"Knowledge is like light: weightless and intangible, it can easily travel the world... Poor countries – and poor people – differ from rich ones not only because they have less capital but also because they have less knowledge" (Knowledge for development. World Development Report. World Bank, Oxford University Press, NY, 1999). Knowledge goes as far back as to the time when our first ancestors began to modify simple objects for their personal convenience. Transmission of knowledge was (and in some parts of the world still is) an informal process based on the transmission of personal experiences. Learning how to use objects and how to modify objects and practices enabled humans to increase productivity and, over time, to attain higher standards of living. The transmission of knowledge from one generation to another is what education is all about. Little else has a similar power to influence where we are headed and who we are. The history of our civilization can be described in terms of the development and improvement of its education systems.

Our so-called "modern" world has attained unprecedented levels of material wealth and prosperity as a result of new technologies, which boil down to an accumulation of knowledge about how to modify objects and processes. Similarly, how far a country develops is greatly dependent on the performance of its education system. Vice versa, an individual’s capacity to advance up the social ladder greatly depends on his/her capacity to access education. The challenge of human development is the challenge of learning from past experiences, of transmitting this knowledge to our descendants and, thereby, attaining a permanent flow of education. Knowledge has the capacity to influence all strata of society and is an investment that does not depreciate with time. Figure 4.1 is an example of that.

Fig. 4.1. Infant Mortality and Real Income per Capita

Source: World Bank

Figure 4.1 conveys a fascinating message. Infant mortality depends only slightly on income and only for that segment of population below the poverty level. As knowledge spreads, infant mortality falls for rich and poor countries alike. In 1950, an income level of 10,000 US dollars was associated to an infant mortality rate of 40/thousand births. Forty-five years later, the same income level is associated to an infant mortality rate of 11/thousand births. This improvement is not just the result of new and expensive technologies (knowledge) available in rich western countries but also the result of simple rules and methods that increase the chances of a child’s survival at birth. Figure 4.2 shows the child mortality rate as a function of the educational attainment of the mother. The message is clear: child mortality falls as mothers learn.

Fig. 4.2. Child Mortality in Terms of the Mother’s Educational Attainment

Source: World Bank

Georgia has attained world-class levels of combined primary, secondary and tertiary education. The country’s education index (0.90) is comparable to countries in the "high human development" category (on the HDI). It is above the index of Singapore (0.86), Hong Kong (0.83), and Luxembourg (0.89) and only just below that of Greece’s (0.91). Nationwide surveys show almost an universal access to primary and secondary education and a high percentage of the population with higher educational degrees (Fig. 4.3). At the same time, however, there is little doubt that the Georgian education system needs serious improvement if it expects to sustain these remarkable enrollment figures in the long run. Deterioration in the quality of and access to education services constitutes a large barrier to long-term growth. Some of the most important reported factors hindering the performance of the education system are presented below:

1. The existing education system is unable to respond to demands imposed by the new market economy. "In the past, teachers were trained to deliver one curriculum that reflected a very positivist view of knowledge, where there was only one truth and that was contained in a single textbook. Students were seen as passive recipients whose main duty was to absorb all factual knowledge that the teacher presented during the lesson. A good student was one who could memorize and repeat the lesson. As a result of this model, a direct observation of Georgian classrooms today shows that regardless of grade, subject, region or urban/rural distinction a similar teaching pattern is followed" (Georgia - Education system realignment and strengthening program. World Bank, Washington DC.).

2. The continued absence of investment in infrastructure has caused major damage to schools throughout the country. The Ministry of Education reported that 70 percent of rural schools and 84 percent of urban schools need significant capital repair or outright reconstruction. According to the evaluation of the Social Investment Fund, the total bill for restoring school buildings could reach 200-250 million USD (The analysis of the situation of children school education in Georgia in 1998 - 1999. UNICEF Report, Tbilisi, 1999).

3. In tertiary education, students overwhelmingly report teaching that does not invite their input or feedback. Examination results are not always objectively assessed. Practices vary from patronage to bribery. University administrations do not collect and evaluate available data to support strategic planning and to monitor resource use. The existence, size, and budget absorption of different tertiary departments often does not reflect employment demand.

4. The efficiency of spending in kindergarten, primary, and secondary schools has been reported as very low for the period 1996-1998 (NHDR, 1999). Unfortunately, data for 1999 was not available. Based on previous findings, however, it is clear that unless resource management in the system of kindergarten, primary and secondary schools increases significantly, reforms in the education system are heading for failure.

