Disintegration of the USSR led to a number of rapid,
drastic transformations majority of which, at least from the general public
standpoint had not been positive and contributed to overall deterioration
of living standards. Transformation of social services are usually perceived
in the most painful way since it was here (especially in education and health
care) where people were entitled to the most valuable and easily attainable
benefits.
Today the vast majority of these benefits are gone altogether or are
transforming in a way that connects them to their former selves only in
a name, their substance quite opposite to whatever they used to be.
Georgia is no exception to this rule. For instance, health care reform,
launched in 1995 transformed the system in a way that simply totally alienates
poorer population and makes it difficult to access for the remaining people
save for the absolute minority of the richest. Under the circumstances
public school education remains almost the only remainder of the past
epoch when all the people were entitled to huge benefits free of charge.
Whatever the actual merits of the Soviet school education, it at least
provided equal access to all children disregarding their ethnic or religious
origins, economic and social standing. As such, both for the government
and general public free public school today stands out as a kind of “status
symbol”, as something solid and unchanging at times of rapid transformations
and general vulnerability.
The reality quite obviously contradicts such popular perception. Continuing
economic hardships and slow recovery rate drastically reduced ability of
a state to provide financial and material support to public school system.
Today it operates at just a fraction of financial provision it used to have
during the last years of the Soviet era.
This leaves it no potential for development and only persistent efforts
of Georgian authorities save it from significant physical contraction.
Even today it maintains almost universal enrollment of basic school age
population. Naturally in financially starved system this could only take
place on the expense of important features like efficiency, quality and
equality. It resulted in frequent disruptions of classes, drove away the
most qualified teachers and impoverished the vast majority of the remaining.
This also led to involvement of parallel schemes of attracting additional
finances by schools, two of which the authorities had eventually to legalize
making public schools system paid on principle, although these schemes mainly
remain outside any control.
As a result today we are dealing with a kind of “chimerical” system
based on contradictory, even mutually exclusive principles – formally
free, but factually paid. Still there are no indications that
non budgetary contributions, apart from the rarest of exceptions, are
able to curb deterioration of schools. On the other hand there is a plenty
of evidence pinpointing them as leading source of corrupt practices in
a school system.
Background
Georgia by a wide acclaim is a deeply corrupt country. Majority of deals
in the country involving those of elected or executive officials, businesses
or common citizens are based on some kind of personal “understanding” among
the interested parties rather than on the law, which is routinely abused.
Corrupt activities have already acquired a systemic character and it looks
like that any government agency is becoming corrupt simply by default, by
virtue of belonging to the system. As to the public school system it may
be involved primarily due to controlling one of the largest public money
flow in the country, especially that this is almost entirely disbursed as
cash.
Also more than a decade after the demise of the USSR, the country is still
at a very initial stage of economic recovery. Even some positive results
were achieved, the actual progress in sluggish and by no means irreversible.
Any large-scale political crisis (quite possible under the current circumstances)
may plunge the country back into deep recession. Its current GDP is just
about 2/5 of the Soviet volume, which itself was by no means impressive.
Actual amount of Georgian GDP is much smaller than for instance fraud committed
by accountants of some American companies. Share of GDP incorporated in the
state budget is also very low by any reckoning and its volume compares very
unfavorably with operating budgets of not the largest and richest of Western
universities.
This leaves public sector, including education, virtually cash stripped,
with no development potential. There are no indications that government
discriminates public education in any way. Quite on the contrary, this sector
receives more public allocation than ministries of defense, interior and
state security as well as all other security agencies combined. On local
government level school education is by far the leading item of spending.
But the actual amount of sums allocated is meager and can only to some extent
slow down deterioration of an education system. In a school system there
is almost no money for anything else but wages and salaries that amount to
9/10 to all expenditures. Still teachers and administrators are remunerated
to the extent of about USD 1 per day or less. Consequences of this for the
education process proper are emerging strictly in accordance with the old
popular Soviet formula – “the government pretends that it pay teachers and
teachers pretend that they work”.
Any positive developments in the school education – repair of school
buildings, outfitting them with computers, etc. are almost exclusively
result of intervention of international donors or some wealthy Georgians.
Chances of reversing school system deterioration and improving its
current standing exclusively by means of public financing are rather slim.
According to my own rather approximate calculations, in order to pay public
schools personnel salaries comparable to current minimum subsistence level,
the government should allocate sums 2.4-4.4 times exceeding total current
public education spending. Given the existing trends of economic recovery,
under the very best circumstances such level of financing may not be realistically
achieved earlier than the second half of the next decade (provided that current
subsistence level is maintained throughout all this period.).
