Economy, Domestic Economy

Brain Drain Triggered by Mismanagement, Lack of Opportunities

Brain Drain Triggered by Mismanagement, Lack of Opportunities Brain Drain Triggered by Mismanagement, Lack of Opportunities

Lack of proper employment is the main reason for the immigration of Iran’s highly educated population, an official with Iran’s National Elite Foundation said.

“There is a high brain drain rate in math, physics and engineering majors, whereas immigration among people who have majored in human or medical sciences is not very significant,” Aria Alasti added.

Deputy Foreign Minister Hassan Qashqavi announced late April that emigration from Iran decreased by 30% in the last fiscal year (March 2015-16) compared to a year before, the Persian weekly, Tejarat-e Farda, reported.

He further said the number of exit permits issued by the ministry had decreased from close to 700,000 two years ago to about 500,000 last year, concluding that brain drain from the country had dipped.

This is while the number of exit permits only indicates official requests to leave Iran whereas there are other routes taken by people to exit the country.

In a statement on the financial consequences of brain drain, former science minister in President Hassan Rouhani’s Cabinet, Reza Faraji-Dana, said 150,000 specialists leave the country every year, taking with them $150 billion worth of capital.

“Brain drain from Iran reached its peak during the former president Mahmoud Ahmadinejad’s tenure,” he said.

Soon after making the comment, he was impeached by the parliament.

Figures disclosed by Faraji-Dana matched those released by international organizations, including a report in 2009 by the International Monetary Fund, which indicated that Iran tops the list of countries losing their academic elite.

The World Bank estimate is lower, putting the economic cost of Iran’s brain drain at $50 billion in 2010.

  Main Motivations

Based on statistics released in the Management and Planning Organization of Iran’s weekly periodical, over the past 14 years, 62% of all the students who had won medals in international scientific Olympiads immigrated to developed countries and are now working in the most renowned universities and research centers across the world.

“The truth is that a majority of specialists have less political or social reasons for leaving the country and are rather motivated by matters related to employment. All they want is to be able to sufficiently provide for themselves and their families,” says Ahmad Shirzad, a lecturer at Isfahan University of Technology.

According to the latest statistics released by the Statistical Center of Iran, the unemployment rate in the last Iranian year (ended March 19, 2016) stood at 11%, registering a 0.4% rise compared with the preceding year. The data also show 9.3% of men and 19.4% of women of ages 10 and above were jobless last year. However, the average rate masks a graver picture as the biggest segment of Iran’s workforce is under 30 years and unemployment shots up to 23.3% for those in the age group of 15-29 years. It is 40.2% for women in the same age group.

Shirzad believes the employment market is facing two major issues.

“The first is the plethora of graduates who have been admitted into universities without officials having planned for their future employment. These educated people are not properly trained and have not acquired the skills and knowledge required for them to enter the job market due to the poorly-functioning educational system,” he said.

“The second problem, or social phenomenon, as I would call it, is the fact that the old workforce will not let go of their posts. They doggedly remain at their positions no matter what, and therefore, no job vacancies are opened to the younger generation.”

He noted that skilled and educated youth need motivation on top of hope and they must know that their efforts are appreciated.

Shirzad is of the opinion that there are ways to solve the problem. He proposes managing the number of students admitted in each major, elevating the scientific levels of universities and science institutions, revamping job environments, reconsidering the standards by which workforce are chosen for employment, encouraging the elite to attend research courses in developed countries and creating jobs in management posts for the young and educated force.

According to Ali Asghar Saeedi, sociologist and lecturer at Tehran University, the elite mostly immigrate to make use of their specialties and skills to gain a satisfactory financial status.

“Finding their deserved financial and social status in Iran seems to be a far-fetched dream for the elite who compare themselves with two groups. First, the elite of destination countries. They see the facilities and incentives of all sorts being granted to them and demand the same from Iranian officials to remain in the country,” he said.

“Second, are the ordinary people of their country of origin. They witness upstarts and nouveaux riches, lacking any expertise and skill, climbing the ladder of social and economic prosperity. This lack of meritocracy is highly repulsive and encourages the elite to go in search of their rightful place.”

Saeedi noted that brain drain has negative impacts on the country’s economic growth and its detrimental effects mount over time and eventually deprive the country of the latest technologies and development.    

“We do not necessarily need to return the elite to the country to make use of their capabilities. They are the best envoys of Iran in foreign countries who can explain Iran’s realities on the ground to people around the world more clearly and accurately,” he said.

“The government has to facilitate their constant travel to the country by inviting them to seminars and embarking upon joint scientific projects. One other way to benefit from them is founding and activating international commercial chambers and inviting them to redirect their capitals to their motherland.”


 Gov’t Calls on Expats for Inward Investment

Wary of Iran’s desperate need for investment following the removal of western sanction against the country, the government of President Hassan Rouhani has been vocal about the importance of attracting the huge wealth of Iranian expatriates.

“Iranian entrepreneurs, executives and investors at home or abroad are given priority over others when it comes to investment in different economic sectors of the country,” Rouhani said in a meeting with a group of Iranian economic elite in New York back in September.

“Today unique opportunities have opened up in the economic, scientific and industrial sectors of the country, thanks to the conditions following the July 14 historic deal with world powers,” he was quoted as saying.

Referring to the fact that Iran needs $50 billion a year in investment to achieve its target of 8% economic growth, Rouhani said, “Every one of us is responsible for Iran’s advancement. The country belongs to all of us and all Iranian expatriates are welcome to invest in their country.”

Around five to six million Iranians are living overseas, constituting 7% of the total population of the country. Figures on their wealth are unreliable, as different sources release widely divergent numbers, Forsat-e Emrooz reported in April.

In March 2007, the Iranian Parliament Research Center, citing National Elites Foundation, put the capital assets of Iranian expatriates at over $1.3 trillion and those of Iranian-Americans alone at over $900 billion.

More than 6,500 companies and 10,000 university students were based in Dubai then and 1,400-odd Iranians have invested in Dubai Stock Exchange.

In January 2014, Alireza Rahmatnia, a deputy vice president, put Iranian investments abroad at around $700 billion, of which $200 billion were concentrated in the UAE alone.

In June 2015, Javad Qavam Shahidi, a senior official with the High Council of Iranian Expatiates Affairs, said an estimated $2 trillion are held by foreign-based Iranians.

The interesting point is that this amount exceeded the country’s GDP in 2014 and the absorption of just 10% of this potential capital could work miracles for the economy.

Research by Rockstone Real Estate shows Iranian merchants and millionaires are highly likely to purchase real estate worth £6 billion within five to 10 years following the removal of nuclear sanctions.

However, London, Dubai, Switzerland, Germany and France are the odds-on favorite to become their destinations, the report reads.