Romania risks loosing EUR 12 to 17 billion by 2025 if it doesn’t invest in education

UNICEF on Monday released “The Cost of Insufficient Investment in Romanian Education” study, conducted in collaboration with the Ministry of National Education (MEN). The report shows that, if costs of education in Romania will not gradually increase by 6 per cent of the Gross Domestic Product (GDP) over the next ten years, the GDP will drop by EUR 12 to 17 billion by 2025. These will be losses caused mostly by the fact that people who don’t go to school become subsequently dependent on social welfare to a greater extent than the educated ones. Thus, Romania will be losing EUR 17 billion over the next ten years, if it won’t increase the expenses on education to 6 per cent of the GDP.

An extra year of schooling increases earnings by 8-9 per cent, reduces the risk of becoming unemployed by 8 per cent and the occurrence of serious health problems by 8.2 percent. The upper secondary education graduates earn by 25-31 per cent more than those who have completed primary and secondary education. The earnings obtained by individuals who complete college exceed by nearly 67 per cent those of students who drop out school after completing the upper secondary education,” results from the study.

On the other hand, the experts who effectuated the report are pointing out that it is not enough to spend more money, as there are needed “smart investments” and a careful analyzing of the way the additional funds are allotted to different levels of education, in order to achieve similar results to those in Latvia and Hungary, for instance.

Also, the increase of expenses regarding education is essential in terms of achieving the EU 2020 targets, because in this way Romania could have in 2025 an economic framework comparable to the current average in Eastern Europe, which is best reflected by Latvia.

Attending the report launching event, the Minister of Education, Remus Pricopie, said that “the first thing I will be doing is take the report and go to the Ministry of Finance to have a cup of tea there and take a look over it. And I believe that, little by little, a culture of education financing will be created.” Pricopie refused to mention though what will the 2015 education budget be, saying that “the 2015 budget is however a bit more complicated, because we shouldn’t forget that social security contributions have decreased, so this means an impact on the 2015 budget.”

Pricopie also said he is“optimistic that the 2015 budget will be a positive one and that in a few years we will be able to reach 6 per cent of the GDP, including also the private costs, as calculated in fact in any other country.”

Asked about the goal with which he will be going to the Ministry of Education and about how much of the GDP will be spent in 2015, the Minister of Education refused to provide an answer: “The 2015 budget – I already had a discussion last week, actually I understand that all the ministries passed by the Ministry of Finance. Generally, the budget is outlined, it is increased, just as happened in 2013. The 2015 budget is still a bit more complicated, because we should not forget that the social security contributions have decreased, so that means an impact on the 2015 budget and we are raising the teachers’ wages in 2015 in two installments, 5 per cent starting March 1^st and 5 per cent before the beginning of the scholar year.”

Pricopie announced that in 2015, teachers will be paid from structural funds for their activities in organizing the evaluations at the end of the II, IV, VI grades, the Baccalaureate exam simulations (XI and XII grades), the National Evaluation exam simulation (VIII grade), and the actual exams. “We had money for these every year in the national budget, only this time we take money from the national budget, we add to it structural funds and we create a special fund for examinations and evaluations. As an order of volume: if today we have around 30 million for national evaluation and baccalaureate, I hope next year to have nearly 200 million for all the evaluations: II, IV, VI grades, simulations and tests. And for this we will probably also need a legislative addition because these evaluations and simulations are today part of the teachers’ duties. So we will have to take them out of there in order to be funded separately,” said the Minister of National Education.

Pricopie noted, however, that “these days we are to decide if the money foreseen by court decisions for 2015 will be awarded in 2014 – and then it will be a significant amount, more than EUR 1 billion 300.000 that can be allotted in 2015 or in 2014.”

The Minister of Education talked on Monday also about the introduction of a loaning system for students, as an example of social policy in the Romanian higher education. The current universities’ funding model “acts so that the money goes to students who come from wealthy families,” said Remus Pricopie. He announced that “the introduction of a system, for example, of student loans could balance this disparity,” adding that “those who come from disadvantaged social environments or those who fail to get a job right after college are not obliged to pay back the money.”

According to the report, Romania ranks the last position in the European Union in terms of investments made in education.