Brain drain costs developing countries billions

It costs India $15,000 to $20,000 to train a computer professional

NEW DELHI, India -- A brain drain of professionals to jobs in developed countries costs Asia billions of dollars each year, according to a U.N. report.

The United Nations Development Program's (UNDP) report estimates that India loses $2 billion a year in resources because of the emigration of computer professionals to the U.S. alone.

The Human Development Report 2001 says that about 100,000 Indians are expected to emigrate each year, and the average total cost to India of educating each one of them was between $15,000 and $20,000.

"In a global market, people with the right skills will naturally migrate to the high-tech, high-wage frontier, wherever it is," said UNDP adviser Nancy Birdsall.

"The success of the Indian diasporas in Silicon Valley ... appears to be influencing how the world views India, by creating a sort of 'branding'," the report says.

The new transnational demand for information technology specialists from India has led to a rapid expansion of training at home, increasingly by the private sector.

Many Indian-launched firms that have "front offices" in the U.S. also have opened manufacturing plants back home, and are making increasing investments in hi-tech training for local workers.

The report made no mention of Indian remittances home.

Bangalore challenges Silicon Valley

"But we do see signs that when countries create the right conditions -- including openness to new investment and new ideas -- they can recapture some of what they have lost. The Indians in Silicon Valley are an important part of Bangalore's success," the report says.

The 264-page UNDP study identifies Bangalore as one of a number of world-class technological hubs which have emerged to challenge Silicon Valley and other centers in Europe and Japan.

The success in IT has created India a good "branding"

Other hubs in developing countries include Kuala Lumpur, Campinas in Brazil, Gauteng in South Africa and El Ghazala in Tunisia.

The challenge for developing countries was to come up with strategies to keep some of their professionals at home and to encourage others to return.

The report said they might consider imposing a flat "exit" tax to be paid by the employee or company when a visa is granted.

Another alternative could be a loan system where each student in tertiary education is given a loan or study subsidy by the state, must be repaid if the student leaves the country.

The report said South Korea and Taiwan had both focused on encouraging their professional diasporas to return home.

Reuters contributed to this report.