Corporatization of Higher Education in Lebanon Jad Chaaban Associate Professor of Economics President, AUB Faculty United 12/02/2015
Oct 03, 2015
Corporatization of Higher
Education in Lebanon
Jad Chaaban
Associate Professor of Economics
President, AUB Faculty United
12/02/2015
Outline: The Signs of Corporatization & Capitalism Taking
Over University Education in Lebanon A non exhaustive list
1. Decline in the relative size of public education
2. Rise of crony private universities
3. Higher cost of attending tertiary education
4. Limited public support to higher education
5. Misleading indicators to measure outcomes of education
6. Higher education mirroring the dependent economy
7. Education as a privilege: Decline in the role of education in
social mobility
8. Universities managed like corporations: CEOs, CFOs and others
Decline in the relative size of public education
More than 190,000 students registered in universities (2011-2012), 86% Lebanese, 54% women
Lebanese University (public): only 40% of students
30,000 graduates per year, 10,000 Lebanese University
Share of LU for Lebanese students dropped by 25% in the last decade
0%
10%
20%
30%
40%
50%
60%
1970 1992 2003 2011
Share of Lebanese Share of all students
Decline in the relative size of public education
Slow down of enrolment for women in the public university as main driving factor
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
1970 1992 2003 2011
Private- Men
Private - Women
Public - Men
Public- Women
Rise of crony private universities
19th century: Confessional, foreign affiliated universities
AUB (Protestant), USJ (Catholic), BUC (then LAU, Protestant)
1952: Lebanese University
1960: Beirut Arab University (Sunni, Egyptian affiliated)
Dramatic rise in private universities:
1975: 5 Universities, 7 Higher Edu. Inst.
1992: 6 Universities, 14 Higher Edu. Inst.
Today: 24 Universities, 19 Higher Edu. Inst.
Wave of new universities between 1995-2001
Almost all for-profit private entities, close to ruling politicians
LIU: Founded in 2001 by a Minister of Education close to Syrian regime, now largest private university in the country (17,000 students)
Islamic University: part of the Shia Jaafari Council (Amal movement)
Antonine: Maronite church
And many others!
Rise of crony private universities
20 Universities (out of 38 active) had 95% of the students in 2011
LIU and the new universities: 26% of the market, mainly taken from the BAU and the LU
Lebanese University,
45%
Beirut Arab University,
31%
AUB , 6%
USJ, 6%
Other , 12%
1992 Lebanese
University, 38%
Beirut Arab University,
6% AUB , 4%
USJ, 5% Lebanese International University,
9%
Other new, 17%
Other , 21%
2011
Higher cost of attending tertiary education
Minimum entry cost/year: 330$ in public university, average 7,000$ in private, almost 50% of GDP per capita!
AUB and LAU: more than 15,000$/year
Many private universities clustered around 5,000$/year
Minimum tuition/year 2014 Nb. Of students in
2012 AUB $ 15,900 7826 LAU $ 15,300 6320
Balamand $ 9,750 4723 NDU $ 9,000 6827 USJ $ 5,000 9362
Other new (av.) $ 4,500 Lebanese International University $ 4,170 16721
Beirut Arab University $ 2,200 11392 Islamic University $ 1,300 4811
Lebanese University $ 330 73689 Other (av.) $ 5,100
100
110
120
130
140
150
160
170
2008 2009 2010 2011 2012 2013
Tuition (minimum cost of30 underg. credits)
Inflation (CPI % change -CRI)
Higher cost of attending tertiary education
In 5 years tuition at AUB increased by 60% (2008-2013)
Twice more than inflation
Limited public support to higher education
Annual public expenditures on higher education: 160 m$
0.6% of GDP, very low, mostly spent on salaries and administration in LU, share is unchanged for 10 years
Households spend more than 4% of GDP (tertiary private cost)
Reducing public debt cost by 10% would double public spending on higher education
9%
4%
0.60%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Interest paymenton debt
Transfers toElectricity
Higher education
Public current expenditure as % of GDP
Misleading indicators to measure outcomes
What we are told:
Higher enrolment reflects greater demand for education
Private universities have better, modern programs
Women enrolment has increased dramatically since 1970 = gender parity and progress
Lebanese labor force has become more educated
0
10
20
30
40
50
1970 1996 2012
8.1
30.9
47.84
26.4 28.8
44.52
17.4
29.8
46.26
Women
Men
Total
Net enrolment rates in tertiary education %
Misleading indicators to measure outcomes
What the reality is:
Higher enrolment reflects lower employment opportunities, youth (15-29) unemployment rate at 28%
Private university programs not innovative: Business, Management, Law and related: 40,000 students (40% of
enrolment)
Increase in women enrolment: But female labor force participation is still low (25%), education inclusion good but not
enough
Unemployment rate for university degree holders: 14%, while national average 10% (data for 2010)
More than 40% of employees report to have skills that do not match those required by their job (WB 2010)
More than 50% of graduates migrate, 15,000-20,000/year
Higher education mirroring the dependent
economy
Small dependent economy, relies on exporting skilled labor and foreign transfers to finance local consumption
Most jobs are informal and in low productivity services sectors Only 1/3 of job holders are wage employees
Higher education sector reinforces this tendency
Losing the countrys human capital, and paying locally for an education that has its returns abroad:
Spending on education in Lebanon is one of the highest in the world: 13.1% - 4.1% public and 9.1% private expenditure (%
GDP), USA 7%, France 6%.
