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Breaking even or breaking through: financial sustainability and MENA’s higher education

Adriana Jaramillo's picture
Also available in: العربية | Français

The global economic crisis and the Arab Spring have sharpened the challenge to the countries of the Middle East and North Africa (MENA) from a large young population seeking better educational and professional opportunities. A variety of factors have impeded the countries’ abilities to absorb an increasing labor force: excessive GDP volatility; labor demand heavily dominated by the public sector; economies dependent on oil revenues and low value-added products; and weak integration into the global economy. This macro scenario is coupled with mismatches between labor supply and demand, slow school-to-work transition, and low quality of basic education and training systems.

Whether a high income, oil producing country, or a low to middle income economy, both will need additional funding to meet the demands for quality education. However, are these countries able to equip their students and graduates with the necessary skills to succeed in the labor market? Higher education graduates should be able to enter the workforce with the cognitive, behavioral, and social skills to solve complex problems, promote new ideas and engage in diverse environments. To meet this goal, more financial resources are needed, but more importantly, existing resources must be effectively utilized.

“Unit costs” in higher education, as in other labor intensive activities, tend to rise at the rate of labor compensation, in this case, faculty and staff. Keeping up with the pace of increased unit costs while student enrollment is increasing is a challenge to be met while improving the quality and relevance of services simultaneously.  The costs and revenue needs of higher education in most countries in the MENA region will increase annually at rates considerably above the annual rates of inflation. In all but a few of the oil-rich countries, these needs will be difficult, if not impossible, to satisfy from the government purse.  Introducing new taxes in the near future will be difficult in most MENA countries so they will have to find alternative sources of public funding, improve the efficiency of current funds and explore ways to increase private funding. Non-governmental revenue from tuition and other fees, entrepreneurial activities, external grants and contracts, private sector and philanthropy will all need to be considered to meet the surging revenue needs of universities and other institutions of higher education in MENA.

Some countries have already taken short-term measures to minimize budgets, for example, by replacing qualified full-time faculty with part-time faculty. They are also increasing class sizes and delaying investment and necessary infrastructure and material refurbishments. Such measures have temporarily eased the financial burden. However, in the long-term, these cutbacks will prove to be a larger “expense” by contributing to the further degradation of study conditions and education quality, the other significant piece of this important challenge.

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