Monday, July 30, 2007

Education and economics

This is my column today. One sentence, the last one, got lost in transmission. I must have sent the wrong file. Anyway, I inserted back the missing (last) sentence in this post.


The buzz during the weekend was that National Economic Development Authority Chairman Romulo Neri is being moved from being the government’s chief economist to being the country’s education czar.

Exactly what government position Neri is assuming remains unclear as of this writing. If we are to believe the scuttlebutt, Neri is going to be named chairman of the Commission on Higher Education.

Neri’s transfer is an interesting development, particularly for those who are concerned with the general decline in the overall competitiveness of our human capital in general, and the gaping mismatch between the output of academic and the needs of industry, in particular. In fact, the mismatch has been cited as a major impetus in Neri’s transfer. At least two papers reported that Neri’s transfer is a tacit admission by government that we now have a major crisis in education; one that requires quick and sweeping reforms. Interesting, indeed.

Unfortunately, there is an incumbent chairman of the commission in the person of Carlito Puno, whose political fortunes have now become uncertain. Puno has come out saying that while he knows that he serves at the pleasure of the President, he is not open to accepting any government position other than being chairman of the commission. As expected, the potential controversy in this emerging human-interest drama threatens to upstage the more serious implications of the transfer. Sigh. But let’s ignore that drama and focus on the substantive issues engendered by Neri’s transfer.

For quite sometime now, I have been writing in this column about the problems of the country’s educational system. We at the People Management Association of the Philippines (formerly called the Personnel Management Association of the Philippines), the country’s premiere professional organization of human resource management practitioners (where I sit as director in charge for research this year), have been advocating a more integrated and proactive response to the problems.

The association has even called a tripartite summit involving academe, government, and industry last year. Addressing the problems of the educational system—and the mismatch—is of grave importance to us, as it should be in a country where human capital is the only sustainable resource left. But lest we be misunderstood again, it must be stressed that while the mismatch is a burning issue for us in the industry, who have even resorted to putting up our own corporate training programs to make graduates responsive to our needs, the overall long-term competitiveness of our human capital is a far more critical concern.

This is crucial because we’ve been seeing a lot of knee-jerk and rather badly thought-out responses supposedly crafted to appease industry and solve the mismatch such as imposing English as medium of instruction, focusing on vocational and technical courses, and in general, reducing the focus on liberal arts. These give industry a bad rap as people who are only concerned with short-term needs.

Once again: While we acknowledge that there are gaps in technical proficiency and in English proficiency, we are more concerned with the decline in general critical thinking skills which, if we really come to think about it, is also the domain of liberal arts training. (There are even studies that debunk the general belief that science, math, and technical skills are the keys to increasing the competitiveness of our human capital, but that is another column altogether). We are worried about the decline in initiative, creativity, entrepreneurship, decision-making, analytical thinking and other foundation skills.

This much is clear: We need to focus on developing our human capital in ways that enable them to use knowledge and skills across a wide spectrum of disciplines and requirements—not just technical and language proficiency—and in ways that enable them to contribute the best value to industry and the economy.

So assigning the country’s chief economist to solve the problems of the educational sector is a bold move. It must be noted that historically, political, cultural, and even religious considerations have always driven educational policies and reforms in our country rather than economic agenda, so Neri’s transfer seems a step in the right direction.

At the very least, it strengthens the link between education and economics; to be more specific, the causal relationship between human capital development and economic growth. It really is about time that we note the important role that human capital development plays in the national development agenda.

It is time that we acknowledge the reciprocal linkage between human capital development and economic growth. Economic growth provides the resources needed to sustain human capital development. (Of course, the matter of equal distribution of economic growth is integral to the premise, but that is again, another column—I told you the problems are complicated!).

On the other hand, human capital development provides the necessary competencies to sustain economic growth. However, human capital development is clearly insufficient without a sound economic framework. The way in which education contributes to economic growth is first of all a function of the economic policy environment. It is economic policies that determine how people can translate education into value. Otherwise, human capital development will simply increase the number of educated people who are unemployed.

All these make for a complicated chicken and egg situation when the matter of setting priorities comes into the picture, particularly for a country that suffers from both low human capital development and slow economic progress compared to our neighboring countries.

One way to get out of the mess is the development of a more integrated, proactive, and purposeful policy framework that takes into account the needs as well as the roles of industry, academe and government. In this light, Neri’s background as an economist and educator (he was professor at the Asian Institute of Management for a long time) should come in handy. But more critical is Neri’s experience in the workings of government bureaucracy.

Neri has already said that he would be coordinating with industry in resolving the problems of the educational system. Great. That’s a welcome development. However, if we are to be honest about it, the needs of industry have already been clearly articulated and academe is aware of them.

One problem is that academe is unable to respond to the problems because of rather tight controls imposed by the government bureaucratic setup which does not allow for flexibility. For example, many academic leaders have been very vocal about questioning the continuing relevance of the CHED, the very government institution that Neri is reportedly going to head.

So we come full circle: Can Neri do the job if he is heading the very institution that both industry and academe think is irrelevant?

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