclusiveness policies towards merit and need. 

Has TalentCorp achieved its objective?

Institute for Democracy and Economic Affairs (IDEAS) chief executive officer Tricia Yeoh said the government has set up entities such as Talent Corporation Malaysia Bhd to bring back talented Malaysians.

Established in 2011 to attract, nurture and retain the best and the right talent to Malaysia, the agency has approved 5,366 applications up until December 2019 under its Returning Expat Programme and recorded 116,605 students profiled for the workforce under the Nurturing Expert Talent and 996 women participated in the Career Comeback Programme.

"I am not clear whether this has resulted in commensurate results. Brain drain is something that is not uncommon in many countries, but the anomaly for us is that the talented workforce is not flowing into the country, replacing the talent that is being lost," Yeoh told Bernama.

She pointed out that one of the chief problems of brain drain issue is the bureaucracy and complexity of immigration rules, making it very difficult for foreign spouses of Malaysians and their children to obtain permanent residency, citizenship and employment. 

"At the moment, professional foreign spouses find it extremely challenging to navigate the red-tape. For example, non-citizen spouses’ visas state that employment is strictly prohibited. And although foreign spouses can work with an endorsement, there are many strict conditions that must be satisfied beforehand. 

"This is just one of the examples that the government could address, since professional foreign spouses would be a natural pool of talents to draw from, to climb up the value chain of the economy," said Yeoh. 

Addressing the issue

Ultimately, many talented individuals leave if there are no opportunities locally. In turn, the opportunities would arise if the economy were to strengthen.

Yeoh said Malaysia's economy was already struggling prior to Covid-19, and the conditions were further exacerbated by the pandemic. 

She noted that if the country’s structural problems were to be addressed, the way to turn the economy around is to emphasise on key sectors and industries of growth, which would create the right kinds of jobs and opportunities that talented individuals would choose to stay in the country.

"This includes creating a more stable and robust political system, transparent and accountable institutions, fair and rules-based economic systems, and ensuring meritocratic practices in specific areas such as enterprise development and equity ownership, while understanding the need to address equitable opportunities for the poorer communities," said Yeoh.

She said addressing the systems would attract foreign direct investment, increase investment into the key IR4.0 sectors or any industries, in which technology could be harnessed, that human capital would in turn be interested in staying in the country to invest and participate in.

Meanwhile, Norizah said there must be equal emphasis on a comprehensive discussion in terms of well-being and quality of life, involving attractive remuneration, job opportunities and the climate for safety, better education for children and a higher standard of living. — Bernama

 

 

 


 

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