The problem began unexpectedly. This year is the 50th anniversary of the University of Technology (UTech). The institution was established in 1958, to begin to meet the expected need for technology arising from the emerging manufacturing sector. Also, the mining sector was then on the verge of entering an industrial phase.

At first, the institution was named the Institute for Technology. Within a year this was changed to the College of Arts, Science and Technology (CAST). On September 1, 1995, it was given university status and renamed the University of Technology (UTech).

After half a century, UTech is now ready to become an independent institution, having the right to operate without administrative control by government. Importantly, among other things, it would be able to set its pay scales at levels which could maintain and attract appropri-ately qualified staff to lift the product of the university.

Budget subsidy

An independent UTech, however, would have to accept that the budget subsidy of 37 per cent given to it by government currently, would have to be reduced. This would inevitably require additional sources of income to compensate for the loss of revenue.

While more than one option exists to earn more revenue, increasing the enrolment of students is the only substantial source of possible additional revenue. UTech currently has an enrolment of 10,000 students, a relatively large institution of higher education in this region. The expansion of enrolment was where the first snag occurred.

Most of the students are from poor homes unable to finance the cost of education. The Students' Loan Bureau (SLB), which I established in 1970, was the source of loans for the education of such needy students.

Additional cost

To increase enrolment for additional revenue, would mean increased funding by the SLB. But the SLB will run out of funds by the end of the present year, 2008-09. Last year, the SLB financed loans for 7,000 students; this year the total will be 9,000.

At this level and rate of growth in numbers, the addi-tional cost required for loan financing for the next five years is projected to be $15 billion (US$200 million), an impossible sum to find. Over the previous 50 years of its establishment the SLB raised only US$37 million in external financing. Understandably, an extra US$200 million could not be secured to cover the next five years, and perhaps not at all, given other needs.

The consequence would be a reduction of enrolment in tertiary institutions where students depend on SLB loans. Revenue would decrease, services would be cut, some courses would be eliminated and the status of the institutions would fall.

From another perspective, thousands of graduates from secondary schools who are qualified would have to forego a tertiary education. This would be a social disaster.

From the pre-emancipation period, slaves who became free men knew that an education was an indispensable requirement for them to succeed socially and economically.

They became the nucleus of the middle class. This emerging middle class grew over the decades to become the administrative backbone of the country. Their success has inspired others to follow. It would be tragic to turn them off at this stage when their dreams were about to be realised and their contribution to society fulfilled.

Empty SLB pipeline

The empty pipeline in the Student Loan Bureau to finance the thousands of students seeking tertiary education has to be dealt with urgently lest the brightest spark in the development of our most precious asset, our young people, be doused before they light their flames.

There is a view, often mentioned, that tertiary education is being over-emphasised; that too many students are being trained, given the limit on job opportunities; and training sometimes in the wrong skills. But this is a very short-sighted approach. Graduates in whatever area of academic discipline will find employment, sooner or later.

What this means is that the tertiary-education system is like a large human resource factory that converts untrained but qualified secondary students into trained tertiary graduates, thereby creating an employable product from human material with an uncertain employment future. The subsided cost of their education should be seen as no different than the subsidies given to the manufacturing and tourism sectors. All have the same purpose, to create jobs. What is more, creating the jobs through university training on the average is less costly than creating a job in tourism, or manufacturing, or mining.

A further argument indicates that a good many graduates migrate, thereby depriving the country of the skills they acquired with a subsidy of 80 per cent of their educational cost financed by government. Again this is short-sighted. The true figure of Jamaican graduates residing abroad is not the preposterous 95.8 per cent as published by the World Bank. A recent study by the Planning Institute of Jamaica places the range of Jamaican graduates migrating as between 34 per cent to 59 per cent, depending on the set of assumptions used.

Graduates in employment overseas, become part of the diaspora which is a prime source of foreign exchange earnings for the country.

To put these potential earnings in context, the net value of remittances with that of others external earnings from other sectors is set out below.

The contribution of remittances to GDP is 15 per cent. It is one of the largest contributors. This contribution is more than 100 per cent of the net contribution of sugar to GDP. It is 88 per cent of the net contribution of exports to GDP, more than 225 per cent of the net contribution of foreign direct investment (FDI) to GDP, 30 per cent of the net contribution of imports to GDP.

Remittances

The demonstrable value of remittances is even more impressive when compared on a basis of net earnings retained in Jamaica of every dollar in foreign currency received, as indicated below.

Remittances - over 90 per cent retained

Tourism - 34 per cent

Bauxite/alumina - 40-50 per cent retained

Remittances, it can be concluded, contribute between at least two and three times greater in proportion of net earnings to the economy compared to other earners of foreign exchange.

It stands to reason, therefore, that a policy supporting migration of graduates can poten-tially enhance the net value of the foreign exchange earnings of the country substantially, beyond the equivalent receipt for sugar, or bauxite/alumina.

At every step of the way education makes a significant contribution to development. The larger the number of educated people, the greater the understanding of the society, the more competent the leadership and the more prosperous the people.

The fact is that the small class of free men which emerged under slavery which formed the nucleus of what is now the middle class with income and status, impelled others to follow in breaking through the shackles of race, colour and economic bondage, by earning the respect due to earners of higher income through academic achievements. Without this, middle-class growth would be stagnant.

Individuals would be dangerously frustrated as rejects without a channel of mobility and the society would be imperilled by a suffocating system offering little or no social or economic mobility, possibly, leading over time to implosion.

In any assessment, value must be attached to the need to keep open the channel of upward social and economic mobility as one of the most effective dynamics to transform hopelessness to hopefulness.

There is no educated country that is poor and no poor country whose population is educated. If prosperity is the goal, higher skills are the tools and knowledge is the way.

Edward Seaga is a former prime minister. He is now a Distinguished Fellow at the UWI and Pro-Chancellor of the University of Technology. Email: odf@uwimona.edu.jm or columns@gleanerjm.com.