Latest update June 2nd, 2023 12:49 AM
May 15, 2023 Features / Columnists, Peeping Tom
Kaieteur News – At an event at the University of Guyana, someone said that Guyana might have lost US$1 trillion in terms of direct, indirect and opportunity costs as a result of the emigration of graduates of the University of Guyana.
Having read that new item which provided no details as to the nature of the analysis from which this US$1 trillion was arrived at, it was not unreasonable to assume that this was more a guesstimate than a serious attempt at computing the actual financial loss to the country due to the emigration of its university graduates.
US$1 trillion in 60 years may be a stretch. Cumulatively, the University of Guyana would not have had recurrent expenditure anywhere nearing this sum. But more fundamental to the flaws of this assertion are the assumptions upon which it appears to be based.
One of the traditional ways of looking at emigration from developing countries is to assume that it has resulted in a brain drain, a loss of skilled personnel and therefore ultimately a financial loss to the country. But that argument is an archaic and does not take account of the reverse benefits of emigration.
In the past, the focus has been on the loss of skills but that loss of skills is mitigated by the tremendous inflows of remittances, including from graduates. But this has to be balanced by factoring the high levels of remittances by economic émigrés.
In 2005, Guyana raised eyebrows in western capitals when remittances accounted for as much as 25% of its GDP. In fact, a senior economist at the Bank of Guyana estimated that official remittances jumped more than eight-fold between 2000 and 2006. In 2001 – and with a much larger economy than in 2005 – remittances accounted for 6.8% of the country’s GDP. And this occurred despite the high cost (listed among the highest in the world) of remittances from Canada and the United States where almost 90% of the local diaspora reside.
These are conservative estimates. Many remittances are not captured in formal statistics. Persons travelling to Guyana, for example are often asked to bring money for some relative or friend. A manner of creative and informal arrangements allow for the movement of funds between the host and home country of immigrants.
The high level of remittances suggests that instead of emigration being a loss to the country, it actually represents a financial bonanza. As such, a different approach needs to be adopted when it comes to emigration, including the emigration of our graduates.
In the past, the developmental literature used to emphasize the brain-drain effects of emigration. The argument was that the loss of educated persons deprived the country of the skills needed for development and this acted as major constraint to development. This myopic and negative view of migration has informed a blinkered official policy – one that sees migration as a net loss rather than a net gain.
But a new paradigm has emerged, one that views emigration in a different light especially considering the significant level of remittances relative to some countries’ GDP. These inward flows represent a source of funds not simply for consumption or as a social safety net, but also as a source of investment, including investments in businesses and real estate.
A number of studies have confirmed the positive impact of remittances, and indeed some have gone as far as indicating that remittances have a more positive outcome than aid. One study found that indeed remittances are statistically significant. Other studies have confirmed that remittances have increased significantly over time and also in relation to other inflows.
But remittances are not the only benefit of migration. Immigrants acquire improved knowledge, skills and experience which they would not have had in their home country. Within a globalized world, this knowledge, skills and experience can be transferred back to the home country. Technology now allows this to happen on a greater scale without the immigrant leaving his host country.
Migrants also help promote trade and investment between their home and host countries. They also a major source of a country’s soft power as is being seen with the Indian, Chinese and Jewish lobbies in the United States.
Guyana, and especially, the University of Guyana, needs to dump this mindset which sees migration as a net loss to the country. The evidence does not suggest this. The quicker there is a rethink and the adoption of more enlightened diaspora policies, the better Guyana will be able to capitalize on the benefits of outward migration.
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