Bahamas Losing 2/3 Of 'Best And Brightest'
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Almost two-thirds of college and university-educated Bahamians have moved abroad to seek jobs in developed countries, costing this nation a sum equivalent to 4.4 per cent of annual gross domestic product (GDP).
The
so-called ‘brain drain’ was highlighted in a newly-released
Inter-American Development Bank (IDB) report, which noted that 61 per
cent of tertiary-educated Bahamians had left this nation for jobs in
Organisation for Economic Co-Operation and Development (OECD) member
countries.
The
study, ‘Is there a Caribbean Sclerosis’, which attempts to determine
why economic growth in the Bahamas and five other regional nations has
been stagnating, effectively suggests this nation is losing its ‘best
and brightest’ minds to other economies.
This,
in turn, has major implications for the productivity, innovation and
creativity of Bahamian firms and the wider economy, all areas where it
is suggested this nation is not as competitive as it might be.
The
IDB report’s authors, Inder Ruprah, Karl Melgarejo, and Ricardo Sierra,
summed it up thus: “The Caribbean countries have lost more than 70 per
cent of their labour force with more than 12 years of schooling through
emigration.
“This
is worrisome because one of the few non-controversial stylised facts in
economic growth literature is the positive contribution of education to
economic growth. Thus, migration affects the Caribbean countries’
ability to generate economic growth and jobs.”
The
IDB study pegs the combined impact of this ‘brain drain’, plus the
money spent on these Bahamians’ education, at 4.4 per cent of GDP. With
Bahamian GDP currently estimated at around $8 billion, the ‘dollar
value’ of that 4.4 per cent is around $350 million.
The
Bahamas, though, is far from alone in the ‘brain drain’ problem. And,
in comparison to regional peers, it is among those that suffers the
least loss, only Surinam (at 48 per cent) losing fewer of its
tertiary-educated workers.
In
contrast, Jamaica and Guyana both see more than 85 per cent of their
college/university graduates migrate abroad for work. And the Bahamas
also suffers the least loss in terms of GDP impact and the number of
secondary school graduates (10 per cent) who head abroad seeking work.
The
IDB study gives no explanation as to why 61 per cent of Bahamian
tertiary graduates head abroad, although the likely reasons include the
fact many of them stay overseas when their college degrees are
completed; the narrowness of the Bahamian economy and opportunities at
home; and a lack of information about openings in the Bahamas.
Still,
the findings have worrying implications for the Bahamas, as they
indicate an entire generation of entrepreneurs and top-level managers
may be heading abroad, never to return. And with Baha Mar set to create
5,000 extra jobs, and other major investment projects coming on stream,
this nation needs all the top-quality labour it can get.
To
reinvigorate Caribbean economies, the ID study suggested they “reorient
trade in goods and services towards growing niches”, namely
faster-growing countries with rapidly expanding middle classes.
Taking
Brazil as an example, the authors suggested that had it been the
Bahamas’ main trading partner during the 2008-2012 recession, this
nation would have seen a 4.5 percentage point difference in its annual
growth level.
“The
average increase in annual growth during the Great Recession would have
been 2.1 per cent for the Bahamas,” the IDB study said. “Over the next
six years, the simulation exercise shows that the increase could reach
0.8 per cent for the Bahamas.”
The
Bahamas is currently targeting Brazil for increased financial services,
trade and tourism business, and the IDB study suggested that instead of
an average 0.4 per cent GDP contraction in 2008-2012, this nation could
have enjoyed a 1.68 per cent growth rate had the Latin American state -
not the US - been its main trading partner.
And,
in the same scenario for 2013-2018, the authors project that the
Bahamas would enjoy a 2.88 per cent average GDP growth rate instead of
2.3 per cent. Per capita would also be slightly higher by around $200
per person.
Noting
just how badly the Bahamas was impacted by the 2008 recession, the IDB
study said this nation collectively lost 40 per cent of its GDP between
2008-2012, based on 2007 growth levels. Only Trinidad fared worse.
And
the authors also added their voices to those expressing uncertainty
over whether Baha Mar would grow or split the high-end visitor market
with Atlantis come 2015.
“The
total investment in Baha Mar is estimated to be about US$3.5 billion,
and the hotels in the development are expected to increase the number of
available hotel rooms by 2,000,” the IDB study said.
“However,
being successful will require a substantial increase in the airlift to
the island, plus a policy of diversification of tourist source countries
such that the Baha Mar represents additional tourism rather than a
diversion from the existing hotel complex, Atlantis.”
The
IDB report also warned that economic growth and competitiveness in the
Bahamas and wider Caribbean was being undermined by “special interest
groups”, who were using “rent seeking” and other tactics to redistribute
social wealth.
“By
enlarging their slice of the pie (real GDP), these interest groups
reduce the enlargement (economic growth) of the total pie, which in turn
reduces total social gains,” the IDB study said. “This happens by
influencing policy.”
Small,
stable Caribbean societies such as the Bahamas fostered the creation
and embedding of these “growth-retarding special interest groups”, it
argued.
As
a result, there is “a lower level of public trust of politicians, more
unproductive rent-seeking, and a greater degree of wastefulness in
government spending.
“Government
officials engage in more diversion of public funds, show greater
favouritism, and Caribbean businesspersons make more irregular payments
and bribes. The only area where Caribbean tourism-based countries are at
the same level as their [small island states]counterparts is judicial
independence,” the IDB study said.
“Thus,
the very feature that the Caribbean is proud of - political stability
-may have created the conditions for and sustained an alliance against
growth. In other words, Caribbean states are good for (some)
businesspersons but not necessarily good for business.
“Thus,
the difference in growth between Caribbean countries and other small
economies could be due to Caribbean governments not being as good for
business.”
June 16, 2014
