Joining the Global Economy

Why do the majority of talented Iranian migrants choose to stay after graduation?

Many of those migrants achieved considerable success in their education and finished PhDs while suffering immense hardship living in a foreign country. They have acquired competence and are highly productive human resource and consequently are offered competitive salaries. The question is whether there is any place for them in Iran. If the answer is yes they will naturally return home and there would be no need to do anything to convince them.

 PhD graduates need to industrialize their thesis and undertake extensive applied research. It seems that there is no demand for such specialties in our economy and this lack of demand is the primary cause for them to stay abroad. If they return to Iran they will not be able to work effectively because actually their level of productivity is not required here and this would result in earning lower salaries comparing to those of the global market.

Let me demystify it; unlike most developing countries the production chain in Iran does not rely upon knowledge. We mostly import the know-how. In other words, Iranian engineers’ task is to select the products or technology to be imported. In an optimistic scenario technologies are copied in Iran and, that is why graduates of top universities in the world are not required.

In a country like United States of America highly productive experts earn a six-digit salary nevertheless there are no vacancies for such talented individuals in Iran and their only option is to start on an academic career with a monthly salary of less than $1000 as a university professor. Therefore in the current cultural and economic situation of Iran an expert’s productivity is much lower than say United States. There is no demand for knowledge production in our universities. Therefore when an engineer graduated from top ranked universities who is capable of producing knowledge and is highly innovative is hired in an Iranian firm which imports technology he or she will be as productive as an engineer graduated from an Iranian university.

The job-education mismatch is a major issue for Iranians abroad. There are of course other issues such as: ambiguity, political issues, civil rights, appreciation of competence and financial problems which reverse their decision to return. Women face their own issues namely lack of full-day comprehensive kindergarten programs for working women, workplace issues, gender discrimination and other cultural issues.

 You mentioned the obstacles in the way of Iranians to return home and the job-education mismatch as a major one, what should be done to surmount the problems?

Joining the global economy is our only option. There is a global chain in the global economy. We need to reconcile our relations with rest of the world to be able to attract human capital to Iran. We might convince them to return using incentives and make use of their “abilities” but this does not mean fully exploiting their “skills”. We need to differentiate skills from abilities. In our discussion we are mainly focused on skills.

Does the difference between “ability” and “skill” impact upon the policies towards human capital?

It surely does. Iranians who pursued their academic interests in top ranked universities across the globe possess a range of abilities. If the objective is to fully exploit their abilities, measures must be taken to stop brain drain. On the other hand, if we tend to use their skills, reverse migration would be the right policy to be adopted. Let me add this; pursuing such policy would be rather dangerous. Abilities are the essence of human capital. In other words, stopping somebody who is potentially capable of working in a global company such as Shell as a top researcher from migration turns him into an ordinary oil industry executive in Iran taking on the task of “translating” existing technologies.

As I said, a paradigm shift and joining the global economy is the only long-term solution to tackle the issue. What I just said is the only remaining strategy.

Let me go back to what you previously said. Do you believe that financial incentives and providing other incentives are totally useless?

It might help to attract some of Iranians abroad and use their abilities for the benefit of the country. However, joining the global chain of production and the global economy is the only way to fully exploit their skills. China and India have generally been seen as developing countries, and they have been impacted by brain drain through the migration of their talented minds to the developed world. The same policies have assisted the two countries in the flow of reverse migration. What we need in our country is 10% economic growth to create demand for highly-educated individuals. The current 3%, 4% or 5% growth rate is not good enough to attract Iranians abroad.

Most high-tech global companies have established R&D facilities in China and India. Chinese and Indian graduates who were not properly hired in the US returned home. The reason behind the decision was central government’s policies towards joining the global economy and fully exploiting the skills of their citizens. Providing financial incentives and housing programs do not produce the desired results. There is no place for experts and intellectual elites in a shrinking economy. It is of no use to us that a Harvard graduate returns to Iran and starts his or her career seeking economic rent and special privileges. So an incentive scheme might even backfire.

It seems that social science graduates are of great value for the country and the government can afford to attract them by offering competitive salaries. Is there a difference between their productivity and performance and those of engineering majors?

Actually, there is no difference. What I mentioned applies to all returnees. It’s not possible to progress towards prosperity and growth in one dimension. In Iran and all around the world, economic growth is not one dimensional. From another point of view engineering majors are preferable to social science graduates. An economist or sociologist cannot take on any roles when there is no growth and development in the country.

Highly-educated individuals (engineering majors, social science graduates, etc.) are not capable of fully exploiting their potentials when they return home. I can provide you with many examples. Consider an Economics major whose specialty is monetary and fiscal policies. How can he work effectively and for the benefit of Iran? I mean in a country where it is not possible to conduct an in-depth analysis of liquidity, there is no cost-benefit analysis for investment decisions and the auto industry is monopolized. Or imagine a person with a degree in international law. Due to the level of international trade in Iran, there are few vacancies for them. Or for instance the same applies to patent attorneys.

First of all, our policy makers need to arrive at a consensus about joining global economy and meeting the target of 10% economic growth rate in Iran’s 20-Year Vision Plan. The next step would be attracting highly-educated Iranians and talented minds and encouraging them to return to their hometown.

What is the role of the government to facilitate their return?

The government needs to try its hardest and perform its tasks properly so that the academic elites who return will be able to fully exploit their skills. For such a purpose, the only option is joining the global economy.

Is there anything else you would like to add?

The tasks I just mentioned range from combating air pollution and cutting the red tape to transparency and accountability in the government. These are of course ordinary tasks of the government. I had a friend who was determined to return; however, living in Tehran caused him breathing problems and made him leave the country. The government must combat the pollution for the benefit of all Iranians and not only for Iranians abroad who plan to return. Or the military service issues which must be overcome. There is a chance for experts to be exempted; what about the rest of young Iranians? To sum up, there are measures to be taken by the authorities which act as catalyst for return of human capital to their motherland.

Initially published in Tejarat-e-Farda weekly magazine