Higher Education Policy Note Pakistan An Assessment of the Medium-Term Development Framework Report No. 37247 Higher Education Policy Note Pakistan: An Assessment of the Medium-Term Development Framework June 28
Future Expansion of University Enrollments
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- Table 17: Projection of HESS Enrollment and Population Age Group
- Table 18: Projection of University Enrollment by Area of Study, 2004 - 2015
- Figure 13: Distribution of University Enrollment by Discipline, 2005, 2010, 2015
- The Costs and Financing of the MTDF
- Box 4: Base Case Scenario - Main Assumptions
- Costs 319 Increasing Access
- Table 19: Projection of Quality Enhancement Programs (2005-2015)
- Total Cost of MTDF Measures
- Figure 14: Projection of Costs Related to Increased Access and Enhanced Quality
- Universities own revenues
Future Expansion of University Enrollments 307 If left to its “natural” course, the distribution of students by fields of study will not be consistent with the priorities of the country. Too few students are enrolled in fields of study most needed in the future. Measures need to be taken to induce more students into engineering, scientific, and technologic fields, and lure them away from general subjects. They must start at the pre-tertiary levels. 308 The projections simulate the flow of students throughout the complete education system. They cover the primary, middle, and upper secondary levels, as well as the collegiate level (grades 11 and 12). Primary and secondary enrollments are projected by year of study, gender, and level of education. The current proportion of females in primary and secondary -- approximately 40 percent -- is assumed to remain constant. University enrollments are projected by year of study and gender for five areas of study: general, sciences, agricultural, engineering, and medical. University projections cover bachelor, master’s and PhD programs. The distribution of student intake by field of study is assumed to remain constant. 309 The projections are based on intakes into the system and internal efficiency rates (promotion, repetition, dropout, and transition rates). These rates are assumed constant over the projection period. The increase in primary school enrollment reflects demographic growth and the built-in momentum of the education cohorts already in the system. The increase in the middle and high secondary education levels is driven by the transition rates to these levels of education in addition to the increase built into the existing cohorts of students31. Intake into the different disciplines of the university is based on the past five year’s rapid growth of admission. 310 Enrollment projections cover students in universities and students registered in the DAIs and in COEs (i.e. all institutions incorporated in the HEC budget). Programs that are comparable to the bachelor, master’s, and PhD levels in distance education also are added to the projections to obtain the aggregated number of university students. Finally, projections include students enrolled in grades 13 and above of colleges, since these are postsecondary grades. Projections cover students in both public and private institutions, and are based on the assumption that the intake into universities would follow the past five year’s trend. 311 The projections show that total enrollments in universities, DAIs, COEs, and the parallel distance learning system will double between 2005 and 2010 and will more than triple by 2015 to reach 1,879,000 students by 2015. The ratio of university enrollment to the population of the corresponding age group (age 17-23) would increase from 2.5 percent in 2005 to 6.2 percent in 2015. When enrollment in the affiliated colleges is added to those of the universities, the total enrollment of the HESS would increase from 807,000 in 2005 to 2,324,00 in 2015, and its ratio to the age group would increase from 3.8 percent in 2005 to 7.7 percent in 2015 (Table 17). Table 17: Projection of HESS Enrollment and Population Age Group
312 The projections suggest that the goal set by the MTDF to raise the enrollment rate to five percent in five years and 10 percent in 10 years (page 28) is probably too ambitious, but that the doubling the number of students over a five-year period may is more likely. Considering the current limited availability of human and physical resources, such a fast growth remains a phenomenal increase to be absorbed.32 313 General universities have by far the largest share of total university enrollments as well as the fastest growth rate in comparison to the other universities. Projections show that if past trends continue, there will be substantial increase in the enrollment of the general universities in both major disciplines of general studies and pure sciences studies (Table 18). Table 18: Projection of University Enrollment by Area of Study, 2004 - 2015
314 Based on the continuation of past growth trends by field of study, the number of students will grow at 16 percent per annum in general universities, eight percent in engineering universities, and five percent in agriculture and medicine. Under these assumptions, general universities enrollments will increase their share of total university enrollments from 79 percent in 2005 to 90 percent in 2015. As a result, the gap between general universities and other universities such as agriculture and engineering is expected to increase further (Figure 13). It must be noted, however, that “general universities” are far from homogenous: they include different areas of studies such as arts, social science, business, IT, and languages, and they also have a considerable number of basic sciences programs such as physics, chemistry, biology, etc. Students in these programs make up about 40 percent of the total enrollment in general universities. Figure 13: Distribution of University Enrollment by Discipline, 2005, 2010, 2015 
