This report attempts to describe the flow of Nepalese people to foreign countries seeking higher education and high paying jobs. various data of brain drain is analysed to conclude the reasons and and the rate of brain drain.

1. A REPORT ON
“Brain Drain”
Submitted By: - Submitted To:-
Section:- Probanx Smart Mentors
Group no.:- 6 Manisha Shrestha
Nabin Bhattarai Ram Prasad Neupane
Date:- 2nd
May, 2013

2. Executive summary
Brain Drain refers to the flow of human capital from one particular nation to another nation. The
human capital is the main resource for the economic growth of any organization and its
profitability. In simple words, the concept of taking education in one country but earning for
another is called Brain Drain. Moreover, it is also coined by the name “The Human Capital Flight”
which has been the major issue of our country Nepal.
When educated people leave a country to work for another, the country will have less talented
people. This will result in slow or no growth. This is because the educated people have left and
very few remain. Also, as these educated people work for other countries, the other countries’
growth might also result in the slow development of the country as they have smarter people that
can contribute to their economy. Therefore, the presence of this condition suggests that the
provider nation is at risk of depleting its natural supply of intellectual talent. However, Brain Drain
affects both parts of GDP equation. In 2010 it was found that around 7500 people went abroad for
their higher study within 8 months. Now this rate has been increased by various multiple.
According to the news published by Ministry of Labor and Employment in 2012 about 38000
Nepali went abroad to earn and study.
Brain Drain being the main issue in Nepalese context it’s not a one day job to demolish it. Various
regulation regarding employment and educational techniques are compulsory to maintain it.
Higher wages for insiders according to their qualifications is essential, instead of over estimating
and hiring expatriates, which are more costly.
Thus, the Brain Drain issue is a global matter with some percentage of its devotion towards Nepal.
The rate of growth of brain drain is very high and is in increasing trend. The government should
make clear the provision of employment and provide more technical and practical basis of
education to decrease the phenomenon of BRAIN DRAIN.

3. Acknowledgement
We take this opportunity to express our profound gratitude and deep regards to our Mentors for
their exemplary guidance, monitoring and constant encouragement throughout the course of this
report. The blessing, help and guidance given by them time to time shall carry us a long way in
the journey of life on which we are about to embark.
We also take this opportunity to express a deep sense of gratitude to Mr. Chatra Mani Rai Sir
(Principle of Golden Peak Boarding) who helped us to complete this report.
We are obliged to staff members of Apex College for the valuable information provided by them
in their respective fields. We are grateful for their cooperation during the period of our report.
Last, but not the least, we would like to express our gratitude towards the MBA seniors who
provided us with this platform through SMART program where we could exhibit our competence
and excellence.
Sincerely,
Nabin Bhattarai

4. TABLE OF CONTENT
Title Page no.
CHAPTER I:
Introduction
1.1. Background……………………………………………..……1
1.2. Objective of the study……………………………………….2
1.3. Methodology of the study…………………………………...2
1.4. Limitations…………………………………………………...3
CHAPTER II:
Issue Analysis
2.1. Problem Recognition…………………………………………...4
2.2. Origin of Brain Drain…………………………………………...4-5
2.3. Consequences of Brain Drain…………………………………..5-6
2.4. Estimating Brain Drain in Nepal……………………………….6-7
2.5. Emerging news about Brain Brain……………………………..7-9
2.5.1. Return of Brain Drain panic…………………………………....7-8
2.5.2. Its reverse Brain Drain to India now……………...…………...8
2.5.3 US slump resulting in reverse brain drain……………..…….…8
2.5.4 Brain Drain or not…………………………..………..................8-9
2.6. Solution…………………………………..…………………........9
CHAPTER III
Summary, Conclusion and Recommendation……………………………..10-11
Bibliography……………………………………………………………........12
Appendix…………………………………………………………………..…13-14

