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How could we benefit from the American model?    - Daily News Egypt

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How could we benefit from the American model?   

Education, health, and public spending priorities 

I had the opportunity to participate with a limited group of activists in the Arab region within the International Visitor Leadership Program (IVLP) in the United States over the last three weeks to get to know the ruling system; the federal authorities; as well as states’, counties’, and cities’ public services. We held several meetings in Washington DC and a number of states with a lot of decision-makers, American officials, and experts.

I realised, like many others, that the American model of governance and management is so unique—notably its social structure and historical conditions—and it is very difficult to apply it to other countries for many reasons. However, we still can adopt many positive aspects of American life and liberal ruling principles and apply them to Arab societies (including the Egyptian one), all of which seek revival and renaissance. So I decided to write a series of articles highlighting the American experience and how we can benefit from it to make a real positive change in the Egyptian state. Perhaps this series can shed light on some beneficial factors for decision-makers and those interested in Egyptian public affairs.

The first article focuses on the priorities of public spending. It seems to be a dilemma in Egypt, in which all governments, ruling systems, and revolutions failed to install a system that achieves social justice, which Egyptians still urgently demand.

Actually, the change of public spending priorities requires the ruling political power to make its choices in favour of the majority of people, in a way that ensures efficiency in the management of state resources and the general budget.

The American model clearly tends to give priority to education and health sectors, out of a belief that the human being is the main development asset and target. This belief has by now become accepted across almost the whole world. It became clear in light of the experiences of many countries, that the only way to achieve change is to give the spending priority to those sectors; governments that decrease budgets allocated to education and health are bound to fail.

The government of each state has the responsibility of allocating its budget for education and health; managing counties and cities brings fewer burdens and responsibilities. The federal government has nothing to do with the education and health sectors, except in terms of federal laws (such as health insurance) or federal education grants. These sectors are financed by tax revenue, which is usually not low at all.

Georgia, for example, one of the richer states, has an annual budget of $65bn amd a population of about 10m people. Georgia spends about 54% of its budget on education, while the health sector takes more than 21% of its budget. It means that three-quarters of the state budget (about $49bn) are spent on education and health only.

Most of the education budget is directed to pre-university education, as more than 70% of the education budget is spent on basic education, compared to less than 30% on university education.

Despite the huge spending on education and health in Georgia, the reader will be surprised to know that Georgia ranked the 37th out of total 51 states in terms of spending on pre-university education, and the 47th in terms of spending on healthcare. It means that other states in America spend much more on these two sectors than Georgia.

Obviously, it would not be appropriate to compare the size of education and health budgets in the United States with Egypt’s, because the economic conditions and historical and administrative circumstances are quite different. However, we should wonder how we can be inspired by this model, taking into account all factors in Egypt.

The answer to this question is that we should immediately eliminate two illusions in Egypt. The first illusion is the necessity of providing state subsidies for everything, including gasoline for luxury cars, bread, drinking water, electricity, and transport. The second is the centralisation of financing and management of education and health sectors. After we get rid of these illusions, we can start to restructure the state budget and direct all the funds saved by cancelling food and services subsidies to education and health sectors. We should also develop the performance of education and health systems to become fully decentralised, in accordance with a general policy, and clear and specific performance indicators.

This suggestion can increase the education and health budgets in Egypt by two-and-a-half times at least, while the decentralisation approach would ensure sustainable development of both services and boost community participation in the development of educational and health institutions.

It is to be noted that the parallel spending on education and health by Egyptian families is actually more than government spending, including private lessons and treatment in private hospitals and clinics outside the health insurance umbrella. It means that citizens spend more money on pre-university education and health than the state subsidies of food commodities, transportation, and energy. So the vast majority of citizens would not oppose the restructure of the public spending priorities, on condition that the state provides guarantees to families that they will receive high-quality education and health services, and offers free university education and almost free healthcare.

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