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Thursday, April 19, 2012

Don't burden the poor undergrad


Higher education is the responsibility of the state. It cannot dilute this obligation by asking commercial banks to offer student loans.

Educational loans formed the only new proposal for education made in the Budget 2012-13 speech of Finance Minister Pranab Mukherjee. The Minister promised to set up a Credit Guarantee Fund, “to ensure better flow of credit to deserving students.” The role and functions of the Fund are to yet to be clearly defined. Student loans are currently operated by commercial banks — public and private — as any other loan programme. The government has laid a few bare conditions in this context, and in 2009-10, a scheme of interest subsidy on loans was announced by the government for students of economically weaker sections.

Increased allocation

Under the scheme, the government would subsidise the interest on loans borrowed from the schedule banks for the period of studies, which would be treated as a period of moratorium. The implementation of this scheme can be expected to be the main function of the proposed Fund, in addition to overseeing the overall implementation of the scheme of educational loans. There is, however, no budget allocation made for setting up the Fund. Allocation for educational loan interest subsidy scheme has been raised considerably from Rs.640 crore in 2011-12 to Rs.800 crore. The actual expenditure on the same scheme in 2010-11 was only Rs.203.3 crore.

Through the subsidy, the government wants to encourage students among weaker sections to go for higher education — technical and professional education. Student loans are gradually and increasingly becoming popular, with the number of loan accounts with commercial banks being 22.8 lakh in March 2011, with an outstanding amount of Rs.42,808 crore, but they are not necessarily popular among students of weaker sections. It is important to note that the government does not spend anything on educational loans, except for the interest subsidy. It does not have to spend huge amounts to promote equity in higher education either, as it believes that interest subsidy on loans itself is sufficient for this.

The Economic Survey (2011-12) makes the intention of the government behind the loans clear, when it states, “over the years, the divergent trajectories of costs and revenues due to rapidly increasing per student costs and increasing tertiary level participation has[ve] created immense pressures on the exchequer.

Moreover, subsidies are inequitable in the sense that irrespective of one's parents' wealth, all individuals in a state subsidized institution get the same level of subsidy. Therefore, there are views that argue for reducing government support for higher education and replacing it with better commercial student loans schemes” (emphasis added).

The government's two-fold intentions are clear: (a) to reduce government support to higher education, and (b) to replace it with student loans. Rather it intends to change the whole method of financing of higher education in the country!

Ironically, the government recognises that many countries in the world provide vast levels of subsidies for higher education. The government is also aware of the rationale. In the same paragraph preceding the above lines, the Economic Survey, stated, “Education being an important component of economic development and a driving force for economic growth, governments in India and across the world are subsidizing higher education.”

In support of extending commercial loans for students, the government makes a reference in the Economic Survey to a paper prepared at the Indian Statistical Institute (probably “Education Financing Policy: Income Contingent Loans and Educational Poverty Traps,” by Seher Gupta, Tridip Ray, Mausumi Das and Shoumitro Chatterjee). It will not be out of context to note that the said paper — or the extracts given in a Box in the Survey — argues for income-contingent loan schemes as against standard mortgage type loan schemes; it does not plead in favour of loan schemes against public subsidisation of higher education; rather the scholars argue in favour of a type of educational loans (income-contingent loans) against another type (standard mortgage loans). This is not new; in fact, several experts who worked on student loans argued for the same. However, few strongly prefer loans to public subsidies.

The arguments in favour of public subsidies in higher education are very strong, and so is the case against loans. Public subsidies in higher education are favoured on the following grounds: higher education is a public good, producing an immense magnitude of social, economic, political, cultural and technological externalities; higher education is a merit good, consumption of which needs to be encouraged; it is a critical investment both from individual and social points of view; it is one of the best instruments of promoting social and economic mobility and thereby equity in society; it is both equity and efficiency-enhancing at the same time; there are economies of scale in the production of higher education; and, above all, it is a human right, as stated by UNESCO long ago in 1948 in the Charter of Human Rights. These and other fundamental characteristic features of higher education provide a strong case for public subsidisation of higher education.

