World Bank study shows that migration takes a large share of the best educated in Jamaica. In this 1992 file photo, hundreds of Jamaicans line-up outside the US Embassy in Kingston hoping to get visas.

IN today's knowledge-based global economy, education is it! Investment in education is not only a critical ingredient in developing a country's human/intellectual capital asset, but it is also necessary to effectively engage in the rapidly growing global trade in educational services.

In 1999, OECD countries earned an estimated US$30 billion in the trade of tertiary education services from about 85 per cent of the world's foreign students. A recent study on the 'Private and Social Returns to Investment in Tertiary Education in Jamaica', undertaken by Dr Vanus James, Colin Williams and myself, conservatively estimates that Jamaica currently exports about US$12 million of education capital annually from approximately 1,700 foreign students.

The global trade in education services is rapidly intensifying due the liberalisation of the trade in services under the WTO General Agreement on the Trade in Services (GATS). In the ongoing GATS negotiations for example, Jamaica received a request from the US to fully liberalise adult education and training as well as other education services. Modern information and communication technologies (ICT) have further accelerated the global trade in education services. Today, educational institutions in any country can open virtual branches of their institution anywhere in the world without physically crossing national borders, thanks to the internet.

Over the past decade, Jamaica has witnessed an invasion of foreign university offerings, forcing our local universities to advertise and aggressively seek to protect their market share. In the face of this competition, local tertiary institutions must now seriously consider exporting tertiary education services, not only for survival and growth, but also to earn badly needed foreign exchange.

In pursuing this option, education must be seen as an industry (and not simply as a social right) and tertiary education as the exporting edge, yielding both pecuniary and non-pecuniary net benefits. In addition to foreign exchange from educational and non-educational expenditures, there are tax benefits, growth from trade links, growth of domestic airlines, and cultural fusion among other benefits.

Since education is considered a key ingredient for economic growth and development, migration of individuals with tertiary level education, the so-called "brain drain", is a source of concern. Our study conservatively estimated the capital flight due to the brain drain at around US$20 million annually. If these were privately funded education charged at market prices, this capital flight would also represent a legitimate estimate of export of education capital. However, since government funds the majority of tertiary education, this capital flight represents a genuine leakage of resources and loss of associated externalities.

Last year, a World Bank study by Richard Adams noted that migration takes a large share of the best educated in Jamaica. The study suggest that Jamaica is suffering from a particularly high degree of brain drain with the highest migration rate (95.8 per cent) for tertiary-educated people to the OECD and the US of the 13 countries studied for the year 2000.

What seems evident from our study is that Jamaica is not fully absorbing the supply of human capital generated by the education system. Most of the unemployed have secondary education or better, and among these, around six per cent now have tertiary education.

Our study concludes that since the social benefits to investment in exporting tertiary education are high and can offset the losses from the brain drain, there is a compelling social interest in developing specific programmes for expanding investment in this export.

The impact of the brain drain can be minimised by a specific programme to collect the cost of education from emigrants if, for example, government's contribution to the full cost per student can be treated as an interest-subsidised loan credited to the student. Such a programme may allow graduates who remain in Jamaica not to repay the interest-subsidised loan while graduates who emigrate would owe a debt of all or some of the loan at the going student loan rate.
It is our hope that these and other policy recommendations in the study can enrich the current national debate about the future of education in Jamaica.
Prepared by Dr Rosalea Hamilton
Trade Policy Consultant
CEO, Institute of Law & Economics, www.ilejamaica.org
E-mail: rosaleahamilton@hotmail.
com

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