Education needs reform, not increased spending!

The problem there of course is the unions. The unions are the worst thing that ever happened to education because it’s not a meritocracy. It turns into a bureaucracy, which is exactly what has happened. The teachers can’t teach and administrators run the place and nobody can be fired. It’s terrible – Steve Jobs, 1996

Union activism is not new to Sri Lanka. They have been there all the time in every sector since independence and opposing every single reform which could bring free market and prosperity, not in short but long term.

Figure 1: GDP growth of Sri Lanka (World Bank, 2012 accessed via Google data)

Sri Lanka’s prospects had never been better. Since its independence, short sighted political reforms plunged the country into deep ethnic trouble which eventually lead to an armed conflict. The gross domestic product (GDP) of the country had never been promising. The GDP grown by an average 4-5% per year, which means it would take around 15 years to double your income. You may think it was not bad. True, it was bad for a developing country. There were countries which did the same in 4-6 years, means they have advanced their economies three times faster than we did. Never mind, we had an excuse on the ethnic conflict, which doesn’t exists anymore.

The country is still stagnated in terms of economy. The department of statistics states that mean household expenditure of a family of four is around 32500 LKR, where about 70% households never meet that income level. Still, we never wanted a reform as a whole to the economy, so that reformation can lead to a state where the entire system can enjoy a privilege for the market to stabilize itself on its own. And Unions, well, they often in a while used to protest in front of the country’s main railway station demanding further regulations to slightly improve their particular life. If they do understand, the regulations after regulations means more bureaucracy, means more deterioration to a greater opportunity.

In a similar way, the academia’s union (FUTA) came to the streets demanding more bureaucracy. In the current wind, what you do forget is that you may need to come again to the streets in 7 years or 10 years as mean expenditure increase with inflation. The current inflation rate is around 9%, which means it will take only 8 years to double the cost of living at the current rate. By reinforcing the bureaucracy and by protesting against free market, we ensure that there will be a chaos in public life every 5 to 10 years, not by one trade union, but many.

In a recent interview, state’s education minister has said that the country spends around 5.0% of the GDP in education, which means 6% is not going to make any big difference. If the minister’s statement is true, then compared to other nations, the country spends considerable amount of money in public education, in terms of its percentage. We have no rationale to demand for a similar amount.

Table 1: A comparison of national expenditure of Sri Lanka on education with other developed and developing nations

(World Bank data, 2012 accessed via Google data)

PPP – Purchasing power parity

The spending as a percentage (Table 1 & Figure 2) is in par with other developed and developing nations.  If the state’s education systems can be blamed for not to be in international standards or to meet higher salaries as FUTA expects, then the economy as a whole to be blamed.

Figure 2: Public and private spending on education

Like all the developed countries, Sri Lanka’s private spending is considerably low in contrast to that the country has no stronger taxation system like developed capitalist economies. To this date, Sri Lanka can easily be lost in tracking the income of every individual, albeit few exceptions.

Only the communist Cuba spends significant amount of public money in education. Here is a choice, should we choose communist Cuba as a role model to progress or other developed capitalist economies as a way forward. Provided, a broader picture given of what would be the life under each model, the choice is with people. To spend more than 11% in education, the government should make cuts elsewhere. In return, expect more and more people to leave the country. Cuba is one of many countries which suffer population decline as people emigrate from the Island.

If you ever witness the union activism, there is a trend. They often fight for short term goals, more ardently for salary increase. How long are they planning to continue the protest?

It should be the role of the government in any country is to put strong regulations which would prevent cartels or monopolies from forming, nothing else. It is not any government’s duty to run schools, universities and factories etc. There should be sufficient freedom for these institutions to form, breed and success. In Walter Euken’s concept, government’s role is to ensure the free market system worked for as many as possible people. Everything else should let to be free.

Although, the state system provides basic education to more than 85% of those are eligible to attend primary and high school, the admissions into the Universities are very limited. Only 16% of those who qualify the advanced level exam gets the opportunity learn at a University. Others find a way leave the country for tertiary education elsewhere, where they pay for the education. This is fundamentally wrong to social welfare system we preach here, if anyone would argue. This is no much difference to what super rich does in an anarcho capitalism. If you are rich in an anarcho capitalist system, there is a complaint that they can mend the laws and find more wealth at the expense of others. Similarly, if they can do well in their exams in the current Sri Lankan system, they can enjoy all the benefits the state can offer at the expense of everyone. What about others, never mind. They couldn’t do well in exams. Well, there is no difference between what they do fight for and what they do hate.

If we need a more prosperous, sustainable and competitive environment in education sector, the fight should be for less government control in education system, more control of the market to determine  how much is spent on education, how much paid for the staff and how state of the art the facilities are. The state’s role should be limited to an external regulating body which has no influence on running the institutions. Until we reach to such a state, their fight and public disturbance due to their fight is not going to stop.

You could get a bunch of people coming out of college tying up with someone out of the business school, they could be starting their own school. You could have twenty-five year old students out of college, very idealistic, full of energy instead of starting a Silicon Valley company, they’d start a school. I believe that they would do far better than any of our public schools would. The third thing you’d see is I believe, is the quality of schools again, just in a competitive marketplace, start to rise. Some of the schools would go broke. A lot of the public schools would go broke. There’s no question about it. It would be rather painful for the first several years

Steve Jobs, 1996


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