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Brain Drain: How we continue to lose 20% of all university graduates (and not just non-Bumis)

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*if you are a Malaysian who may choose to leave the country after graduation, please help us fill out this 2 minute survey on brain drain:

As a Malaysian student myself at King’s College London, a common question my peers from UCL and LSE ask is:

“Do you plan on working here in London after you graduate? Or go home to Malaysia?”

An overwhelmingly common answer to that question is;

“No, I plan to work anywhere except Malaysia.”

To put into perspective how often this phenomenon transpires not only here in London but throughout the global Malaysian Diaspora - the World Bank reported in 2010 that the number of Malaysians living overseas (‘the Malaysian Diaspora’) was 1 million. A figure that quadrupled over the 3 decades preceding 2010. That means an average of 300,000 Malaysians leaving the country every decade. The same 150 page report, states that two out of ten Malaysians with tertiary degrees, are leaving the country, double the world average.

The current numbers are even more startling, Asia Sentinel reported that in March 2022, the Malaysian Diaspora now contains over 2 million Malaysians - 6.25% of our population and a rise of 1 million in just 12 years. Other sources such as Kuala-Lumpur independent think tank, EMIR Research, also support these figures. In 2021, Astro Awani reported that this trend is not plateauing, in fact it is increasing by 6% per annum.

It should be noted that these are not retirees that seek calmer pastures, 500,000 of the 2 million are adults over the age of 25 - who could have entered the workforce and benefitted Malaysia. Not to mention the fact that those with tertiary degrees tend to be much wealthier and as such, their absence means the loss of vast amounts of injections in the circular economy.

Who is leaving?

Since Malaysia is a multi-racial country, we think it would be useful to breakdown, which ethnic groups are leaving?

In 2016, then home affairs minister Ahmad Zahid Hamidi said in parliament that of the 56,576 Malaysians who renounced their citizenship over the past decade, more than 90 per cent, or 49,864 people, were ethnic Chinese.

Meanwhile, the rest comprised 1,833 Indians, 834 Malays, and 4,044 who were classified under the “others” category.

Prior to the 10 years preceding 2016, more Malays left the country than any other group. Asia Sentinel reports that in 2007, controversy erupted when then deputy home affairs minister Tan Chai Ho released statistics showing that of 107,000 Malaysians who had renounced their citizenship since independence, 79,000 were ethnic Malays – not the minority races who have been getting increasingly short shift.

These numbers show that minorities are trading off their citizenship as of late, but that is a very advanced stage in the life of Malaysians who leave. Often people work decades before converting citizenship. Thus, the numbers show us which groups feel an increasing distance from the identity of being Malaysian but does not mean that bumiputras are not leaving the country without converting citizenship.

Why are they leaving?

While there haven’t been wide sources surveying why these people leave, various institutions have compiled anecdotal data from several sources trying to understand why Malaysians are fleeing.

According to a study published by Stanford University on Malaysian Brain Drain, there are two significant reasons.

Firstly, the low salary and benefits offered within the country. A large part of the brain drain are Malaysians that received degrees in overseas universities where the cost of tuition is extremely high. For example, a law degree from a major London university is around £25,000 (around RM130,000) annually, for a 3 year degree. If one were to work at an average annual salary as a lawyer in Malaysia, RM45,000 (£9,450), it would take around 8 years to match the tuition fee in sheer revenue alone. Comparatively a lawyer in the UK would earn £50,000 (RM250,000) annually, taking only 1 and a half years to match the tuition fee in revenue.

Pair that with the prestige that accompanies a job in global financial centres such as London, New York or Singapore, which make it far easier to land lateral job transfers globally, and you will find that the choice to stay in a foreign land is not difficult at all.

Secondly, the Stanford report finds that those that leave often blame “social injustice” policies. Namely, the report mentions that the benefits given in Malaysia to only the “bumiputera” class including: “extra assistance in starting businesses, mandatory discounts for real estate and a quota system based on racial distribution for education opportunities” has caused a feeling of “unfair treatment has resulted in a diaspora with a strongly ethnic dimension”.

The article even mentions that this opinion is shared by Former US Ambassador to Malaysia, John Malott in a Wall Street Journal Article who view the policies as a strong root of brain drain. This problem has also been pointed to by local Malaysian media giant, Astro Awani.

The Astro Awani article remarks that “There’s no shortage of anecdotes comprising both advice and stories of non-Malays being frustrated and fed up with the situation in the country. It’s common to hear from relatives, friends, neighbours, acquaintances and others about their treatment and experience as non-Malays.”

“And how voting with our feet is still the most viable option.”

