Economy has come to the stage calls for retaining skilled manpower

Dec 04 - Dec 10, 2006

Pakistan is said to be struggling to build an adequate infrastructure for producing expertise. The number of experts working in almost any field is getting woefully low; training remains inadequate; and most of the facilities are antiquated or simply nonexistent. Experts say that the capacity-enhancement move of the existing industrial units and corporate sector, especially those belonging to the value-added segment, has exposed the acute shortage of skilled manpower in the country as skilled professionals are always willing to leave the country.

The worries of the industrialists have started multiplying with every passing day following the non-availability of a sufficient number of skilled manpower in the country, which would have direct impact on their cost-effectiveness as well as competitiveness in the days to come. The business community has a general feeling that, barring a few exceptions, no serious effort has been made to meet the demand of skilled manpower despite repeated calls. So much so, the President and Prime Minister are continuously advising the policy makers to initiate a crash programme for skill training, which again demonstrates the miserable condition on the ground.

No doubt, amidst the changing trends of the globalised markets and competition, Pakistan's international competitiveness depends upon high quality graduates, tertiary and education systems and capacity building. These are not encompassed in the Social Action Programme but are nonetheless in desperate need of attention and resources. There are clear signs that skilled manpower shortages are already a limiting factor in Pakistan's industrial growth. The business community feels that the dream of expansion of the existing capacities could not come true unless the country is abundant in skilled manpower. However, the critics are also blaming the businessmen associations, chambers and such other organisations for not projecting the issue at the appropriate time. All such forums have been found busy in their internal feuds, especially during the last one-decade, without realising the changing demands of world trade.

All such trade forums are supposed to play an active role in running technical and training institutes as well as conducting extensive research work throughout the developed western world. Germany could be quoted as a leading example in this regard where the number of chambers of commerce and industry is very large but each of them is assigned to run technical training institute as well as conducting detailed research on the trade profiles of countries around the world. The business community cannot exclude from this responsibility and criticise the government for not ensuring a sufficient number of skilled labour in the country. While the loss of skilled professionals and academics, in particular, may be an important barrier to development, there is a number of factors associated with migration generally, and in some cases with skilled migration specifically, which may offset any negative impacts. These include education inducement effects ρ the idea that the example of migrants and the higher pay or other benefits that they might accrue (as well as potentially higher wages at home resulting from skill shortages) offer an incentive for others to undertake education.

However, while this might be the case in some circumstances, for the most part there is no lack of demand for education in developing countries. Rather, what are important are institutional and social barriers to participation such as inability to release time or afford user fees (on the demand side) and problems with provision due to lack of resources or teachers (on the supply side).

Remittances ρ the main factor cited as offsetting the brain drain is that migrants send large financial transfers back to their home country. There is substantial evidence that this is indeed a major offsetting factor. In some countries remittances are the main source of foreign earnings. However, equally important is the use of these remittances. Here the evidence and theory over the importance of remittances becomes less clear and there are important arguments to suggest that remittances might also create problems unless they are more effectively channelled into productive and social investments in developing countries. Whether or not the impact of skilled labour migration is negative it will depend on a small number of factors (or determinants) which include whether or not the lost labour could be usefully employed in the home country, whether or not and how skilled migrants remit and what purpose remittances are put to and whether or not skilled migrants subsequently return or engage in knowledge and technology transfer activities.

According to most theories of growth, then, high-skilled labour migration will affect the potential for growth, primary because of the loss of human capital, impacting both directly in terms of the loss of their output (or surpluses from their output) and indirectly through the loss of their multiplier effects in the economy or more indirectly still because of the loss of their capacity to generate additional human capital accumulation (as in the case of teachers, educators, healthcare professionals, organisational experts etc). However, in practice these theoretical effects are highly contingent on a wide range of additional determining factors including the type of labour and skills involved and the capacity of the sender economy to put them to good use.

Nevertheless approaches to economic growth throughout the world are increasingly shaped by the drive to increase human capital. This involves both education and training interventions and also attempts to lure high skilled workers from overseas. 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 labour for contribution and advancement opportunities. Unemployment among educated people is getting elevated and salary levels for skilled workers are often kept forcibly low by governments to maintain an egalitarian income policy.

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, also fueling a frustration with the system, which also leads to Pakistan's professionals leaving the country for one in which their skills and talents will be rewarded properly, based on what they do, not who they know. If the economic managers are really serious about stemming this 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 labour to countries where benefits and opportunities are plentiful and a system based on merit versus contacts is in place.