Local returns on higher education are 6% in Lebanese University, negative in private universities, thus the need for migration to
make educational investments profitable.
Education as a privilege: Decline in the role of
education in social mobility
Public university mostly for the poor and middle class: 92% of poor households register in public university (2005)
92% 77%
48%
8% 23%
53%
0%
20%
40%
60%
80%
100%
120%
Poorhouseholds
Middle Class Richhouseholds
Private Universities
Public University
Distribution of university enrolment by family status, 2005
Education as a privilege: Decline in the role of
education in social mobility
Students originating from public schools less than 10% in elite private universities
Lebanese university graduates face a salary disadvantage compared to elite private universities
Lebanese University 61%
Beirut Arab University 57%
American University of Beirut 10%
Universite Saint Joseph 5%
Lebanese American University 5%
Other universities 26%
Lebanese University -14%
Beirut Arab University -15%
American University of Beirut 38%
Universite Saint Joseph 11%
Lebanese American University 5%
Other universities 5%
Proportion students originating from public schools, 1993/1994
Difference in monthly earnings from global average, 1994
Education as a privilege: Decline in the role of
education in social mobility
75% of AUB students come from only 40 schools (out of 160 origin schools)
95% of these schools are located in the Greater Beirut area
The number of students enrolling in AUB from the Lebanese public schooling system has dramatically declined in the past two decades
0
100
200
300
400
500
600
700
0%
2%
4%
6%
8%
10%
12%
1993 2003 2013
Share originating from public schools
Minimum credit cost US$ (right axis)
Universities managed like corporations: CEOs,
CFOs and others: AUB as a case study
Several budget items have seen a significant increase over 2007-2012:
Information Technology, Travel and meetings, Compensation of key officers and administrators, Taxes, Interest Fees
Together the above items totaled an addition of more than13m$ over their level in 2007
Salaries of key administrators have increased by as much as 89% over 5 years
Selected expense items, US$ (IRS declaration)
2008 2012
Management salaries 8,773,000 22,700,000
Legal 2,300,000 2,100,000
Travel 3,400,000 5,700,000
Interest 266,000 1,400,000
Information Technology 1,400,000 4,000,000
Advertising and Promotion - 1,000,000
Category AUB
AAUP-
CUPA Diff
Ratio to
lowest -
AUB
Ratio to
lowest -
USA
VP Medicine 59,000 37,000 37% 118 31
President 39,500 31,000 22% 79 26
VP Facilities 33,000 9,000 73% 66 8
VP IT 30,500 10,500 66% 61 9
VP Development 29,500 13,000 56% 59 11
VP Finance 27,500 14,000 49% 55 12
Provost 26,000 14,500 44% 52 12
VP Legal 23,000 15,000 35% 46 13
VP Human Res. 22,000 8,750 60% 44 7
VP REP 21,500 13,000 40% 43 11
Professor 7,600 8,700 -14% 15 7
Associate Prof. 5,700 6,500 -14% 11 5
Assistant Prof. 4,700 5,500 -17% 9 5
Lecturer 4,000 4,800 -20% 8 4
Instructor 2,800 4,400 -57% 6 4
Janitor 500 1,200 -140% 1 1
Average monthly salaries comparison, AUB vs. USA December 2013, US$/month
Data sources: AUB Fact Book 2014, AUB IRS Form 990 2013, AAUP 2013, CUPA 2013. US comparator: AAUP private independent average, masters level, CUPA all combined average.
Comparison of faculty and administrators salaries
Salaries of administrators at AUB are all 20-70% higher than those in the US, while those of professors are all 15-60% lower.
The highest paid administrator at AUB makes 118 times the minimum wage, compared to a ratio of 31 in the US.
An administrator at AUB earns on average more per month than what an instructor makes in one year.
Salaries of administrators at AUB are on average 5 times higher than those of professors
Many instructors still earn as low as 1500$/month, 20 times less than an administrators average salary
8 additional English professors can be hired using the salary of AUBs Chief Operating Officer
Comparison of faculty and administrators salaries
Conclusions
Corporatization of higher education is embedded within the Lebanese rentier -dependent economic system
Divided society that perpetuates conditions of submissions:
Poor and peripheries in the public system, precarious jobs, no social mobility, easily controlled through rentier and sectarian system
Rich in the private educational system, trained to migrate, no threat on the ruling class
Same struggle of school teachers, university professors and activists in socio-economic progress
Rights and values vs. commercial interest
Democratization vs. rule by cartel and crony capital
Secularism and respect for diversity vs. sectarianism
Global struggle against various forms of capitalistic control within class warfare
Thank you