Ethics of the Brain Drain in the Developing World: The Case of Philippine Health Professionals

July 11, 2007


DEVIN STEWART: I'm Devin Stewart from the Carnegie Council.

I met Dr. Macaranas just a few weeks ago in Manila. He was briefing me on how he sees Asian integration. We are holding a great talk with Josh Kurlantzick, my research partner from the Carnegie Endowment. Dr. Macaranas hosted Josh for his book talk on China's Charm Offensive, which is Chinese soft power and what that means. I have to say that it was a packed audience, just like this, but it was about a hundred times bigger.

It was my first time in Manila. I have to say I was really impressed by not only the level of debate there, the amount of emotion, or the degree to which people seemed to really care about economic issues, politics, international politics, and there was a real thread of corporate social responsibility from the audience. There were a few people from the fair trade movement questioning China's trade statistics as well as the quality of Chinese exports. I've been hearing this over and over again, from Africa, to Asia and Europe, and of course in America.

Dr. Macaranas is Executive Director of the Asian Institute of Management [AIM] Policy Center, which is AIM's think tank, where he holds the Chair in Public Policy Studies. He is also the Executive Director of the AIM World Bank Development Resource Center and the Global Distance Learning Network in the region, which is what I got to see. We had a videoconference, which is a lot more high-tech than this boardroom.

I'm going to turn it over to Dr. Macaranas. He's going to talk about the brain drain in the developing world, which poses a lot of ethical issues.

Thank you very much.


FEDERICO MACARANAS: Thank you very much, Devin and the Carnegie Council, and for everyone braving the afternoon heat to listen to more heated discussion on a topic that has swept not only this part of the world, because of President Bush's failed immigration bill, but also because of the influx of people where you expected goods rather than human beings to be at the center of global movement.

My research has been sponsored by a number of international organizations interested in the issue of human movement. And definitely our European partners, the Konrad-Adenauer-Stiftung, and the Manila-based official development assistance agencies, USAID, and the International Labor Organization have all expressed interest in reviving a dead issue that some people thought died with a Global Commission on International Migration report. It has not been as widely discussed as it should have been when the report was aired two years ago. This is going to be part of my discussion today.

I have a very simple summary of my presentation. I will just note three main ideas that I will be dwelling upon.

    • The first is that poor nations with skilled human resources, like the Philippines, find it extremely difficult to manage the flow of people, given that there is no regulatory body in the whole world to manage people movement. As people know, there is a World Trade Organization. But there is no organization that pulls together all of the international efforts in regulating movement of human beings. Of course, there are studies that suggest a world migration organization is needed.

    • The second point: The more attractive labor market conditions in the industrial West, like the United States, actually pull the very resources that will help countries like the Philippines develop on its own. When you take out talent from poor countries, it takes time to develop the talent. And in between the time that they were educated and they are gainfully employed in their countries, the recruiters who find it cheaper to poach the poor countries are like sharks in the waters of talent; hence, they eventually suck off the kind of strength that the poor countries have. I will demonstrate this with numbers in the health professional fields.

    • The third point is that there have been many arrangements, bilateral arrangements and multilateral arrangements, on top of unilateral voluntary individual country solutions to the problem. Yet it does not appear that there is any consensus on the right approach for this burgeoning global problem. And so who owns the problem? We don't know whether it is individual countries, bilateral partners, or the international agencies that are supposed to help regulate the movement of people.

So with those three ideas, permit me to elaborate on these points with some of the findings from our own research in the Philippines.

The Asian Institute of Management, by the way, is based in the Philippines, but we are an educational arm for the rest of Asia. We were founded in the late 1960s with the assistance of Harvard University, which developed the first case method in Asia through the Asian Institute of Management. For the next 15 years thereafter, we were able to develop case materials for sharing in the classroom, both for degree and non-degree courses.

It is in this spirit that our cases are developed. These are very instructive for management courses, and we believe that managing the flow of human resources is actually at the root of the solution of this global problem.

In 2000, 175 million people, or 2.9 percent of the world, were living outside their country of birth, compared to only 1.8 percent, or 100 million, in 1995. Now, there are 200 million, or 3 percent of the world population, living in countries other than their place of origin. So this is a large number. It has been perhaps the largest ever in the history of mankind.

And so the question is: Is this for good? Is this a long-term trend?

I believe that anyone watching developments in the global economy will say this is going to be permanent. The movement of people will not be stopped by any sovereign government because people move voluntarily on their own, no matter what restrictions there are.

In fact, I think corporations are already eyeing their markets, not only on the movement of ethnic groups in other countries, but also in making sure that these markets extend to larger communities. For example, Chinese and Japanese food are now all over the world, and so Mexican and Thai food will soon be all over the world too. But this is part of the movement of ethnic groups around industrial countries that cause markets to be created beyond their original markets.