315 These patterns have a serious incidence in terms of relevance to the evolving labor market needs. According to the HEC vision, the country will move towards a knowledge-based economy with modern agriculture, light manufacturing, and IT industries. Student enrollments by discipline will need to be reoriented to that effect. For the last two years, the HEC has applied a financing formula which starts to address that issue by including built-in incentives for the universities to enroll more students in professional disciplines (Chapter III, Box 1). These incentives should help to bridge the gap between the general areas of study and other applied studies. However, initiatives are also needed at the pre-university level in order to foster the attractiveness of applied studies. Costs_and_Financing_of_the_MTDF'>The Costs and Financing of the MTDF 316 Cost projections must combine realism and flexibility, and must be easily manipulated so that sensitivity to assumptions can be clearly assessed. Projections also must provide a reference against which alternatives can be estimated. Following these principles, two scenarios were built: the Base Case, which serves as a reference, and the High Case, which depicts a situation combining more realistic assumptions and more pro-active measures (projection results in Annex 11). The Base Case 317 If all the measures carefully crafted by the HEC to rebuild Pakistani universities were to be implemented as scheduled, but if, at the same time, the resources they receive from the budget were not growing faster than the economy, the financial gap associated with the MTDF would creep to unsustainable levels. With a budget increasing at the GDP rate of six percent, universities could hardly accommodate the additional students projected to enroll in the next 10 years; they would not be able even to maintain the already low level of quality which called in the first place for the energetic actions envisaged in the MTDF. Hence, there is a clear incompatibility between the level of funding universities have been accustomed to until recently, and the increase in access, let alone the ambitions of the MTDF to overhaul quality in these learning institutions. 318 The Base Case factors in the comprehensive set of measures contemplated in the MTDF. The Base Case projections assess the cost implications of the different programs in increasing access and enhancing quality during the period 2005-2015. The costs of increasing access and those of enhancing quality are estimated separately, with distinct methodology33. On the resource side, the Base Case is conservative to the extent that it extrapolates revenues only on the basis of GDP growth, and does not take into account recent statements regarding the government’s commitment to increase dramatically budgetary allocations to the sector and the subsector (Box 4). The Base Case is used to answer the following question: Would the MTDF be affordable with the level of resources currently available to universities?
Costs 319 Increasing Access. Cost projections of increasing access cover recurrent expenditures, which consist of salary expenditures associated with the additional staff required to teach the additional students, and non-salary expenditures. Recurrent cost projections linked to access are based on student/teacher ratios (STR) in the different areas of studies34. In the Base Case, these ratios are assumed constant. Salary expenditures are projected on the basis of the average salary in the base year (also assumed to be constant)35. Since most of the non-salary expenditure is associated with staff expenditures such as transport, travel, and fixed assets, the non-salary component is projected by using its elasticity to salary expenditures (i.e., increases in non-salary expenditures are proportional to increases in the salary bill). 320 Assuming stable STRs, the total number of full-time staff needed would increase from 10,500 in 2004 to about 47,000 in 2015 -- i.e., at an average annual increase of about 3,300 staff. This increase is high in comparison to the current expansion of about 2,000 additional staff per year. When part-time staff is added, then total staff needs are projected to increase from 13,500 in 2004 to 63,200 in 2015, and the total salary expenditure, based on the average salary level in 2004, is expected to increase from Rs6 billion to Rs30 billion in 2015. When adding the non- salary expenditure, the total recurrent expenditure would rise from Rs11 billion in 2004 to Rs56 billion in 2015. 321 The next step is to add the cost of the ambitious tenure track plan which provides substantial salary increases for those faculty members who are prepared to undergo periodic reviews of their performance36. According to the HEC plan, the proportion of faculty in the tenure track would be increased gradually to 30 percent within the coming 10 years. The average salary of faculty in the tenure track is three times the average salary of regular faculty, and therefore, the cost of the measure is quite high. Total recurrent expenditure (salary and non-salary) including the tenure staff would rise to about Rs68 billion by 2015, of which about Rs12 billion would be allocated to the tenure track system37. 322 The costs associated with the expansion of access also include capital costs -- i.e., costs of additional physical infrastructure needed to accommodate the additional 833,000 university students expected to be enrolled in the coming 10 years. Using the infrastructure costs per student as estimated by HEC (Rs360,000), the incremental capital cost would reach approximately Rs300 billion for the 2005-2015 period. Capital costs also include the component of development grants granted by HEC for the expansion of the physical infrastructure (about 2/3 of these grants). 323 When capital costs are added to the recurrent expenditure, the total cost of increasing access would reach about Rs724 billion for the entire period, and the yearly cost would rise from Rs17 billion in 2005 to about Rs119 billion in 2015. 324 Enhancing Quality. Quality improvement is a major focus for the HEC, and is reflected in a number of initiatives inventoried in the MTDF and reviewed in Chapter III of this Note. The total cost of the quality enhancement over the 2005-2015 period is estimated at over Rs390 billion (Table 19). Table 19: Projection of Quality Enhancement Programs (2005-2015)