Inherent weaknesses

On the other side, the inherent weaknesses of student loan schemes as well as the practical nuisance involved in them are also widely known. Despite several supplementary measures, student loans, in comparison to public funding, are, like high tuition levels, highly regressive, adversely affecting the demand for higher education of the weaker sections; with the burden of loans on their shoulders, students could face severe psychological pressures, affecting their educational performance during studies and labour market performance after studies; and with loans not being available equally across all disciplines but going more towards employment oriented courses, the other disciplines of study might slowly perish, affecting the very structure of the higher education edifice.

Unlike in a few countries, and in the past in India when the national loan scholarship scheme was in operation, it is not the government, but commercial banks which run student loan programmes nowadays. Banks, being banks, have their own principles of business. Obviously, they would consider the repayment capacity of the student as the main principle before advancing a loan. Hence many deserving poor students who cannot provide collateral may be denied loans. This is so, despite several regulations issued by the government and/or the Reserve Bank of India. Banks do not necessarily have any consideration for promoting academic excellence or for helping the poor. Moreover, educational loans have become a very powerful instrument for promoting private education.

Change in attitudes

Above all, student loans change the attitudes of students and of society as a whole towards the very nature of higher education. Public financing of higher education recognises that higher education is a public good and it is the sacred responsibility of the state to provide it to its citizens. Methods like student fee dilute the state responsibility. Student loans assume that higher education is the responsibility, not of the state, nor of the families, but of the student himself, as if education is completely an individual private good, as it is mainly the student who takes the loan and it is the student who will be repaying it. Parents are at best guarantors of the loans. This shift in responsibility from state to parents and then to students will have dangerous implications not only for the development of higher education, but also for the very social fabric and national development.

While many countries heavily subsidise higher education and rely on student loans only partially on a very limited scale, the government of India intends to use this method to altogether replace public funding of higher education.

(Jandhyala B.G. Tilak is with the National University of Educational Planning and Administration, New Delhi. Email: jtilak@nuepa.org)

Tuesday, April 17, 2012

War looms as Khartoum parliament brands Juba an ‘enemy’

Sudan’s parliament branded South Sudan an “enemy” on Monday and called for a swift recapture of a disputed oil-producing region, as rising border tensions pushed the old civil war foes closer to another full-blown conflict. The United States, meanwhile, condemned the bombing of a U.N. base in the south.

South Sudan, which seceded from Sudan last July, seized the contested Heglig oilfield last Tuesday, prompting its northern neighbor to vow to recapture the area by “all means.”

The oilfield is vital to Sudan’s economy, producing about half of the 115,000 barrel-per-day output that remained in its control after South Sudan’s secession, according to Reuters.

Addressing the Khartoum parliament, speaker Ahmed Ibrahim al-Tahir accused the South’s ruling party -- the Sudan People’s Liberation Movement (SPLM) -- of posing a security threat to the north.

“We declare that we will confront the SPLM until we end its rule of the South, and will work to gather our resources to realize this aim,” he said. “We are in a battle that does not finish with the recovery of Heglig, but with an end to the danger that comes from South Sudan.”

The assembly went on to adopt a resolution describing the SPLM government as “an enemy,” but it did not spell out the full implications of the decision.

Fresh airstrikes

The unanimous parliamentary vote on Monday came as South Sudan in turn accused Khartoum of fresh airstrikes that killed 10 civilians and also hit a United Nations peacekeeping camp.

Sudan denied having any links to the bombing of the U.N. compound, an attack condemned by the United States on the seventh day of the most severe border fighting since South Sudan separated last July.

“Sudan’s army didn’t have any link with what’s going on in Unity state in South Sudan,” army spokesman Sawarmi Khaled Saad was quoted as saying by the official SUNA news agency.

“The army is defending its land after aggression from South Sudanese troops and doesn’t take any responsibility for what’s going on outside Sudanese territory.”