This is the joy we celebrate in globalization. Indeed, the charge that globalization has fomented a very homogeneous American-style culture is wrong. I see that Bollywood has outgunned Hollywood in many places, even in America. And, even in the ethnic richness of New York it is foreign food fare and cuisine that makes nouvelle cuisine really exciting. And, therefore, this is part of the benefits of this global culture that we celebrate.

But the problem of human movement, of course, is that there is an imbalance. Aging populations in the industrial world have to be cared for by younger people. In all demographic studies, you note that the younger people live in poor countries and the older people live in industrial countries. So there is a natural magnet for younger people to care for the older people through the movement of health professionals.
This, of course, is enshrined in immigration laws and in corporate recruitment of talent.

Now, other less dynamic economies, which are very bad economic systems due to poor governments, of course suffer, because instead of helping their talents grow domestically and earn rather well, policies have worked against their own citizens' satisfaction in terms of jobs, employment, and rearing of families. Therefore, they tend to migrate.

In our studies, we note, of course, that while individual decisions to migrate and to recruit talent from abroad are quite different from national social decisions to regulate or to accept these people, there must be data to work on so that we can actually proceed with good policy.

I use the nursing example as a case in point. There is no hard data on the Philippines side that will document the number of nurses abroad. Our partner countries have data on the entry of nurses, but, because of the global movement of different kinds of people, there is a problem.

For example: The United States is very restrictive in the entry of nurses, but the United Kingdom has most recently attracted more of these nurses from poor countries. Many from the Philippines use the United Kingdom as a starting point for entry into the United States. But they come to the United States via arrangements that are not for official nurse positions. They come as tourists and they adjust their own status here with the help of lawyers domestically in getting their jobs and their permits, which is legal.

So while the data can be developed, it is not quite easily gathered by countries because of the difficulty in tracing movement of people. Hence, policies that should be very dependent on numbers are very difficult to implement. So researchers are left to "guesstimate"—guess the estimate of those who are abroad.

In the guessing game, we have rough numbers, for example, of how many nurses there are in the United States from, let's say, the Philippines. By the way, the Philippines is the number one supplier of nurses in the whole world. So it is quite important to realize that this topic is not just one of the footnotes in global migration. It is a major concern. That's why the nursing export phenomenon receives attention not only here in the United States but globally, because we realize that Filipino nurses are preferred by many recruiters abroad, not only because of quality and the perceived quality, but because of the experience recruiters have had with them over the past several decades.

Now, the guesstimate is rather convincing in leading us to a policy conclusion that I will elaborate on in a while.

The number in the United States is an easy estimate of 70,000 in the past, but today we believe it is more than that, hovering around 100,000. Meanwhile, in the Philippines, there are only about 33,000 nurses employed. In our estimates, there are at least six times that number abroad, easily 180,000. But we note that even in the four years between 2006 and 2010 an estimate of 180,000 nurses employed abroad is already projected. That means that we are going to double the number of nurses by 2010 who are going to be abroad. This is an enormous challenge not only for the Philippines but for those who recruit abroad.

The ethical issues that we raise are something that perhaps a group like Carnegie should think about, because they are not as simple as asking whether a net producer of health professionals, like the Philippines, ought to unilaterally control the flow of the people, because in the end recruiters, as I said, are very aggressive in taking this talent from those poor countries.

Why do they do this? One, they say that the training cost for nursing in the Philippines is very, very low compared to that of the United States. When I made an estimate of what it would take to replace these Filipino nurses in the United States as of last year, it would take around $3 billion U.S. dollars to train the replacement of all Filipino nurses. So that number of $3 billion is a genuine cost to the Philippines, because the training costs were undertaken in the Philippines, not only by the Philippine government for state universities and colleges, but also by their families, who are desperate enough to send their children to nursing school to better their lives.

To balance off the $3 billion cost, of course, is the remittances that return to the Philippines. Here is where the real problem comes in. We don't have surveys to show what is the amount of remittances that nurses give to the country because banks don't collect information according to the professional status of any person. Hence, we do not know whether there is a net benefit to the Philippines from the cost of training versus the remittances.

This is where inter-country cooperation should come in. Why? Because we believe that if there were any policy to emanate from this movement of nurses, it must be for the betterment of global health. That means Philippine health professionals must be trained to serve the world, but not at the expense of Filipino patients, not at the expense of the Philippine hospital system. This is the underlying point of our research.

We believe that there is a hospital crisis in the Philippines that ought to be publicized globally, but which of course might seem to be a failure of government administration. I speak here as a member of the National Competitiveness Council, a public-private partnership task force set up by President Gloria Arroyo, and I am the academic sector representative. I don't represent the government nor the business interests. I represent a neutral point of view of analyzing the situation.

Our analysis suggests that, indeed, failing to underscore the hospital health crisis in the Philippines because of the movement of health professionals, the Philippines will be in a sorry state of asking the United States for official development assistance. So rather than beg for money to help the Philippines develop, we suggest that we negotiate from a position of strength, which is that nursing professionals here in the United States are a net contributor to the welfare of this economy. Therefore, there must be a proactive solution to this brain drain to mitigate the reverse outcomes in the Philippines.

