Brain Drain in Argentina Tuesday, September 08, 2015 Larry Or Dan Bryce Risto.Karinen Dan 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 yearly 1 –60% of medical doctors trained in Ghana during the 80s have left 2 –4,316 skilled South Africans left in –India looses 100,000 professionals to the United States yearly, at an estimated annual cost of $2 billion 4 –6,000 left Argentina annually between , plus 250,000 more since then 5 1 Prof. Edward Ofori-Sarpong, Ghana 2 Mutume, Naidu, UN Human Development Report, Intl 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 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 ; 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 ReformsScience Policy Initiatives

References Nevaer, Louis. “Brain Drain - Troubled Argentina Losing Its Minds.” Pacific News Service, May 15, 2002 “Argentina: Economy.” Mar 21, Africa “brain drain”: 70,000 scholars leave yearly,” Gumisai Mutume, “Reversing Africa’s Brain Drain, Zambia Daily Mail,2003, World Economic Forum, “Battling the emerging market brian-drain,” 2000, 0market%20brain-drain_2000?open&topic_id= U.N. Human Development Report 2001, Edwin Naidu, “Figures show massive increase in brain drain,” 2003, “Expatriates return to Argentina,” International Herald Tribune Online, Feldstein, Martin Argentina's Fall: Lessons from the Latest Financial Crisis Foreign Affairs Journal March/April 2002.