Brain drain: stemming the flow of talent

Can the government succeed in bringing home talented Malaysians and professionals working abroad?

According to TalentCorp, the government has approved more than 2,500 Returning Expert Programme (REP) applications since 2011. This exceeds the total number of 1,130 applications approved over the 10 year period between 2001 and 2010.

I don’t know if that is cause for celebration, given the fact that a 2011 World Bank report said about one million Malaysian citizens lived abroad, and that at least a third of them were considered part of the brain drain.

The government realises it needs to bring back talent and reverse the brain drain trend. That is why it established TalentCorp which is not only actively working to bring back Malaysian talent from overseas, but has also introduced a few measures to retain talent in the country.

Benefits offered to those who return include an optional 15 percent flat tax rate on chargeable employment income for a period of five years continuously.

Also, tax exemption is allowed for all personal effects brought into Malaysia, limited to one shipment. But this does not include motorised vehicles.

The foreign spouse and children will be given permanent resident status within six months of the receipt of their PR application form by the Immigration Department, according to TalentCorp.

But the government has revised some of its criteria and benefits for its REP effective tomorrow. The government calls it refining the REP eligibility criteria.

The new criteria will, ostensibly, better facilitate the return of Malaysian talents to drive the Economic Transformation Programme of the government. The government is targeting what it calls “high value-added Malaysian professionals”.

According to TalentCorp, the REP “facilitates the return of Malaysian professionals from abroad to overcome the shortage of professional and technical expertise in the country, and creating a world-class workforce in Malaysia, particularly in the context of the Economic Transformation Programme (ETP)”.

One would have thought that this refinement would mean a loosening of criteria requirements or an increase in benefits offered. Not so, it appears. The new criteria will probably make it more difficult for talent to return.

For instance, the number of years of work experience abroad has been raised. Until April 15, diploma holders were required to have 10 years of overseas working experience, bachelor’s degree holders six years, and masters (or professional membership) holders four years. Holders of PhD needed to have two years of work experience in foreign lands.

Now it is 12 years for diploma holders, eight for bachelor’s degree holders, five for master’s holders and four years for PhD holders.

But the new requirements also take compensating factors into consideration. For instance, a bachelor’s degree holder with only four years of experience abroad is eligible if he has also worked in Malaysia for 12 years prior to that and earns a current monthly salary that is equivalent to RM25,ooo or more.

One revision appears to both help and hinder someone about to make a decision on returning home. Until today, April 15, tax exemption was given for two completely knocked down locally manufactured vehicles but those who apply from tomorrow can only apply for tax exemption on either one locally manufactured CKD or one fully imported CBU car. And this is subject to a maximum of RM150,000 worth of tax exemption.

This will enable a Malaysian abroad to bring the car he owns with him, but he cannot buy a second car at a reduced rate.

While bringing home Malaysian talent and the measures taken so far to retain talent is good, it is still a case of looking for a cure. The government is mainly dispensing some medicine, which it hopes will result in a cure for the ailment. I don’t think this will cure the disease although it may very well bring about some relief.

The better move would be to tackle the reasons why Malaysians go away. After all, prevention is better than cure. And it is not as if the government is unaware of the reasons why more and more Malaysian talent is leaving the country.

All the government has to do, if it is serious about retaining or grooming talents, is to make it more conducive for talented Malaysians to live and work here.

For that, it has to overhaul some of the stifling mechanisms and policies it has in place. This includes ensuring that every talented person – and his or her children – has equal opportunities to be well educated and to progress in his or her career or field. It has to ensure, among other things, that the education system is fair to every citizen, that the aggrieved get justice and that the rights of all citizens have equal protection.

Until that happens, the brain drain will continue. All that TalentCorp will be able to do is slow down, or delay, the flow.