UNDP Oldthink

The United Nations Development Programme’s (UNDP) recent Human Development Report 2001 has been hailed for championing information technologies as a means, not an obstacle, to economic growth in poverty-stricken nations. After the report’s release in July, the Economist quickly declared it an important victory over antiglobalization activists, claiming that the report offers "a convincing conclusion: poor people need more innovation and access to technology, not less."

Yet a careful reading suggests some UNDP ambivalence over granting all people from developing nations exposure to the latest information technologies. Consider the report’s analysis of India’s "brain drain" — the outflow of highly skilled information technology professionals to Silicon Valley and other high-tech centers around the world. The UNDP estimates that four years of public university education in India cost up to $20,000 per student. Multiply that sum by the 100,000 high-tech professionals expected to leave India annually over the next three years, and the annual price tag for the Indian government reaches $2 billion.

"How might India begin to recover this loss?" the UNDP asks. Its answer: an "exit tax" paid by the outgoing Indian employee or the hiring firm overseas, equivalent to two months’ salary. If high-tech Indian expatriates earn $60,000 per year, India could recoup up to $1 billion annually. Alternatively, the UNDP proposes that Indian authorities could grant subsidies to university students, with repayment obligations kicking in if the student leaves the country, or a flat tax, with all overseas nationals paying 1 percent of their annual incomes.

Unfortunately, such "solutions" would create real obstacles for qualified Indian workers who wish to upgrade their technology skills overseas — skills that could prove extremely valuable for India should such professionals return to their homeland. Moreover, the report itself cites the many benefits that flow from India’s diaspora network in Silicon Valley, including financial contributions to the endowments of institutions of higher learning back home, as well as the establishment of high-tech manufacturing facilities in India (with the "front office" remaining in the United States). It also fails to mention the remittances that Indians overseas send home, estimated at some $49.8 billion from 1990 to 1998.