U.N. mission spokesman Kouider Zerrouk confirmed the attack on the peacekeepers’ camp but said there were no casualties and it was unlikely the U.N. was targeted, as the Antonov aircraft used by Sudan are notoriously inaccurate, according to AFP.

U.S. Ambassador to the United Nations Susan Rice described the bombing which hit the U.N. camp as “particularly condemnable and deplorable.”

“This is obviously a subject of grave concern as is the South’s continued presence in Heglig and a myriad of violent confrontations in and around the border area and deep into both countries territory,” she told reporters on Monday, according to Reuters.

“We strongly condemn the bombing by the Sudan armed forces of the U.N. mission in South Sudan,” State Department spokesman Mark Toner told reporters in Washington.

The State Department earlier condemned U.S.-allied South Sudan for seizing Sudan’s oil hub of Heglig.

Fighting over Heglig

Fighting broke out last month between the rival armies of Khartoum and Juba around Sudan’s main oilfield, called Heglig.

The clashes escalated last week with waves of aerial bombardment hitting the South, whose troops on Tuesday seized Heglig from Khartoum’s army.

Although South Sudan disputes that Heglig belongs to Sudan, the area is not among the roughly 20 percent of the border officially contested.

In the Southern capital Juba, Information Minister Barnaba Marial Benjamin said the vote by Sudan’s parliament was “unfortunate.”

“We have never been their enemy -- our position is that we don’t consider them as our enemy,” he told reporters.

Meanwhile aid workers said the fighting is worsening an already grim humanitarian situation.

In South Sudan’s Yida refugee camp -- one of several along the border -- around 400 refugees are arriving every day, up from an average of 50 a day last week, the International Rescue Committee (IRC) aid agency said.

Those refugees are fleeing civil war and hunger in the Nuba mountains of Sudan’s South Kordofan state, an area close to where Sudan and South Sudan have been fighting.

In South Kordofan, Sudan has for months been battling ethnic insurgents formerly allied with the rebels now ruling in South Sudan.

Violence escalates

Nineteen South Sudanese soldiers have been killed since Tuesday, while 240 Sudanese troops have lost their lives, Juba’s army said in figures impossible to verify.

“It’s a war,” a foreign diplomat said, but there is a logistical imbalance between the combatants since South Sudan has no warplanes, meaning “they are obliged to respond on the ground.”

Questions are being raised in Khartoum over how easily Southern forces managed to seize Sudan’s main oilfield, worsening an economy mired in crisis.

The Sudanese military is already severely stretched, in the face of the major insurgency in South Kordofan, a smaller uprising in Blue Nile, and ongoing fighting in the war-ravaged Darfur region.

China said on Monday that South Sudan’s President Salva Kiir will visit from April 23 to 28 for talks with Chinese President Hu Jintao.

Beijing is an ally of the Sudanese government and the largest buyer of South Sudan’s oil. Last week it called on both sides to enact a ceasefire and return to the diplomacy table.

Other world powers have also called for restraint and voiced deep concern at the escalating violence.

Khartoum seeks the South’s unconditional withdrawal from Heglig.

But Juba has said it will not pull back unless Khartoum removes its troops from the contested Abyei region nearby, among other conditions.

In Juba, South Sudan’s parliament decided to raise military spending and bolster the army by cutting salaries of all deputies by 10 percent for three months.

The clashes have all but killed hopes the two can reach an agreement soon on disputed issues such as demarcation of their 1,800-km (1,200-mile) border, division of national debt and the status of citizens in each other's territory.

agencies

Monday, April 16, 2012

Web freedom faces greatest threat ever: Google co-founder


The principles of openness and universal access that underpinned the creation of the internet three decades ago are under greater threat than ever, according to Google co-founder Sergey Brin.

In an interview with the Guardian, Mr. Brin warned that there were “very powerful forces that have lined up against the open internet on all sides and around the world. I am more worried than I have been in the past.. it’s scary."

