6% of GDP For Education: Who Is Telling The Truth?

By
Dr. Nirmal
Ranjith
Dewasiri

Federation of University Teachers’ Associations (FUTA) is asking the government to prioritise education and to invest in education. Towards this end FUTA has shown a concrete figure of measurement: the allocation on education as a percentage of GDP. This is a globally accepted measurement and the figure of 6% has been agreed to by the Sri Lankan government at many forums. FUTA has also shown that the government is not anywhere close to meeting this standard. Instead of engaging meaningfully with FUTA on this issue and trying to figure out a way of meeting its commitments, the government is spending its energy on trying to show not only that FUTA is wrong, but that these internationally accepted benchmarks which are used not only by Sri Lanka but all other countries are wrong! It is also bending over backwards to suggest that investing more in education is impossible and by implication, not necessary. This simply means, the government is saying it is NOT interested in education. The government is asking the public, the citizens of this country to take the responsibility for education. The government is stating over and over again, that it is simply not willing to allocate funds for education. It is saying this while it has shown its willingness to allocate funds for other, arguably less critical sectors. This is definitely not the mandate with which this government came into power. It is definitely not the legacy to which the constituent parties of this government can lay claim to. No other government has dared to so openly declare its intentions of divesting itself of the responsibility for education. Does this government want to be remembered as that which was responsible for the destruction of education in Sri Lanka?

Part I

FUTA’s response to the attempt by the government to suggest that currently the spending on education amounts to about 5% of GDP
In response to FUTA’s demand that the government increase its spending on education to 6% of the GDP, the government has recognised that there is a UNESCO recommendation to this effect and said that it already spends 5% of the GDP on education, since expenditure borne by individuals and private parties should also be included in it.
FUTA is glad that the government has finally come out of a state of denial and has begun to address the issues FUTA has raised. However it is clear from the above statements of the government that it is trying to deceive the public. These statements are factually incorrect and are designed to deliberately mislead the public.

The government position that UNESCO refers to the total amount spent nationally on education including expenditure of education borne by individuals and private parties, is incorrect. Hence, it is grossly misleading for the government to say that Sri Lanka is presently spending approximately five percent of its GDP for education. The globally accepted measure is to assess public (that means government) spending on education. This most definitely does NOT include private contributions.
This is because there is global recognition that governments must take primary responsibility for education. The Sri Lankan government by insisting on including individual and private expenditure on education as part of calculating public expenditure on education is essentially saying it is unable and unwilling to accept responsibility for education. This is a serious issue and a clear diversion from not only existing education policy but the stated policy of this government, and specifically the Mahinda Chinthanaya.
The government needs to clearly tell the public if this is its current position on education.
It is highly unlikely that the government is unaware of the actual details. In fact, figures for government education spending (1.9% of GDP and 8.1% of total expenditure) are included in the 2011 Central Bank annual report and the 2010 University Grants Commission annual report. These figures have not been calculated by FUTA but by the government itself! Thus we believe that the government position is aimed at deliberately misleading the public. Or is the government now saying that the statistics available in the Central Bank Annual Report and the University Grants Commission’s Annual Report are wrong? If that is the case, this is an extremely serious issue since the public will no longer have faith in any figures presented by the government!

Comparison of government spending on education with government revenue.
The Government stressed that the FUTA demand to allocate six percent for education from government revenue, which only amounts to 14.3 percent of the GDP, is impractical and hilarious.
This statement is also factually incorrect and is aimed at deliberately misleading the public. First of all, particular budgetary allocations are expenditure items and hence should be compared against the total government expenditure and not against government revenue. That is the accepted practice and we find it not hilarious but quite tragic that the government seems to be unaware of this. Typically, expenditure always exceeds revenue due to high deficit created in budgeting. In 2010 government revenue (excluding grants) was 14.6% of GDP while the total government expenditure was 23.1% of GDP. In this context the question that FUTA asks is why Sri Lanka cannot immediately allocate at least 2.9% of GDP for education and then delineate a road map to increase education spending up to the already committed value of 6% of GDP by 2015 as already agreed by the government at various international and regional forums?

