Brain drain has for decades choked Latin America’s economic and technological flourishing. The region is generating enough interest in global business to speak of a change in its fortunes in the mid to long term. However, Latin American luminaries keep flying away to greener pastures.
Much has been said and written about strategies for Latin America to reverse its loss of talent. Perhaps its policy makers should take notes from another segment of the world which has been gradually recouping its “brain power”: Eastern Europe.
What’s happening: Several Eastern European countries have been able to recover at least partially from decades of brain drain. Expats who traveled west in search of better opportunities have been coming back east, finding improved living conditions and chances for development at home.
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One cannot identify a specific period in which Eastern Europeans headed back home. Studies point mainly to “waves” of return migration after recent economic shocks of regional and global impact: the 2008 financial crash, Brexit and COVID.
Outsiders welcome: Between 2013 and 2023, EU members in Eastern Europe –like Poland, Romania, Hungary and Croatia– saw their number of employment visas granted to non-EU citizens go from hundreds, tens or zero to thousands, or tens of thousands, achieving percentage growths of triple and sometimes quadruple digits.
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Bulgaria: 2,850%
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Czech Republic: 1,700%
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Estonia: 354%
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Croatia: 3,700%
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Latvia: 523%
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Lithuania: 1150%
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Hungary: 2,050%
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Poland: 1,400%
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Romania: 3,750%
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Slovenia: 910%
Germany and France, the two biggest economies in the EU, grant a larger number of employment visas each year, but their growth over the past decade hasn’t been as spectacular. Germany’s volume of visas issued has grown 44% since 2013, and France’s 165%.
Punching above: Eastern Europe’s economy grew 2.3% in 2023, according to the International Monetary Fund (IMF), which expects it to expand by 2.9% this year and 2.6% in 2025.
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Western Europe’s GDP expanded 0.5% in 2023. The IMF forecasts 0.8% and 1.5% growth in the zone for 2024 and 2025, respectively.
The correct moves: Eastern Europe’s economic performance can be explained by many factors. A PwC study, however, points to three major reasons: integration with the European bloc; an educated, wage-competitive workforce; and years of investments in infrastructure, digital capabilities and innovation.
The same boat: Like Eastern Europe, Latin America has become a great spot for nearshore investment and sourcing for the most developed countries in its continent. However, Latin America has yet to recoup from its loss of talent, which in itself damages its opportunities for development.
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The US issued 6,832 worker (employee of preference) visas to people from Latin America and the Caribbean in FY2023, according to data from the State Department. That’s 15% of the total worker visas issued for that period.
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And that’s not accounting for the other sorts of migrants fleeing to the US –asylum seekers, students, family members of other migrants– and to other places, like Canada and Europe.
In position: Latin America is well-positioned to replicate the Eastern European experience.
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Though there are no plans for integration into a regional bloc like the European Union, nearshoring has strengthened trade ties with the US and Canada.
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Mexico is the third member in an unofficial North American bloc.
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US authorities plan to turn Costa Rica into an essential node in its regional supply chain for microchips, and they’ve eyed Chile as a source for lithium.
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Colombia, Argentina, Brazil, Mexico and Costa Rica have for decades cultivated a profile as prime locations to set up facilities for nearshore manufacturing, support of back office business operations, customer care and, most recently, software development, IT staffing and tech augmentation.
Home improvement: Latin American countries struggle to generate expertise in tech and other fields, which leaves them at an extreme disadvantage when compared to offshore “talent factories” like China and India. There’s the option of drawing expats back, but that will require some home improvements first.
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“Poland suffered a period of brain drain. Many of its top talents migrated to Germany, to the UK. Eventually, Poland began to grow,” Owaldo Gómez, a Mexican ML engineer who migrated to Poland, told NASAM in a previous interview. “If you look at videos or pictures of Warsaw, you might think you’re looking at New York City […] Now Poland is seeing a ‘reverse brain drain’ of sorts.”
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“I would also recommend giving Mexicans working abroad good reasons to return,” he added. “When a country has rule of law, security, good salaries and investment, expats come back.”
NSAM’s take: Latin America is like Eastern Europe in many ways: it is often stereotyped as the “backwater” of a whole continent, regarded as a crime-ridden, violent, politically unstable, underdeveloped pit right next to a wealthy neighborhood. Foreign investors who have come to know both regions first hand know better, though. They’ve seen not only the potential, but the actual achievements attained through decades of effort and policy.
Eastern Europe is proof that a region can overcome its own structural challenges and bring its best and brightest back home. All it takes is committing to the right set of policies, both foreign and domestic.
Latin America won’t be able to replicate the Eastern European experience one-to-one, however. There’s a long history of failures in the implementation of “external economic models” in the region, attributed mainly to a lack of proper adaptation of policy to the realities of each country. In that sense, Latin American governments will have to understand their situation as best as they can before giving the Eastern European experiment a shot.
That means a precise evaluation of each countries’ strengths and challenges when it comes to infrastructure, education, business friendliness, digital culture, corruption, security, rule of law and other issues frequently cited by expats as reasons that forced them to migrate.
As mentioned above, Latin America finds itself in a “do-or-die” situation which doesn’t come often. If it can focus, put the pieces in place and do the work, development will come, and, eventually, the brains will come back if asked to, as long as they find sufficient reasons to.
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