Put money where your mouth is, Holness!
The crisis of UWI's finances and why we must overcome itTuesday, March 02, 2021
The entire world is facing an economic crisis and the tertiary education sector is not immune from this crisis. In fact, one of sectors most hit by the novel coronavirus pandemic is tertiary education and the Jamaican education sector, particularly universities, have been devastated.
But, and it is a big but, the crisis being experienced by Jamaican universities predate the pandemic and is rooted in the fact that our political leaders lack a vision for sustainable development and have deprived our universities of the support needed to function. Given the neglect shown to our two public universities — the regional The University of the West Indies (UWI) and the national university University of Technology (UTech) — it is literally a miracle that both are still functioning, as the editorial in the Jamaica Observer of February 21, 2021 argues. But, in the case of The UWI, it is not merely functioning as in barely surviving, it has been doing spectacularly well, as the editorial commendably and compellingly contends.
During orientation at the beginning of the current academic year, one of the things I told students about the university in which they had entered was that:
“As at July 2020 The UWI was #1 in the Caribbean and moved from being among the top three per cent in Latin America and the Caribbean to being in the top one per cent of the best universities from a field of over 2,000. It stands at number 18 in Latin American and the Caribbean. Even more spectacularly, The UWI was ranked in the top one per cent in the Golden Age University category. This category refers to universities between 50 to 80 years old, which number 10,000 universities globally. Expressed in its most compelling language, The UWI is among the top 100 universities of the world's Golden Age universities.”
These breathtaking accomplishments have been made in the face of the most severe financial crisis facing The UWI, which accelerated post 2007. Interestingly, when disaggregated, the data below show that the Mona Campus represents a debilitating drag on the operations of the university as a whole. The number one reason for this is the Government of Jamaica's inability to provide adequate financial support for the bulk of Jamaican students who attend the campus.
The link: Education and Development
In my recently published book, Education and Development: Policy Imperatives for Jamaica and the Caribbean, I described the inexorable, but widely overlooked, nexus between education and development. I argued that one of the biggest challenges facing our region, which accounts for our lack of development, is our failure to make that simple connection. It takes an educated population to create a prosperous nation and, in this regard, building an education system in which the vast majority matriculate, and have access to quality post-secondary and tertiary education. These are the two most important vehicles to sustainable development, real wealth, and true property.
In chapter 2 of the book I cited a 2010 presentation by Drew Faust who, in a speech entitled 'The Role of the University in a Changing World', highlighted the experiences of India and China, which had taken the strategic decision to invest heavily in tertiary education.
In the case of India, Faust highlighted the plan by the Government of India to establish 800 new institutions of higher education by 2020. This plan was designed to more than double the higher education participation rate from 12.4 per cent to 30 per cent.
In the case of China, Faust noted that between 1999 and 2005 the number of degree earners quadrupled to more than three million. China's development strategy using higher education has resulted in that country producing the world's largest number of PhD scientists and engineers.
In Education and Development I also discuss the experience of New Zealand, which has a population of just under five million (40 per cent higher than Jamaica). New Zealand more than doubled the tertiary population in less than 20 years between the mid-1980s to early 2000s, from 120,000 to 282,000. Currently, tertiary participation rates in New Zealand among students 15-19 years is a whopping 81 per cent and 29 per cent for people 20 to 29 years old. As many as 50 per cent of New Zealanders aged 15 years and over have tertiary qualifications.
The tertiary participation rate in Barbados is 65 per cent, compared to 27 per cent in Jamaica. The comparative experiences of Jamaica with that of other countries cited above tell almost all we need to know about the underlying causes of poverty, crime, and lack of high and sustainable economic growth and development in Jamaica. This is not to say that the other three countries are examples of perfection or paradise, but they certainly are far better off than Jamaica in many respects.
The biggest explanation for the state of education, and by extension social well-being and national wealth in these countries, is the commitment of their respective governments to funding education.
The UWI and Mona's reality
The level of funding to The UWI and to the Mona Campus tells the story about why The UWI, generally, is struggling as well as why poverty, income inequality, crime, and corruption are so rife in Jamaica. Simply put, if the Government of Jamaica were to demonstrate greater commitment to improving education so that more students matriculate, and were to stick to its pledge and play its part in funding the UWI, then we would see poverty levels fall, income inequality gaps narrow, and crime and corruption decline. The big question is whether the Government is committed.
