Thu | Dec 3, 2020

Editorial | UWI in a time of fiscal crises

Published:Thursday | July 4, 2019 | 12:00 AM

If the trends hold true, sometime after they graduate, more than 14,000 Jamaican students now enrolled at the University of the West Indies (UWI) will emigrate. Of the 12,000 or so at the University of Technology, over 10,000 will leave. They will depart in similar ratios from the private universities and, if they can, other tertiary institutions. For Jamaica, it is estimated, loses upwards of 80 per cent of its university graduates to migration, mostly to the United States, where approximately 70 per cent of them will settle.

It’s a movement that represents, on the face of, a major transfer of resources from a poor to a rich country, and should be a catalyst for a new discussion, not only about how people are trained and for what, but on the funding of tertiary institutions that are increasingly under financial stress. The central issue is whether they can continue to operate in their existing paradigm. And that question is particularly pertinent to the UWI, which, according to recent global surveys, is among the top five per cent of the world’s universities.

UWI is ‘owned’ by 17 Caribbean governments, some of which used to fully cover the economic cost of their students to attend the university. Others subsidised as much as 85 per cent. But, facing fiscal crises and slow recovery from the Great Recession of a decade ago, even those regional governments have cut back sharply on their contributions. They now provide around 45 per cent of the UWI’s income, causing the university to scramble for new sources of financing.

Last year, the UWI faced a double whammy. In addition to declining subsidies, it had to take a 50 per cent haircut on debt owed by Barbados, thus taking a BDS$87 million write-down on its balance sheet. The upshot: a deficit of BDS$96.5 million, which would have been worse had the university not previously absorbed a BDS$45-million impairment on Barbados’ obligations.

Even if the economies of member governments improve, the forecast, given the competing demands for their limited resources, is that their contribution to UWI, as a proportion of its expenditure, will continue to decline. And there is little sign on the immediate horizon that UWI will be able to increase its income fast enough, even at the deficit of BDS$27 million in 2017, to fill the gap.

Based on its 2017-18 expenditure, it cost UWI approximately BDS$21,857 (US$10,928) per student per year. But students, through their tuition and other fees, contributed only 13 per cent to the university’s income, down a percentage point from the previous year. At the same time, its income from special projects was static at 30 per cent of earnings, although inflows from commercial operations inched up by one percentage point, to eight per cent.

DIP IN ENROLMENT

If this problem is not cauterised, UWI, in the not-so-distant future, may face an existential crisis. Already, enrolment at the university, which has increased sharply over the last two decades, slipped by 1.3 per cent at is Mona, Jamaica campus, where the governments provide 36 per cent of its income. Up to 40 per cent of the prospective students turn down offered places. The campus’ principal, Professor Dale Webber, says a major cause is the inability to pay.

While this crisis is especially acute at UWI, the English-speaking Caribbean’s elite, and largest university tertiary institutions also face similar problems, exacerbated by the fact that most of the region’s tertiary-educated people emigrate, with perhaps 70 per cent of them ending up in the United States. Reliable recent data isn’t readily available, but in a 2006 paper, an IMF researcher, Prachi Mishra, said that between 1965 and 2000, Jamaica lost 85 per cent of its “tertiary-educated labour force”, a figure only exceeded by Guyana, with 89 per cent. Even if the emigration has slowed since then, the haemorrhaging remains heavy.

These issues, including whether the society’s loss of people with subsidised tertiary education is compensated for by the remittances, demand debate. But what ought to be more urgent on the agenda is how to lower the cost of university education in the context of the economic realities of Jamaica and the Caribbean, and, in that regard, what sort of university UWI should become, how it should be funded, and who it should be for.