LOSING OUR MINDS

by Nicola de Chaud and Manu Padayachee, 11 March 2001, Carte Blanche

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Goodbyes are never easy - especially when they may be for the last time. Deciding to emigrate must be one of the most traumatic events in anyone`s life.

Nearly all the people leaving South Africa have a valid return ticket. But you can bet that up to three times the official figure will be going for good. You can also be sure that most of those taking flight will be highly skilled South Africans. Official numbers of skilled emigrants in the last decade are around 83 000, but in actual fact, close on 250 000 professionals settled abroad in that time.

Professor Haroon Bhorat from the University of Cape Town`s school of economics believes this trend has a negative effect on our national development. He says that the country faces a severe skills shortage, and that in this context, the outflow of that scarce resource - skilled workers - is a cause for concern.

Kim Panovka is a doctor, her husband Steve Nackon is a lawyer. They will be emigrating to Canada in the next two months. Steve knows that the grass may not be greener on the other side. He has lived abroad - his law degree comes from Boston University in the United States. The transition may be more difficult for Kim. She is a local girl, born and schooled in Springs, east of Johannesburg. She studied medicine at Wits University and has never lived outside of Gauteng.

When Kim met Steve, she was determined that she would stay in the country: "This is my home, this is my life, this is where I belong. I was adamant I would never leave. I think I started changing my mind when I fell pregnant." Kim and Steve are not convinced that their nine-month-old daughter Gina will be safe growing up in this country, and say that crime is probably the biggest factor for them.

There`s nothing new about people coming and going - in recent South African history there have been peaks of emigration: Soweto 1976; the State of Emergency in the mid-80s; the run-up to the 1994 general election.

Commentators say political instability and socio-economic uncertainty makes South Africans leave and foreigners stay away. According to a study conducted by Statistics South Africa, the reasons for the latest wave of emigration has been political violence and the increase in crime.

Statistics South Africa recorded the departure of professionals in various fields in 1999, and the figures are at least three times lower than those recorded in recipient countries. The figure for executives departing in that year - set at 673 - would in fact be closer 2 000. Recipient countries keep close tabs on those who cross their borders permanently and statistics taken from the point of entry are far more accurate than those recorded at the point of departure.

The official statistics are based on information provided on the forms that South Africans are required to fill in before they depart. There is no way that anyone can determine whether this information is accurate or not.

Professor Reynold Joubert, head of Unisa`s Business School, has studied emigration trends in terms of the loss of human capital to South Africa. Human capital refers to an individual`s worth, based on his or her skills and earning capacity in a lifetime.

"The average person with a Bachelor`s degree is of the order of R5,8-million per person. If one multiplies this with the quantum of people emigrating, the loss is of the order of R1-billion. In the long run, it means that it becomes difficult to become a competitive nation internationally, on the back of a very small skilled workforce," calculates Joubert.

The Human Sciences Research Council (HSRC) traced the movements of graduates and found that close on 20 percent of South African graduates are living abroad - a fact that costs the South African Receiver of Revenue R20-billion per year. But while rands and cents can be counted, the personal losses can never be quantified.

Caroline Pulford and her husband Gavin have booked a one-way ticket to the United Kingdom for next month. They are prepared for the losses - but for them crime in this country has come too close for comfort.

Like Kim and Steve, Caroline and Gavin have no fixed prospects ahead. But Gavin believes his job opportunities will be better in the United Kingdom.

"I feel this Employment Equity Bill just holds me back. I don`t think that`s fair. I think everyone who has the ability - no matter who they are, or what colour skin they have - should be given the right to go as far as they can. I`m at middle management at the moment, and I feel that it will take me quite a while to get to that next level. I believe that the job prospects over there are very good," he says.

The parents of five-year-old Arthur feel they must leave South Africa to ensure his long-term job prospects. He will soon be heading for the United Kingdom. Born in the United Kingdom, his father Maurice came to South Africa 27 years ago. He married Alna, a South African, in 1988. They believe Arthur`s future as a white male in this country may be compromised.