What are these very bad outcomes? I will enumerate them from the point of view of studies made by different institutions. I simply report the following.

Number one, at least 200 hospitals closed in the Philippines over the past five years—hospitals—and 800 more hospitals partially closed, one wing or one ward each. That's easily 1,000 hospitals. That's quite a big number in a country where hospitals only number in a few thousands. And most of these hospitals were in the poorest districts of the country. The reason is simply that the registered nurses and doctors left the hospitals.

Now, if the issue is allowing the free movement of doctors and nurses to migrate, whose responsibility is it to make sure that the hospitals in the Philippines do not close to serve the needs of its own people?

What is the net result of the closure of hospitals? Former Secretary of Health Jaime Galvez-Tan says the following: He found out that Filipinos dying without medical attention reverted back to its 1975 level of 70 percent—and this happened at the height of the migration of nurses and doctors who have turned to the nursing profession—in 2002-2003.

The fact that doctors have become nurses is an anomaly in global human resource allocation. It is not only true of the Philippines. It is true of Latin America and Africa. The reason is very simple: it is more remunerative for a doctor who trained cheaply in a poor country to migrate abroad, to earn as a nurse rather than as a doctor, because the American Medical Association here has more clout in policymaking than perhaps the American Nursing Association.

But the reality is, given that this imbalance of resource distribution has made doctors into nurses, whose ethical standards have to be examined? Is it the individual? Is it the country? Is it the sending country? Is it the receiving country? I submit it is a global issue, because when it is a health concern it is health for all. That is enunciated by the World Health Organization, by the United Nations systems, by all sovereign governments who wish to see Millennium Development Goals achieved.

And this sad realization that there is no single body in the world addressing the movement of human health resources and addressing domestic equity issues is quite a shock. We wish to elevate this to the Carnegie Council because we believe that this is a forum that will be in the best position to air it.

This year the global migration topic is going to be discussed in Belgium. Following the release of the report in New York in October 2005 of the Global Commission for International Migration, we believe that the effort of the Belgian government is most welcome because it will discuss one of the underlying themes of the report, which is that there must be a global migration facility, there must be one institution responsible enough to gather all of the facts and propose solutions so that governments and institutions can discuss them with the kind of urgency that the situation calls for.

The fact is many of the broad principles enunciated by this Global Commission on International Migration are well accepted by many governments, but they have not been quite applied to the human health professionals in the manner in which we see fit. For example, these are some of the issues that they enunciated:

(1) Migration should be out of choice. In other words, poor doctors and nurses in developing countries should not be goaded to migrate because of the impoverished conditions that they face in their own local job markets. But if the choice is really for them to earn better in developed industrial countries, there must be a recognition that beyond individual benefits and costs of migration are social benefits and costs.
Very few would say that you should shackle the feet of nurses and doctors who have the freedom to move to better job and employment opportunities. Those few are government officials and scholars, who say: If your schooling is funded by your government, there must be a way of that government holding you for a period of time for you to serve back your country. There are bills in the Philippines today that will require state university and college graduates of nursing to stay for at least two years. China did this in the past, and I know that many countries have experimented with this hold period for nurses before they depart for better employment abroad. That's one solution.

(2) The other question, of course, is whether sovereign governments can tax people so that they will be less encouraged to move. There are already many proposals. For example, make it more expensive for people to be placed in jobs abroad by taxing not only recruiters but also domestic institutions who might be encouraging these people to move. However, of course, it has received less attention.

The more interesting solution, of course, is for those countries who have chosen to recruit openly, because migration is out of choice, to consider the fact that they must not aggressively recruit and have codes of conduct defining what legal recruitment limits and constraints must be, because there are ethical dimensions that must be addressed.

And indeed, in Uganda, where I served for two weeks helping repatriate Ugandan doctors to help in the HIV/AIDS crisis in the late 1990s, we realized that there is no sentiment in some institutions to have the social responsibility returned to them, simply because the challenge is quite enormous. The enormity of problems sometimes deflects the issue away from the institutions that should address them.

In this regard, a tiny country like the Philippines is lost in the global market for recruitment because it is not the state university graduates which we are afraid of losing. It is the majority of the graduates of private universities where we don't have any moral code, because they are free to move wherever they wish to go.

This is the dilemma, because many of the private schools' graduates eventually work in hospital systems in the Philippines where the remuneration has been piggybacked on a game of playing the international market. We end up to be the losers.

What is this game? If I am a Philippine private hospital and I am about to recruit nurses, I will tell the nurses, "Oh, I will pay you the minimum wage," which of course is an insult to four-year graduates with baccalaureate degrees, because they deserve more than the minimum wage. But why can these hospitals have the temerity to say so? Because they will argue, "Oh, we know that you will make use of our hospital as a stepping stone for the next job recruiter's effort in a foreign hospital." So the general wage level in the country is depressed by an artificial market condition which prepares the very graduates who would help us for an international market.

