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Wages and aid dependency: The issue none of us want to talk about.

Is there a ‘brain drain’ away from the government because aid agencies pay higher salaries?

There was an interesting article in Devex recently (see link below) asking the question of whether donors and international agencies should pay their local staff less in order to prevent movement of qualified people away from the government - to stop a 'brain drain'.

The article was using the example of Afghanistan but I think everyone would agree that it is a good thing for Myanmar to have smart and hard working people in government positions. Ministries and government departments need the best minds in the country to try to solve lots of challenging problems.

But if you can earn three, four or five times the wage when you work for an NGO, a UN agency or another institution, then that is a serious incentive for people NOT to be working in government.

So should donors to Myanmar cap local wages - at a level that is much closer to what you might expect to get if you had the same skills and experience, but were working for the government?

It is an issue that is very difficult to discuss because it is a little version of the ‘tragedy of the commons’. It is in every individual fisherman’s interest to catch as many fish as possible, but if everyone does that then there are no fish left and everyone suffers.

If you are working for government but then get offered a job at the UN paying five times as much, then fair enough if you take the job. You want to send your kids to a good school, you want to pay for your mother’s medical care - fair enough.

If you are the manager of an international NGO and you are hiring new staff. You want to get the best people you can, so you make sure you have a high enough wage which can attract the best people - fair enough.

But if across the board there is a system where NGOs and UN agencies pay a lot more than government positions then you almost certainly end up with a drift of qualified people away from government. To be sure, there are more to work decisions than just wages, but such a dramatic difference in wages must have an impact.

And what has happened in Cambodia is that this discrepancy is now entrenched. There is what some experts call a cycle of aid dependency and capacity gaps. The government has low capacity so donors ramp up their capacity building programs. But because of high wages, those aid programs draw more qualified people out of government. So the government’s capacity declines further. Which then brings more capacity building programs. And a downward spiral.

I don’t judge anyone for taking a job with a better wage. If my mother was sick and I got offered a job with a higher wage – which then meant she could get the best treatment – I would take it.

But surely we have to recognise that when the whole system works on such an artificial difference in wages, then there can be significant problems. So should donors cap local staff wages? I am not sure if that is the answer.

But surely international agencies have some responsibility to recognise the systematic problems they may be causing.

Tamas Wells is the editor of the PK Forum.…/should-donors-pay-locally-hired-sta…

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