5. Chapter I: INTRODUCTION
1.1 Background
Among the various topics for the study and the report preparation we choose brain drain to
understand what brain drain exactly is and how it occurs and what impact does it have in our
society or in the nation.
As we all came to know that Brain drain is flow of human capital from one particular nation
to another nation. It has great impact in our society. Even though the world is being more
informative or enjoying the technological advancement. The human capital is the main resource
for the economic growth of any organization and its profitability. The more brains in an
organization or in a nation, the more ideas, and the more innovations in an organization or in the
nation.
After completing education in Nepal or in the process of gaining education in Nepal,
Students often leave for foreign countries in search of better working environment. This concept
of taking education in a country but earning for another is called brain drain. Nepal has been a
patent of this disease since western countries opened the job opportunities for eastern countries.
They get cheap and hardworking labor in this manner.
So, the brain drain or also called “The human capital flight” has become the most arising
problem of our country Nepal. There is a huge mass emigration of technically skilled people from
Nepal to other country. Unemployment, instability of nation, corrupt political system is main
reason for migration of skilled workers of Nepal. In Nepal, graduates, post graduates, experience
and skilled professional are not getting enough opportunities to development and high standard
family life; such professionals leave Nepal in search of better future.
Thus, brain drain is a great loss to Nepal. So government and public should take immediate
effective steps for this problem which are preliminary requirement at present.

6. 1.2Objectives of the study
The broad objective of the study of brain drain is as maintained below:
 To present the finding and result about brain drain.
 To keep record of data related to brain drain
 To tell about advantage and disadvantage of brain drain
 To attract the attention of people about the burning issue of Nepal
1.3 Methodologyofthe study
The report writing process is not an easy task. We had to find the accurate data and analysis
of the present situation. Data we collected are classified in two groups’ primary data and
secondary data. To make our work flow easier, we took following methods under consideration.
Primary method:-
 Talking, interviewing and motivating the target client to know their choices regarding the
countries they prefer.
 Group Members went for survey in all the places we could such as footpath, shops,
restaurants, and also the venders etc.
 We also asked some of our friends regarding brain drain.
Secondary method:
 The study was based on secondary source of information. The secondary data were
collected from published and unpublished document related to brain drain. We went
through the journals and newspapers as well as magazines.

7. 1.4 Limitations
We tried our best to include most of the information regarding brain drain.
Following are some of our limitations:
 Time limit.
 Lack of relevant data
 We could not accommodate more tabular information.
 This research was only focused on Kathmandu, Lalitpur, Bhaktapur.
 The questionnaire might be having some undetectable error and limitation, which could
shape the response in particular fashion.
 While interviewing locals, they did not give enough information. They were not willing
to give response.

8. Chapter II: ISSUE ANALYSIS
2.1. Problem Recognition
Brain drain” is the phenomena whereby nations lose skilled labor because there are better
paid jobs elsewhere. In recent years, this has affected poorer countries more so, as some rich
countries tempt workers away, and workers look to escape bleak situations in their poor home
countries.
Though this matter is a global issue but most of the poor countries of the world are
continuously facing the problem of Brain Drain. When educated people leave a country to work
for another, the country will have less talented people. This will result in slow or no growth. This
is because the educated people have left and very few remain. For example, the economy will get
poorer as there are fewer businessmen, fewer investors, fewer computer professionals etc.
Research and scientific progress will also be slow, as these fields require clever professionals.
Potential politicians may have already left, resulting in the government brings less competent or
maybe more corrupt. If the economy gets worse, crimes rate may increase due to the peoples'
desperation for money, affecting the safety and security of a country. Also, as these educated
people work for other countries, the other countries' growth might also result in the slow
development of the country as they have smarter people that can contribute to their economy.
2.2. Origin of Brain Drain
The movement of intellectuals like University lecturers and researchers from one national
setting to another, ranging from permanent relocation to short-term visits or exchange programs,
facilitates the dissemination of knowledge and the broadening of cultural horizons. However, when
one nation becomes a substantial net exporter of academic talent, a "brain drain" condition is said
to occur. The presence of this condition suggests that the provider nation is at risk of depleting its
natural supply of intellectual talent.
Education seems to play a key role influencing rural-urban migration in the developing
countries. Numbers of studies of migration in many countries have documented the positive

