The departure of skilled workers in the developing world may, contrary to popular belief, do more good than harm. Photo:banoiff (flickr)

When educated professionals depart a developing nation, does greater wealth arrive? Some scholars in the international development community are saying farewell to the notion that the ‘brain drain’ hinders impoverished countries from expanding human capital and increasing the growth rate.

Exit brain drain. Enter brain gain.

The brain drain has long been perceived as a constraint on the progress of developing nations—much-needed doctors, professors, and scientists often abandon their homelands in exchange for better salaries and more comfortable lives in the developed world. However, research indicates that if countries can hit a sweet spot of sending around 20 percent of their talent to other countries, the residual impact of those individual losses will actually spur economic and educational growth at home.

But how? One way is through remittances, cash transfers from an individual in one country to another elsewhere. Take Ghana, for example. Some figures place remittance levels at $400 million per year, on par with the country's two biggest exports, cocoa and gold, which account for 25 percent of the foreign exchange earnings of the nation. To put this figure in perspective, in previous years Ghana has received around $650 million in foreign aid. Compared to other developing nations, that's low—in some, “remittances are more than double the amount of foreign aid,” as reported by Foreign Policy.

Furthermore, remittances can withstand the tests of natural disasters, and political and economic crises. Chances are an economic and political collapse in Egypt would deter foreign investment but encourage a migrant to increase his or her monetary givings to Egyptian relatives. Now those are derivatives Fannie and Freddie should have bet on.

Much of the new economic activity happening in African countries like Ghana are catalyzed by residents who have traveled or lived in developed countries. New York University professor William Easterly refers to this as “brain circulation,” that is, the movement of ideas and investments from educated professionals between their homes and the West.

Often, brain drainers will eventually return to their country of origin or maintain residency both abroad and at home. Not only do these individuals in turn support the economic development of their hometowns, but they also inspire members of the community to invest in education. According to Easterly, most students are motivated by the idea of living abroad, noting that “if this prospect is closed tightly, this may have an effect on the effort levels of students in the system, and therefore the quality of the graduates of the school system.”

Additionally, travel expands capital horizons. Robert Guest notes in Foreign Policy that “countries trade more with countries from which they have received immigrants.” A migrant living in the UK might inform his sister in Somalia that there is demand in his city for a specific talent she may have the skill sets to provide. Diaspora thus encourages a fluidity of ideas, innovations, and supplies and demands between often disconnected parts of the world.

Investing money abroad can be the best way to bring more of it home. Brainpower may work that way, too.

Like any extremely successful idea, the world's most widely-cited statistic has drawn a lot of critics—starting with its creator and continuing to big thinkers of the moment.

But nobody would dispute that today, gross domestic product (GDP) remains the king of indicators, an all-purpose way of estimating how things are going. And even though GDP can be faulted for assigning zero value to many important tasks—cooking dinner for your family, for example—it's a nuanced piece of social science.

Planet Money, NPR's extraordinarily earnest explanatory economics program, launched a video series at Slate V this week that breaks down the details, advantages and shortcomings of GDP. It's perfect for anyone who wants to know what economists mean when they talk about "growth."

According to Riane Eisler, the work of raising childern is devalued the world over. Photo: Mishimoto (flickr)

Unlearn economics. Forget GDPs and growth rates. Ignore financial institutions (and their crises). Rethink well-being and worth. What do you care about? What in your life holds the greatest value?

This is a good starting place for a conversation with Riane Eisler, author of the highly successful book "The Real Wealth of Nations," amongst others. She believes it is time for a practical critique of modern economics.

Eisler’s work in the fields of economics, women’s studies and social science has attracted a lot of attention. Some list her work beside great thinkers like Smith, Marx and Hegel. The book "Great Peacemakers" named her one of 20 subjects along with Gandhi, Martin Luther King Jr., and Mother Theresa. This recognition is largely a result of her work on developing the ideas of a system of "caring economics." We caught up with Eisler this week to discuss just what a caring economy would look like and how it might change the way the world works.

Global Envision: What's wrong with modern economics?

Economics is the study of value, and for decades it has been assumed that value is measured mostly by money. If I value organic vegetables, I will be willing to spend more money for them. It should follow that if the government values organic vegetables, it would support the farmers that grow them. Economists devise ways to assess these values and attach number and formulas to quantify them: net worth, salary, gross domestic product. Flip to any news channel or radio station and you will hear endless debate about these figures as they rise and fall.

