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BRAIN GAIN vs. BRAIN DRAIN: A CASE STUDY OF PAKISTAN

BRAIN GAIN vs. BRAIN DRAIN: A CASE STUDY OF PAKISTAN. Safwan A. Khan, Vaqar Ahmed. Migration and Development: Emerging Debates. Balanced growth theory ( Haas, 2012) Migration  development of human capital Reverse transfers of money, knowledge, best practices, technology etc.

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BRAIN GAIN vs. BRAIN DRAIN: A CASE STUDY OF PAKISTAN

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  1. BRAIN GAIN vs. BRAIN DRAIN:A CASE STUDY OF PAKISTAN Safwan A. Khan, Vaqar Ahmed

  2. Migration and Development: Emerging Debates • Balanced growth theory (Haas, 2012) • Migration  development of human capital • Reverse transfers of money, knowledge, best practices, technology etc. • Asymmetric development theory (Haas, 2012) • Migration  underdevelopment of the sending country • Brain drain • Migration and development: no relationship (Skeldon, 2012)

  3. The Case of Pakistan • Average growth in annual emigration flows (1970-2011): 7%

  4. Research Approach • Data • Pakistan Economic Survey • World Development Indicators • Bureau of Emigration & Overseas Employment • Theory triangulation • As on previous slide • Methodological • Qualitative methods (Key informant interviews) • Quantitative methods (Time-series analysis)

  5. Migration Patterns in Pakistan GDP growth and emigration (% change)

  6. Pakistan: Consumption, savings, and remittance flows

  7. Top emigrant destinations

  8. Migration by labor type

  9. Migration by province

  10. The number of overseas Pakistanis (2010) Source: Bureau of Emigration and Overseas Employment (2010)

  11. Time-series Analysis • 3 SLS estimation (Foldvari et. al, 2012) • Variables used • GDP per capita (lny) • Physical capital stock (lk) • Annual emigration numbers (ltm) • Literacy rate (lr) • Period covered • 1972-2011

  12. Model specification lnyt = β10 + β11lnkt + β12tmt + β13lrt + u1,t lnkt = β20 + β21lnyt + β22tmt + β23lrt + u2,t tmt = β30 + β31lnyt + β32lnkt + β33lrt + u3,t lrt = β40 + β41lnyt + β42lnkt + β43tmt + u4,t

  13. Regression Results • Effect on GDP per capita

  14. Effect on capital stock • Effect on migration numbers

  15. Effect on literacy rate

  16. Migration & Development: Cross-cutting Themes • Overseas exposure and training: qualified diasporas • Japan: Knowledge and technology transfers due to increased migration • Globalized citizenry • Lack of economic opportunities  migration away from the country • Pakistani exports 20% higher owing to Pak diasporas

  17. 1970s and 1980s: Loss in production quality as qualified personnel moved abroad

  18. Labor Mobility and Development • The case of illegal migrants: over 33 million in EU • Bilateral readmission policies being undertaken by EU to address illegal migration • The EU model of increased labor mobility and increased economic activity • Two-way migration for reverse transfers and development • Malaysia: improved markets  lower migration

  19. Cluster phenomenon: concentration in sectors of comparative advantages rather than subsidies • Exchange programs can be more beneficial for brain gain • EU reintegration support fund: to facilitate migrant settlement in home country; run by NGOs instead of the GoP

  20. Remittances & Development • Higher remittances  inflationary pressures  poverty • Remittance flows only second to export earnings • Remittance spending  consumption goods and investment goods • Use of remittance flows: financing of CAD  less available for expenditure on social services

  21. Positive effect of remittances (Ahmed et al., 2010) • GDP growth • Household expenditure • Real investment • Poverty • Income inequality • But need to be aware of ‘Dutch Disease’

  22. Conflict & Migration • Push and pull effects of migration • Karachi: conflict  push migration  flight of capital • FATA: conflict  pull migration  source of livelihoods

  23. Case Studies on Returning Migrants • Faculty at various public and private educational institutions • Shifa International • Omar Saif (SMSall) • Centaurus • Rozee.pk

  24. Future Outlook • 2014 withdrawal of US troops from Afghanistan  influx of Afghan migrants • Push migration likely over the next 5 years  flight of talent • Competitive markets  opportunities for commercial investments by diasporas • China • India

  25. Policy Implications • Skills training for manpower export  high end skills • Too narrow a focus on remittances alone  engaging Diaspora in knowledge, ideas and technology transfer • Easier transition for returning migrants  conducive business environment • Diasporas  opportunities for export markets • Competitive markets where Diaspora can enter into Joint Ventures: ASEAN economies, China, India

  26. Thank you safwan@sdpi.org, vaqar@sdpi.org

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