We suspect that the reasons could be either that the government priority on education is low or that its fiscal management policies are wrong. We also suspect that the government says one thing to the international community and another thing locally. Or else, that within the government there is disagreement on policy since the various statements the government makes are contradictory. Or even that, what the government says and what the government does are completely different. By holding the government to account based on its own stated policies and its own published figures, FUTA has exposed the lies and duplicities of this government.
The statement by the government that all countries that allocate more than 6% of GDP for education either charge fees for education or have high poverty levels is wrong.
Government has stated that almost all the countries which have allocated more than six percent of their GDPs for education either charge fees for education or have high poverty levels. This statement is incorrect.
If you look at the data in the following table where we have listed countries spending more than 6% for education, it becomes clear that the government is purposely trying to mislead the public. Many of the countries listed cannot be categorised poor by any stretch of imagination. Nor do they all charge fees for education.
The government tries to portray that Sri Lanka is the only country that provides free education. This is factually incorrect. In many developed and middle and upper-middle income countries such as Argentina, Brazil, Cuba, Czech Republic, Denmark, Finland, Greece, Hungary, Morocco, Norway, Peru, Scotland, and Sweden even University education is free.

University per student funding has decreased.
Government has said that the allocation for universities has been increased over the past years. The amount which was Rs. 5000 million in 2000 was increased to Rs. 10,200 million in 2005, Rs. 19,600 million in 2010 and Rs. 25,000 million in 2012.
The above statement does not address the level of per student government funding and is hence misleading. Allocation for universities has increased but at the same time student enrolment has increased as well. Thus what really needs to be compared is the average per student cost. The graph below shows that this measure (per capita expenditure on students) has steadily decreased over the past few years.

Part II

Introduction
Government (public) education spending reflects government policy on education. There are several international indicators to assess and monitor government funding for education. Compliance of this must be assessed and monitored with appropriate indicators. According to the World Bank, the following are among the indicators identified as World Development Indicators for education: http://data.worldbank.org/indicator
•    Public spending on education, total (% of GDP)
•    Public spending on education, total (% of government expenditure)
A comparison of Sri Lankan public spending indicators with other countries using data available for the year closest to 2009 (either 2007 or 2008) indicates the following. Of the above indicators when considering public spending on education as a % of government spending Sri Lanka (with 8.08% of government spending) ranks 129th out of 132 countries for which the data is available for the year 2009 or the closest to 2009 (either 2007 or 2008). Only Georgia, Lebanon and Monaco spend less than Sri Lanka. The world average is 15.58%. Among Upper Middle income countries it is 16.20% and among South Asian countries it is 12.63%.
If public spending on education as a % of the GDP is taken of the 151 countries for which the data is available for the year 2009 or the closest to 2009 (either 2007 or 2008) Sri Lanka is ranked 145th with 2.06%. Brunei, Darussalam, Lebanon, Zambia, Central African Republic, Monaco and the United Arab Emirates lag behind Sri Lanka. The world average is 4.6%. Among Lower Middle income countries it is 4.03% and among South Asian countries it is 2.46%. Considering that Sri Lanka currently allocates only 1.9% of GDP on education, our ranking must have fallen even further. Sri Lanka along with other countries has committed to reaching the 6% benchmark by 2015. They should immediately ensure that their spending on education is at least on par with public spending on education in regional and other comparable countries. This would reflect Sri Lanka’s commitment to public education and signal a reversal from the decline in spending since 2005.
The government rationalises its low expenditure on education by claiming that countries that spend more on education are either where education is so poor that they need to invest more in education or where the countries are economically stronger. However, this is not a very rational argument:
•    Sri Lanka’s overall government expenditure as a percentage of GDP is comparable to the averages of South Asian countries and lower middle-income countries.
•    Sri Lanka’s government revenue as a percentage of GDP is also comparable to the averages of lower middle-income countries and is in fact, higher than the averages of other South Asian countries.
This means, that there is no significant difference in either government revenue or government expenditure as a percentage of GDP between Sri Lanka and other South Asian countries and lower middle-income countries.
The next logical question to be asked then has to be why is Sri Lanka’s public expenditure on education as a percentage of GDP, less than the average for South Asian countries and lower middle-income countries? Is it because education is a low priority for the government? Or is it because of poor fiscal management policy?
The Sri Lankan government must provide the public with answers to these questions! Distracting the public by misinformation and deliberate lies suggests that the government is unwilling or unable to answer these very important questions.

The importance of government spending on public education
In many countries in the region, the education sector claims the largest share of public expenditure devoted to social welfare. This is because most governments acknowledge that sectors such as education must be the primary responsibility of the state. This is to ensure both the quality of education as well as equity in accessing education. This is also why there are globally accepted benchmarks for public expenditure on education and standard indicators for measuring a country’s public expenditure on education.
Sri Lanka falls way below in both indices described above when compared to other South Asian countries and Lower Middle-income countries. Alarmingly, the trend over the past few years has been for these indices to show a decline despite the fact that Sri Lanka has committed itself, at regional international forums, to increase public spending on education to reach 6% of GDP by the year 2015. This suggests that over the past several years, successive governments and for this government in particular, education has been a low priority.