So who do we train in order to answer the question? Is it the management of hospital systems? Is it the government that must realize that global forces are the ones pulling our nurses, and hence their wage rates must be also pulled up? Or is it the individual who, after having accepted a minimum wage, should decry the fact that this is not the value that ought to be paid a local nurse? These are ethical issues. Yet, we seem to be lost, because there are no groups that are fighting for the concerns.

The Philippine Nursing Association, which I advise, together with 17 other nursing institutions in the country, lament the fact that they are also helpless. I advised them to realize that their problem is not a domestic Philippine problem, it is a global problem.

Why are Philippine nurses and other poor country nurses being recruited abroad? There is a need. They fill that need. But that need must be balanced in terms of the domestic needs.

The fact that immunization coverage in the Philippines has also declined in the past five years, due to the shortage of experienced health professionals, brings home the point that it is experienced health professionals that can help improve the quality care system.

The budget is not the issue, because the Government, I think, has increased the health budget proportionately. And it is not the skill of managers, because skilled managers are easily available in the Philippines. In fact, many doctors have become MBAs in order to manage the hospital systems à la Western hospital systems.

The problem perhaps can be couched in terms of what we call the supply chain. We have educational institutions that supply hospital systems that care for the people of the world. If the educational institutions were to help the people of the world, isn't it logical that the world must help those educational institutions?

Therefore, our research is leading to a proposal: That the global health care system must look at liberalization of the educational system so that the nursing curriculum is not only upgraded according to the needs of the older world.

By the way, the Philippine nursing curriculum has very minimal gerontology and geriatric care courses. But when nurses come to the United States, that's what they need most. So if there were any investor in a Philippine nursing school, that focus will be appropriately attended to.

The other one is psychiatric care nursing. Of course, psychiatric care needs in the Western world are more pronounced, for one reason or another—we don't know—but that definitely is where one of the opportunities for improving the domestic nursing curriculum lies.

If you are able to attract foreign investors in upgrading nursing schools, they will demand that the kinds of institutions servicing the nursing profession be upgraded to global standards. For example, there was a recent nursing licensure scandal in the Philippines where a cheating case became a global issue, because as soon as the nurses who cheated were exposed, the entire crop of nursing graduates were affected.
It's really a tiny handful. Three-to-five percent of those examinees were the recipient of the cheating scandal, yet the entire nursing profession was tarnished.

All of the nursing examinees were asked to retake the exam. By the way, this is not a simple 1,000 or 2,000. Sixty thousand people were asked to retake the exam. This is not only a national scandal, it is a global scandal.

Why? Nursing schools in the Philippines proliferated to produce the graduates needed in servicing the needs of the world. Riding the belief that the nursing graduates of the Philippines are the best caregivers, therefore recruiters abound in the country and take the best of the country.

Creaming off the best eventually means getting the teachers, and today the number one crisis we face in nursing schools is the availability of qualified nurse instructors, and deans of colleges and schools of nursing. If this is not a global issue, because the Philippines is a majority supplier of nurses abroad, then I do not know how to phrase the problem.

What we are proposing is that we now recognize that liberalizing the nursing market in the Philippines is a natural step for the Philippines helping the global health care needs. But accompanying the liberalization of the nursing school industry, if you will call it that, must be a proactive government recognition of the need to regulate. You cannot have free movement of nurses and doctors-turned-nurses to serve the world minus a proactive government recognition of the need to care for its own.

Not only are the statistics of Dr. Tan very revealing of our inability to help ourselves, but is also revealing of how the world has failed to realize that when you globalize, your responsibility is not only to your own nation, but to the very sources of the help that you get for your elderly and for your own health care system. This help is the Philippine medical system, the Philippine health care system, which includes the educational and the hospital systems.

Investors must be welcome in not only nursing schools but also in hospital systems, not only because the hospitals have closed, but because for nurses you need what are known as related learning experiences. You cannot graduate as a nurse without a hospital where nurses can physically train. For example, in the Philippines it used to be that nurses had to give five live births, assist in five operations, et cetera. These practical learning exercises, of course, are only done in hospital systems that are adequately prepared for them.

I know that many Filipino nurses when they come to the United States are shocked at the information technology requirements of the nursing profession. The curriculum of nursing in the Philippines is hardly IT-rooted. So our own nurses have to catch up with the work by retooling and retraining themselves here. That is very costly for the world.

It is cheaper for the world to retool those nurses who will eventually go abroad right there in the Philippines, because the cost of training in the Philippines will be cheaper. But for us to be able to answer for the long-term needs, the global investors must not only put in the IT facilities, the curriculum that is appropriate for the world, but also the resolute determination to help in the Philippine health care system. You cannot have a foreign institution that will merely transfer resources from the Philippines to abroad without helping the resource country. This is the main point that we are raising in our studies.

The U.K.-South African Health Agreement has been broached as a bilateral model. More than half of the South African professionals who migrate to the U.K. are health professionals.

In the Philippines—you will be surprised—two-thirds of the émigrés to the U.K. from the Philippines are in the health professions. So there must be a way of balancing this through agreements.