325 These programs are expected to be executed gradually, especially with regards to faculty and staff development and training and according to an implementation plan that ensures the continuation of the teaching process without disruption. Based on this gradual implementation scheme, the ESM assumes that the programs will be evenly implemented throughout the period, and therefore, their costs are distributed in a linear fashion between 2006 and 2015. 326 Total Cost of MTDF Measures. Under the Base Case scenario, the total budget (recurrent and development) required to implement the measures aimed to improve quality and increase access to university education would reach about Rs1,120 billion over the 2006-2015 period. Gradual implementation of the MTDF programs would result in a steady growth of the universities’ annual expenditures which would soar from about Rs30 billion in 2005 to about Rs177 billion in 2015 (Figure 14). It is worth noting that quality improvement measures account for only 35 percent of the total envelope, the rest being attributable to access -- i.e., the mechanical continuation of the current flow of new intakes into the system. In per student terms, the increase would be only about 51 percent, meaning that a good deal of the growing budget would be absorbed by swelling enrollments. Figure 14: Projection of Costs Related to Increased Access and Enhanced Quality 
327 From a macro perspective, the ratio of total universities expenditures to the GDP would increase from 0.5 percent in 2005 to 1.4 percent in 2015. These levels exceed the MTDF target of increasing universities resources to one percent of GDP in the coming 10 years – an already ambitious target. They even exceed current OECD levels,38 and may not be realistically achievable, especially if one considers that the budget is only for the university segment of the HESS. 328 The picture is even more dramatic from a sectoral point of view, since the ratio of the budget needed to implement the MTDF to the sector budget – assuming the latter would grow proportionally to the GDP – would rise from 26 percent in 2005 to 69 percent in 2015. Such a level has not been recorded in any country39, and is indeed unrealistic –regardless the resource level. Revenues and Gap 329 Resources are made up of two components: the envelope allocated by the state to universities through HEC, and the funds generated by the institutions themselves. The first component is derived from macro considerations, while the second is based on micro observation at the university level. 330 Government allocation. In the Base Case, the budgetary envelope allocated to universities is projected to follow the same path as the GDP. The latter is based on the recent IMF macroeconomic framework projections (IMF, November 2005) which include the future growth of the GDP, public expenditures, and the education sector budget. The ratio of the higher education budget to the GDP is assumed to remain at the same level as in the base year during the projection period (0.37%). As an increase of this ratio was recently decided, the main purpose of the resource level projected in this conservative Base Case is for comparison only. 331 The recent government data (Economic Survey 2004-05) show that the GDP grew at a very high 8.4 percent in FY2005 (surpassing expectations for the third straight year). The IMF expects that the economy will “cool down” and that the GDP growth rate will decrease to seven percent in 2006 and will stabilize at six percent thereafter. These are the rates used in the projections. Projections of the universities resource envelope are based on the share of the total universities budget (recurrent and development) in the GDP (0.37%). Under the Base Case, the resources expected to be allocated by the government (through the HEC) to the universities would increase from Rs32 billion in 2006 to Rs54 billion in 2015. Total resources for the whole period (2005-2015) would reach about Rs444 billion. 332 Universities own revenues. Revenues generated by the universities on their own are made up of four main components: tuition fees (41% of all revenues), examination fees levied on affiliated colleges (36%), fees collected from self-financing students, and miscellaneous revenues (23% combined). Under the Base Case, tuition fees are assumed to remain nominally constant and to follow strictly university enrollments. Examination fees are projected to follow college enrollments, and other revenues are projected to follow their recent trend. Under those assumptions, universities would raise close to Rs130 billion over the whole period. Together, the government allocation and the self-generated revenues would amount to about Rs570 billion. 333 An unbridgeable gap. Comparing the estimated cost of implementing the MTDF programs in their entirety with the total resources expected to be available to universities (whether self-generated or channeled by the government) yields a financing gap of about Rs546 billion over the period. In yearly terms the gap would start at about Rs17 billion in 2007, and be multiplied sevenfold by 2015, reaching Rs105 billion by then. The bulk of the deficit would be borne after 2010. In addition, almost two-thirds of the entire education sector budget – assuming the latter would grow proportionally to the GDP -- would need to be allocated to universities to execute the MTDF. This is indeed a clear impossibility. The lesson of the Base Case is that the level of resources allocated thus far to the education sector, the higher education subsector, and universities in particular, is not consistent with the standards expected of them. The magnitude of the gap shows that in order to make the MTDF financially feasible, measures must be sought on both sides of the equation, namely costs and revenues. This is what the High Case is all about. Directory: curated curated -> Concept stage curated -> Concept stage curated -> Republic of Côte d'Ivoire Urbanization Review curated -> Report No: aus11011 Central America curated -> Report No. 94474-pk fiscal Disaster Risk Assessment Options for Consideration curated -> Environmental and Social Management Framework for the Costa Rica Telecommunications Sector Modernization Project curated -> Environment Impact Assessment For Jiangxi Shangrao Sanqingshan Airport Beijing Guohuantiandi Environmental Technology Development Center. Ltd. Oct. 2012 Content curated -> Growth through Innovation An Industrial Strategy for Shanghai By Shahid Yusuf Kaoru Nabeshima April 22nd, 2009 curated -> Report No: 70178. People's Republic of China Download 1.13 Mb. Share with your friends:
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