9. relationship between the educational accomplishment of an individual and his or her interest to
migrate from rural to urban areas.
Education also plays a big role in the growing problems of international migration of high
level educated individuals from poor countries to the rich ones causing the so called Brain Drain
to the poor countries. However, this has simply left helplessness to the concerned institutions and
countries of the south that have been losing thousands of their highly educated workers for the
benefits of the rich countries and individuals.
 Emigrants due to lack of employment and low salaries, and thus people are tempted to look
for better salaries elsewhere - here, we talk about Economic factors.
 The second cause of migration is political instability in home countries, thus they lose
confidence to their governments and future prospects for a better life. These are individuals
who may have difficulties because of their ethnic, cultural, regional belongings or being a
member of opposition political groupings in their home countries, - Migration taking place
in response to wars, and political and social turmoil.
 Many scholars who have been sent abroad for further studies or who are once out in one
way or another, remain abroad leaving their family and workplace behind with the hope
that a better life can be achieved elsewhere, despite their well-being at home. Expectations
are usually no met as hopped; thus, obliged to seek asylum which deteriorates their lives
and becomes ashamed of themselves to return home empty handed - Immigration flow due
to lack of information and misguidance.
2.3. Consequences of Brain Drain
Brain drain threatens to hurt economic prospects and competitiveness of the developing
nation. Brain drain threatens to hurt economic prospects and competitiveness of the developing
nation.
Brain drain adversely affects both parts of the GDP equation. First, the size of the labour
force is diminished. Second, it is agreed by most that it is the most intelligent and capable that are
being lured away to the developed nations for these greater opportunities and/or higher after-tax

10. incomes.
Therefore, we see that the brain drain often results in missed opportunities, reduced
growth, lower employment and reduced overall tax revenue.
The taxpayer of the developing nation should also be concerned about the brain drain
problem as it is he or she that subsidizes these graduates' education, only to see them leave upon
graduation for a more attractive opportunity elsewhere.
The problem can also be looked at from an ownership point of view. With many
entrepreneurs taking their ideas and businesses to the rich nations, there is a missed opportunity
for wealth creation for their own country. Instead, it is the venture capitalists and investors of the
rich countries along with the entrepreneur, which benefit western libraries.
2.4 Estimating Brain Drain in Nepal
(Estimating Brain Drain in Nepal, 2010) The Himalayan Times, Every year 250,000 youth
are reported to leave the country for various reasons. They seek opportunities in its various
manifestation — higher living standards, employment, better income, education, a luring western
lifestyle, stability and security. The list entails everything our country is incapable of providing to
the youth for the obvious reasons. Hence, it comes as no surprise that 556 youth leave the country
to go overseas in a given day. How many of them return to their homeland? The inflow number is
almost negligible and the inflow and outflow ratio of youth in Nepal is very discouraging.
Nepal is losing its young people and the government has done absolutely nothing about
it. There has been no investment in the youth. “The government should start a
system that tracks Nepalese abroad, list their professions and expertise. They should then initiate
and generate opportunities which will create an environment for reverse brain drain,” opines
Thapa. On the other hand Poudel says, “More than a system, creating an environment and
awareness is of utmost importance.” But that’s easier said than done because in Nepal every issue
is politicized and nothing really gets done. “The first priority is to get our own house in order
politically and then economically. The political parties do not seem to understand the needs and

11. feelings of the people. The number of students who went to 45 different countries between January
to August, 2012 is shown below in the bar diagram.
2.5. Emerging news about Brain Drain throughout the world (Emerging News
about brain drain, 2012)
2.5.1. Return of brain drain panic
(Return of brain drain panic, January 30, 2012)
By Jagadish Bhagwati “While developed countries are angst-ridden over mostly illegal
immigration by unskilled workers from developing countries, a different set of concerns has
surfaced in Africa, in particular, over the legal outflow of skilled, and even more importantly,
highly skilled, people to developed countries. This outflow is supposedly a new and damaging
“Brain Drain ," with rich countries actively luring away needed skills from poor countries”.
2.5.2 Its reverse brain drain to India now
Chidanand Rajghatta , TNN (Its reverse brain drain to India now, october 25, 2005)
0
200
400
600
800
1000
1200
1400
1600
January February March April May June July August
No. of students
No. of students