"It`s a big decision, it`s a costly decision, a costly move, and we`re doing it for the reasons that we think are best for our future," explains Alna, who has put 12 years into teaching in South Africa. She says she`s lost faith in the system and she`s looking to new horizons: "Yes, the country needs me, but they don`t really treat us as though they need us," she says.

A large number of South Africans who have left the country have formed Sansa - the South African Network of Skills Abroad. In a study commissioned by them, it was found that for every skilled person entering South Africa, ten similarly skilled people left the country. Simply put: the Department of Home Affairs makes it very difficult for skilled foreigners to settle in this country.

Lou Wells was trained in the United Kingdom in a highly specialised area of psychology, her areas of expertise being "anti-discriminatory practice and empowerment". Lou`s application for residence was turned down and she and her son Khanya are now reluctantly back in London.

South African Lisa Yahooda and her Israeli husband Amir fought the department for permission to stay for nine months, before unwillingly leaving South Africa to settle in Israel. The problem has been recognised at the highest level: in his address to the nation last month, President Mbeki made specific mention of the shortcomings in our immigration policies.

It is recognised across the world that skilled immigrants, rather than taking up local jobs, tend to create employment. Australian authorities have calculated that every skilled immigrant to that country has set up an average of six jobs for locals. According to Haroon, the South African economy is "at a position where the need to attract skilled workers, or the need to retain our skilled workforce, is critical to long-term growth prospects". He says that together with unemployment, the brain-drain is the most severe labour-market crisis the country faces.

An Excerpt from "Losing our Minds: Migration and the `Brain Drain` from South Africa
by Jonathan Crush, David McDonald, Vincent Williams, Robert Mattes,
Wayne Richmond, C.M. Rogerson and J.M. Rogerson

Many countries, South Africa included, are in a panic about skills emigration -  the so-called “brain drain.” One business-oriented institute even thinks that South Africa’s skills shortage is so “desperate” that the country should immediately throw open its borders to anyone who wishes to enter. Yet most South Africans are ambiguous about the wisdom of using immigration policy to offset skills loss.  Immigration, no matter how selective and tightly controlled, arouses nationalist passions and causes moral panics.

Anti-immigrationists argue that governments are supposed to protect citizens from “outsiders”; not let them in to compete with locals for jobs and resources.    Even the most liberal immigration countries have strong and vigorous anti-immigration lobbies.   In fact, if immigration policy were driven purely by the wishes of citizens, there would be very little legal immigration in the modern world.  Why then do some governments go against the popular will and their own constituencies in encouraging immigration?  Presuming that they are not acting totally irrationally, they appear to believe that immigration and the interests of citizens are not always incompatible.

South Africa is hampered by a very clouded and unsavoury immigration history.  Before 1994, immigration policy was a naked instrument of racial domination.   There was also considerable emigration during the apartheid years,  but emigration rarely exceeded immigration (Figure 1.1).   What has happened to immigration and emigration since 1994?  Government data certainly underestimates the extent of emigration.  A recent study by the SANSA project at UCT shows that over 233,000 South Africans emigrated permanently to five countries - the United Kingdom, the USA, Canada, Australia and New Zealand - between 1989 and 1997.

Is it possible that skills emigration is being offset by a proactive immigration policy and recruiting of skilled foreigners to make up for the “brain drain”?  On the contrary, immigration has fallen significantly since the early 1990s.  In 1993, South Africa let in 9,800 immigrants.  By 1997, the number had more than halved, to only 4,100.  These figures raise some pointed questions.

The SAMP survey of South African emigration intentions reported in Chapter 1 of this publication suggests that the brain drain is unlikely to slow over the next decade, and that black South Africans are as likely to leave as white South Africans.  This represents a potentially significant drain of human capital.  While politicians, the media and business bemoan these patterns of emigration, there is not much they can do about it.  The constitution guarantees that no restrictions will be placed on the free movement of South Africans to greener pastures.