He said the threat to the freedom of the internet came from a combination of governments increasingly trying to control access and communication by their citizens, the entertainment industry attempting to crack down on piracy, and the rise of “restrictive” so-called walled gardens such as Facebook and Apple, which tightly controlled what software could be released on their platforms.

The 38-year-old billionaire was widely regarded as having been the driving force behind Google's partial pullout from China in 2010 over concerns about censorship and cyber-attacks.

He said five years ago he did not believe China or any country could effectively restrict the internet for long but he had been proven wrong: “I thought there was no way to put the genie back in the bottle, but now it seems in certain areas the genie has been put back in the bottle.”

Although he said he was most concerned by the efforts of countries such as China, Saudi Arabia and Iran to censor and restrict use of the internet, he also warned that the rise of Facebook and Apple, which have their own proprietary platforms and control access to their users, risked stifling innovation and Balkanising the web.

“There's a lot to be lost,” he said. “For example all the information in apps - that data is not crawlable by web crawlers. You can't search it.”

Mr. Brin's criticism of Facebook is likely to be seen as controversial with the social network approaching an estimated $100bn flotation. Google’s upstart rival has seen explosive growth, with more than 800 million members worldwide and one in two of all Americans with computer access signed up.

Mr. Brin said he and co-founder Larry Page would not have been able to create Google if the internet was dominated by Facebook. “You have to play by their rules, which are really restrictive. The kind of environment that we developed Google in, the reason that we were able to develop a search engine, is the web was so open. Once you get too many rules that will stifle innovation.”

He also criticised Facebook for not making it easy for users to switch their data to other services. “Facebook has been sucking down Gmail contacts for many years.”

Mr. Brin’s comments come on the first day of a week-long Guardian investigation of the intensifying battle for control of the internet that is being played out across the globe between governments, companies, military strategists, activists and hackers.

From Hollywood’s attempts to pass legislation allowing pirate websites to be shut down, to the British government’s plans to monitor social media and web use, the ethos of openness championed by the pioneers of the internet and world wide web is being challenged on a number of fronts.

In China, which now has more internet users than any country in the world, the government recently introduced new “real identity” rules in a bid to tame the country’s boisterous micro-blogging scene. In Russia there are powerful calls to rein in a blogosphere that was blamed for fomenting a wave of anti-Putin protests. It has been reported that Iran is planning to introduce a sealed “national internet” from this summer.

Ricken Patel, co-founder of Avaaz, the 14 million-strong online activist network which has been providing communication equipment and training to Syrian activists, echoed Mr. Brin’s warning: “We've seen a massive attack on the freedom of the web. Governments are realising the power of this medium to organise people and they are trying to clamp down across the world, not just in places like China and North Korea; we're seeing bills in the United States, in Italy, all across the world.”

Mr. Brin reserved his harshest words for the entertainment industry, which he said was “shooting itself in the foot, or maybe worse than in the foot” by lobbying for legislation to block sites offering pirate material.

He said the SOPA and PIPA bills championed by Hollywood and the music industry would have led to the U.S. using the same technology and approach it criticised China and Iran for using. The entertainment industry failed to appreciate that people would continue to download pirated content as long as it was easier to acquire and use than legitimately obtained material, he said.

“I haven’t tried it for many years but when you go on a pirate website, you choose what you like, it downloads to the device of your choice and it will just work - and then when you have to jump through all these hoops [to buy legitimate content], the walls created are disincentives for people to buy.”

Mr. Brin acknowleged that some people were anxious about the amount of their data that was now in the reach of U.S. authorities because it sits on Google's servers. He said the company was periodically forced to hand over data and sometimes prevented by legal restrictions from even notifying users that it had done so.

He said: “We push back a lot; we are able to turn down a lot of these requests. We do everything possible to protect the data. If we could wave a magic wand and not be subject to U.S. law, that would be great. If we could be in some magical jurisdiction that everyone in the world trusted, that would be great . . . We're doing it as well as can be done.”

GUARDIAN NEWS SERVICE