Oil and education don’t mix, OECD finds

School performance lags in countries rich in natural resources.

By DAVID ROSENBERG / THE MEDIA LINE
March 12, 2012 17:38
4 minute read.
Students sit for an exam in a school in Riyadh

Saudi Arabia students 390. (photo credit: REUTERS/Fahad Shadeed)

 
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The oil-rich countries of the Gulf are investing heavily in education to diversify their economies and build a workforce capable of competing in knowledge-intensive industries.

But a paper by the Organization for Economic Cooperation and Development (OECD) released on Monday has some bad news for them. Students in resource-rich economies nearly always underperform compared with their peers in countries where people have to study and work hard for a living.

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The OECD reached its conclusion after surveying the educational performance of students across 65 countries globally, measuring them with a standardized test called the Program for International Student Assessment (PISA). Looking at the Middle East, the paper compared PISA scores from 2009 by resource-poor Israel with the energy exporters Saudi Arabia, Qatar, Iran and the United Arab Emirates (UAE).

“As the Bible notes, 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,” Andreas Schleicher, special adviser on education policy to the OECD secretary-general and head of its Indicators and Analysis Division, said in an online comment.

Israel, which derives a tiny fraction of its gross domestic product from natural resources, scored a national average of 447 points on the mathematics PISA, the highest in the Middle East. By comparison, Saudi Arabia, which gets close to half its national income from energy extraction, scored close to the bottom of the 65 countries surveyed with an average of 336. Other energy exporters scored little better.

“One interpretation is that in countries with little in the way of natural resources -- other examples [besides Israel] are 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,” Schleicher said.

The Gulf oil exporters are wealthy, but they suffer from high unemployment and a lack of opportunities to start businesses or make careers in challenging, well-paid jobs. In Saudi Arabia, for instance, the jobless rate is in the double digits, with unemployment for people aged 20-24 estimated at four times the national average, even as the economy has been growing quickly, boosted by high oil prices. That has prompted the country to beef up its educational system, investing in multi-billion-dollar university campuses and luring world class researchers to shake up a primary school system focused on religious studies. Saudi Arabia’s $2.4 billion Tatweer education project, backed by King Abdullah, aims to form partnerships with international companies to develop an education industry, curricula, teacher training and technology intended to create so-called smart schools.

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In fact, United Nations Educational, Scientific and Cultural Organization (UNESCO) says the Arab world is one of the biggest spenders on educational globally. It estimates that the region is spending 4.89% of GDP on schooling, ahead of any other region of the world except North America and Western Europe. Resource-rich economies are widely acknowledged to be economically and socially less developed because their exports of oil and other mineral wealth undermine other industries. But Schleicher adds lazy students to the list of woes that easy income creates. Among oil exporters at the bottom of the class are Iran with a PISA score of 397, Kuwait 358 and Qatar 368. Only the UAE, at 421, breaks the 400 barrier.

“Many of the countries with below-average GDP succeeded to convert their national resources into physical capital and consumption today, but failed to convert these into the human capital that can generate the economic and social outcomes to sustain their future,” he writes.

Muhammad Faour, a senior associate the Carnegie Endowment for International Peace’s Middle East Center, said in a recent interview that most education systems in the Arab world have failed to prepare students to compete in the global economy. But he blamed the suppliers (the schools) rather than the consumers (the students).

“Teaching in most Arab states continues to be highly didactic, teacher-directed, and not conducive to fostering analytical free thinking,” he said in a Q&A published in December. “On top of that, Arab countries have a shortage of qualified teachers and most of those currently employed have relatively low salaries and limited opportunities for professional development.”

By contrast, Israel has spawned a world-class high technology sector and all seven of its universities ranked among the world’s top 500 in last year’s Academic Ranking of World Universities. But Israel’s laurels are wilted; its PISA scores lead the Middle East but are about average for the 65 countries surveyed by the OECD. It also faces the bittersweet prospect of easy, energy-generated wealth after the discovering of huge natural gas reserves off its Mediterranean coast.

In Israel’s favor, the government plans to divert much of its energy income into a sovereign wealth fund. Under a plan approved in principle by the cabinet in February, half of the state’s royalties from gas and oil will be deposited into a fund that will invest in foreign securities and spend profits in education and defense.

That kind of strategy, the OECD’s Schleicher said, is the key to enjoying natural resource wealth and ensuring the nation’s children do not coast through school. He noted in his paper that the few economies, among them Canada, Australia and Norway, where student performance and reliance on natural resources are both high, governments have deliberate policies of saving rather than spending the wealth.

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