12. WASHINGTON: Despite the hullabaloo in the 1990s about brain drain from countries such as
India and China, such large developing nations may have escaped the deleterious effect of talent
flight compared to other small poor third world countries in Africa, South America and the
Caribbean, a World Bank study has said. In an extensive survey of data from 30 OECD countries
such as the US, U.K, Canada and Australia (rich nations under the head Organization for Economic
Cooperation and...
2.5.3. US slump resulting in reverse brain drain
PTI (US slump resulting in reverse brain drain, 2009, march 8)
WASHINGTON: Burgeoning new economies abroad and flagging prospects in the United States
are pushing "talented" immigrants, including those from India, to move back to their homes,
according to a new study. For more than 40 years, India and China suffered a major "brain drain"
as tens of thousands of talented people made their way to US, a news report here said quoting
Vivek Wadhwa author of the study. But, burgeoning new economies abroad along with flagging
prospects in.
2.5.4. Brain drain or not, the right to emigrate is fundamental
Swaminathan S AnklesariaAiyar, TNN (Brain Drain or not, the right to emigrate is
fundamental, may 6, 2012)
Socialists like health minister Ghulam Nabi Azad won't admit it, but they rather liked the Berlin
Wall. They think it's morally right to keep citizens captive at home, unable to migrate for better
prospects. Azad has proposed not a brick wall but a financial one: he wants all doctors going to
the US for higher studies to sign a financial bond that will be forfeited if they do not return. Sorry,
but the right to emigrate is fundamental. States can curb immigration, but not.
2.6. Survey Result

13. The above figure shows percentage of male and female involved in survey, the purpose of going
abroad, people willing to return to their motherland and perception about brain drain. We took
survey of about 50 people on subject related to brain drain. And we got to know that all of them
were familiar with the word brain drain. In the survey 68.50% of people were male and 31.50%
were female and out of them 33.33% were married and 66.67% of people were single. As we can
see from the above figure that the draining purpose of people from Nepal to foreign country is not
only for study but it is for earning purpose too.
Most of them prefer to go London and Australia for their further study and some of them prefer to
go UAE and Kuwait for earning. And out of these 52.38% people think that this trend is good and
47.62% of people think this is not a good trend. In this survey we found that 79.18% of people
have intension to return to their motherland but 20.82% of people would like to stay in abroad
instead of Nepal.
2.6 Solution
0
10
20
30
40
50
60
70
80
male/female study/earn/both good/bad will return/will not

14.  Good governance at the national and international level, especially maintenance of
reasonable security for peoples' lives and property is essential for economic progress, thus
withholding political and economic emigrants, who blame their government’s failure for
political unrest and stagnant economic growth is possible. Transparency in leadership is
essential and should be maintained.
 Offering higher wages for `insiders` according to their qualifications is essential, instead
of over estimating and hiring expatriates, which are more costly.
 Education plays a powerful role especially in the growing problems of international
migration. Therefore, offering these individuals the necessary education qualifications in
their home countries, and expanding a better educational infrastructure may definitely
prevent emigrants who are seeking a higher education abroad.
 Seeking alternative measures for return of warranty from the beneficiaries, such as the
withholding of academic degrees until the graduates return and are willing to serve the
people, may be another considerable alternative.
 The last alternative measure could be, taxing emigrants who are indigenously trained in
home countries. This is indeed a sensitive issue and may sound absurd, and may potentially
infringe on the basic human right and freedom to choose the nature and location of
individuals where to live and where to work. Thus, it must be agreed upon the international
community and international laws.