Sri Lanka compared to other countries:
Where does Sri Lanka stand compared to other countries in public education spending?
Government education spending in Sri Lanka as a percentage of GDP was 1.9% in 2010. The average investment among South Asian countries is 2.9% of GDP whereas the average among Sub-Saharan African developing countries is 4.7%. The average investment among low and middle-income countries is 4.6% (Sri Lanka is now regarded as a middle income country).
Education spending in Sri Lanka as a percentage of government expenditure on education was 8.1% in 2010. For the same measure the average among South Asian countries is about 15% whereas the average among Sub-Saharan African developing countries is 19%. The average among low and middle-income countries is about 18%.
Is government spending on education low because of low revenue and expenditure?
In Sri Lanka the overall government expenditure as a percentage of GDP was 23.1% in 2010. This is how Sri Lanka compares with other regions:
•    The average among South Asian countries is 16%
•    The average for Sub-Saharan African developing countries is around 24%.
•    The average among lower middle-income countries is around 20%.
This shows the although Sri Lanka’s overall government expenditure as a percentage of GDP is comparable to the average of other countries, its expenditure on education as a percentage of GDP is far lower.
In Sri Lanka, government revenue (excluding grants) as a percentage of GDP was 14.6% in 2010. In comparison:
•    The average government revenue among South Asian countries is about 12%
•    The average for Sub-Saharan African developing countries it is around 24%.
•    The average among lower middle-income countries is about 16%
•    The average among low and middle-income countries is around 19%.
This shows that the Sri Lankan government’s revenue as a percentage of GDP is not significantly different to other regional countries and countries of similar economic levels.
But, in Sri Lanka, government spending on education as a percentage of government revenue was 14.6% in 2010. This is significantly less than the average of lower middle-income countries and South Asian countries where this value is around 23%.
This means, that whatever way we look at it, that is:
•    As a percentage of GDP,
•    As a percentage of total government expenditure,
•    As a percentage of government revenue,
Sri Lanka spends less than other countries on education. For a country that boasts of its educational achievements, this is a shocking state of affairs. What is particularly significant is that this was not the situation in the past, but that our investment in education has been rapidly declining in recent years. While we are happy to reap the benefits of our past policies, we are selfishly and irresponsibly not ensuring that future generations will reap the same benefits. Investment in education does not produce instant results; investment in education is an investment in the future; an investment in future generations. We can only conclude from the current trends in education spending, that the government is neither interested in the future nor is it interested in future generations. Certainly, it is not interested in ensuring education for future generations.
Of course, we are also already facing the consequences of this policy. Very soon, if things do not get better, if we do not halt the decline in public expenditure on education, things can only get worse.
Finally, what is important for us is to understand what all of these facts, figures, arguments and counter arguments mean. Very simply, FUTA is asking the government to prioritise education and to invest in education. As one of the measures of this prioritization and investment, FUTA has shown a concrete figure of measurement: the allocation on education as a percentage of GDP. This is a globally accepted measurement and the figure of 6% has been agreed to by the Sri Lankan government at many forums. FUTA has also shown through many means (analyzing government revenue as well as expenditure) that the government is not anywhere close to meeting this standard. What does all of this mean?
What has been the government’s response to this? Instead of engaging meaningfully with FUTA on this issue and trying to figure out a way of meetings its commitments, the government is spending its energy on trying to show not only that FUTA is wrong, but that these internationally accepted benchmarks which are used not only by Sri Lanka but all other countries are wrong! It is also bending over backwards to suggest that investing more in education is impossible and by implication, not necessary. What does this mean? Very simply, the government is saying it is NOT interested in education. The government is asking the public, the citizens of this country to take the responsibility for education. The government is stating over and over again, that it is simply not willing to allocate funds for education. It is saying this while it has shown its willingness to allocate funds for other, arguably less critical sectors.
Is this the government position? Because, this is definitely not the mandate with which this government came into power. It is definitely not the legacy to which the constituent parties of this government can lay claim to. No other government has dared to so openly declare its intentions of divesting itself of the responsibility for education.
Does this government want to be remembered as that which was responsible for the destruction of education in Sri Lanka?

References
http://data.worldbank.org/indicator Role of Public Expenditure on the Provision of Education and Health, Economic and Social Survey of Asia and the Pacific 2003, (http://www.unescap.org/pdd/publications/survey2003/Survey03-12.pdf)
Central Bank Annual Report, 2011
Universities Grants Commission Annual Report, 2010
World Bank Report, ‘Transforming School Education in Sri Lanka: From Cut Stones to Polished Jewels’, 2011
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This article was first posted on Colombo Telegraph