As South Africa engages in an active nation-building process, there is a danger of a misleading idea taking hold; i.e. that nation building means no immigration should be permitted.  This, of course, may be one reason for the dramatic decline in immigration since 1994.   The thinking of the Minister of Home Affairs on these matters was recently revealed in the Draft White Paper on International Migration.   What is striking about the White Paper is its emphasis on control, on keeping people out, on removing those who South Africans don’t want.  There is little systematic consideration of the potential role of immigration as a tool of economic and social policy.

The White Paper misses the opportunity to initiate a public debate on the possible benefits for South Africa of legal immigration, but also encourages South African citizens to take up an anti-immigrationist stance. The White Paper does, however, recognise the virtues of greater freedom of temporary residence and work in South Africa; and for that the drafters are commended.

The lack of encouragement of public debate is not merely a sin of omission.  The Draft White Paper actually advances a misleading argument about why immigration is supposedly undesirable for South Africa.  Canada and New Zealand, we are told, encourage immigrants because they have lots of space and not many people.  South Africa, in contrast, has too many people and not enough space; South Africa should thus stop all immigration.  In fact, neither Canada nor New Zealand sees immigration primarily as a tool to boost population numbers.

These two countries don’t recruit South Africans at random -- they target the most skilled, trained, experienced and entrepreneurial.  Innovative and hard-working immigrants add massive value to the new economy and society.  Their net impact is hugely positive for national economic development and the citizenry.

South Africa is shedding skills at a worrying rate to its global competitors.  These countries have no compunction about creaming off skilled people from other countries.  Why should South Africa be that different?  Why should it not also gain massive value from a selective immigration policy that targets the brightest and best of other countries?

There are two legitimate fears that need to be addressed.  First, it has been argued that this policy would simply be a recipe for renewed European immigration.  However, the facts show that the majority of immigrants to the western “immigrant recruiting nations” are no longer from Europe.  These countries are drawing skills globally, including from Africa, Asia and Latin America.  Perhaps South Africans would feel morally queasy about “robbing” other developing countries.  The point is that these are people in those countries who are looking to leave anyway.  If South Africa is not one of the options, they will just go elsewhere.

Second, there is the argument that immigrants deprive locals of jobs.  However, when it comes to skilled immigrants, most of the evidence suggests the opposite.  They create enterprises and jobs for locals, they enhance the productivity of existing enterprises and they pass on valuable skills and experience.

We raise these issues not to prescribe an immigration policy but to initiate debate.  What we suggest is much greater public and official discussion about the pros and cons of skills immigration and its advantages and disadvantages for South Africa.  Nation-building and immigration are not mutually incompatible.  In some circumstances, they may actually be mutually reinforcing.

The existence of the Draft White Paper on International Migration provides a good opportunity for these issues to be raised and publicly debated.  Uncontrolled immigration is in no-one’s best interests.  But a selective immigration policy could be critical in offsetting the brain drain and injecting new ideas, innovations and energies into the country.  Without such a debate, insularity and exclusive nationalism will win the day.   This will not be in the best interests of South Africans.

In order to put this debate on a sound footing, rigorous research is required into the so-called “skills crisis” in South Africa.  To this end, the Southern African Migration Project (SAMP) in 1998-9 embarked on a major research project on skills migration to and within the SADC region. Amongst the products of this activity are a major report on the development of an immigrant selection system for South Africa; a forthcoming special issue of the journal Africa Insight on skills migration in SADC and several survey reports.  The two papers in this publication are the first products of the survey component of the project.

As this research was getting under way, the South African public was presented with two very contradictory messages about the brain drain.  First, in a much-publicized speech in September 1998, President Nelson Mandela was reported as saying that those who were emigrating from South Africa were cowardly and unpatriotic and that the country was pleased to see the back of them.    At around the same time, the Sunday Times published the results of a misleading readership survey which seemed to show that nearly 75% of skilled South Africans would quit the country in the near future. These claims do not stand up to the research results reported here.

The objective of the first report was to gauge the dimensions of the “brain drain” from South Africa and to ascertain whether the drain would escalate into a chronic and damaging skills shortage.  The second, complementary, report analyses the results of a survey of South African employers on their attitudes towards the actual and potential loss of skilled personnel.  The investigation was designed to assess the hiring practices, attitudes and responses of enterprises towards the skills shortage in key areas of the economy.