15. CHAPTER III: Summary, Conclusion and Recommendation
Our estimates show that there is an overall tendency for migration rates to be higher for
highly educated individuals. With the important exceptions of Central America and Mexico, the
highest migration rates are for individuals with a tertiary education. A number of countries—
especially small countries in Africa, the Caribbean, and Asia—lost more than 30 percent of this
group to migration. These numbers suggest that in several developing countries the outflow of
highly educated individuals is a phenomenon that policymakers cannot ignore.
More research, especially empirical studies, is needed to evaluate the impact of the brain
drain on source economies and on worldwide welfare, as well as the reasons for such migration.
In regard to the latter subject, immigration policies in OECD countries tend to favor better-
educated people, which may explain why the educational composition of total migration is skewed
toward the better educated but cannot explain why so many skilled workers are willing to leave
developing countries. Wage differentials may be part of the explanation, but this raises the question
of what accounts for such differentials. Differences in the quality of life, educational opportunities
for children and job security may also play a role, as may the desire to interact with a broader
group of similarly skilled colleagues. Another important issue is the extent to which the benefits
of education acquired by citizens of developing countries are externalities that individuals cannot
be expected to take into account when making their private decisions. If such externalities are
substantial, as is emphasized by the "new growth theory," then policies to curb the brain drain may
be warranted.
Our research also indicates several ways in which estimates of the brain drain could be
improved using existing data. The first would be to use census information for other large
immigrant receiving countries, such as Australia, Canada, France, and Germany. Together with
the United States, these four countries account for about 93 percent of total migratory flows to
OECD countries, so the resulting figures would be a very good approximation of the total. Another
promising direction for future research would be to try to obtain, from census data or other sources,
more detailed information about the occupational categories of highly skilled migrants, in order to
assess whether the brain drain from a given country is especially marked for particular professional
groups. This type of analysis could be useful for evaluating the problems that policy programs—

16. such as health sector reform, financial liberalization, or civil service reform—may encounter in
developing countries.
Through the research and analysis, we can draw the following conclusions:
 In the context of Nepal the rate of growth of Brain Drain is very high.
 Lack of employment and proper education technique is the main reason for brain drain.
 Most of the people migrate to another country without the intension of returning back
to motherland.
We would like to recommend the following suggestions for reduction of brain drain:
 The concerned authority should pay due attention why brain drain is growing especially
in Developing countries like Nepal.
 Skilled manpower can be produced through sufficient training and hospitality
development in their own countries.
 Investment should be promoted in brain drain.
 More opportunities and schemes should be brought to involve the maximum youths.
The developing countries like Nepal should create favorable situations to maintain their youths
within their territory.
More researches should be perused for finding more issues and scopes in brain drain.

17. Bibliography
US slump resulting in reverse brain drain. (2009, march 8). PTI.
Estimating Brain Drain in Nepal. (2010). The Himalayan Times, 1.
Emerging News about brain drain. (2012, January 27). Retrieved from http://www.project-
syndicate.org/commentary/the-brain-drain-panic-returns
Return of brain drain panic. (January 30, 2012). Daily Dispatch.
Brain Drain or not, the right to emigrate is fundamental. (may 6, 2012). TNN.
Its reverse brain drain to India now. (october 25, 2005). TNN.

18. APPENDIX
SECTION1. A QUESTIONARE REALTED TO GENEAL INFORMATION
1.1. Demographic figures
RELATIONSHIP SEX AGE EDUCATION OCCUPATION
M F MAJOR MINOR
INDEX:
I= Illiterate A= Agriculture
L= Literate B= Business
P= Primary education H= House wives
L.S= Lower secondary education S= Service holders
S= Secondary education L= Labor
H.S= Higher secondary education O= Others
H.E= Higher education St. students
1.2. How much money does your family earns per month?
SOURCE OF INCOME INCOME PER MONTH ANNUAL INCOME
1.3. Do you have own home in the valley?
a) Yes b) No
1.4 Does your family income is sufficient to fulfill your family needs?
a) Yes b) No
1.4. If no, what are other alternative sources of getting money?
a) Borrowing b) credit
c) Loan d) selling of assets

19. SECTION2. QUESTIONS REALTED TO PECEPTION, KNOWLEDGE
AND BRAIN DRAIN
2.1 Have you heard about brain drain?
a) Yes b) No
2.2 From where did you hear?
a) FM radio b) neighbor
c) School /college d) person who got this service
2.3 For what purpose you prefer to go abroad?
a) Study b) earning c) both
2.4 Which country do you prefer to go?
…………………………………………………………….
2.4 Why you prefer to go this country?
..............................................................................................
2.5 Do you think this trend is good?
……………………………………………………………..
2.6 Do you have any intension to return your motherland after expiration of your visa?
a) Yes b) No
2.7 What do you think, should people follow the trend of Brain Drain?
a) Yes b) No