These trends are farther exacerbated by other problems that in some
other post Communist countries (in Eastern Europe for instance) play
a major role in public school sector development. These are unfavorable
student-teacher ratio, unfinished devolution and continuing mix-up of
functions and responsibilities between the Ministry of Education (MoE)
and local governments, resource allocation mode at local government level
that discourages rationalization of school system, absence of the most
necessary standards and norms of school education, etc., etc. General institutional
weakness and lack of control also feature prominently in a current school
system crisis.
In case of Georgia all these play by far the secondary role to problems
of school education and it looks today that their successful solution
will hardly be able to turn the tide. Mobilization of internal resources,
leading to cost cutting and more efficient utilization of available funds
can hardly offset the deficit created by the general macro economic crisis.
Restrictions that may be imposed on schools in order to improve their
standing given current financial and material constraints may also be unjustifiably
heavy.
Also the government as a whole, as well as political
opposition and trade unions maintain position that school education should
be free of charge, whatever the actual abilities of the state and consequences
of constant drastic under financing of the system. This position
is supported by schoolteachers - may be the largest remaining single group
of state employees who mainly escaped drastic job cuts that affected other
people employed by the government. They represent rather well organized
and influential group lobbying preservation of existing organization and
relations in public education. In addition, given the current public sentiment
any decisive measures that may lead to considerable alteration of status
of public school system may be politically disastrous for whose who
dare initiate it.
Even simple formal acknowledgment of quite obvious fact that a public
school system is not free of charge any more is tantamount to political
suicide for any politician or high rank public servant. That's why anyone
disregarding their actual standing in society and political affiliation
are adamantly supporting the old Soviet model of free public school system
providing universal access for all. This primarily manifests itself in preservation
of maximum amount of teachers and resistance to rationalize school system.
Public school system in Georgia is rapidly transforming from system providing
general education for young generation into system mainly providing livelihood
(however meager) for people who work there.
Such approach is strongly supported by the local governments that by law
are currently in charge of financing public schools. Here the education (primarily
public schools) represents the largest item of budget expenditures. The
vast majority of local governments are too weak economically to support public
schools independently and heavily depend on central budget transfers that
play a key role in financing this system. The actual role of transfers in
local finances is unjustifiably high stemming again from the fact that these
are the only guaranteed spending items. This again makes education sector
the most important one for local budgets – first because almost all transfers
come to education; second – almost all these transfers consist of salaries
that belong to so called “protected” items and cannot be sequestered, providing
districts with badly needed cash, third – considering the current state
of relations between a federal and local governments actual spending of
this money is almost totally outside any control.
These transfers are disbursed notwithstanding the actual performance of
sector they are intended for. It looks like that they are mostly applied
as policy instruments in relations between federal and local governments.
Of course they to a large extent reduce formal budget independence of local
governments, but also work the other way being used as potent instruments
in actual power sharing between center and regions. More schools, more teachers
– more transfers, especially if district is very weak economically and its
finances in disarray. It’s only natural that local governments fight claw
and tooth to preserve school education as it is, without any changes.
Taking into account the easily observed attitudes and practices of local
administrations probability that cash intended for public schools is misappropriated
is very high. According to local experts this cash is used in a form of a
short term loans for local businesses that provide a quick turnover and high
return at rates lower than formal bank rates. It looks like that cash involved
in such transactions exceeds the amount of non budgetary contributions to
schools almost to the order of magnitude. Although formally these transactions
take place outside public school system proper, their negative influence
on schools is very strong. The most important is that schools are used both
as formal pretext and instruments for fostering such country wide corrupt
activities.
The Issue
The current standing of the Georgian general public school system
may be best described by a term fuzzy. It is still formally free of charge
while fee for “above the standard” tuition and parents’ “voluntary” contributions
are also formalized. These hardly improve overall standing of schools but
provide plenty of opportunities for misappropriation of money and corruption.
Attempts of the Georgian authorities to preserve such situation as it
is today are tantamount to “having a cake and eating it” and are not rational
even in the short run.
To add to this misfortune public school system is used as a potent instrument
to provide local governments with the largest, mainly uncontrolled cash
flow available to them. Although this money is by far not enough to
improve public school standing to any noticeable extent, it still provides
plenty of incentive for local officials to use it for their private ends.
This document focuses on status and financing since they provide basis
for all other school reform measures currently under way and efficiently
define any alternatives of public school system development. Thus
the rationale for fighting “new corruption” in a school system in Georgia
through redefining its status and providing better financial incentives
is running as follows:
· The state cannot realistically expect school
system to perform its functions as defined by current legislation without
necessary financial provision (especially personnel remuneration);
· Any insistence that schools should perform
their formal functions in the absence of such provision eventually leads
to involvement of “shadow financing” and corruption;
· Attempts to formalize such payments while
clinging to formal “free education provider” status of public schools creates
even larger “window of opportunity” for corrupt practices;
· Even schools widely practicing alternative
financing schemes, with the rarest of exceptions, are not able to attract
enough money to offset financial and material resources deficit and noticeably
improve their performance making the current situation even more attractive
for unscrupulous people.