Chapter 1 reports the results of the first survey, a representative national sample of skilled South Africans.  This is the first survey of its kind and provides invaluable insights into the attitudes and stay-go intentions of skilled South Africans.  The authors point out that there is a great deal of hearsay surrounding the reasons why people leave.  They suggest that even if it is true that crime, violence and declining public services are responsible, we still need to ask what distinguishes those who go from those who stay.

Predicting exactly how many skilled people will emigrate from South Africa in the future is not a precise science.  Even if a person says they want to leave, there is no certainty that they actually will. The authors therefore develop the concept of potential for emigration, which is not the same thing as a firm prediction of future emigration patterns and trends.

 Emigration potential consists of several different elements.  To what extent has a skilled person even considered the idea? To what extent do they actually want to emigrate?  To what extent do factors outside their control affect the likelihood of leaving?  Exactly when do they plan to leave? What preparatory measures have they taken?

A distinction is necessary between temporary and permanent movement (or emigration).  There is no sense decrying a “brain drain” if skilled people intend to return to South Africa.  Permanent movement on the other hand is clearly indicative of a brain drain.

 The main findings of the study are as follows:

• The economically active population in South Africa is approximately 17,000,000.  Using various criteria, the size of South Africa’s skilled sector is defined at 1 600 000 (or 9% of the economically active population).  Given the role of apartheid in reserving important positions in the economy for whites, it is no surprise that the random sample was predominantly white (72%).  Of the remainder, 18% were African, 8% coloured and 3% Indian.

• The pool of skilled South Africans who might conceivably leave is a large one.  Over two-thirds (69%) say they have given the idea of emigration some thought (and 38% say they have given it a “great deal” of thought).   There is a perception that the brain drain is a “white phenomenon” only.  This is misleading; 69% of whites and 68% of blacks have given emigration some thought.

•  Thinking about leaving, and actually doing so, are not the same thing.  Only 20% say that it is very likely that they would leave for a period of more than two years.  Slightly higher proportions of skilled whites (22%) than blacks (15%) say that a permanent move is very likely.  On the other hand, skilled blacks are more likely to leave South Africa on a temporary basis (15%) than whites (10%).

•  Specifying a time frame dramatically cuts the levels of potential emigration.  Only 3% said that it was “quite likely” that they would leave within six months, 5% say they will leave in the next two years, and 13% say it is “very likely” that they will leave within five years.  The proportions of skilled blacks and whites who express a strong probability of leaving within six months or within two years are statistically the same (though whites are more likely to express a strong probability of leaving within a five year time period).

•  The firmest indicator of a person’s emigration potential is whether they have actually begun the process of application for emigration documentation. Some 6% say they have applied for work permits in another country, 5% have applied for permanent residence elsewhere, and 3% had applied for foreign citizenship.  Again, there are no statistically significant differences between skilled white and black South Africans.

•  A composite statistical index was used to summarize each person’s potential to emigrate.  Around 2% of the sample fall into the “very high” category of emigration potential (of leaving South Africa for a period of two years or more, within the next two to five years).  Some 10% have a “high” emigration potential and 25% have a “moderate” emigration potential.  Only 20% have no emigration potential.

• There is absolutely no difference in the proportion of skilled whites and blacks who fall into the “very high” category (2% of either group).   A higher proportion of skilled whites (11%) than skilled blacks (4%) fall into the “high” probability category.  But adding the two together, the difference in proportions of skilled whites (13%) than skilled blacks (6%) with a high/very high probability of leaving the country within five years, is not nearly as great as might be expected.

•  If only those with a “very high” emigration potential left the country in the next five years, this would translate into a potential gross loss of around 32,000 skilled people.  If those with a high potential are added, the number could jump to 192,000.

•  The United States (24%), Australia (22%), United Kingdom (15%), New Zealand (12%) and Canada (11%) rank as the five most often mentioned emigration destinations.

