Brain drain in Malaysia keeps getting worse

By Vanitha Nadaraj

The longer filmmaker Indrani Kopal stays in New York, the stronger is her desire to remain overseas and not return to Malaysia. Home may be where her heart is, but it is a different story when opportunities start popping. She was already winning awards for her documentaries in Malaysia but the chance to go beyond all that is too good to resist. Her documentary called The Game Changer has been selected for the 2014 Portland Film Festival in August and the 9th Harlem International Film Festival in September.

Malaysia Brain Drain

“Even though I am a foreigner here (in US), I get to pursue my dream just like anyone else. I am presented with the same opportunities as others in my field. The only question they ask is how good I am in what I do, not what my race or ethnicity is,” said Ms Kopal in an email response to The Establishment Post.

Ms Kopal will be completing her masters in Fine Arts, specialising in documentary studies and production at the Hofstra University. She is the first filmmaker to be on a Fulbright Scholarship. “I do want to come back home and share everything I have learned here and hope to inspire others. But I’m not sure about staying long,“ says the 35-year-old who needs to return home to serve a two-year residency as per the scholarship requirement.

William Christiansen Robert has already made up his mind. He is getting ready to migrate to Australia and all he has to do is complete his coaching certificate course within the next two years from the Badminton Association of Malaysia. He wants to be a badminton coach in Australia. The decision to leave Malaysia was not a hard one to make. His friends who have migrated are earning so much more than he and the others who stayed in Malaysia.

“The wage structure versus things you can purchase is imbalanced here in Malaysia. With the rise of house prices especially after GST (Goods and Services Tax which come into effect on April 1, 2015), I predict things are going to get worse,” says the 28-year-old from Kuala Terengganu who studied communications in a local university.

Most of the graduates who join the workforce in Malaysia are unable to support themselves. High prices of property in the Klang Valley or Greater Kuala Lumpur force many to stay with their parents.

“It is very difficult to get a good blend of income and work-life balance, unless you are an entrepreneur. This is especially applicable to the middle and lower income group,” says Mr Robert. He has job offers in Malaysia but feels the salary and the prospects are far below what he needs to own a house and start a family.

Outflow greater than inflow

As long as there are greener pastures out there, brain drain is never going to stop. In a 2011 report titled “Malaysia Economic Monitor: Brain Drain”, the World Bank says that the number of skilled Malaysians living abroad has tripled in the last two decades. Between 2000 and 2010, Malaysia saw about one million citizens migrate which is a huge figure when the population is less than 30 million. About one-third of those who left were professionals. That means each day in that 10 years, 278 people migrated, and out of this figure, 84 of them were professionals.Screen Shot 2014-07-16 at 6.18.46 PM

The World Bank report also said that if the situation was not addressed quickly, it would slow down the economy and halt the country’s development. Soon after that report was published, the Malaysian government went on a mission to reversing brain drain and TalentCorp was established under the Prime Minister’s Department. This agency is tasked to make sure the right talent is available for the country’s economic transformation and one of its functions is to bring back Malaysian professionals.

This has proven to be an uphill task and in the last three years, TalentCorp managed to bring back 2,500 Malaysians who working abroad despite having an allocation of RM65 million (US$20.4 million) as of 2013. Lately, TalentCorp has faced an onslaught of criticisms. One of the key policies to lure high-skilled Malaysians to return was to offer incentives that includes a flat 15 per cent income tax rate for first five years. Locals with an annual income of RM70,000 (US$21,900) get taxed between 24 and 26 per cent.

Dr Lim Kim Hwa, Penang Institute’s chief executive officer and head of economics, was reported to have said that this would drive local high skilled workers overseas instead of drawing emigrants back. He said brain drain was costing Malaysia RM8.4 billion (US$2.6 billion) per year taking into account the fiscal impact of immigration and emigration, tax revenues, consumption taxes from brain drain.

ICT industry at risk

It now looks like ICT industry professionals are likely to be the next in the brain drain. Earlier this month, the National ICT Association of Malaysia (Pikom) unveiled its latest ICT Job Market Outlook report that, among others, raised the issue of continuing brain drain of Malaysian ICT professionals. The report said that countries in East Asia such as Vietnam and Hong Kong paid 2.19 and 2.12 times respectively higher than in Malaysia. Other countries that topped Malaysia included China (1.93), Singapore (1.73), Thailand (1.54), United States (1.9), Canada (1.44), Britain (1.40) Australia (1.52), New Zealand (1.64).

Not only is the national agenda for development is at stake, but Malaysia could be looking at its own nationals being the drivers of multi-billion dollar software industries for other countries. The software industry is one of the fastest growing segments of the information technology industries. In 2008, the size of the global software industry was US$303.8 billion. In 2013, it was US$457 billion.

When such a huge industry beckons Malaysian ICT professionals with huge wages and career prospects, it is going to be hard to say no.

Need for new policies

A survey, by Chinese newspaper Oriental Daily on those who either work in Singapore or depend on the island republic for an income, shows that 87 per cent of them do not want to be Singapore citizens. All they wanted was to earn “Sing” dollars, the colloquial term for Singapore currency. The good part is that it is the lure of higher wages that is drawing Malaysians to the island republic. The bad part is that it is an uphill task to get wages in Malaysia up to a level where the grass is just as green in Malaysia and to retain our talent at home.Screen Shot 2014-07-16 at 6.18.53 PM

Former prime minister Tun Dr Mahathir Mohamad said in recent press reports that Malaysia was “still being robbed of its expertise, with highly skilled workers in specific areas of the industrial sector seeking higher salaries abroad … We should stop losing expertise to Asean and other countries.”

Maybe something more than just fiscal incentives are needed to reverse the brain drain. It is about time the benefits and career prospects that are in Singapore and other parts of the world be replicated in Malaysia.

New economic growth areas need to be identified and the long worn out habit of keeping wages low to attract investors need to be replaced. As long as conditions remain the same, it is going to be hard to reverse the brain drain. – The Establishment Post

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