» World Economic Forum

Asean integration could see brain drain, economist warns

Publication Date : 02-06-2012


Asean has been warned of downside risks of economic integration, especially the free movement of skilled labour, which could lead to a brain drain from poor countries to richer ones.

Joseph Stiglitz, economics professor at Columbia University in New York, said yesterday that risks could arise from skilled workers moving to rich member countries such as Singapore.

He said this happened in one country in Africa that suffered a shortage of medical doctors after they left for other countries. This was a failure of human development in that country, he said at the World Economic Forum's seminar on "Asean Connectivity: Road Map to 2015".

He warned that Asean should be careful on the free movement of talent, which could lead to a "hollowing out" in the poorer countries. He suggested there should be assistance from the rich countries to ensure adequate healthcare systems in the poorer nations.

Surin Pitsuwan, secretary-general of Asean, said the free movement of skilled labour would be undertaken gradually after the Asean Economic Community takes effect in 2015.

However, he said the Thai medical community would be forced to open up the market, and the current barrier of requiring foreign physicians to speak Thai would not fit in with the Asean single market.

Malvinder Singh, executive chairman of Singapore-based Fortis Healthcare, however, suggested that the opening of the market for talent should come sooner rather than later. He said the free market would lead to less costly medical bills and better service thanks to competition.

He urged that people look at Asean as a single economy so benefits would be generated within that economy. He agreed, however, that the opening up of the labour market should be done gradually.

Pailin Chuchottaworn, president of PTT, said Thailand had in the past faced a brain drain as medical doctors moved to the United States, so this problem could occur even if there were no Asean single market. Thailand has changed the rules regarding medical education and can solve the problem of brain drains, he said.

Looking forward, well-to-do economies have to assist less developed economies such as Cambodia, Laos, Myanmar and Vietnam to prevent hollowing-out, he said.

Mustapa Mohamed, Malaysia's minister of international trade and industry, said his government had put in place a programme to attract talented expatriate Malaysians to come home and contribute to the country's development.

Fresh lesson from European crisis

Stiglitz also said Europe had made mistakes, as the bloc created a common currency without creating institutions to deal with it, so they have landed in trouble now.

Surin replied that a single currency was not on Asean's table. He said this region had learned from its own financial crisis in 1997 and the one in Europe now.

He also said Asean had created an emergency credit line worth US$240 billion to shield member states from volatility in financial markets. A surveillance mechanism has also been set up to warn members of macroeconomic developments to prevent economic instability.


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