But is a bilateral agreement like the U.K.-South African Health Agreement the answer? We believe this is a very partial approach, because soon enough we will realize that the aging countries of the world—Canada, United States, United Kingdom, Japan, Australia—will be fighting tooth and nail for these caregivers, for these health professionals, because you have to care for your old, you have to care for the sick and dying in your own countries. But what about the poor countries who answer for that?

With that, I rest the case that there must be a Carnegie Council further discussion of these issues.

The Philippines hosts an international migration conference next year. We hope that with this lecture we are able to excite the world community in addressing this health concern so that this issue becomes not a unilateral policy problem, not a bilateral policy problem, but a multilateral one.

Japan recently signed a Philippine Economic Partnership Agreement where nurses are welcomed to work in Japan. But the catch is they must take an exam in Japanese. A Filipino-Japanese notes that not only is a technical diploma in nursing extremely difficult, the nursing exam itself was made deliberately difficult, so that even the Japanese failed the exam.

So the point is: Why are governments forced to sign bilateral agreements? This is a short-term answer to a more global concern. We must address this globally. It cannot be bilateral. It must be multilateral.

Thank you very much.

Questions and Answers

DEVIN STEWART: Thank you very much for inviting the Carnegie Council to help out with this conversation and this really important discussion, and thank you for addressing almost every nuance and every level of the ethical debate—the level of the different actors and looking at it from different perspectives, and the different interests.

A few tools you mentioned for helping the situation: One was a world migration organization. The others were FTAs [Free Trade Agreements], broadly speaking. Another was the role of investors.

I wonder if, for example, there might be some investment rules that you might think about, if there is a way to do more than just encourage investors to help out, but to codify it in a more stringent way.

I was also wondering if you could tell us a little bit more about the world migration organization idea, if you had thought that through a bit, on what role it might play.

And also, on the Japan-Philippines FTA, what was the number like? How many nurses were allowed to come into Japan? Was there a number limit, or was it just the requirement that they take the exam?

FEDERICO MACARANAS: I believe there is a number limit. The officers from the Philippines Consulate may know the number. I knew that they were negotiating 500. This is a very small number.

DEVIN STEWART: Is that satisfactory?

FEDERICO MACARANAS: Oh no. Our analysis is that this was just an excuse for Japan to get at other parts of the agreement, so this was a sweetener for the Philippines. The bait did not really sound as attractive because the universities in the Philippines which will train the Japanese-language nursing graduates have had very few applicants. So I think it will fail. It is going to fail.

Why would they want to create such a high bar for nurses?

FEDERICO MACARANAS: Well, Japan really wants to be a homogeneous society in the global age. This was what I was telling the Japanese Ambassador: "You lie when you tell me that rich Japanese cannot talk English. The rich Japanese can afford Filipino English-speaking nurses. If there are thousands of them, you will at least need a handful of Filipino nurses speaking in English and not in Japanese. So for God's sake open up the market even to the high end of the Japanese market, English-speaking, not Japanese-speaking." And, of course, they are saying it is a cultural, not an economic, issue.

DEVIN STEWART: How about the world migration organization?

FEDERICO MACARANAS: The world migration organization was first broached by Jagdish Bhagwati of Columbia University, right here in New York City. It has not received a good audience because there were no support groups. We are ready to help support the idea that this is high time for the world to consider a world migration organization.

There are many organizations, like the International Organization for Migration, which is outside the United Nations system. And there is a United Nations Commission for Refugees, UNHCR, which is a separate body dealing only with refugees. And then there are commissions on nursing. There is a global commission on registered nurses that talks about the issue. So there are many disparate bodies discussing different topics under the same heading without talking to each other.

The Global Commission for International Migration Report underscored the need for one facility. Why did it die a natural death after it was reported to Kofi Annan?

Number one, people were saying you cannot have a top-down facility where the governments tell people what to do, because they think that if you have this global facility under a UN umbrella it will be sovereign governments again who will be talking to each other and dictating what institutions in the private sector should do. So that was one of the arguments against the facility.

Yet, we are arguing, can we not invent a new facility where public-private sector participation is actively at the core of that structure? "Public-private partnership" is now the buzzword in the World Bank, in the Asian Development Bank, so why not extend this beyond financial institutions? Why not extend this to institutions like the International Labor Organization, the world migration organization in the making, so that the private sector can also have their own views?

The solution of the world is very simple: have a Davos conference where the sovereign governments and the multinationals and the civil society people debate endlessly, talk endlessly, and come up with their own solutions in their own niche corners—government without taking care of civil society, business without taking care of government, et cetera.

What we need is a global dialogue of all the stakeholders. We find this missing because there is no consensus on such a global facility. So we hope there will be one such active discussion.

QUESTION: I have a couple of questions, if I may indulge myself and take advantage of you.

