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	A STRATEGY TO PROMOTE REFORM
	BRIDGING EXTREMES IN HIGHER EDUCATION

By Peter Bate

Hundreds of university students filled the Che Guevara auditorium, bellowing “Strike, strike, strike!”. After decorating the dais with a dummy representing the university’s president, they appointed representatives to a General Strike Council. At midnight, student leaders tried to hoist a black-and-red flag, but found that the flagpole had no rope. After improvising with some string, they closed down Latin America’s largest university to protest against an increase in tuition fees.

A scene from the radical 1960s? No, it actually happened in April 1999, at Mexico’s 270,000-student National Autonomous University (UNAM), after its authorities decided to raise tuition fees for the first time in nearly half a century. Inflation had diluted the institution’s already modest tuition to a symbolic two cents a year. Under new rules, all but the poorest students would pay the equivalent of $140 a year, roughly 1.5 times Mexico’s minimum monthly wage. Funds raised would be used to cover expenses for needy students and improve the university’s library and computer services. The Mexican government would continue to subsidize about 95 percent of UNAM’s cost.

The most militant students, however, refused to accept even the slightest increase.

In their view raising fees violated a Mexican constitutional guarantee that the state provide education free of charge, in spite of the fact that other public universities in Mexico do charge for tuition. So the students set up roadblocks and closed off UNAM’s main campuses, paralyzing the careers of hundreds of thousands of students and shuttering Mexico’s principal scientific research center for months on end. Summing up the strikers’ views was one of their signature slogans: “We’re closing down UNAM so that it may remain open to all.”

UNAM’s plight is emblematic of the problems plaguing Latin America’s large “multiversities.” These state-run entities are still the best option for higher education in many of the region’s countries, producing much of the best scholarship and providing a professional stepping-stone for hundreds of thousands of working-class students. But Latin American universities also reflect the broader fortunes of the region, suffering from economic instability and political repression and from technological backwardness. They tend to be shackled by a resistance to change archaic rules that prevent them from serving their purpose more efficiently. And they often lack internal controls on academic quality and financial management.

Because of these shortcomings, universities that are responsible for a large portion of Latin America’s scientific research and development must rely almost exclusively on government subsidies. This dependency often spells trouble. A case in point is Argentina’s Universidad de Buenos Aires (UBA), a leviathan second only to UNAM in enrollment. In November its president, Oscar Schuberoff, warned that UBA might not be able to open the following year because federal authorities had fallen short by some $18 million on disbursements for the university. Yet although threatened and actual budget shortfalls are an almost annual ritual at the UBA, its leadership doggedly refuses to consider charging tuition fees. César Milstein, an UBA graduate and winner of the Nobel Prize for Medicine, has observed that the university could raise hundreds of millions of dollars a year just by charging tuition only to its middle- and upper-class students.

Catastrophes such as the UNAM strike tend to reinforce the stereotype of Latin America’s higher education as inefficient, mediocre and out of touch with the real needs of modern society. But while these problems are real, they are not the whole story. There are many efficient and competently run colleges in Latin America. Moreover, governments, citizens and private institutions in many countries are working to reform the region’s universities so that they can better serve the needs of the seven million students who are currently enrolled.

A new strategy. The Inter-American Development Bank has been supporting these efforts for 30 years. During the 1960s and 1970s, the IDB lent nearly $500 million to help develop and expand many of the region’s leading universities. While boosting the universities’ enrollment capacity was the chief aim, Bank-financed programs also promoted quality by encouraging full-time teaching, research and graduate education.

Over the past two decades IDB lending has shifted toward an emphasis on improving the quality and reach of basic education. Nevertheless, the Bank never abandoned the view that a sound higher education system is an indispensable element for creating more productive, prosperous and democratic nations. To further this commitment, in 1997 the Bank adopted a new, more selective strategy to guide its lending for higher education in Latin America.

