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.
• Asymmetric development theory (Haas, 2012)
▫ Migration  underdevelopment of the sending
country
▫ Brain drain
• Migration and development: no relationship
(Skeldon, 2012)
The Case of Pakistan
• Average growth in annual emigration flows (1970-2011):
7%
Emigrant Numbers
500000
450000
400000
Emigrant Number
350000
300000
250000
200000
Emigrant Numbers
150000
100000
50000
0
Year
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)
Migration Patterns in Pakistan
GDP growth and emigration (% change)
80
60
40
GDP Growth (%)
20
%
% Change in Emigrant
Numbers
-20
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
-40
-60
Year
Pakistan: Consumption, savings, and remittance flows
120
100
%
80
60
Gross domestic savings (% of GDP)
40
Final consumption expenditure, etc.
(% of GDP)
20
0
Year
12000
Million US$
10000
8000
6000
4000
Remittances (Million US$)
2000
0
Year
Top emigrant destinations
300000
250000
Numbers
200000
150000
100000
50000
0
2002
2003
2004
2005
2006
Saudi Arabia.
2007
U.A.E.
2008
Oman
2009
2010
2011
2012
Migration by labor type
250000
200000
Numbers
150000
Highly Qualified
Highly Skilled
Skilled
100000
Semi Skilled
Un-Skilled
50000
0
Year
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Number
Migration by province
300000
250000
200000
PUNJAB
150000
SINDH
K.Pakhtunkhaw
BALUCHISTAN
100000
AZAD KASHMIR
N/AREA
TRIBAL AREA
50000
0
Year
The number of overseas Pakistanis (2010)
Region-wise percentage of overseas Pakistanis
(2010)
Africa
2%
Americas
19%
Asia and Far East
3%
Australia and
New Zealand
1%
Middle East
47%
Europe
28%
Source: Bureau of Emigration and Overseas Employment (2010)
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
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
Regression Results
• Effect on GDP per capita
• Effect on capital stock
• Effect on migration numbers
• Effect on literacy rate
Migration & Development: Crosscutting 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
• 1970s and 1980s: Loss in production quality as
qualified personnel moved abroad
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
• 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
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
• 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’
Conflict & Migration
• Push and pull effects of migration
• Karachi: conflict  push migration  flight of
capital
• FATA: conflict  pull migration  source of
livelihoods
Case Studies on Returning Migrants
• Faculty at various public and private educational
institutions
• Shifa International
• Omar Saif (SMSall)
• Centaurus
• Rozee.pk
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
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
Thank you
safwan@sdpi.org, vaqar@sdpi.org