Fig. 4.3. Stratification of Population According to the Education Census

Source: GORBI

The quality and quantity of data presented in the works of the World Bank, UNICEF NGOs and previous NHDRs is impressive and we refer the reader to these documents for a description of the problems affecting different components of the education sector. This year, the NHDR contributes to this body of literature by exploring the interrelation between access to education and advancement up the social ladder.

We will follow a similar structure as in Chapter Three and begin with a description of public expenditures on education as a share of GDP. Figure 4.4 shows that Georgia is not only behind the average of countries in Latin America, Middle Orient and Africa but also behind low income states. Figure 4.4 also shows that public spending on education does not exclusively depend on the country’s income level. Rather, other factors, such as countries’ priorities appear to affect total resources allocated.

Source: World Bank; 1999 State Budget of Georgia; Budgetary Office of Parliament.

Figure 4.5 shows public expenditure on education from the 1995-1999 State Budgets in USD equivalent. It can be observed that since 1997, budgetary allocations have been decreasing steadily and that in 1999 were less than 15 million USD, approaching in real terms the levels of 1996.

 
Fig. 4.5. Public Expenditures on Education from the 1995-1999 State Budgets

Source: own calculations based on data from the World Bank, the 1999 State Budget of Georgia,
and the Budgetary Office of Parliament.

The result of these low levels of spending are easily noticed in the form of appalling conditions of schools, lack of minimal supplies, salaries below the poverty line, salary arrears and a general low morale among teachers. In addition, the state’s inability to contribute minimal levels of financing to public education has provided fertile ground for an informal payment system to develop by which Georgian householders cover a considerable share of the education budget directly from their own pocket. These out-of-pocket payments can be classified into several categories:

1. Semi-legal fees for buying wood in rural schools and kerosene in urban schools for heating;

2. Legal fees in grades 10-12 of secondary schools;

3. Informal payments for additional training of students (see below);

4. Official fees in private secondary schools and tertiary education institutions; and

5. Bribes.

Out-of-pocket expenditures in education appear to be a sensitive issue for most Georgian households. That 78 percent of respondents refused to answer questions concerning the amount of their monthly spending on education purposes is revealing (GORBI household survey of Georgia, Final Report, Tbilisi, July 2000). Figure 4.6 shows personal spending on education for the fraction of households that agreed to report its educational expenses. Based on this data, a household’s average monthly spending is about 34.77 GEL. The extrapolation of this figure should be done with extreme caution but should this reflect average spending, overall out-of-pocket education expenses in 2000 would be as much as 476.7 million GEL (243.2 million USD according to the current exchange rate) or 16.21 times over the corresponding public expenditures from the 1999 state budget.

Fig. 4.6. Monthly Spending on Education of Georgian Householders

Source: GORBI

The poor conditions of schools and the impressive informality of the private payments system in primary and secondary institutions, however, have not yet impacted enrollment and graduation ratios (Table 4.1). The data shows that about 95 percent of pupils enrolled in primary schools graduated from them seven years later. Out of this total, 97 percent entered I level secondary school and approximately 96 percent of these students managed to graduate. At this point, there is a significant drop in enrollment as only 58.84 percent of those that graduated from I level continued to II level secondary schools. About 88 percent of students that enrolled in II level secondary schools completed their studies and obtained their diploma (Fig. 4.7).

Table 4.1: Enrollment of Pupils in Primary and Secondary Schools in the 1998-1999 Academic Year

Source: Ministry of Education; UNICEF

Fig. 4.7. Enrollment/Graduation Ratio in Georgian Schools

Source: Ministry of Education; Ministry of Finance; UNICEF

There are several factors that explain these variations in enrollments from primary to secondary school. The good enrollment ratios in primary schools and I level secondary schools are a Georgian tradition. The overall Georgian population, regardless of its national or social origin, considers education an indispensable attribute and does whatever is within its means to access education for their children. One can note that the percentage of students graduating from primary and secondary schools is very high. Exams and other requisites do not constitute serious impediments for graduation and, in fact, only those students who have some health problems or those who are arrested withdraw or leave schools (The state provides some facilitates for impaired students. according to official data from the Ministry of education, in addition to state-run orphanages Georgia prossesses the following special schools for disabled students: one for the blind, one for those with limited eyesight, two for the deaf, one for those with limited hearing, one for those with cerebal paralysis, one for those with spinal curvature, one for asthmatics, one for those in need of speech therapy, one for those suffering from gastic diseases, and eight auxiliary schools).

