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THE USP LAW MOVE TO VANUATU: who benefits? [The Fiji Times, 30 March 1998]

29/03/2012

There has been much concern expressed in the media about theUSPLawSchool’s move toVanuatu.  Sections of the Fiji Government or bodies receiving scholarship funds from the Fiji Government, have refused to support the study of law, if sited inVanuatu.

 

There are no doubt benefits involved in the move of theLawSchool toVila.  On the surface, Vanuatu will gain economically; students who do make it to Vanuatu should also benefit by studying in what is considered to be an extremely attractive and unique environment; law teaching staff probably benefit from the absence of income taxes in Vanuatu (although living costs are also slightly higher in Vanuatu); and USP’s image as a regional institution will be enhanced.

 

WhileFiji’s position is not reasonable (given theLawSchool’s history) there are unfortunately many costs involved in the situation, that need further consideration.  The costs to students and sponsoring governments are obvious, as highlighted by the media.  But there are serious costs toVanuatuitself, and to all the USP countries, that have probably not been discussed in any forum.

 

The Original Decision

 

It should be remembered that it was USP Council which decided (with the Fiji Government being party to the decision) that there were benefits to be obtained by siting theLawSchool inVanuatu. An important consideration was the Vanuatu Government’s commitment to provide the physical facilities, estimated to cost in excess of US$10 millions, but regionalism was also a factor.  Council perceived that with the decentralisation of USP facilities, the wider benefits of economic activity associated with staff and students incomes and expenditure (taxes etc), would be spread to other countries, providing more substance to the concept of USP’s regionalism.

 

It is therefore not reasonable for the Fiji Government or its funded organisations to withdraw support from the Law Programme inVila.  It would similarly be unreasonable if any other Government withdrew support from a USP programme, simply because it was sited inFiji.

 

The Hidden Costs

 

When the Council decision was made, it was acknowledged that there would be costs involved.  However, the costs were not fully outlined, and some probably not even discussed: costs to the Law Programme, to USP’s Member Governments, to the private students and, equally importantly, to the Vanuatu Government itself.

 

Costs to USP Member Governments

 

USP is going to considerable institutional expense to expedite the move of the Law Programme toVanuatu, where running costs will also be higher than inSuva.   For instance, there will need to be a bigger staffing establishment in Vila, since it will be more difficult to hire part-time staff for the courses, than if the programme had been in Suva (with its large cadre of legal professionals in Government and the private sector).

 

There are hidden future economic costs to USP as well, because of the impact on enrolments.  Of the 192 internal enrolments in the Law Programme in 1995, 143 were fromFiji.  Furthermore, more than 50 percent of the internal students were private students, whose numbers and fees are necessary to make this programme economically viable.  There will be a considerably higher costs for travel and lodging (to be borne by students or sponsors), than if the School was inSuva.

 

Undoubtedly, these higher costs will tend to reduce privateenrolments (both full-time and part-time) in the internal Law programme and thereby also reduce USP’s revenues from the special fee income (of $4,500 per student).

 

Given that the Law Programme requires a wide range of courses, staff, and teaching materials, it is relatively more expensive than the typical social science programme.  The unit cost of the Law Programme must therefore remain high, if enrolments do not rise as expected (in much the same way that USP’s School of Agriculture in Western Samoa now has unit costs which are as high as, or higher than those in Australia and NZ).

 

If enrolments go down because the Fiji Government also does not support law scholarships toVila, the entire programme may become economically unviable.

 

The financial burden of maintaining such unviable programmes (as with Agriculture in W.Samoa) falls on all Member Governments who fund USP, includingFiji andVanuatu.

 

Costs to Private Students

 

If USP were a private company setting up a supermarket, it would be expected to site its outlet close to the largest market. It would not be reasonable to site it in a remote area and expect ninety percent of the customers to bear the extra expense of travelling to the remote site in order to purchase goods.

 

Similarly, to site the Law Programme inVanuatufor other than economic reasons, and to ask the majority of students (and their sponsors) to bear the significant extra costs involved, cannot be reasonable.  It is even more unfair to the many who will be denied access to a law qualification because of an inability to pay the extra costs.