•  Skilled South Africans were asked about their satisfaction with a wide variety of measures of “quality of life.”  There are high levels of dissatisfaction with (a) the cost of living, (b) levels of taxation, (c) safety and security, and (d) the standard of public and commercial services.  With the exception of standard of services, dissatisfaction extends across racial boundaries and is not a predominantly white pre-occupation.  They are far less dissatisfied with personal economic conditions as well as with schools and available health care.  The single exception is black dissatisfaction with current income levels.

•  We see far higher levels of relative dissatisfaction among skilled whites when we ask them to compare their lives today versus five years ago.  Some 65% of skilled whites say their lives got worse in the previous five years.  In stark contrast, 65% of skilled blacks say it got better.  But all skilled South Africans tend to feel that life will only get worse. Skilled South Africans are particularly pessimistic about their future cost of living, levels of taxation and safety, and the standard of public services.  Again, this pessimism extends across the racial divide.

•  The major difference between white and black skilled South Africans is in political attitudes. Skilled whites are highly dissatisfied with government performance, feel that it does not represent them and distrust government.  Skilled blacks have far less pessimistic views.  Skilled whites are widely opposed to affirmative action (83%) while only 20% of skilled blacks are opposed.

• Those with high emigration potential were asked what, if anything, would lead them to stay in South Africa. Only 12% said that there was “nothing” that could make them stay.  One quarter (25%) said improvements in safety and security would make them stay.

•  Finally, would government steps to restrict emigration make them more or less likely to leave? Such policies would be counter-productive and hasten the exit of almost half of the high emigration potential group.  Specific steps such as requiring a year’s national service from students leaving professional schools, an end to dual passport holding, or increased fees for documents would actually hasten the exit of between one-third to one-quarter of this group.

The second survey reported here shifted the focus from interviewing individual South Africans to interviewing employers.  The main findings of this survey of 200 public and private sector enterprises were as follows:

• The survey captured a cross-section of enterprises from a range of different sectors, of different sizes and with different ownership characteristics. It includes a set of enterprises, private and public sector, foreign and local, which are leaders in the market for high skilled personnel in South Africa.  The 200 enterprises employ an estimated 101 000 skilled personnel with the largest absolute numbers in banking and finance, education and health, and industrial. The sectors with the lowest absolute numbers of skilled personnel were entertainment and tourism, and construction.

• The sectors in which the ratio of skilled personnel to total employment is especially high include education and health, banking and finance and computers and IT services.  The most high skills intensive sectors are computers and IT services (57% of employees), business services (47%), education and health (41%) and banking and finance (29%).  In total, these four sectors accounted for 78 000 skilled employees.  In several computer services and IT enterprises the proportion of highly skilled was 90% or more.

• Over 50% of enterprises employ a skilled workforce of citizens or permanent residents alone. Some 46.5% employ some foreign high skilled workers.  The highest proportions are in banking and finance, computers and IT services, education and health, and business services.  But across the 200 surveyed enterprises, foreign skilled personnel number in total only between 2 000 - 3 000 workers.  Overall, non-South Africans represent more than 5% of the total labour force in only 8% of the enterprises.

• In certain multinational enterprises, foreign skilled personnel are not in South Africa on a long-term basis. Rather, they are part of intra-corporate movements involving a rotation of personnel or exchange programmes. The sources of foreign skilled personnel vary, with the most common countries of origin being the United Kingdom, Germany, the USA, Italy, and Australia.

• Companies say that the impact of the emigration of skilled personnel has been much greater in the post-1994 period.  The tempo of emigration of skilled personnel appears to have escalated, especially from 1996 onwards.  Overall, one-third of enterprises rated as “significant” the outflow and impact of the brain drain, compared to only 2% for the pre-elections period.  Some 98% said the impact of emigration was none or negligible before 1994.  The corresponding figure for the post-1994 period falls to 67%.

• The brain drain to date is of only minor importance compared to the total skills base of surveyed enterprises.  In 67% of enterprises the issue of emigration of high skilled personnel was rated as of no or negligible importance.

