Speaking at the 25 Anniversary of Institute of International Finance celebrated in Washington DC, Trevor Manuel South Africa’s Finance Minister said, “In pursuit of macro economic goals there is some risk of losing sight of the human purpose of our shared institutional arrangements. Human development – building human capabilities, constructing opportunities for people to lead better lives, sharing knowledge and building interconnected institutions – if we don't achieve these things then our financial intelligence and macro-economic structures have little meaning.”
Referring to the relationship between global inequality of wealth and inequality of human capital, he said “While knowledge is to some extent a shared public good and skills are comparatively mobile, there are clearly quite powerful dynamics that work to reinforce, perhaps even widen human capital inequalities, both within and between nations.”
He said that investment in people is much greater in rich than in poorer countries and this further exacerbates the gap between the rich and the poor. Manual said, “It is a sensible public policy to aim for equal access to good quality schooling.”
But he identified the major problem for developing countries as being, “the outflow of their talented and educated people to opportunities in other countries – this is all too-easily a self-reinforcing deteriorating spiral: people leave because the outlook for their own countries looks unfavourable, and the outflow itself reduces the prospects for growth and development.”
Speaking of the widening gap in remuneration, he said, “The mobility of skilled people means that the widening earnings gap in the United States of America and other developed countries over the past two decades has contributed to even more extreme remuneration gaps in developing countries.”
Referring to the short-term education and its problems he said, “Education and training are about long-term capabilities, and perhaps our problems are partly about both developed and developing countries under-investing in expensive categories of professional competence. There is the additional victim of short-term approaches to training that has been highlighted in so many failures – from banks to engineering – and that is the under investment in the values that should guide the choices of professionals.”
It is interesting to note that Gandhiji over many decades ago encouraged graduands to go to the rural areas and invest in the education of the rural children. In keeping with this call many top professors in India sacrificed their personal ambition and path to wealth, and chose to go to the villages. Their contribution is even today being recognized by the people and the government of India.
Referring to the problems of globalization, Manual said, “Globalization and growth have accentuated shortages of skills for engineers, doctors, nurses, plumbers and other artisans, in both the developed and developing worlds. But these shortages are not due to globalization itself, but to past fiscal and market failures.”
He said, “From the perspective of the South it seems that developed Western countries, who in their quest to save and minimize costs and maximize returns, are producing too few engineers, doctors and nurses to even meet their own demands. And so the developed world plunders developing countries for the skills that they have failed to create, and makes it more difficult or impossible for developing countries to reduce poverty and attain their development goals.”
“According to the United Nations, about 90 percent of highly skilled migrants live in a member state of the Organisation for Economic Co-operation and Development (OECD).”
“Africa, with its serious shortages of manpower, was the biggest loser, having lost 60 000 professionals (doctors, university lecturers, engineers, surveyors, etc) between 1985 and 1990 and an average of 20 000 annually until the mid-1990s. On average, 10,4 percent of skilled migration is from Africa. Asia also experienced an increase in outflows of skilled professionals to the US, Canada, Australia and the United Kingdom during the 1990s, partly due to the strong demand in OECD countries for Information Technology and other skills in science and technology, as well as selective immigration policies that favour skilled workers.”
“In South Africa we have 393 nurses and 74 doctors per 100 000 people, compared with the 901 nurses and 247 doctors per 100 000 people in the United States (US).”
So there are challenges for national education and training systems, and it seems clear that better international co-ordination is needed in this arena. “This is not just about planning and financing investment in skills, it is surely also about curricula and learning technologies and what goes on in the classroom.”
In summing up he said, “Education and training are investments for the long term, and their returns are not easily measured or securitized; it is no surprise that the associated financing arrangements are comparatively primitive. Alongside the enormous efforts that go into structuring financial arrangements for business investment and capital projects, perhaps it is time for more concerted efforts – across countries and involving private and public sector stakeholders – to put the financing of education and training on a better footing.…considered understanding of the connections between values and earnings, knowledge and power, education and privilege, training and access to opportunity.”
