*Education must remain Government’s top priority
* Cuts should have been made in subsidies, dying State enterprises
*Low returns from GATE as labour market insufficient
While Government may be saving around $100 million annually by slashing the GATE programme, economist Dr Justin Ram believes other cuts should have been made instead, emphasising that education is critical if T&T is to transform from a developing country.
As part of the cuts, national scholarships will be reduced from 400 to 100 annually and GATE funding for postgraduate studies in tertiary education institutions will be stopped.
However, current postgrad students who have already applied and received approval will receive funding until August 2021.
Ram told the Business Guardian that Government should examine its transfers and subsidies for instance, instead of lessening its spend to educate.
“We spend a lot of money on propping up State enterprises, subsidising energy, water and lots of other things which are more important for the Government to cut back on than on education because these entities are draining billions every year,” Ram said.
He advised Government to also look at reforming State enterprises and where possible privatise, enter into PPPs or even close enterprises deemed unprofitable.
Additionally, Ram said, more consultation should have been made with relevant stakeholders before the GATE cut announcement.
He explained that in cases where some households are now forced to pay for education as opposed to where they previously did not have to, this in turn, could have dire rippling effects on the society.
“That household would now think it’s not worthwhile to get tertiary level education and this would then be a real loss to society in many ways,” Ram said.
Government, he advised must take heed as T&T ought to be a society where the majority of people should move on to some type of tertiary education.
And along with university training, Ram suggested there also be sound technical vocational institutions, noting that tertiary education doesn’t always entail earning a degree.
“You could get a technical certificate which could get you into the labour market and if later on you want to turn that into a degree there’s the option,” Ram said.
He also suggested a study be done on the GATE programme with a focus on investing in the human capital.
“But if you really think about it this will really take a number of years before the true benefits are seen,” Ram added.
While educational investment may result in better jobs, this could also result in labour migration.
“This could mean we are educating people for other labour markets because people may want to migrate,”Ram explained.
To ensure citizens get a fair chance of a sound education he advised Government provide student loans which will then be repaid once the person enters the world of world.
“But what you don’t want is a situation where cost is putting off someone from getting a tertiary education,” Ram emphasized.
Research remains critical
It remains critical therefore, that Government provide support for research and development.
Ram noted that for any economy in 2020 and beyond to survive and remain relevant there must be significant spend from its GDP on these crucial areas.
Regarding PHDs, he said Government would normally provide funding to universities or institutions to conduct research and these in turn, will use some of those resources to hire PHD students.
“This must remain important. Government doesn’t necessarily have to provide direct funding for PHD bursaries but it should provide funding for research and development and out of that there could be the hiring of young aspiring academics to further the research.
“In this day and age if you’re trying to get by with an economy where you’re not spending on research and development you will definitely not be successful,” Ram advised.
Inefficiencies in GATE
UWI economist Dr Regan Deonanan who echoed similar sentiments agreed that the main impact will be the output of graduates over time.
However, he noted, there are a few considerations to bear in mind.
On one hand, ongoing research and data from CSO Household Budget Surveys suggest that a greater proportion of higher-income households access GATE than middle and lower-income households, Deonanan cited.
Furthermore, Deonanan said, a greater proportion of urban households access GATE than households in rural communities. On the other hand, saturated employment conditions in several sectors suggest that the job market absorption may be low for a portion of graduates.
Deonanan said tracer studies on graduates conducted by UWI show that there is some degree of mismatch between the demand and supply of skilled labour .
“The implication therefore, is that greater efficiencies in the administration of GATE and more purposefully creating and linking graduates with employment opportunities, alongside cuts in funding to the program, may serve to temper any negative effects arising from the reduction of funding,” Deonanan added.
He noted that according to a report from the GATE Task Force in 2016 and data from the Review of The Economy Reports, Government spent approximately $7.7 billion to fund the programme over 2004 to 2018.
This amounts to 2.3 per cent of Government expenditure on transfers and subsidies over this period.
Expenditure on GATE rose sharply to TT$473 million in 2006, up from TT$180 million in 2005, when 100 per cent of tuition was provided for undergraduate programmes.
Annual expenditure grew to over TT$700 million in 2012, beginning a downward trend thereafter, alongside a continued decline in energy revenues, Deonanan noted.
He noted that also according to the GATE Task Force Report of 2016, the ultimate objective of the programme was to increase the local participation rate in tertiary education to 60 per cent by the year 2020.
The tertiary participation rate increased from eight per cent in 2002 to over 65 per cent in 2015 Deonanan said, adding that in the fiscal year 2014/2015, over 47,000 students were funded by GATE, and by 2016, over 200,000 students in total had benefited from the programme.
Enrolment numbers at tertiary institutions increased significantly.
According to the UWI Annual Report 2018/2019, enrolment grew from 8,186 students in academic year 2001/2002 to 16,349 students in 2018/2019 at the St Augustine campus of The UWI.
The annual number of graduates at The UWI. with first degrees, diplomas and certificates also increased from 1,240 in 2002 to 2,883 in 2018.
The GATE programme also expanded in 2011 to include technical and vocational education and training.
“The implication therefore, is that greater efficiencies in the administration of GATE and more purposefully creating and linking graduates with employment opportunities, alongside cuts in funding to the programme, may serve to temper any negative effects arising from the reduction of funding,” Deonanan added.
Returns on investment
T&T did not receive the expected returns from investment in human capital through GATE primarily because the demand for skills and knowledge of university graduates in the job market was insufficient to accommodate all these graduates, even in times when the economy was booming, noted economist Dr Vaalmikki Arjoon.
He explained there simply wasn’t enough positions for them to fall into, nor were there adequate jobs to match their skillsets.
“This is because we were supposed to implement other measures alongside investment in human capital to build the non-energy sectors, thereby creating jobs and diversify the economy,” Arjoon said.
In the last few years, he noted, the job market worsened further reflected in the economy declining by over 9.7 per cent over 2015 to 2019, and is expected to remain in a suppressed state in the short term due to the COVID fallout.
He suggested it was imperative to aggressively drive private sector activities through improving the ease of doing business, attracting non-energy foreign direct investment, ensuring that private firms especially SMEs had adequate access to capital and foreign markets.
Arjoon added that State entities also behaved in a risky, cost ineffective and financially imprudent manner, failing to sustain profits and expand the scope of their operations, which otherwise could have absorbed many more of these graduates.
“Had we adequately addressed these factors, graduates would be able to apply their skills more appropriately and build the diversification thrust even further, the job market would have been more lucrative, there would be less underemployment and the state would have seem better value for money from human capital investment,” Arjoon advised.
He noted the demand for jobs would be matched by the supply with the appropriate skillsets, advising that going forward, these issues must be corrected, noting that a sense of entrepreneurial culture among graduates must be instilled – an initiative which the UWI has already begun.
Arjoon said however, that it’s positive the State is not making massive cuts to the programme that would cause thousands from low income households to be unable to access tertiary education.
But he advised, this must be avoided in future as it will worsen the knowledge gap and compound the already high levels of income inequality in the economy, especially since those in the higher income brackets will afford to go to university but those from low income households may not be able to.
“It is also imperative that the ministry tighten their audits to ensure that students are receiving the correct GATE funding based on their household income levels,” Arjoon added.