Lao Economy

Southeast Asia Is Losing Best And Brightest To Richer Nations

Source: the edge markets

Nyl Patangan, a nursing graduate from the Philippines, left his native land in search of a better life. Now working in a Chicago hospital after a stint in Dubai, he’s supporting his parents back home and is buying his mother a Toyota Vios. A recent study by the Asian Development Bank shows that the number of immigrants with university degrees who left to work in richer nations in the Organisation for Economic Cooperation and Development surged 66% in the decade through 2010-2011 to 2.8 million. More than half of them came from the Philippines, with hundreds of thousands more working in regions outside the OECD like the Middle East.

The trend has persisted, with the number of Filipinos leaving for work overseas rising 27% between 2011 and 2015.

Brain drain, a term which originated in the 1960s when British scientists and intellectuals immigrated to the US, refers to the loss of human capital. Emerging nations, where salaries are but a fraction of those in the OECD, are vulnerable to losing their brightest talent even if it offers a silver lining in the form of remittances that support families back home. The World Bank estimates that remittances to developing countries amounted to US$429 billion in 2016, with those to the Philippines rising to US$30 billion, a tenth of its economy.

“This loss of human capital in the fields of medicine, science, engineering, management, and education can be a major obstacle to economic and social development,” ADB researchers Jeanne Batalova, Andriy Shymonyak, and Guntur Sugiyarto wrote in a February report.

Close to 10% of the highly-educated citizens from the Philippines, Singapore, and Vietnam live in OECD countries. For Laos and Cambodia, the ratio is about 15%.

The emigration comes even as Southeast Asia has made tremendous progress in boosting education in recent decades. More than 50% of Filipinos, Malaysians, and Singaporeans in OECD countries are highly educated, compared to the average of 30%. Immigrants from Southeast Asia are also often more educated or more experienced than what is needed for the jobs they hold. About 52% of workers from Thailand are overqualified and the ratio is more than 40% for immigrants from the Philippines, Laos, Cambodia, Myanmar and Vietnam.

Despite the region’s economic boom, with countries including the Philippines, Vietnam, Laos, Myanmar and Cambodia posting growth rates of more than 6%, the educated citizens are still likely to look for opportunities abroad.

“Migrants respond to other countries’ higher wages and better working conditions, prospects for professional development and continuous education, and opportunities to work with other skilled persons in talent clusters,” the report said.

In the hospital where Patangan works as a dialysis nurse, his colleagues include migrants from Cambodia, Laos and Thailand. Holding down two jobs, Patangan is now a permanent resident in the US. He’s traveling to Europe this month before paying his parents a visit in September in southern Philippines. “You work so hard, but at least here, you’re earning,” he said.