PTPTN student loan, Bersih 3.0, ‘Occupy Dataran’ …


The case for PTPTN to stay ….

Higher education is not a right but a privilege and the Government cannot provide subsidies for everything. And European countries famous for fully subsidising tertiary education are moving away from that system.

A PROPOSED overhaul in the way tertiary education is funded in our country has added to the number of causes being combined with Bersih 3.0 due tomorrow.

The suggestion is that the National Higher Education Fund Corporation (PTPTN), which provides loans to students pursuing their higher education, should be replaced by a fully subsidised system in which (most/all) students receive fully government-funded tertiary education.

PTPTN abolitionists charge that it is administratively inefficient and unfair to leave graduates with a mountain of debt, costly to the taxpayer because of low repayment rates (and subsequent costs of having to forcibly recover dues), and un-Islamic due to the charging of interest.

Though I was not a beneficiary of PTPTN, I routinely meet young people who are, through the education sub-committee of Yayasan Munarah, the royal foundation funded solely by private and corporate donations.

Since the start of our education fund last year, we have screened over a thousand applications for financial aid and I have personally interviewed hundreds of them at our office in Seremban.

Of the nearly RM500,000 disbursed so far, most cases involve the “topping up” of the amount students had already received from PTPTN, Mara and private sources.

In these 15-minute interviews, no student has ever complained about PTPTN; rather, the hardworking students often show gratitude to the fund, providing a contrast to the attitude of the Dataran Merdeka protesters.

What has impressed me in the denunciation of replacing a voluntary loan system with a compulsory subsidised system is that many commentators in the mainstream and alternative media object to the loss of individual responsibility that this will entail; young citizens will no longer feel that they owe anyone anything in exchange for the tuition, and this does not encourage responsible citizenship.

Higher education is not a right but a privilege, they say, and the Government cannot provide subsidies for everything.

Articles also point out that European countries famous for fully subsidising tertiary education are moving away from that system, though even so, those countries embedded competition between universities enabled by sponsoring students directly, rather than fully funding universities, so that a market mechanism is at work to reward the cleverest students and the best universities.

Indeed the potential impact of this proposal on our universities needs to be highlighted.

European universities possess much more autonomy than ours do – even if they are state-funded – allowing for areas of specialisation and different preferences to be accommodated.

Our public universities are not used to such competition, and may end up decomposing into a stultifying heap of monotonous, mediocre institutions unless autonomy is granted first.

The opposite approach is taken in the US, where universities are very independent and often expensive; but a deep tradition of alumni endowments for scholarships and bursaries enable academic merit to remain the main criteria of admission.

At the same time, one of the assumptions in effect in this whole debate is the idea that the primary purpose of tertiary education is to prepare one for a job that can pay back the cost of that education while contributing to national economic growth.

This offends the very principle of education for its own sake as well as the idea that the arts have merely an economic value.

I have long objected to Government attempts to engineer society by providing scholarships or loans for some subjects and not others.

If public money is being used to subsidise education, then it must grant every young Malaysian access to that money without discrimination.

I have met dozens of young Malaysians whose dreams of becoming historians or performers have been scuppered because they are discriminated against in favour of those who want to become doctors or engineers (tellingly, Aswara comes under the Culture Ministry, not the Higher Education Ministry).

The academic profile of the next generation of Malaysians should be shaped by their own preferences and perceptions of their futures, not by the dictate of someone with a crystal ball in Putrajaya.

If you agree that tertiary education funding should be designed to allow maximum freedom for students on the one hand to pursue the disciplines of their choosing without guilt, and institutions of higher learning on the other to compete amongst themselves – then it is more likely that this will be achieved by reviewing the current loan system (including repayment mechanisms), developing vocational options and granting much more autonomy to universities, including on financial matters.

> Tunku ’Abidin Muhriz is President of IDEAS.

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UK Banking Rules Risk Bank’s Future Market Value


Royal Bank of Scotland Group Plc may lose as much as 20 billion pounds ($32 billion) from its future market value because of planned U.K. regulatory changes, Chief Executive Officer Stephen Hester said.

The “regulatory environment has changed even more dramatically than we bargained for,” Hester said in the text of a speech at the Manchester Business School yesterday. “U.K. regulatory reforms on their own have probably cost 10 to 20 billion pounds from our future market value.”

The government-sponsored Independent Commission on Banking recommended in September the U.K.’s biggest banks should boost capital, implement plans for an orderly bankruptcy and erect fire breaks around their consumer units to boost the stability of the financial system.

