Pros and cons of the 6% debate

FUTA has demanded that the government allocates 6 percent of GDP for education. According to reports, the demand was supposed to be based on a UNESCO recommendation which urges countries to invest 4-6 percent of the GNP on "education for all" depending on a country's democratic and economic status. In this context, a few pertinent factors need attention.

The first factor would be to understand what is meant by the term "investing in education". FUTA takes a narrow view and suggests it is the amount spent by the government directly through the annual budget. On that basis, Sri Lanka's direct investment is about 1.9 percent of GDP.

However, when the amounts invested through many other ministries, authorities and government departments on education and training is taken into account, the direct state investment rises to around 2.6 percent of GDP.

Tthere are many thousands of educational scholarships and "free" training opportunities that are provided to the country by various foreign governmental, academic, professional and NGO authorities, which too the government and other Sri Lankan authorities allocate to various officials, academics, professionals and students.

The value of these "free" scholarships too, would essentially be a part of the investment in education.

Many concessions in the form of direct subsidies, low cost housing and duty waivers on vehicles are provided to those State academic personnel who are engaged in educational activities. Opportunities are also given to the state university academia to engage in private practice and consultancies.

These opportunities too could be considered as a part of the investment in education, since such concessions allow them to generate additional incomes for themselves, which in turn, could be considered as being the incentive for them to provide their services to educate students in state universities.

A preliminary assessment of the value of such concessions, waivers, special opportunities and revenue foregone has revealed that a further 0.7 percent of GDP could be attributed to that form of indirect investment.

Accordingly, in a cumulative sense, the government, through direct and indirect methods, would be investing around 3.3 percent of the GDP on education.

The second factor would be to assess the investment in education and training that is made by the private and corporate sectors of our country. Many corporations, private sector companies,professional firms and NGOs carry out extensive education and training programmes in order to mould their the work-forces to deliver the outputs necessary in their organisations.

These substantial private sector investments too are supported by the government since those costs are allowed to be deducted from the organisation's profits in the computation of their profits for purposes of income tax purposes.

A detailed assessment of this type of education and training would probably reveal that it ranges from hairdressing to ICT; fisheries to cricket; dancing to singing; music to motor cycle racing; cooking to gardening; entertainment to engineering; kennel services to tourist guiding; preaching to planting; architecture to zoo keeping.

This list would be endless. The investment in education and training in these thousands of sectors would also form a part of a country's collective investment in "education for all". However, it is likely that FUTA may not acknowledge these different areas of education, although the millions of persons who receive education in these fields would readily accept that there is massive investment in these areas.

While a detailed assessment has probably not been done on this type of investment, preliminary assessments reveal that it is likely that such investment would be at least 1.4 percent of GDP.

The third factor would be the investment made by thousands of parents in educating their children in tertiary institutions and universities abroad.

As a result of the objections of a few vested interests (who, incidentally, have been educated by the tax payers' funds), thousands of Sri Lankan parents have to educate their children in foreign universities.

The investment by parents for this purpose would add up to a massive investment, since preliminary estimates indicate that at any given moment of time, around 150,000 students are receiving education abroad, on whom their parents invest at least US$10,000 per student per year.

On that basis, such investment in education amounts to a staggering US$ 1.5 billion, which, in today's terms, works out to about 2.5 percent of the GDP. While that would be the annual investment that the vociferous FUTA is compelling the Sri Lankan middle income families to make in providing for overseas education of their children, it must also be understood that this investment leads to a corresponding drain of the country's hard earned foreign exchange.

To add insult to injury, the FUTA objections also deprive the country of the economic activities connected with university education that could have very easily been carried out in this country, leading to thousands of possible direct and indirect jobs being lost to the nation.

The UNESCO suggestion is based on its laudable goal of "education for all". In Sri Lanka, over 95 percent of the population is literate, and it is a well-accepted global fact that Sri Lanka is a well-educated nation. Many global investors choose Sri Lanka as a sound investment destination because they are convinced that the ground level education in this country is at a higher level than even in many advanced nations.

That type of acceptance would not have been possible if Sri Lanka's investment in education had been miniscule or ineffective, as alleged by the FUTA.

In fact, as the above assessment indicates, such international recognition is perhaps possible because Sri Lanka is actually investing about 5.8 percent of its GDP on educational activities, through several fronts.

It is therefore clear that the wide investment in education through various sources has borne fruit in our nation and the ready global acceptance is due to the combined outcome of these large scale investments through different sources.

In that background, it is now time that the hollow slogans such as "invest 6 percent on education" put forward by some members of FUTA are exposed, so that the ordinary citizens of our nation would be able to see that these slogans have no validity.

It is also time for good sense to prevail in this highly politicised 6 percent debate, and for the right thinking people to demand that a few misguided academics are not permitted to mislead the public by wild and selfish slogans.