Only those students who have lost any hope of entering a university stop education after graduating from I level secondary schools. This is due to a number of different reasons, but is first and foremost financial. The diploma obtained at the end of the II level of secondary school is perceived to have no social function other than to allow access to higher education. This diploma, as well as those from vocational institutions, gives minuscule, if any, advantages in searching for a job. In fact, our own surveys among potential employers suggest that, as a rule, employers divide the population into three main categories: (i) those who have higher education, (ii) skilled workers and technicians (here a formal diploma is unimportant) and (iii) unskilled personnel (On this count, foreign investors do not differ much from Georgians. For instance, a large foreign-qwned company operating in the energy sector in tbilisi often prefers to hire unskilled personnel (and does not ask them to provide any diploma) and afterward to provide them with profrssional training. Managers of such enterprises consider that most skilled workers and technicians are difficult to retrain and are prone to corrupt practices). Correspondingly, almost all young people who enroll in the II level of secondary school hopes to enter a university or, in the worst case scenario, any other private higher institution.

Tertiary education constitutes the big prize for the average Georgian citizen because traditionally it is associated with opening up doors to higher social layers. This perception goes back in time. At the beginning of the XIX century, after conquering Georgia, the Russian administration closed all Georgian educational institutions and founded Russian schools. It was only in the 1830s (after series of public protests and pressure) that four-year term primary Georgian schools and Russian gymnasiums were opened. The ensuing process of Georgianifying the education system resulted in its first important victory in 1918, when, after independence was declared, the State Georgian University was founded. Its students and professors were considered to be the best representatives of the nation regardless of their social origin. After the Red Army invaded Georgia, the university’s initial celebrations were short-lived as the university was soon to become the target of the same Stalinist repression that so decimated the ranks of intellectuals. By the 1930s, the purges had been so thoroughly carried out as to result in worryingly low levels of highly educated people. This, in turn, obligated communist leaders to react. First, by opening the doors of higher institutions to a vast mass of the population (correspondingly decreasing demands for knowledge). And, second, by creating a system of privileges for students and professors that included high salaries, access to better living conditions, the possibility to buy goods in the so-called "closed" stores and, most importantly, to avoid universal military service (even during the Second World War).

Those within the higher education system continued to receive significant privileges and perks until the 1960s when the number of students in tertiary institutions had increased to acceptable levels, giving the communist authorities fewer reasons to maintain the generous incentives for people to access universities. At the same time, the incentives became unnecessary as the number of applicants sharply increased. This was a consequence of the decision to increase Tbilisi’s population to over 1 million, in order to benefit from the substantial differences in material allowances given by Moscow to big urban centers. Other urban settlements were similarly expanded. This policy changed the ratio between the urban and rural population and created an accessibility problem to universities and institutes. Although demand for higher education increased significantly, no new universities or institutes were built. Competition at entrance exams became tough.

In turn, the tougher exams meant applicants had to acquire a greater knowledge about the subjects being examined. It wasn’t long before the Georgian school system proved unable to provide such a level of education. The spin-off from the unmet demand for the additional knowledge required to access higher education was an illegal system of tutors, mainly professors from universities, who managed to compensate the cancelled benefits by supplementing their salaries with a shadow income. The payments system to private tutors also created a parallel system of payments from tutors to members of examination committees. Each tutor had a high incentive to ensure a high percentage of their applicants were successful in sitting the university entrance exams. Connections and chains of obligations were used to open up back doors to universities. Thus competition between applicants was not limited to the domain of knowledge but also included the domain of personal relations. In the 1970s, Mr. Edward Shevardnadze dealt this system a heavy blow as part of his campaign against corruption. However, the system has proved to be remarkably resilient and is still and well alive today.

A big casualty from this informal system of tutors and payments at universities was the social prestige of secondary school education and, consequently, that of teachers. This remains very low because neither the secondary schools nor the teachers determine the accessibility of higher education. Another group badly affected was the considerable segment of the population that did not have the means to afford these informal payments. Our own research suggests that the sums paid are not trivial and involve a transfer of out-of-pocket spending from the secondary education system to private coaches at universities. The estimated number of youths that use private tutors every year is twice that of students enrolled in universities. On average, these potential entrants take training in three or four disciplines and the yearly fees paid to coaches are substantial. For instance, annual costs of training in Georgian Language and Literature can equal 600 USD, in Justice and Social Sciences - 800 USD, in Geography and History - 500 USD, in Mathematics, Physics, Chemistry, Biology - 600 USD and so on. A committed applicant can spend from 2,000 up to 3,000 USD for a thorough training.