First of all, respectfully, I would like to disagree with you that a UN affiliation would somehow inject sovereignty—individual sovereign nations dictating policy. The UNHCR doesn't do that, and it's not perceived that way at all. International migration is a global issue, and it has become a humanitarian issue, obviously. So if you organized it as an NGO, as a nongovernmental organization, which it is, and affiliate it as a human agency, I think it could be a very useful starting point. It's not mutually exclusive. You can then have other discussion groups. After all, Kofi Annan drew on private enterprise as a new way of support for the United Nations. So you could somehow get into that too. So that's my suggestion.

I wanted to also say that it seems to me that if the Philippine government invests capital, which obviously it does, in training these people, these people have an ethical and a moral obligation to the government. You said two years. I mean when they enter into being trained, there should be some sort of a contract: "You are giving us this training; we, in turn, will give you our commitment for six years, ten years, whatever." I think that is an ethical issue.

Let me address the first issue. The issue of a world migration organization being a top-down facility was scrutinized by many others in the context of the existing structures of the other UN agencies.

You are right that the call for private participation in support of UN activities has been heightened, not only by Mr. Annan but I think by the present Secretary-General, in the spirit of what is going on around the world. Sovereign governments do not have the money to answer for all of the problems of their societies, and the private sector can very well answer to that more easily.

I believe that the issue is less whether it is top-down. It is whether the solutions to the problems will be more in a cooperative public-private tasking rather than merely assigning to government this part of the problem and leading the private sector to that part of the problem.

A case in point is in education. Indeed, if there are government and private education institutions who have to craft a policy for retaining the graduates of their own institutions, they must be given some of the individual benefits that the students may have received while they were in school.

Even some private universities receive funds from abroad; for example, American foundations' support of nursing students in the Philippines. And, more recently, they found out that, because of the deflection of funds away from nursing into anti-terrorism campaigns, it is really a problem for the nursing schools now. So the question is: Will you now allow those private school graduates to leave the country when in fact they should be addressing problem areas where terrorists actually may thrive? In the Philippines, it's a region called Mindanao, the southern part of the Philippines. That's a very complex issue. That's why we say it cannot be in the context of pure nursing alone; it must be an overall systems view.

On the contract for service, the Philippine government—I think there is a bill in Congress today for this retention of nurses prior to their departure for abroad. I hope that the Philippine Nursing Association will get its share of views from the world, because I always insist this is not a domestic Philippine problem; this is a global problem. You cannot address a global problem from a poor country perspective where you fight your own turf and then realize that you are helpless because they go out anyway. So this is our perspective.

QUESTIONER: May I just point out one thing? Ban Ki-moon is, of course, an Asian. It seems to me you could just talk to him. I think he would have really empathy and more concern and understanding of the problem and might be very helpful in creating an agency at the United Nations. And I don't think it's naïve to say that.

FEDERICO MACARANAS: Thank you very much for that suggestion. I hope the Philippine government officials here listen to that.

QUESTION: Is it being implied that the IOM [International Organization for Migration] is not involved at all in the migration of professionals?

FEDERICO MACARANAS: No. They are. The IOM is not officially affiliated with the United Nations. When they organized this skilled talent issue in their agenda, it was actually because of the Philippines prodding them to get into that issue. They used to be concerned with refugees and cross-border movement of people. Now they are engaged.

There is therefore a starting point.


FEDERICO MACARANAS: But, unfortunately, I said in the report that it is a tiny, tiny, tiny part of the IOM's concern.

QUESTION: The UNHCR is involved with refugees. The IOM supposedly was going to be involved in the migration of non-refugees. Then the WTO was going to address the question of the migration of professionals. There seems to be nobody that addresses the issues that concern these individual organizations.

FEDERICO MACARANAS: Curiously, the World Trade Organization is into the picture precisely because there is what is known as the General Agreement on Trade in Services. Nursing services are now classified into four types. People can cross borders physically, so Filipino nurses come to the United States. But there are other ways of nursing services being traded.

One of them is through what is known as medical tourism. Patients can now come to the Philippines and receive their medical and nursing services in the Philippines. So that's the reverse movement. Medical tourism is big in Asia and I think in Eastern Europe. So this is one kind of reverse brain drain solution.

The other one is encouraging video or distance learning so that instead of physically moving to another country for education, for retraining in a specialized field, you will conduct them via videoconference. We have proposed that to the World Bank for the Asian operations, and we are slowly inching into that direction.

Philippine retiring nurses, for example, in this country are better off salving their conscience by teaching in the universities in the Philippines which are crying desperately for help, via videoconference. They need not fly to the country. They can be right here in New York City, lecture at 8 o'clock in the morning for an 8 o'clock evening class in Manila, Iloilo, Bacolod. So one lecturer can be beamed to five cities in the whole country, and that one person will benefit not only 1,000 but perhaps 5,000 students, both at the same time.

DEVIN STEWART: Will they make more money?

FEDERICO MACARANAS: I think there will be more money. So I think it's a nice solution in the trade in services arrangement.