The new strategy is designed to support what the Bank considers sound education management policies in such key areas as equity and subsidies, performance incentives, governance and quality control. The IDB is willing to work with both public and private institutions that are committed to reform, says Claudio de Moura Castro, the IDB’s senior education advisor and one of the architects of the new strategy. “We fund what the market cannot fund and has to be funded, regardless whether it is in the public or the private sector,” he says.

As the crisis at Mexico’s UNAM shows, a basic question facing the region’s universities today is who should pay. The IDB supports greater recovery of costs through tuition and other means, Castro says, but it does not advocate a one-size-fits-all solution. In most situations, a mix of public and private funding, in which tuition would be only one component, is the most promising approach.

For example, governments have good reasons to subsidize their academic leadership, that is, the elites involved in teaching and research that require high levels of intellectual preparation and ample funding that cannot be obtained entirely from private sources. But it may make sense to recover costs by charging for other types of higher education, such as specialized programs for professionals or technicians. To understand why, consider the difference between a biomedical researcher and a plastic surgeon. Training and supporting the researcher is much more expensive and time-consuming than training the plastic surgeon. But while the latter might quickly pay off education debts by performing lucrative face-lifts and tummy tucks, the former may eventually develop a disease-curing medicine that will benefit millions.

Moreover, professionals who make valuable contributions to society, such as judges, usually earn much less than colleagues who go into more profitable fields, such as corporate law. It stands to reason that governments would choose to subsidize training for judges, scientists and other similar professional groups by funding libraries, laboratories and research. The cost of educating professionals who will be adequately rewarded by the job market can be covered through tuition or the reimbursement of student loans.

Funding should also take into account the fact that most of the students attending public universities in Latin America come from the middle class. According to the Bank’s strategy, many of UNAM’s students would not have a priority claim to public funding, although others certainly would.

Creative solutions. Since tuition and other traditional forms of cost recovery still generate a great deal of opposition in most Latin American countries, many universities are finding alternative ways to generate revenue. Castro cites his native Brazil as an example. One popular approach is to develop a sophisticated network of specialized research organizations and foundations capable of generating revenue through contracts and partnerships with the private sector. Perhaps the best example is the Universidade Estadual de Campinas, a public university in the state of São Paulo with a $230 million annual budget that has forged extensive ties with the private sector. More than a dozen foundations affiliated with the university generate revenues of nearly $150 million by catering to the needs of Brazilian businesses and government. “In other words, inside those dinosaurs you have fiercely capitalistic gazelles that are selling research, services and training very aggressively,” says Castro. According to the university’s web site, these organizations have signed more than 800 agreements with private firms to conduct research, improve industrial processes, develop products and train personnel.

But despite the use of foundations, Brazil’s public universities must still deal with serious constraints on initiative and imagination. Highly centralized rules and administration are part of the problem. Anglo- Saxon universities have a tradition of decentralization, where each department is free to pay or hire according to what it needs or can afford. In their most extreme forms, says Castro, universities in the United States have been described as a group of researchers that happen to use the same parking lot. Latin American universities follow a more rigid tradition. In some cases they may have the same criteria for hiring the head of a physics department or the coach of a sports team. For example, Pelé was able to become Brazil’s minister of sports but could never teach soccer at a federal university because he does not have the right degrees.

Mexico’s UNAM, once one of the most prestigious institutions in the region, has also suffered from a rigid and centralized tradition by which it must treat all students the same. “You cannot have elite education if you have more than 100,000 students,” says Castro. “That’s mass education. They allowed it to grow, they allowed governance to become very feeble, and every attempt to fix it finds fierce opposition.”

The next wave. In Mexico, perhaps the best example of creative funding is offered by the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM), which was founded in 1943 by a group of business leaders in that northern Mexican city.

Comparing notes at ITESM, a tech-oriented university in Monterrey, Mexico

Now a network of 29 campuses in 26 cities with more than 80,000 students, itesm has also developed a “virtual university” that has allowed it to expand its reach across Latin America.

