Towards a Knowledge Hub: What do we expect from the Budget 2012?

September 11, 2011, 7:13 pm


I saw on TV news recently that President Mahinda Rajapaksa as Minister of Finance had met with representatives of various social groups of economic importance for pre-budget discussions. Deliberation of this kind with interest groups as part of the budget preparation process is commendable because these groups can express their views on the economic progress and social welfare. To what extent these views, naturally may be conflicting, will be incorporated into the budget is yet to be seen. During the trade union action embarked on by the Federation of University Teachers’ Association (FUTA), many academics highlighted the importance of the concept of making Sri Lanka a knowledge hub in South Asia. However, this aspect was not stressed adequately in the pre-budget discussions, may be in formal discussions with the President or in informal discourse in media. As a person who proposed to FUTA that it include as one of its demands an increase of the state expenditure on education and higher education to 6 per cent of the GDP by year 2016. I think that this is the best time to revive that idea.

Education data in the region show that Sri Lanka spends on education, higher education and research less than 3 percent of its GDP, while countries with lower GDP per capita spend a higher percentage of GDP on education. Hence, if the UPFA government intends to make Sri Lanka a knowledge hub in the region, the country has to increase expenditure on education, higher education and research substantially. It does not mean that the entire financial burden should be borne by the government. However, the initiative in developing the sector should be taken by the state for two main reasons. First, education is not a sector that as a whole generates profit directly so that the private sector investment on education would concentrate only on immediate profit generating sub-sectors. While allowing private sector to engage in such sub sectors, the state has to invest in remaining sub-sectors that are not directly profit-generating. In this respect, the government should prepare a six-year education plan clearly delineating the respective roles that private sector and public sector should be responsible for. Secondly, education is a great social equalizer. As the Sri Lankan experience has demonstrated, the system of free education that was introduced in the latter part of the colonial rule has contributed immensely to reducing social and economic inequalities. The setting up of Central Colleges in remote areas played a role of catalyst in broadening educational opportunities. In a market system, the state has to perform a corrective function by providing a new space to social layers marginalized by the operation of the market mechanism.

The educational gains that Sri Lanka achieved in the past are now eroding gradually and we can no longer claim that our educational standards and indicators are well above those of other countries in the region. Some countries have overtaken us during the last two decades or so. In this context, if we are really interested in making Sri Lanka the knowledge hub of the region, the country should advance systematic and planned approach to achieve this goal. As I mentioned in one of my previous notes, a knowledge hub means ‘that the country should achieve one or more of the following three things. First, Sri Lanka can be made a regional centre of knowledge-based industries. Secondly, the country can focus on knowledge creation through research and development. Thirdly, it can be made a regional centre of training and dissemination of knowledge. Although conclusive evidence on the existence of a positive correlation between educational level and economic development cannot be established, all three definitions above stress the fact that Sri Lanka cannot be made a regional knowledge hub without paying due attention to higher education and research’. However, the government appears to have given priority to the third aspect of the knowledge hub idea. Why is this aspect attractive to policy makers? I think it is for the wrong reasons! The policy makers appear to expect immediate financial benefits in terms of foreign exchange to the country by attracting foreign students and also by encouraging local students to study in Sri Lanka rather that going abroad. Most important element of knowledge hub has to do with making Sri Lanka improve its export and production capacity by transforming its production sector into one driven by high technology and information. India was able to make headway partly because it has trained through IT’s high level graduates who could be easily accommodated to knowledge based industries. When it comes to Sri Lankan exports less than two percent came from high tech industries. This needs to be changed.

So, what is important is not only to raise state expenditure on education but also to have a comprehensive education, research and development plan to change the direction of education. The higher budgetary allocation should be linked with such a comprehensive plan. The plan covering primary education to post-graduate level education and research should include new ethics for teachers of all institutions including universities. About two weeks ago, I was invited to give a talk at a private campus in Colombo and teachers there informed me that they had to be on the campus from 8.00 a. to 5.00 pm. In my opinion some kind of ethics has to be introduced into state university system and such a system should be developed within the universities itself. So, as the first step to improve our education system, in my opinion, the budget 2012 should raise state expenditure on education and research to minimum 3.5 per cent of the GDP. This with a comprehensive education plan and rigorous implementation of it together with assurance of relative autonomy for universities and research institutions would place Sri Lanka on the correct path to a knowledge hub.



The writer teaches political economy at the University of Peradeniya

E-mail: sumane_l@yahoo.com