QUESTION: Until now we've been talking about cross-border migration, and the analogy has been with refugees. I was thinking of a scenario where the analogy would be more internally displaced people, where you have foreign foundations supporting initiatives in countries that are very equipment-intensive and take local professionals away from the local population to serve a particular need group, and then the foundation leaves. So those people go with it.

I'm wondering if you have any examples from those practices, where perhaps a funder has gone in and in exchange for hiring local talent has supported local education that is useful in the cross-border scenario.

FEDERICO MACARANAS: I am not aware of any foundation that has brought with them the health professionals upon closure of their local programs. But I am very aware that many of these local health professionals eventually become attractive for recruitment by international groups.

In fact, in the Philippine case, we are the number one volunteers for health professionals in the UNV, the UN volunteers program, precisely because there are Filipinos who have had some experience in working with international organizations in IDPs, internally displaced people, in the Philippines.

A good case is the Morong, Bataan, case. The Vietnamese refugees were housed in Morong, Bataan, for some years. The health professionals there were able to get the attention of international aid-giving agencies. Lo and behold, five years later we realized that they were the most attractive recruits for the agencies. But we don't have a correlation with immediately upon closure they were taken by these groups.

QUESTION: You hit a button, sir, with me when you were talking about medical tourism. It's in its infancy in this country, and I doubt if many people have ever been exposed to it. What is being done, or what can be done, to access the U.S. market? There are 47 million many uninsured people in this market. As I understand medical tourism, the concept is procedures that can be done in countries by American-certified doctors. What, if anything, is being done in the Philippines or Asia to expose medical tourism to the United States?

FEDERICO MACARANAS: There was a recent delegation from the Philippines that visited the United States, a team of 16 hospitals, I believe. Maybe the officials of the Philippine Consulate can share some thoughts on that.

VOICE: It was also in the context of public-private partnerships. We had our best hospitals in the Philippines, like St. Luke's, Mission Hospital, [inaudible] Medical center. They came here and they got to meet specific groups, companies, who can send their patients. The hospitals can reduce their costs. So we are already starting to do this.

FEDERICO MACARANAS: Thailand has a very active medical tourism promotion globally. In fact, Thai medical tourism has outstripped the Philippines in number of patients coming in, but hopefully the Philippines will catch up.

We know that in Eastern Europe this is quite actively promoted because lowering the cost of medical care in the [European] Union is an objective that is widely shared.

The main problems we face would include the portability of insurance. Americans who are insured here, some are not allowed to enjoy that insurance privilege in countries even for the accredited hospitals. In the Philippines, the three accredited hospitals are St. Luke's—

St. Luke's already has Blue Cross, I think.

[Inaudible] with an aging population, it is imperative if we are to be successful in that [inaudible].

FEDERICO MACARANAS: The Japanese reportedly relaxed on pension funds being used abroad, so that now aging Japanese or retired Japanese are able to enjoy their later years in the tropics and they commute to and from Japan every season. It is so cheap that it becomes like a second home.

That is exactly what the world retirement authorities are saying. The new world is one where older people will reside in the tropics during the winter months in their home countries and just visit their own children and relatives and colleagues in the summer months. We find that this Japanese policy direction is something that will be attractive to many other countries of the West.

QUESTION: You mentioned very briefly South Africa, which of course does have a very serious problem as well with losing medical professionals. But on top of that, the countries surrounding South Africa have a problem with their medical professionals going to South Africa. I'm wondering, do you have any data on medical professionals from other countries coming to the Philippines and [inaudible]?

FEDERICO MACARANAS: In ASEAN, the Association of South East Asian Nations, there has been a mutual recognition arrangement for the nursing profession. We allow the entry of nurses from nine other countries to the Philippines. We know that we will be a net beneficiary in terms of nurse education. Few would come to the Philippines to serve in the hospital system because their own countries seem to be paying better packages, compensation packages. As I noted, the compensation package for the Philippines is artificially depressed by the global conditions and the managers of the Philippine hospitals playing the game of forcing the wage low because they say "anyway you will leave us."

So, in that sense, the mutual recognition arrangement will actually be more useful for other countries where they need upgraded training. So Philippine nurses who will train Cambodian nurses will tend to go to Cambodia rather than the Cambodians coming to the Philippines.

We are a favorite destination for China already. We have several schools, Catholic nursing schools, who have attracted Chinese students by the hundreds—not by the dozens, but by the hundreds.

One of the lessons we learned was a very astute religious leader found out that by demanding the setting up of a dormitory for the Chinese students she was able to require that additional rooms be set up for a similar number of Filipino students. So for every 150 nursing rooms for the dorm for Chinese, there will be 150 nursing rooms for dorms for the Filipinos. And she demanded, saying, "If there is an additional laboratory for the Chinese, there will be an additional laboratory for the Filipinos." Because the claim is that if you allow the entry of these nurses and nursing students to the Philippines, you eat up space for a Filipino student, and therefore that opportunity must somehow be compensated for.

This school, St. Paul's of Tuguegarao, is now a benchmark for global models in negotiation.