In addition, the university has built a network of nonprofit associations to raise funds. Tuition covers the cost of operations while donations pay for buildings and equipment. The university even holds lotteries to increase its budget for scholarships and loans, which benefit nearly one in three of its students. In the process, itesm has become a major exporter of outstanding “courseware” via distance education, says Castro.

Latin America’s elementary and secondary education has undergone a revolution over the past few decades that has swelled enrollment. This demographic wave moving through the schools has already reached the higher education system in some countries, Castro says. “It’s not just the elites that aspire to a higher education degree,” he says, “but children of much more modest backgrounds who have had weaker education.” Instead of a full-blown university education, many of these students will prefer “short, post-secondary courses” that improve their chances of getting a job, according to Castro.

Institutions in Argentina, Chile and Venezuela have anticipated this demand for briefer, job-oriented training, and others in Brazil and in Mexico are beginning to offer such courses. Along the border, U.S. community colleges are starting to build links with Mexican institutions. El Paso Community College in Texas, which has long provided English language training for Mexican students, faces an ever-rising demand for its courses. This has led the Texas college to enter into an agreement with itesm’s campus in Ciudad Juárez, across the Rio Grande from El Paso, to offer English classes at the Mexican university’s facilities. In June, the Alamo Community College District in San Antonio, Texas, hosted a conference for 40 Latin American university presidents on the development of technical education services with a view to building a system of community colleges offering short, job market-oriented courses. The IDB plans to follow up this initiative with another seminar this year to raise the profile of community colleges.

According to Castro, the potential demand for this type of education is tremendous.“From the narrow point of view of costs, two years of college are cheaper than four,” Castro says. “From a personal standpoint, many students would be better off if they could get a job in two years instead of four.”

"Many students would be better off if they could get a job in two years instead of four"
Claudio Castro, IDB education expert

There is also an equity issue. “This is the first opportunity for the region’s working-class kids to get into higher education,” says Castro. “Stuffing them with price equilibrium theory is not necessarily the best choice. A two-year course is often ideal. From the labor market’s perspective, there will be a huge demand for well-trained technicians who can fix fax machines, cellular phones or computers.”

While in the past an experienced mechanic could tune a car’s motor by ear, today he must deal with dozens of computers under the hood. These new technologies—and the mammoth manuals they invariably spawn —require several levels of abstraction that can only be acquired in post-secondary education, says Castro. Latin American universities have traditionally been geared toward producing engineers who could understand the theory behind technologies but would have a hard time changing a tire. Community colleges could fill this vacuum. But if two-year institutions are given second-class status, they will fail to fulfill this role, says Castro. “We want to raise the profile of the community college concept, similar to what the United States and Europe have done.”

In industrialized countries, at least half of higher education graduates go through community colleges or similar institutions. This is especially true in the case of older and less-affluent students who are already in the work force. Two-year schools frequently work in close contact with the private sector. Their boards of governors tend to include local business leaders as well as government representatives. Their study programs are usually designed to match the requirements of the job market. In some cases their campuses are right next to the facilities of the companies where their graduates will eventually work.

However, funding will still loom as a problem as Latin American countries attempt to build similar institutions. Traditionally, community colleges are public entities that cover their costs with a mix of state and local government subsidies and tuition fees. But in most of Latin America, such hybrid solutions are still in their infancy.

Will these financial constraints force Latin America to buck an increasingly popular trend? Clearly, massive admission into traditional universities with long academic courses has not been the solution for those students who must quickly acquire the practical skills needed to succeed in today’s labor markets. In contrast, career-driven short courses seem like a reasonable option and a wiser investment of scarce public resources. As Castro notes, even though the region’s political and cultural peculiarities may prevent it from replicating every aspect of the community college model, the winds are blowing in that direction.

The websites of UNAM, UBA, Universidade de Campinas and itesm can be found at www.unam.mx, www.uba.ar, www.unicamp. br and www.sistema.itesm.mx.

For more on the IDB’s work in education, go to www.iadb.org/sds/edu.

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