• The perceived impact of the brain drain varies sectorally.  The numbers of enterprises reporting a significant impact was high in education and health (59%), business services (47%), banking and finance (43%), computers and IT services (35%) and industrial high tech (35%).

• The most severe emerging skills shortage clearly relates to computing and information technology personnel. A global labour market has emerged in the sphere of computing and IT skills. Within this market, South Africa is rapidly losing competitive ground to the aggressive recruitment strategies and lucrative employment packages of enterprises in the USA, Western Europe and Australia.

• The major potential source of recruitment for new high skill personnel is South Africa rather than overseas. The survey disclosed that the majority of enterprises prefer to hire local South African personnel into high skill positions whenever possible.

• A key issue in offsetting the brain drain is the training programmes offered to employees. The operation of training programmes is a major means for expanding an enterprise`s asset base of skilled personnel.  A positive finding was that the vast majority of the surveyed enterprises - 85% of the total - are involved in training and skills upgrading of their personnel. In many cases the budgets allocated to training and upgrading of personnel are substantial and impressive.

• Finally, enterprises seeking to hire overseas employees report consistently negative experiences with the Department of Home Affairs.  Almost without exception, there were complaints about delays, lack of transparency and obstructionism.  In the case of many private sector enterprises, new growth and job opportunities for the South African economy have been either postponed or, in many instances, lost forever through what employers perceive to be the Department`s inability, unwillingness or failure to expedite the entry into the country of a relatively small number of highly skilled personnel.

Taken together, these two SAMP surveys provide unprecedented insights into South Africa’s brain drain and, in so doing, challenge many popular misconceptions.  Their publication will, we hope, provide a sound basis for a rational debate on immigration policy and the development of a sound and workable alternative to current policy and continued anti-immigrant restrictionism.

The Shocking Statistics

1. Five countries absorb three-quarters of South African emigrants. These are: the UK, USA, Australia, Canada, New Zealand. Most emigrate to the UK.

2. Unofficial estimates are that 250,000 South Africans emigrated in the period 1989-1999. This represents about 0.5% of the population.

3. Official statistics place emigration in the period 1989-1999 at about 82 000. This is generally recognised as an underepresentation, because emigrants often do not declare that they are emigrating.

4. It is estimated that between one-eighth and one-fifth of South Africans with tertiary education now reside abroad. A total of 24,196 professionals emigrated from South Africa in the period 1994-97.

5. The HSRC found that 53% of graduates leaving the country annually intend returning.

6. The number of professionals to Canada and New Zealand increased massively in 1993, prior to the 1994 election.

7. The "brain drain" is not a recent phenomenon. Pre-1994, South Africa experienced a substantial net emigration of professionals. Skilled personnel constituted a high proportion of emigrants since 1970, on average 16%.

8. The problem is not solely one of high emigration, but low immigration - immigration is falling.

9. Given the number of emigrants that are high earners, it is estimated that almost R11-billion left the country in the emigration period 1994-1997. This excludes physical assets.

10. Other costs to the economy include R2.5-billion per annum due to staff turnover; increased wages for skilled labour; and billions of human capital exported in the form of education, training and experience.

11. Economist Dawie Roodt has calculated that if a family earning R300 000 leaves, the tax support for roughly eight people is lost. If a family earning R1-million a year decides to emigrate, the tax support for as many as 36 people is lost.

12. "High rates of professional emigration are likely to continue. A recent international survey of the well educated found that the likelihood of them remaining was lower for South Africa than for any other country, except for Russia which was marginally lower" (The Economist, July 10, 1999).

13. A recent survey by IT Web found that 54% of computer experts are considering leaving SA withing the next two years.

14. In 1999, at least 267 engineers, 93 doctors and dentists, 311 teachers, 266 accountants, 673 executives and 255 artisans left South Africa.

Source: Kaplan, Dave; Meyer, Jean-Baptiste and Brown, Mercy. 1999. "Brain Drain: New Data, New Options". Trade & Industry Monitor. September. For more information: visit www.uct.ac.za/depts/dpru/ or www.tips.org.za.

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