 

The burden is heavier for Indo-Fijian law students, who are denied access to scholarships, because of racially biased scholarship policies by the Fiji Government, and the strange erroneous conclusion by a Government-funded Ministry that the USP Vanuatu complex and the Law Programme there is not part of USP.

 

It would be an interesting exercise for the Law students involved (supported by their Law Faculty), to make a case to USP Council that the University should bear any extra costs which are unnecessarily created by a University decision which departs from economic efficiency principles.

 

However, theLawSchool move toVila becomes even more irrational, when it is realised that the ongoing costs toVanuatuare also going to be quite high, for relatively insignificant educational benefits.

 

The Hidden Costs to Vanuatu

 

Apart from national pride at having USP facilities on their territory,Vanuatu will no doubt benefit economically by having theLawSchool inVila.  However, there are major additional costs involved forVanuatu, in terms of payments to the Chinese Government and to USP itself.

 

The situation is unique in that the Vanuatu Government is using a loanfrom the Chinese Government to build the Law facilities, and this loan will eventually need to be paid back in international currency or in kind.  The annual principal repayment will easily be of the order of hundreds of thousands of dollars.

 

If the Chinese currency appreciates in future (as it is likely to do, given the enormous economic growth and development that is currently taking place inChina), thenVanuatu’s debt in local currency and resources will rise even more.

 

If the Vanuatu Government does not have the foreign exchange, then major demands will be placed on its natural resources, including timber and marine resources, possibly placing national conservation policies at risk.

 

Vanuatu already pays (without taking the Law School into account), almost a million dollars to USP’s budget.  Vanuatu’s normal budgetary payments to USP will also increase, because siting USP’s Law Programme in Vanuatu increases the amount of USP salaries paid on Vanuatu soil, and this increasesVanuatu’s share of the USP bill, through USP’s Funding Formula.

 

This extra payment is likely to be in excess of $100,000 per year, starting in 1997.  In much the same way, the Western Samoan Government probably pays an extra $600,000 for the siting of theSchool ofAgriculture and IRETA inWestern Samoa.

 

The loan repayments to the Chinese Government and extra payments to USP will eventually add in excess of $300,000 annually toVanuatu’s financial liabilities.  In 1995, there were only 2Vanuatustudents internally enrolled in the USP Law degree programme.

 

Is it worth it forVanuatuto be paying out an extra $300,000 per year or more, for the benefit of having an extra 3 or 10 students enrolled in the Law Programme (who will need to be paid for in any case?)

 

Better Alternative Uses for Vanuatu

 

Anyone who has studiedVanuatu’s education system will vouch that the most urgent problem is the gross inadequacy of qualified teachers in junior and senior secondary schools (and inadequacy of secondary classes and schools themselves).

 

Currently, only around 25 percent of the students pass Year 6 and 25 percent pass Year 10.  An extremely small fraction of their youth reach sixth form level, and an even smaller proportion (and number) will ever be in a position to take advantage of degree courses in law.

 

Vanuatu’s own secondary teacher training efforts are not particularly successful, even where massive funds have been injected through donor projects, with most being unsustainable because of the lack of qualified Ni-Vanuatu trainers.

 

It would be infinitely more useful for the Vanuatu Government to use whatever scarce resources they have (including teaching facilities built by low interest loans from donors such as the Chinese Government) to rapidly increase the supply of quality junior and senior secondary school teachers (and secondary schools).

 

What of the Future?

 

The Fiji Government is morally bound to support the Law Programme inVila, having been party to the Council decision made several years ago.  USP is similarly bound to implement the Council decision.

 

In the medium to long term, USP may wish to enlighten Council and the Vanuatu Government of the broader salient issues, only some of which have been discussed here.  Ultimately, the Vanuatu Government will need to make a decision.  But would USP Council refuse if the Vanuatu Government requested USP assistance to use their costly law facilities for turning out 50 teaching graduates a year, instead of 4 enormously expensive Ni-Vanuatu lawyers (who could be trained elsewhere anyway)?

 

But then, who would provide a new site and facilities for theUSPLawSchool?

 

[These are the views of Dr Wadan Narsey and not those of the University of the South Pacific where he is currently the Director of Planning and Development]

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