For bumiputeras, according to Prof James Chin, director of the Asia Institute Tasmania at the University of Tasmania, who mentions in a The Sun Daily Article. “For the Malay community, although they don’t face much discrimination, they feel that there is no future for the country and they might be uncomfortable with the conservative trend among some Muslims,” he said.

Chin said Malay professionals might find it difficult to climb the corporate ladder without contacts or connections.

“For both bumiputras and non-bumiputras, if you want to climb to the top, it is not based on meritocracy, it is whether or not you are the owner’s son or have other connections,” he said.

Where are they Leaving to?

According to CNA, almost 55% of Malaysians abroad have left to Singapore, making up 44% of Singapore’s immigrant population.

Research by the World Bank has shown that the next most popular locations are the UK, Australia, the USA and Brunei. Each with percentages close to 10% shortly followed by Canada, Hong Kong, India and New Zealand.

Many Malaysians attribute the move across the Causeway to the similar culture, close proximity to home and improvement in the issues stated above.

What is Malaysia doing about this?

Since 1995, there have been three “brain gain” programmes to attract our best talents back, but results have been abysmal. According to the Malaysian Employers Federation, only about 50 are returning a year.

Since the World Bank report in 2011, Malaysia’s Ministry of Human Resources has created TalentCorp in the same year. The agency aims to attract and retain the right talent to boost Malaysia’s economy. Their results have been better but only provide an information and opportunity stopgap.

Among its efforts identified by Stanford, is working with the government to change its overseas scholarship policy to allow scholarship holders to serve their bond by working at a private company in Malaysia that would fully utilise their skill instead of the government. It has also introduced the Returning Expert Program to encourage Malaysians currently working abroad to return home. Among its incentives are a flat tax rate of 15%, tax exemption for all personal effects brought home and permanent resident status for spouse and children.

Previously Malaysia under the Najib Razak administration launched the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP) to tackle the issues of non-inclusiveness for non-Bumiputeras.

What should Malaysia do about this?

Within Astro Awani’s article, they mention EMIR Research’s suggestions as to how to improve the issue of Brain Drain in Malaysia.

1. Scholarships and Education reforms

Based on research, education transfers between secondary to tertiary education cause huge dissatisfaction among minorities within the country. EMIR recommends that “A paradigm and cultural shift is called for – that identify nurture talent regardless of ethnic background or profile. Here, it’s no longer about the Bumiputeras needing to catch up but the nation as a whole.”

They recommend the increase of Public Service Department (JPA) scholarships to be substantially increased for non-bumiputeras.- In tandem with scholarship schemes with GLCs, GLICs and subsidiaries to be expanded for non-Bumiputeras as well. Lastly, the grooming of non-bumiputeras for leadership roles in these such companies.

2. Make Kuala Lumpur an International Hub

Widening the policy base of foreign talent attraction. EMIR remarks that Kuala Lumpur is recognised as one of the top ten cities in Asia by PWC’s Greater Kuala Lumpur: Bridge between Asia and the World” (2017). We are ranked third among the upper middle-income countries (34 in total) on the Global Innovation Index (GII) by the World Intellectual Property Organisation (Wipo) and at number 12th in the World Bank’s Ease of Doing Business ranking.

Although the HSR (high speed rail) project to connect KL and Singapore has fallen through, the idea of a Bandar Malaysia should be revived as a terminus and as a self-contained talent hub. This would create a one-stop centre and ‘convergence point’ for venture capital and technopreneurs in Malaysia. A recommendation is also made to introduce special taxation rates to make Kuala Lumpur a special economic zone akin to Shenzhen in China.

3. Smart cities

To retain the outflow of local talent, the government is recommended to form a Silicon Valley for research and development. This could ideally be infrastructurally integrated with the Malaysia Vision Valley (MVV) 2.0 – which encompasses the new conurbation of Nilai and Seremban with new developments of new townships – thus enhancing liveability and ease of communication

Simultaneously this could be placed in Cyberjaya, near leading educational facilities and Putrajaya. Additionally, EMIR recommends an increase in GDP percentages devoted to R&D funding. According to the World Bank, Malaysia's R&D &was only at 1.4% of gross domestic product (GDP) in 2016 from below 0.7% in 2006. It declined to slightly below 1% as at 2018 (“Assessing the Effectiveness of Public Research Institutions” 2020). In contrast, South Korea’s R&D spending was almost 5% of GDP, with Singapore at more than 2% of GDP.

Help us find out what the answer is

The Tapir Journal would like 2 minutes of your time to complete this short survey. As students in London, we have a unique ability to do a survey to discover if the information discussed in this article is true. The survey can be done anonymously and no information will be shared with any third parties.

The survey will close in 21 days where the results of the survey will be included in an article at the end of this month.

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