The proposals also mean that banks will no longer be allowed to use their consumer units to provide cheap funding for investment-banking units.

Greater regulation is adding to a slower-than-expected economic recovery and turbulent markets, said Hester, 51. The British economy shrank in the first quarter as Britain slid into its first double-dip recession since the 1970s, figures from the Office for National Statistics showed.

“We can cope with these extra challenges, but they use up the outperformance we have achieved and they mean that our shareholders, indeed all bank shareholders, will see value recover less well than hoped,” he said.

Two More Years

The government was forced to rescue RBS at the height of the financial crisis, injecting 45.5 billion pounds of taxpayer money into the lender, making it the costliest bailout of any bank in the world. Hester said in the speech that the cost of cleaning up the lender he inherited from former CEO Fred Goodwin totals 43 billion pounds so far.

RBS still has two more years of “heavy lifting, significant clean-up costs and vulnerability to outside events” as it restructures its business, Hester said.

RBS fell 0.3 percent to 23.2 pence at the close of London trading yesterday. The shares have rallied 15 percent this year, boosting the Edinburgh-based lender’s market value to about 26 billion pounds. The U.K., which owns 82 percent of the lender, paid an average of 50.2 pence a share for its holding.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Fragile British economy enters double-dip recession


LONDON, April 25 (Xinhua) — Britain’s economy has fallen into double-dip recession after official figures showed its economy shrank in the first quarter this year.

The Office for National Statistics (ONS) said Britain’s gross domestic product (GDP) contracted 0.2 percent in the first three months 2012, meaning the country has slipped back into recession.

Technically, a recession occurs after two consecutive quarters of negative growth. The ONS figures said Britain’s GDP in the last quarter of 2011 dropped by 0.3 percent. Britain last experienced recession in 2009.

A HEAVY BLOW

The worse-than-expected economic growth figure has dealt a heavy blow for the ruling coalition led by Prime Minister David Cameron.

The prime minister and Finance Minister George Osborne were “very disappointed” at the figures.

Cameron said: “I don’t seek to excuse them. I don’t see to try to explain them away. There is no complacency at all in this government in dealing with what is a very tough situation that frankly has just got tougher.”

Osborne in his March budget forecast growth of 0.8 percent this year and 2 percent next year. In 2014, 2.7 percent was forecast, followed by 3 percent growth the following years.

The current 0.2 percent contraction in GDP is bad for the coalition government as it desperately seek to grow the economy and eliminate the country’s large budget deficit over the next five years.

The government is set to unveil new measures to further limit public spending as part of the government’s efforts to meet its austerity targets. Under the new rules, government departments will have to set aside 5 percent of their annual budget to cover unexpected expenses in a bid to discourage them from asking for more money from the central government when emergencies arise.

Osborne said: “It’s a very tough situation when you’re recovering from these enormous debts that Britain built up in the good years.”

Cameron added it was “painstaking, difficult” work, but the government world stick with its plans and do “everything we can” to generate growth.

Labor party leader Ed Milliband said the figures were catastrophic, blaming the government’s economic policies for landing the country back in recession.

A GLOOMY OUTLOOK

The latest data from the ONS is consistent with a report released by the OECD predicting the British economy would shrink in the first quarter of 2012, taking it back into recession.

Meanwhile, economists and research institutes have warned that Britain’s economy will continue to struggle with factors such as high inflation, rising unemployment and uncertainty in its exports market, which is strongly affected by eurozone debt.

According to the ONS, the recession was mainly driven by a sharp fall in construction sector, which contracted 3 percent and 0.2 percent in the last two quarters. At the same time, the manufacturing sector failed to return to growth.

The services sector, which accounts for a third of the economy, grew only 0.1 percent in the first quarter this year, after a decline of 0.1 percent in the previous quarter.

Production industries output also declined 0.4 percent in the first quarter of this year, and 1.3 percent in the previous quarter.

The latest report issued by the Ernst & Young Item Club said Britain’s jobless rate is forecast to rise to 9.3 percent in the middle of next year from the current 8.4 percent, with the number of those seeking work rising to almost 3 million.

Britain’s Consumer Price Index (CPI), a major gauge for inflation, will reach 2.8 percent this year and drop to 2.1 percent next year.

The country’s consumer spending power continued to deteriorate in March, dropping by 1.1 percent compared to a year earlier, reaching the lowest level since February 2011.- Xinhua

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