The test of whether the Government of Jamaica is committed to advancing national development and contributing to regional development is measured by what it does (or does not do), not what it says — though by it words and deeds it has shown lack of commitment to funding university education.
The most recent data from The UWI's profit and loss statement show that if the Mona Campus were not consolidated in the wider UWI financial statements, The UWI would be showing an operating surplus — instead of a deficit — for its latest accounting period. Table 1 shows that, while some of the other campuses recorded surpluses, the massive deficit of the Mona Campus, the largest campus, dragged down the overall performance to produce a deficit of Barbados $9.3 million for the period ending November 2020. See Table 1.
While three of the six reporting units reported losses two of the three (Centre and Open Campus) saw significant improvements in their performances, with HQ improving by 38.5 per cent between 2019 and 2020 and Open Campus by 82 per cent. In the case of the Mona Campus, losses more than doubled; moving from $8.4 million in 2019 to $17.9 million in 2020. It must be noted that the Regional Headquarters is a cost centre, and so its losses should not be judged in the same way as the campuses, which are major revenue and profit centres for The UWI. If Mona's massive deficit were taken out of the calculation, and the others retained, the 2020 performance would be a surplus of $8.6 million. Mona's position is a direct result of the Government of Jamaica under-funding the campus.
But the deterioration of The UWI's finances, and Mona's in particular, did not begin in 2019.
For context, when Professor Kenneth Hall left office as principal of the Mona Campus in 2006 Mona had a surplus of over $1 billion. The rot in The UWI's finances began during the time Prime Minister Andrew Holness was minister of education. In 2007, the Bruce Golding Administration cut the financing to the university by 50 per cent, throwing the Mona Campus into a tailspin. This cut was a unilateral decision by the Government and took the campus by surprise. The Government of Jamaica decided not to honour the receivables to the campus and changed the funding model to a block grant funding type, compared to the previous and respected tradition of paying a portion of the cost for each student who matriculates to the campus.
Despite the Government having cut its contribution to the student, the campus has been unable to increase tuition fees to reclaim the reduced funding. This situation has meant that the institution had to deviate from its core business of research, teaching and learning to find other sources of revenue to fund its operations. This The UWI has done well, as the revenues from commercial operations show that in all areas The UWI has generated surpluses. However, the surpluses are not large enough to offset the massive reduction caused by the Government's decision to reduce funding to students.
The campus has simply not recovered from the blows which have been landed to its finances starting in 2007, and had Gordon Shirley not managed the crisis as well as he did after he succeeded Kenneth Hall, then the current crisis — in response to which current Principal Dale Webber has called for a government 'bailout' — would have happened during his time or his successor, Archibald McDonald.
Are there areas which can be improved? Surely, but to suggest that the state of The UWI's finances is a result of mismanagement of the university is simply untrue.
Fulfil your commitment
Professor Webber is naturally gracious, thus his call for a bailout is a soft way of making a request that the Government of Jamaica steps up to the plate and delivers on its obligation. The problem, however, is precisely with that word “obligation”.
Unfortunately, the Holness Administration does not see itself as having an obligation to fund The UWI, rather it sees itself as being “expected to contribute”, and thus, as I wrote in a previous article, the Holness Administration has told the Mona Campus not to regard the monies it expected as debts and should therefore not record them as receivables as, in the thinking of the Administration, a gift or contribution cannot be viewed as a debt.
This notion that the Government of Jamaica does not owe the university is the single largest source of The UWI's financial problems. The management of The UWI has, despite the mountain of debts and financial challenges, moved the university to being among the most respected and recognised globally. There is much more to be done, but the performance of The UWI should lead governments of the region to “rally roun' The UWI” and give it the support it needs to move to the next level, and to contribute even more to the development of the region.
We need visionary leaders. The irony is that we speak of emulating the successes of other countries, we talk about Vision 2030, but that vision cannot be realised unless and until we put our money where our mouths are, and that includes funding tertiary education, including at our teachers' colleges and UTech, with a consciousness that says our future depends on it.
I call on colleagues in academia and visionaries in the private sector and in the Government to make their voices heard in challenging the Administration to do the wise and right thing for education, now.
Dr Canute Thompson is an advisor to president of the People's National Party and Leader of the Opposition Mark Golding as well as a senior lecturer in educational policy, planning, and leadership at The University of the West Indies, Mona, where is also serves as head of the Caribbean Centre for Educational Planning (CCEP). Send comments to the Jamaica Observer or firstname.lastname@example.org.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login