Middle East 'Brain Drain' Reverses

Brain drain, the emigration of a country’s most skilled and educated individuals, usually to a more developed country, has afflicted the Middle East for decades. The region’s most talented individuals have fled wars, repressive dictatorships and a lack of higher education opportunities for work and education opportunities in the West.

Now there is a reverse trend, spurred by a flat job market and low economic growth in the West, and the  rise of opportunities in the Internet technology and other sectors in the region.

Combined with enthusiasm for some younger entrepreneurs to return because of the Arab upheavals that began in 2011, returnees are spurring job growth as entrepreneurs, spreading skills and education, and inspiring new political ideas in the region.

Although statistics on the number of returnees are not readily available — many returnees moving back and forth several times, and working informally while in the Middle East — several cases illustrate the push and pull propelling the trend.

Najwa Doughman, a Palestinian-American, moved to the Middle East to support a community that was more her parents’ than her own. After graduating with a degree in architecture from the University of Virginia, Najwa moved to Lebanon to work as an architect for the United Nations' Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), designing the reconstruction of the Nahr al-Bared Palestinian refugee camp, which was destroyed in a war with the Lebanese army in 2007. “Nahr al-Bared appealed to me because my parents were both born in Lebanese refugee camps,” she said. “Working in Nahr al-Bared was a way for me to combine architecture with politics, development and other passions of mine.”

The Arab Spring was an opportunity for politically active Arabs raised in the West to take part in their countries’ historic transitions. Sarah Mousa, an Egyptian-American raised in upstate New York, moved to Egypt after graduating from Princeton University in 2010.  After the revolution that deposed former President Hosni Mubarak, Mousa decided to join then-presidential hopeful Mohamed ElBaradei's campaign.

“One reason I decided to stay was a sense of responsibility,” she said. “I saw a lot of people risking or sacrificing their lives for the sake of a better future for the country. And these are young people, like our age, and for me that really made me feel like I should be doing something.”

Big fish in a small pond

While the political transitions have hooked many returnees, others return simply for financial reasons.

While the US may be the proverbial “land of opportunity”, it is also a country of fierce competition in its labor market. Amanj Yarwaessi, an Iraqi Kurd raised in London, moved to Iraqi Kurdistan to find work after graduating with a master's from Cardiff University in the UK He found that in Iraq, he was a big fish in a small pond: “In London, you’re one among thousands of people who have a Masters’ degree. In Kurdish, we say ‘your hand is not visible’,” he said. “So you go back to Kurdistan where there is a need for educated and skilled people, and you can get good money for it, too.”

In many cases, moving from the West to the Middle East brings returnees from the top 10% to the top 1% overnight. Young professionals who would be entry-level employees or even interns in New York or London are more readily afforded access to high-level government officials and CEO’s in the Middle East.

Razhan Miran, another Iraqi Kurd raised in London, returned to work in Iraqi Kurdistan first as a university lecturer, then as a senior analyst at the Kurdistan Regional Government’s Oil Ministry. “I was so much more respected here for my age than I was back in the UK,” said Razhan, who is 27. "The respect I feel from colleagues and business associates in Kurdistan is reserved for much older employees back in the UK."

As opposed to Dubai, where English is widely spoken and living standards are comparable to those in the West, life in Iraq, Lebanon, Egypt and Jordan can be low on electricity and high on political instability.  While the Gulf may benefit from relative political stability at this time, there are still bureaucratic and other challenges to doing business.

Across the Arab world,  corruption and the culture of “wasta,” an Arabic word that loosely translates to “a hookup,” referring to the need to have a personal connection with powerful people to get a job, establish  a company and avoid penalties, creates uncertainty and complicates that deters some returnees educated in the more transparent and merit-based system in the West.

Intraregional reverse "brain drain"

Despite the relative challenges in non-GCC states, talent is still moving from the more developed Gulf to still-developing Arab countries. Marcus Noland, author of The Arab Economies in a Changing World, said to Al-Monitor: “We’ve seen an interesting set of shocks to the system — first the financial crisis in Dubai [in 2009] that pushes people out, together with political upheaval that may have the effect of pulling people in and also pushing people  out. That has contributed to in the last five years an unusually large circulation of people in the region relative to more stable periods in the past.”

Dubai is still the main hub in the Middle East for young professionals and expats from all over the world (expatriates make up about 88% of Dubai's population), though it is no longer the only hub. Since Dubai’s financial crisis, and with the emergence of a region-wide ecosystem that supports Internet-based start-ups and other entrepreneurial efforts, talent is beginning to spread more evenly across the Middle East.

Jordan, for example, attracts more start-ups than anywhere else, according to Fadi Ghandour, the CEO of Jordan-based Aramax. “In terms of animation, e-commerce, creating original Arabic content online, and in terms of pure outsourcing opportunities, you’ll find that Jordan is quite advanced,” Ghandour told Al-Monitor in an interview last month.

Challenges for returnees and the role of public policy

Although several factors are luring second-generation immigrants to the Middle East, obscure and complex business regulations in both GCC and non-GCC states discourage the trend.

Sinan Khatib, a Syrian-American entrepreneur, moved from New York, where he worked as a lawyer and banker, to Cairo to set up a group-buying site and later to Saudi Arabia to set up boutique clothing shops. “In the West today, idea risk is very high and execution risk is very low. It’s very hard for someone in Silicon Valley to come up with the next Facebook because it’s a mature and saturated market, but if they do, they have everything at their disposal — networks, investors, etc. In the Middle East, you have the inverse — execution risk is very high, but idea risk is very low. Basic ideas don’t exist yet, but once you get an idea, the execution is difficult — talent pools are limited, capabilities, logistics don’t exist, so you deal with that execution risk.”

Khatib bemoaned: “In Dubai, which is on paper the most business-friendly place in the Middle East, before you even turn your lights on you’ll probably have a $15,000 bill just to get licenses ... In Saudi, I found out only after I opened my store that I also need a municipality permit in addition to corporate registrations. Nowhere does anyone tell you what you need to do. You feel you’re operating in the dark. All that would be fine if you had a basic website that laid out a pathway for basic regulations for opening a business.”

Middle Eastern governments should not take the reverse brain drain for granted and continue must implement transparent laws that secure property rights, and legal protection for their investments

“Part of the greatness of the United States is that there is a justice system that is functional,” said Safa Rifka, chairman of the American-Arab Anti-Discrimination Committee.

To encourage Arabs raised in the West to move to their countries of origin, Rifka said, “Arab governments should adopt global best practices of property rights and security, based on secular not religious law,  to encourage even more entrepreneurs and corporations to return.”

The Arab world will need to create 100 million new jobs in the next 20 years — doubling the current level of employment — in order to meet the needs of youth entering the labor force.  Incentivizing the return of Western-educated Middle Easterners who can become job creators could be part of the solution. 

Cale Salih was most recently a MENA Fellow for the International Crisis Group, based in Beirut and Cairo. Follow her on Twitter@callysally.