. At local government level public school system financing
is basically used as a pretext for acquiring additional, hardly controllable
and probably misappropriated central government funds.
Although there is clear understanding of the problems at hand, issue
of redefining public school education status in accordance with actual ability
of the state to sustain it, is so politically risky that so far there have
not even been attempts to start some kind of public discussions on it.
Still the situation calls for concerted efforts of Ministries of Education
and Finances, local governments, other interested government representatives,
NGOs, representatives of teachers, school administrators, parents as well
as other interested parties in order to develop comprehensive policies
directed at redefining public school system status and existing financing
schemes.
Development options and recommended actions
Current crisis of school education in Georgia is not resulting from
easily observable financial and material deficit per se, but stems rather
from growing gap between the model and size of the public school system
inherited from the USSR and ability of the state to satisfy these needs.
This gap is easily utilized by corrupt practices further undermining
already weakened system.
Given the existing socio-economic and political constraints, the only
option acceptable for majority of stakeholders while leading to improvement
of a general financial standing of schools may be based on operational
scheme already to some extent utilized by the state higher educational institutions
in Georgia.
Formally remaining in the state ownership, schools should be given
the much greater autonomy and formal right to offer a paid for tuition
while retaining free of charge sector as well. Parents should be offered
a flexible tuition scheme enabling them to choose between all free or all
paid for sectors, or even their combination. Existing salary caps should
be lifted enabling schools to remunerate teachers depending on actual performance.
Special taxation scheme should be applied to paid sector enabling it to keep
operating costs low, with provisions that encourage reducing amount of budget
money schools utilize.
The best performing schools should be encouraged even to leave the
state sector altogether. The scheme should be supported by comprehensive
regulation, control of its implementation delegated to strong school boards
with broad functions.
Such a scheme obviously will not solve problems of public school sector
development and financing. Nor will it be easily applicable to schools
outside the major urban centers. Still it will provide the sector with
a formal development alternative and incentive – things that it clearly
lacks today.
The following steps should also be undertaken in order to better utilize
existing internal resources of the system:
· Per student costs of education varying
in accordance with various regions and geographical zones of Georgia should
be calculated. Education authorities should also calculate the real cost
of education on per school basis in order to learn the real needs of the
system;
. Comprehensive, clear set of education standards
should be developed ASAP with special emphasis on eliminating the possibility
of "bending" these standards in accordance with private needs of local
administrators.
· The MoE should carry out the inventory
of schools and implement country-wide rationalization program, closing
down schools which are permitted to function today based only on rather
vague moral and/or political consideration (especially in larger urban centers).
Afterwards the rights to open/close schools should be passed to local governments,
as well as right to appoint school principals that local authorities may
share with or delegate to school boards;
· Existing system of generalized education
transfer allocations to local governments should be replaced by per student
education grant, to be channeled directly to recipient schools. Rules
and criteria of application for such grants should be made very simple and
clear, process of their allocation - public;
· Local governments should also be encouraged
to retain only first four grades of elementary school in small villages
and provided some financial incentives to do so. Local governments (district
level) should have right to retain schools earmarked for closure provided
that they finance them above and beyond all other budget contributions. Such
schools also should not have a right to apply for the central government education
grants unless some time in future they start to meet some clearly defined
criteria they did not meet at the time of rationalization;
. During some transitional period (3-5 years)
small elementary and basic village schools with less than 100 students should
be left out of any rationalization schemes (provided that there is only one
school per village). Afterwards local communities should be provided with
option to maintain these schools on their expenses (without any outside
support) as alternative to their closure;
. Status of schools should be redefined, making
them legal entities, with their own budgets, bank accounts and rights to legally
incorporate all contributions into the budget. These contributions and
other incomes generated by providing services beyond the formal education
programs should not be subjects to taxation at least at the initial stage
of legalization of these practices (3-5 years);
. Clear, simple, transparent rules for attracting
out of budget contributions should be established. Only one legal entity (school
board) should be earmarked as executor of these functions. All others (even
if they are legally established) should be deprived of this right. All other
practices of collecting money for schools should become punishable under
the law. At the initial stage of establishing such system it should be overseen
by the central authorities (may be even by MoE);
· Parents and public at large should be encouraged
to actively participate in school management (especially control of finances)
through special programs directed at development of system of school boards.
Nation wide propagandistic campaign should be initiated explaining population
importance of this.
Created: March 24, 2003, Author V. Melikidze
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