[Gap in taping]

QUESTION: . . . for foreign investors in the health care industry. If I had money, why would I go to the Philippines? What incentives are offered?

FEDERICO MACARANAS: I believe the Board of Investments has a package of incentives for pioneering institutions. For example, if you are setting up a hospital system where you have pioneering in something, then you will receive the tax holidays and all the fiscal incentives. It must be pioneering because if there is a local institution that can answer for the local need, then you should not be unevenly giving favor to the foreigner. So this is to level the playing field.

I guess in the past several years we have seen Thais buying up shares of the Asian Hospital in Alabang and Chinese investors from Hong Kong investing in Cebu for the medical facility there. More recently, Libya expressed interest in a wholesale reproduction of a University of the Philippines nursing school in Libya, but I suggested to the dean of the UP College of Nursing that instead of having the faculty and the administration go for a one-year trip to Libya, ask the Libyans to invest in Mindanao, where they can now have a hospital for their fellow Muslim brothers and sisters but with a University of the Philippines faculty and administration teaching the Libyans how to start a nursing school.

So there are ways of having official incentives and private incentives packaged so that the net benefits will be for the Philippines.

In terms of the Chinese who come here, does the Philippines have an exception for them in terms of obtaining green cards like there is for lawyers? Philippine lawyers don't have to have a degree from a U.S. law school. There was an exemption here many years ago so they could take the bar exam. Do the Chinese get that same vehicle for nursing? Do they get a green card right away if they graduate from one of your chools? Maybe that's the incentive for [inaudible].

FEDERICO MACARANAS: No. It's just a student visa that they are getting. I presume that because the Chinese nursing program in the Philippines is really destined for assisting the Chinese health care system, they are required to return to China. But we found out belatedly that the English-language capability is the one major reason why they want to study in the Philippines. Eventually, they may be the next wave of nursing professionals to move to the industrial world.

QUESTION: I believe the whole Philippine brain drain has been happening for 25 years. There was a time when a lot of Filipinos who came to the U.S. were professionals—doctors, accountants, lawyers—and I think the whole thought has changed now to where we have the ordinary workers, basically Filipino caregivers and domestics. I guess my point is why is it ascribed to globalization?

I also believe in the whole idea of thinking globally and acting locally. Having said that, don't you think that the Philippine Parliament should be taking the lead in terms of ending this crisis? And I'm not just talking about the crisis of hospitals, crisis of human resources.

Don't you think it's possible to assume people might leave because they just want better jobs or better opportunities? Don't you think that that the economy of the Philippines offers no opportunities? I have friends who are doctors who come here as nurses. Why? Because there are no opportunities.

I can understand that we want to get all this help externally from foreign investment, but I really believe that if we don't own the problem it will never be solved. This is our problem. This is a national issue. It has been happening for 25 years. I think it's mostly tied to economic and political stability of the nation. If people are happy there, why would they leave? These are people who are leaving families, going to dangerous places like Iraq to be a driver, or being raped, abused, molested, and they have no help. And yet they will invest $5,000 to get an exit card. I just want to get your thoughts on that.

I believe the issue is more complex than comparing the situation today with 25 years ago. The world is flatter today. Outsourcing, movement of goods and people, are heightened by technology and by relaxed policies and by local needs. Indeed, we cannot absorb all the 60,000 nursing graduates in the Philippines. We are deliberately producing nurses for the world. If the government did not want to produce nurses for the world, there will only be 100 schools. We have 475 schools. That means we have deliberately programmed the health care education system not for the local economy but for the world.

It is much like whether Japan produces cars only for the Japanese market or for the world. If you were saying, "Gee, that is because they are not able to buy all those cars locally in Japan," that's exactly the question. The world is different today. We produce things for different places precisely because we have some relative or comparative advantage, so that with the remittances from the nurses abroad we may be able to develop the local economy better.

The question of whether indeed we ship out only the less skilled versus the more skilled is a human rights issue. I cannot prevent an illiterate person from escaping the borders of my country and then tell them that, "Oh, I cannot provide a job for you, so that when you get a job in Malaysia it is your own outlook that you must be providing for."

What we are saying is that perhaps, if global consciousness of this changed reality was focused on the health professionals, we would realize that the Philippines is a net provider of human resources.

The policy of the Philippine government today is to allow the movement of more skilled professionals. The Philippine Overseas Employment Administration has, in fact, slowed down on the release of permits for people to work in those dirty and dangerous jobs. The fact is there is a ban on Filipino workers going to Iraq, but they still go to Iraq. What government will not want to prevent the flow of people to dangerous places? But the fact is that human beings answer for their own needs and violate sovereign laws because they think the risks are worth the try.

Hence, in the end the ethical question is: Whose standard prevails, my family's need or the country's requirement? In the end, we must balance the two. In the case of nurses, it is very clear that the government has allowed the proliferation of schools to service the global health care community and not the Philippines' needs alone.

DEVIN STEWART: I would like to wrap up on that note. Thank you so much, Dr. Macaranas.

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