Brain Drain in Argentina

Wednesday, April 19, 2023

Larry OrDan Bryce

Risto.KarinenDan LoVullo

Outline

• Overview

• Context

• Analysis

• Recommendations

Overview• Definition:

– General: movement of highly trained personnel from one area to another

– Specific: The emigration of highly educated workers from developing

countries to developed countries / from poor countries to rich countries

• Causes – Inadequate salaries

– Unstable government and insecurity

– High inflation and falling currencies

– Lack of human rights

– Corruption and lack of accountability

– Limited educational opportunities(World Economic Forum, 2000)

– Africa looses 70,000 scholars yearly1

– 60% of medical doctors trained in Ghana during the 80s have left2

– 4,316 skilled South Africans left in 20033

– India looses 100,000 professionals to the United States yearly, at an estimated annual cost of $2 billion4

– 6,000 left Argentina annually between 1995-2000, plus 250,000 more since then5

1Prof. Edward Ofori-Sarpong, Ghana2Mutume, 20033Naidu, 20034UN Human Development Report, 20015Intl Herald Tribune

Scope

“Having lost its money, Argentina is now losing its minds.” (Nevaer, 2002)

• 2002 Economic Collapse– “… in the first two months of this year [2002], 1,260

Argentine Jews moved to Israel …compared with 2001, when 1,300 Argentine Jews emigrated to Israel over the entire year

– “Argentines with a[n] … immediate family member living in Spain or Italy can obtain visas to emigrate there”

– “Recently, Argentina issued a desperate plea to the World Bank for an extension on $800 million loan”

Argentina: 19th century: “glorious century” → 20th century: “lost century” → 21st century: “?”

• GDP: purchasing power parity: $403.8 billion (2002 est.), • Real growth rate: -10.9% (2002 est.) • GDP: composition by sector: agriculture: 5%, industry: 28%, services: 66% (2000 est.)

• Inflation rate (consumer prices): 41% (2002, yearend) • Labor force: 15 million (1999), Unemployment rate: 21.5% (37377) • Industries: food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel

• Agriculture products: sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock

• Exports: $25.3 billion (2002), Exports commodities: edible oils, fuels and energy, cereals, feed, motor vehicles

• Export partners: Brazil 23.6%, US 10.9%, Chile 9.7%, Spain 4.3% (2002)• Imports: $9 billion (2002), Import commodities: machinery and equipment, motor vehicles, chemicals, metal manufactures, plastics

• Import partners: Brazil 42%, US 12.8%, Germany 4.4% (2002) • Debt external: $155 billion (2001 est.)

Analysis and prospects for the future

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• Generally high rankings in human capital variables; highly literate, relatively well educated population,

• Diversified industrial base• “Catching up”-hypothesis

• Scientific community unsatisfied – threshold for departing very low

• Weak political institutions and corruption• Crisis of 2001-02 already destroyed the intellectual infrastructure? → insufficient “social capability” in order to “catch up”?

• Generally very low rankings in economic variables; recurring economic problems of inflation, external debt, capital flight, and budget deficits, unemployment high

• Foreign investment attracted mainly by protected domestic market

• Problems in the national innovation system: poor incentive regimes, low R&D/GDP (and mainly carried out by public sector)

• Economy stabilizing after the crisis of 2001-02; growth, new governmental programs to attract hi-tech companies and investments

• Large and knowledgeable ex-patriot scientific community; knowledge transfers (brain drain → brain circulation), government is developing “Intell/Scien Diaspora Network”

• USA immigration policy after 9/11; decreasing brain drain or just redirecting it?

Recommendations

• Convert to a floating currency valuation system.

• Stop borrowing from the IMF and private banks to support government spending.

• Continue privatization efforts and other pro-growth reforms.

• Reduce bureaucracy and endemic corruption.

• Increase investment in education at all levels.

• Generate a compensation scheme that encourages graduates to stay for at least a few years.

• Engage the large expatriate community of scientists in providing technical assistance in R&D infrastructure and market reforms.

Economic Reforms Science Policy Initiatives

References• Nevaer, Louis. “Brain Drain - Troubled Argentina Losing Its Minds.” Pacific News

Service, May 15, 2002• “Argentina: Economy.” <

http://reference.allrefer.com/world/countries/argentina/economy.html> Mar 21, 2004.• Africa “brain drain”: 70,000 scholars leave yearly,”

http://www.warmafrica.com/index/geo/1/cat/5/a/a/artid/208• Gumisai Mutume, “Reversing Africa’s Brain Drain, Zambia Daily Mail,2003,

http://www.queensu.ca/samp/Commentaries/2003/drain.htm• World Economic Forum, “Battling the emerging market brian-drain,” 2000,

http://www.weforum.org/site/knowledgenavigator.nsf/Content/Battling%20the%20emerging%20market%20brain-drain_2000?open&topic_id=

• U.N. Human Development Report 2001, http://hdr.undp.org/reports/global/2001/en/pdf/pr5.pdf• Edwin Naidu, “Figures show massive increase in brain drain,” 2003, http://

www.iol.co.za/index.php?click_id=594&art_id=ct20040321104139440L152496&set_id=1• “Expatriates return to Argentina,” International Herald Tribune Online,

http://www.iht.com/articles/131302.html• Feldstein, Martin Argentina's Fall: Lessons from the Latest Financial Crisis Foreign Affairs

Journal March/April 2002.