Education and Subsidies

An interesting article   by the author of “The World is Flat”,
for your reading pleasure. Helps to   explain the difference
between Singapore’s and Malaysia’s   development.



By THOMAS L.   FRIEDMAN
Published:   March 10, 2012
EVERY so often someone asks   me: “What’s your favorite country, other than your   own?”
     
Josh   Haner/The New York Times
Thomas   L. Friedman
I’ve always had the same answer:   Taiwan. “Taiwan ....
Why Taiwan?” people ask.
Very simple: Because Taiwan is a   barren rock in a typhoon-laden sea
with no natural resources to live off   of — it even has to import sand
and gravel from China for construction —   yet it has the fourth-largest
financial reserves in the world. Because   rather than digging in the
ground and mining whatever comes up, Taiwan has   mined its 23 million
people, their talent, energy and intelligence — men   and women. I always
tell my friends in Taiwan: “You’re the luckiest people   in the world.
How did you get so lucky? You have no oil, no iron ore, no   forests, no
diamonds, no gold, just a few small deposits of coal and   natural gas —
and because of that you developed the habits and culture of   honing your
people’s skills, which turns out to be the most valuable and   only truly
renewable resource in the world   today. How did you get so   lucky?”
That, at least, was my gut instinct.   But now we have proof.
A team from the Organization for   Economic Cooperation and
Development, or O.E.C.D., has just come out with   a fascinating little
study mapping the correlation between performance on   the Program for
International Student Assessment, or PISA, exam — which   every two
years tests math, science and reading comprehension skills of   15-year-olds
in 65 countries — and the total earnings on natural resources   as a percentage
of G.D.P. for each participating country. In short, how   well do your high
school kids do on math compared with how much oil you   pump or how
many diamonds you dig?
 The results indicated that there   was a “a significant negative relationship
between the money countries   extract from national resources and the
knowledge and skills of their high   school population,” said Andreas Schleicher,
who oversees the PISA exams   for the O.E.C.D. “This is a global pattern that
holds across 65 countries   that took part in the latest PISA assessment.” Oil
and PISA don’t mix.   (See the data map at: http://www.oecd.org/dataoecd/43/9/49881940.pdf.)
As the Bible notes, added Schleicher,   “Moses arduously led the Jews for 40
years through the desert — just to   bring them to the only country in the
Middle East that had no oil. But   Moses may have gotten it right, after all.
Today, Israel has one of the   most innovative economies, and its population
enjoys a standard of living   most of the oil-rich countries in the region are not
able to   offer.”
So hold the oil, and pass the books.   According to Schleicher, in the latest
PISA results, students in   Singapore, Finland, South Korea, Hong Kong and
Japan stand out as having   high PISA scores and few natural resources, while
Qatar and Kazakhstan   stand out as having the highest oil rents and the lowest
PISA scores.   (Saudi Arabia, Kuwait, Oman, Algeria, Bahrain, Iran and Syria
stood out   the same way in a similar 2007 Trends in International Mathematics
and   Science Study, or Timss, test, while, interestingly, students from Lebanon,  
Jordan and Turkey — also Middle East states with few natural resources —  
scored better.) Also lagging in recent PISA scores, though, were students   in
many of the resource-rich countries of Latin America, like Brazil,   Mexico
and Argentina. Africa was not tested. Canada, Australia and Norway,   also
countries with high levels of natural resources, still score well on   PISA, in
large part, argues Schleicher, because all three countries have   established
deliberate policies of saving and investing these resource   rents, and not just
consuming them.
Add it all up and the numbers say that   if you really want to know how a
country is going to do in the 21st   century, don’t count its oil reserves or
gold mines, count its highly   effective teachers, involved parents and
committed students. “Today’s   learning outcomes at school,” says Schleicher,
“are a powerful predictor   for the wealth and social outcomes that countries
will reap in the long   run.”
Economists have long known about   “Dutch disease,” which happens when
a country becomes so dependent on   exporting natural resources that its
currency soars in value and, as a   result, its domestic manufacturing gets
crushed as cheap imports flood in   and exports become too expensive.
What the PISA team is revealing is a   related disease: societies that get
addicted to their natural resources   seem to develop parents and young
people who lose some of the instincts,   habits and incentives for doing
homework and honing   skills.
By, contrast, says Schleicher, “in   countries with little in the way of
natural resources — Finland, Singapore   or Japan — education has
strong outcomes and a high status, at least in   part because the public
at large has understood that the country must live   by its knowledge
and skills and that these depend on the quality of   education. ... Every
parent and child in these countries knows that skills   will decide the life
chances of the child and nothing else is going to   rescue them, so they
build a whole culture and education system around   it.”
Or as my Indian-American friend K. R.   Sridhar, the founder of the
Silicon Valley fuel-cell company Bloom Energy,   likes to say, “When
you don’t have resources, you become   resourceful.”
That’s why the foreign countries with   the most companies listed on
the Nasdaq are Israel, China/Hong Kong,   Taiwan, India, South Korea
and Singapore — none of which can live off   natural resources.
But there is an important message for   the industrialized world in this
study, too. In these difficult economic   times, it is tempting to buttress
our own standards of living today by   incurring even greater financial
liabilities for the future. To be sure,   there is a role for stimulus in a
prolonged recession, but “the only   sustainable way is to grow our way
out by giving more people the knowledge   and skills to compete,
collaborate and connect in a way that drives our   countries forward,”
argues Schleicher.
In sum, says Schleicher, “knowledge   and skills have become the global
currency of 21st-century economies, but   there is no central bank that
prints this currency. Everyone has to decide   on their own how much
they will print.” Sure, it’s great to have oil, gas   and diamonds; they can
buy jobs. But they’ll weaken your society in the   long run unless they’re
used to build schools and a culture of lifelong   learning. “The thing that
will keep you moving forward,” says Schleicher,   is always “what you
bring to the table yourself.”