Figure 4.8 contains information on competition at entrance exams in Tbilisi State University for no-fee education. More than 1,700 new students have enrolled in addition to more than 800 in departments that charge between 400 to 600 USD for annual education.

Source: Tbilisi State University

Figure 4.8 shows that the most prestigious subject is, without a doubt, Law and International Relations. This is followed by Economics and Trade, Human Sciences, Foreign Languages, and, surprisingly, Journalism. Demand for, as well as the social prestige of, the hard core sciences has fallen. It is interesting to note that the demand for Business Administration is still relatively weak, which suggests that youths do not seem to associate education in business management with an increased chance of being a successful businessman. We will elaborate more on this issue in the next chapter.

The competition for entrance in prestigious departments does not appear to be in relation with the market demand for their graduates. For instance, the Department of Law at Tbilisi State University has a yearly quota of about 95 state-funded (With free education) and 70 fee-based students for international relations. We are concerned that in the medium term Georgia will face an "overproduction" of those Juris Bachelors and Masters as we observed an overproduction of physicians and biologists in the late 1980s. The same can be seen in medical state and private higher institutions, including Tbilisi State University and the State Medical Institute. Each year, the system of medical schools grants medical Diplomas to about 3,000 youths, whereas the Georgian medical system needs no more than 300 young physicians per year.

In general terms, the overall access of Georgian youth to the primary and secondary school system has been shown to be good and this is reflected in the indices for combined primary and secondary enrollment. Primary and I level secondary education are almost universal and show remarkably high graduation ratios. We are concerned, however, with the quality of education provided to youth and we hope that the reforms to the education system, which include teacher examinations, will show the planned and desired results. In addition, the purpose of the II level of secondary schools must serve other more productive ends than being a mere formal springboard to access tertiary education. Students only invest in these two final years of secondary education to access a prestigious department at prestigious institutions with Tbilisi State University topping the polls. Those turned away try the Kutaisi and Batumi institutes, including the commercial ones. The most unfortunate ones try to obtain a higher education diploma as a sort of consolation prize for their investment of time and energy.

The need for attaining not only good quantities of students enrolled but also a good quality of education provided has apparently been well understood by the Georgian Government and the Parliament. Both recognize that there is a need to define the objectives at each education level in view of the demand of the market and society. The Government has taken the first steps to address this issue. There has been the development of a new Minimum Content Curriculum Standards for basic education. The new "Law on Education", which was adopted in 1997, envisages (starting from 2001) the introduction of external assessments at the end of grades 6, 9 and future grade 12 in order to grant certificates at the end of each cycle. The most far-reaching provision of this Law is that the grade 12 exam would replace university entrance exams. We agree with the project’s authors that such measures can finally break the vicious system of informal applicant training and corruption at entrance exams. At it stands today, access to universities is restricted and biased toward those in the higher income brackets or those with the right social connections.

However, the replacement of entrance exams at universities by grade 12 exams must be accompanied by a substantial revamp of the quality of learning provided at the first and secondary school stage. Otherwise another informal system of tutors will develop in the secondary education system. In this regard, we applaud an initiative by the Georgian Government aimed at improving the quality and relevance of general secondary education. Phase I of this project has begun to develop the policies and institutional framework required to effectively realign the system of educational objectives, to develop local capacity at government levels to meet those objectives and to manage the physical, financial and human resources in the education system more equitably and efficiently. Georgia is investing a heavy sum in this project in the form of a 60.06 million USD loan provided by the World Bank.

Loans have to be repaid sometime in the future. Thus the effective implementation of the agreed policies is of utmost importance. Otherwise the result will be merely a wealth of expensive documents and plans for which the Georgian people will have to pay sooner or later. In addition to the reforms, which we consider of critical importance, the effective implementation of public educational policy will require an increase in the low budgetary allocation to the schooling system. The state cannot escape its obligation of providing a critical mass of financial resources to the public education system. As long as teachers’ salaries remain well below the poverty line and as long as salary arrears continue to exist, the best and brightest will leave for better paid professions. Quality will suffer. The incentives for a private system of tutors at secondary schools will remain very much alive. Not long after that, the vices observed at the entrance exams in tertiary institutions will find fertile ground in the system of secondary schools. In a similar vein, as long as the infrastructure in public schools continues to fall apart, and as long as the state is unable to provide minimal educational materials and supplies, the morale of those in charge of preparing our youth to meet the challenges of modern life will remain unsurprisingly low.