Higher Education and Elite Economists

Dr. Atiq ur Rehman
In a social media group having some of the most popular economists of the country in it, someone posted a recently adapted fee structure of a famous public sector university which also serves as a policy think tank for the government. The fee in that university has increased by about 200% during the last three years. It was pointed out that such a huge increase is equivalent to restricting the middle class to earn higher education. The reply was ‘higher education is not a fundamental right of citizens and only those who can afford it should get the higher education. There’s no need to subsidize higher education for the marginalized classes.’ The debate prolonged and many people participated, but no one shown a dissent to the central idea that higher education is not a fundamental right and it does not deserve a subsidy. This was a group of economists having a couple of persons from the Prime Minister’s Economic Advisory Council in it, and the economists are the people who have to teach the government how to behave in its economic decisions. Therefore, this was a reflection of the stance of the government and the people seem to have an agreement with this. It is true that higher education is not globally recognized as a fundamental right, but the government has to do many things beyond the fundamental rights which are necessary for smooth functioning of the State. For example, provision of a public sector job is not the fundamental right, yet the governments provide jobs to large numbers of people because it is needed for smooth functioning of the government. The governments have many other obligations apart from the fundamental rights and they consume resources for fulfilment of these obligations. Pakistan is signatory of the sustainable development goals (SDG) declaration and has adopted the SDGs as the national goals and the government is bound to struggle for the achievement of these goals. Higher education is needed for more than one of SDGs. For example, two of the SDGs are to eliminate poverty and reduce inequality; and provision of higher education is the most effective way of reducing income inequality. Those who get higher education, they may uplift their standard from low to lower-middle and higher income groups. So as a nation having SDGs as national development goals, it is desirable for the government to subsidize the higher education. The state has to perform several functions which need a high level of skills. If there is no subsidization of higher education, the government will need to hire services from out of the country which will become a source of outflow of foreign exchange. Pakistan has been facing a huge trade deficit since very long and the government is struggling to maintain the foreign exchange reserves. Restricting higher education to the elite class only will cause a reduction of the skilled people which will have adverse effects on the foreign exchange. In order to avoid such a situation, the government needs to subsidize higher education for those who have talent but no affordability. The largest source of foreign exchange earnings in Pakistan today is remittances which are sent by those who have travelled abroad for jobs. If the government is restricting higher education to the elite class only, this will affect the supply of human resources to the foreign countries and will cause a reduction in the inflow of remittances in future. For a sustainable economy, the government needs to promote Made in Pakistan culture and to promote the industry at local level and if the education is restricted only to upper class only, the supply of human resources for running factories and production units would not be possible. In a nutshell, in order to save a small amount of revenue, our economists are advising something which can have many adverse effects for the economy in future. Some of these economists are themselves the beneficiaries of subsidized higher education and now after joining elite club, they want to close the doors for the others. It is because of these economists that the budget of higher education commission is already reduced by a significant amount and the government is withdrawing the patronage of higher education day by day. The government is compelling the higher education institutions to develop their own sources of revenue instead of looking at the government for support. Many universities are facing such a huge crisis that they are unable to pay the salaries to their employees. The non-salary budgets available to the universities, such as the budget for seminars and conferences are so small that sometimes it is not possible to hold one seminar in a whole year. I am personally heading the Institute of Economics at University of Azad Jammu and Kashmir and literally I don’t have the budget for conducting a single seminar in the whole year. This is because our economists are advising the government not to invest in higher education and to leave the higher education only for those who can afford it. This is resulting in extreme adverse impact for higher education. The Stanford University alone has an annual budget of $10 billion and on the other hand the budget for HEC in Pakistan is about $ 0.25 billion which is to be distributed among 150 public sector universities. In such a situation how can we expect the novelty and innovation coming from Pakistan? Because of the budget restrictions, the institutions of higher education are now working as teaching units only with nonfunctional research units and near zero productivity in terms of innovation. One of the lessons that economists learn in the very first course of macroeconomics is that austerity does not work at the government level. A reduction in government spending has a multiplier effect. If the government is reducing its expenditures by 1 billion, the economy will suffer a loss of many billions. Yet our elite economists are advising the government for reduction in expenditures and especially in the expenditures for higher education which is resulting in a loss for the universities today and will result in a loss for the nation tomorrow. If a person has the option of buying 2 kg of apples at Rs 200, but he buys them at Rs 250 per kg, he will be termed as stupid for wasting Rs 100. If a person is able to obtain a loan of 30,000 billion at 5%, but he willingly obtains a loan at 15% instead of 5% and as a result he wastes 3000 billion for himself and the nation, such a person is called a monetary economist or central banker.