Eisler ignores this chatter.

“We have been stuck on a conservation that does not get to the core of the challenges we face,” she says. If economics is to be a measure of what we value and care about, why has it ignored raising infants, supporting families and nursing the elderly or infirmed? The constructs of caring extends beyond human relations and applies to the natural environment. But under both capitalism and communism, land is seen only as a source of profit. “An old stand of trees is only given value when it is chopped down," Eisler says. "And yet we need them standing to breathe.”

Economic measures have become divorced from the real values they were originally intended to quantify, Eisler argues. For her, this is no coincidence. "Economic systems don’t evolve in a vacuum," she says. "They are cultural constructs.” According to Eisler, the current system evolved in an environment where nature was exploited and so-called "women’s work" was devalued. Consider this: a women who stays at home and cooks, cleans, gardens, feeds, washes, and rears her three children for 16 hours a day contributes absolutely nothing to the GDP, a measure of a country's standard of living. Instead, the GDP values only income. This includes the cleanup of environmental disasters, the sale of cancer causing cigarettes, war operations and weapon manufacture.

GE: If GDP is a bad measure of value, what statistics should replace it?

Eisler was ready for this question. In a recent report commissioned by Center for Partnership Studies, Eisler helped to synthesize 14 categories with 79 indicators that more accurately measure well-being, including human rights ratings, the number of premature deaths from pollution, and access to health care, as well as more traditional measures of joblessness rates and average annual earnings.

Eisler also hinted that measuring mechanisms should be secondary to the values behind them.

GE: In past economic transformations, the people with the least have been first to lose their livelihoods.

Eisler assured me this would not be the case. “After all, the majority of poor are women and children and a major reason for this is that care-giving is given no value,” she said. To prove her point, she pointed to societies who have already taken steps to place a greater value on caring. Many Nordic countries, who always seem to score high on human development indices, provide extended paternity leave for both parents, offer universal health care, and support government-funded child support. But can low income countries afford such programs? Eisler acknowledged the challenges they would face but also reminded me of CCTs in Latin America, a government program that financially rewards mothers for taking their children to health checkups and primary school.

GE: With this week's massive spending cuts by an austere U.S. Congress, could the transition to "caring economics" happen here?

Eisler agrees the signs don’t look good but still remains hopeful. The way she sees it, creating an economic system that values the unpaid work of caring is an investment, not just an expenditure. In other words, the money spent now will be returned in future savings and revenues. And she has the scientific research to back her up. In her book, "The Real Wealth of Nations," she cites substantial evidence that private corporations have been able to realize savings and increase profits by taking care of their workers.

GE: It sounds like there's a lot of work to be done. What's the role for those of us without advanced degrees in economic theory?

Eisler's answer was surprising: Everything. She believes that interdisciplinary support outside the field of economics must begin valuing the work of caring. Gender equality, civil rights, environmental responsibility, access to quality education, the right to health care, and supporting families are all areas that work towards the goal of overriding the top-down, masculine-valued economic system currently in place.

“Change doesn’t happen quickly,” Eisler reminded me. “It can, but there are many steps that need to be taken.” Eisler is hoping to create a ground swelling grassroots movement that can champion such a transformation. Her foundation, the Center for Partnership Studies is making progress and inviting others to do the same. For example, the foundation offers an online training program where people from all over the world are able take leadership roles in the economic transformation. The next session begins this fall.

“The response to the online program has been wonderful,” Eisler said. But she also mentioned that with the size of this paradigm shift, “We will need more people.”

Eisler will speak on "The Power of Partnership: Towards a Caring Economics and Society" at 2 p.m. on Friday, Aug. 5, at Marylhurst University, just south of Portland, Ore. The event is free and open to the public. Questions above were edited for clarity.

African leaders discuss the state of the African economy at the 2010 IMF/World Bank Spring Meetings. Photo: International Monetary Fund (flickr)

The Economist

The Economist

Since 2001, the budding economies of the BRICS (Brazil, Russia, India, China and South Africa) have dominated global financial headlines. But looking back, it turns out some of the so-called “African lion” economies (Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda) were just as fierce.

Six of the 10 fastest-growing economies in the world hail from the “forgotten continent” of Africa — putting up annual average GDP growth rates of around 8 percent or more from 2001-2010. The monumental rates have even earned these sprinters a spot next to “Asia's tigers” of the 1980 and 1990s — Making Africa one of the fastest growing regions in the world, according to The Economist.

