This is a guest post by a philantrophist tycoon, Mr. Koon Yew Yin. You can read about his recent stock recommendation here.

Malaysia’s Brain Drain: Government in Perpetual Denial

Introduction by KCLau:
I just made a simple calculation with my wife a few days ago during the drive to KL. How many of our friends had migrated oversea? Half of my wife’s course mates work oversea now in Singapore, United Kingdom and also Australia. I have three clients (who bought insurance policies from me) migrated to Australia, five family relocated to China and probably won’t be back, one family migrated to Canada, two close friends moved to United States. Among 16 of my total course-mates who studied Aeronautical engineers in UTM, 5 are working in Singapore, one in UK. Did you ever count the numbers on your side?

Introduction by CPI
Dr. Mahathir has derided the World Bank brain drain report as “useless and politically motivated”. The country should ignore his criticism as the ranting of a seriously flawed leader whose shelf life has expired and who has long lost his credibility to comment sensibly on any public policy subject. Prime Minister NajibRazak’s response has been equally disappointing. He must surely know – as any sane and reasonable person would – that the emigration of Malaysia’s highly educated and skilled has been disastrous and is an exodus the country can ill afford.
Malaysia’s Brain Drain: Government in Perpetual Denial
For some years now, various analysts have written about the brain drain from Malaysia arising from the country’s racist policies. Now the World Bank has finally come out with a definitive report detailing that the number of skilled Malaysians living abroad has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.

The report also studied the factors that would entice Malaysian currently staying overseas to return. The top picks were a change in the country’s race-based policies and fundamental reforms in the public sector with “Paradigm shift away from race-based towards needs-based affirmative action” and “Evidence of fundamental and positive change in the government/public sector” receiving 87 and 82 per cent positive responses respectively.

The brain drain report mainly focused on the human capital outflow of migrants with tertiary level qualifications. If it had taken into account the out-migration of those with upper secondary and other desirable vocational and other skills, the human capital haemorrhage from the country arising from the New Economic Policy and other racially skewed policies would be far worse than the report’s findings show.

The Past and Present Prime Minister’s Responses

What has been the response to the report? Not surprisingly, the chief critic has been Dr. Mahathir who has derided the report as useless and politically motivated. As Dr. Mahathir has been the main architect of the socio-economic policies that have been responsible for the brain drain, his reaction is predictable. The country’s leadership and citizenry should ignore his criticism as the ranting of a seriously flawed leader whose shelf life has expired and who has long lost his credibility to comment sensibly on any public policy subject – whether this relates to the New Economic Model or human capital development – and especially if it concerns governance issues of which the former Prime Minister has been fundamentally compromised and incorrigibly irresponsible.

The present Prime Minister’s response has been guarded but no less disappointing. Dato Seri NajibRazak, whilst acknowledging that the brain drain is “one of the problems that must be resolved”, has pointed to the recent pickup in foreign direct investment to argue that the Bank report was not “quite correct”. The Prime Minister is grasping at straws to deny the undeniable. He must surely know – as any sane and reasonable person in the country would – that the emigration of Malaysian talents has been disastrous to the economy and is an exodus the country can ill afford.

He must also be aware that the outflow of another generation of young Malaysians (this time, including many Malays) is presently taking place and will continue unabated so long as racial (and religious) discrimination, and the self enrichment and political bankruptcy of the UMNO elite and its cronies, remain unchecked.

Incentives such as lowered income tax and other material or monetary sweeteners promised by the Talent Corporation are not the solution. They do not address the sense of not belonging, social injustice and lack of belief in the country’s future that are at the heart of why Malaysians have chosen to abandon the country of their birth, and to seek what – for most migrants – are less materially privileged but more psychologically fulfilling alien lands, despite being cut off from families and friends.

The Reverse Brain Gain

There is a key related topic which the World Bank report failed to deal with – the lower quality human capital inflow that has replaced the outflow of highly educated, skilled and talented Malaysians. During the past 30 odd years, there has been a massive officially sanctioned influx of migrants, especially from Indonesia and the Southern Philippines aimed at ensuring ethnic and religious dominance of the Malays. Millions of poor, uneducated, unskilled or semi skilled migrants have been permitted – rather, encouraged – to work and stay in Malaysia, thus offsetting the skilled brain drain with a cheap labour influx. According to the 2000 Census, 1.3 million or about 5.9 percent of Malaysia’s population of 21.9 million was comprised of foreigners. This estimate does not include other categories of non-citizens, such as permanent residents, spouses on a social visit pass, and stateless persons born in Malaysia. The latter number, of which there are no officially available figures, could bring the total number of non-citizens living in the country to close to 4 million or more.

Should the higher figure be used as the basis of calculation of the foreign component of the population, and even if the high birth rate of the Malay population were taken into account, it would imply that up to 25 per cent or one quarter of the country’s present total population are unskilled or semi-skilled migrants who have settled in Malaysia recently, especially since 1970. The influx of over 4 million lower quality human capital at the same time that over one million highly skilled Malaysians have left the country is probably unprecedented in the history of global migration flows (for a profile of the countries where Malaysians have moved to, see table below reproduced from Lee Wei Lian,“A Snapshot of Malaysia Talent Outflow”.)

The Malaysia Brain Drain

I have no doubt that many recent migrants to Malaysia are hard working and good people, and deserve to have their rights protected. However, they would never have been allowed into the country or given easy access to citizenship in the normal circumstances of any other country in the world. What has made the difference has been a racially obsessed regime with a political agenda to artificially bolster the Bumiputra component of the population, and to provide that component with citizenship and voting rights aimed at ensuring Malay dominance of the government and country.

The pro-Nusantara cheap labour, easy assimilation (if the migrant is a Muslim or has no objections to “conversion”) policy of the last 30 years and its socio-economic costs and benefit needs to be studied by the World Bank team as a logical complement to the brain drain one. I have no doubt that should this lower level “brain gain” study be conducted, its findings will more fully explain the economic decline that the country has experienced. It will also expose fully the crude demographic numbers game that UMNO under Dr. Mahathir and his civil service underlings have engaged in to ensure continued Malay hegemony.
KetuananMelayu forever – the Perkasa slogan – is not a new one. It has been the bedrock of UMNO’s ideology since Dr. Mahathir came to power and will continue to be that way until the Malay population comes to its senses and realizes that the non-Malay communities are not their enemy – it is Malay political leaders that have failed them and are now looking for non-Malay scapegoats to explain why poor Malays have been left behind in the country’s socio-economic development.

Koon Yew Yin
9th May 2011


Personal finance author and trainer

    4 replies to "Can we stop the talent outflow from Malaysia?"

    • ChampDog

      Interesting, I don’t know that Malaysians are that high demand. 😀

    • PartOfBrainDrainStats

      Did you know that Malaysians are in high demand because of their good command of English and greater ability to communicate and resolve issues in an organisation compared to all others. Migrants from Malaysia are usually always renummerated on par with locals.

    • A lot of my friends are migrating to other countries too. We have a lot of good and knowledgeable people in Malaysia but a lot of them have moved to other countries.

    • ChampDog

      I have the same experience with you that many of my fiends and colleagues have been migrating… 🙁

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