Over the past decade, sub-Saharan Africa’s real GDP growth rate jumped to an annual average of 5.7%, up from only 2.4% over the previous two decades. That beat Latin America’s 3.3%, but not emerging Asia’s 7.9%. Asia’s stunning performance largely reflects the vast weight of China and India; most economies saw much slower growth, such as 4% in South Korea and Taiwan. The simple unweighted average of countries’ growth rates was virtually identical in Africa and Asia.

That said, in the next five years Africa is set to take the top spot from Asia as the fastest-growing region in the world, writes The Economist. "Standard Chartered forecasts that Africa’s economy will grow at an average annual rate of 7 percent over the next 20 years, slightly faster than China’s."

Ironically, much of Africa's growth can be attributed to China's investment and demand for raw materials in the region. And more recently, another of the BRICS, Brazil, has been competing for assets in Africa, writes Fast Company.

The Economist also notes growing success in Africa's manufacturing sector, which Standard Chartered predicts will become "significant."

Even with challenges such as political instability, corruption and weak rule of law, the African lions have been able to compete with the economic prowess of the Asian tigers.

But before Africa's growling economies can dream of surpassing Asia's roaring ones, those structural problems will have to be fixed.

"Without reforms," The Economist says, "Africa will not be able to sustain faster growth."

Markets like these in Egypt bring in local as well as tourist business, helping to increase Egypt's overall economic strength. Photo: effeietsanders (Flickr)

Though they are currently considered to be developing economies, the four BRIC countries — Brazil, Russia, India, and China — are expected to become economically dominant by the year 2050. Now, Jim O'Neill, the economist who coined the BRIC acronym, sees a new emerging power— but it's not a single nation. According to O'Neill, Africa, when taken as a whole, could become the next BRIC.

According to his article in Financial Times, when O'Neill began looking at Africa as a whole rather than as individual nations, he found an economy comparable in growth and potential with the BRICs. Today, Africa has a combined GDP larger than India's and on par with that of Brazil and Russia. If current estimates hold, the total GDP of the 11 largest African economies in 2050 looks as though it would "reach more than $13,000bn, making them bigger than either Brazil or Russia, although not China or India."

O'Neill believes that in particular Egypt and Nigeria are the two countries that have the individual strength to help Africa become a leading world economy. Both are included in O'Neill's group of' the 11 most up-and-coming economies and collectively, they provide almost half of the total African GDP. There is special potential for growth in Nigeria to contribute because almost 20 percent of Africa's population lives there.

While not populous enough to significantly influence continental GDP, South Africa also has a critical role to play. As one of the more developed countries in Africa, South Africa could serve as a connecting force between southern Africa and the strong economies of Egypt and Nigeria.

But in order for Africa to truly emerge as a BRIC, O'Neill acknowledges that reform is necessary. Egypt and Nigeria, as key players in the overall strength of Africa's economy, must take action to encourage business. Rather than promoting censorship, increasing transparency and education is a crucial first step to encouraging economic growth. Focusing on eradicating corruption, lowering national debt and stabilizing inflation are all key moves that must be made, particularly in these leading nations but across the continent, in order for Africa to truly achieve its potential.

No two economies are the same. Photo: Silent Observer (flickr)

With all of the talk of the global economic downturn, you'd get the impression that all economies are wallowing. Yet, this interactive map from the Guardian shows that, while some economies are down, some are also up. Find out which is which by passing your cursor over a country to reveal its GDP last quarter.

Changing the dates of the weekend in Algeria has been endorsed by the World Bank. Photo: Radio Nederland Wereldomroep (flickr)

The Algerian government hopes to boost the country's economy by shifting the weekend from Thursday and Friday to Friday and Saturday. The change comes after 33 years of Thursday-Friday weekends.

Because most other countries observe Friday and Saturday as the weekend, Algeria operates out of sync with its trading partners. The government expects the date change will add $800 million to Algeria's annual gross domestic product.

Most countries would love their economies to grow by 8 percent a year in a recession. But for China, at least, its expected 8-percent GDP growth in 2009 might really sting.

Yes, 8 percent is an impressive figure considering the economic times, but it's still a substantial dip from last year's 13-percent clip.

And that difference could spell dire consequences for China's workforce. One international economist says every percentage-point decline in GDP growth costs China two million jobs. Ouch!