By Hema Senanayake –

Hema Senanayake

The whole nation was waiting for the final report of the Presidential Committee appointed to study and report proposals in resolving issues related to SAITM. The Presidential Committee so appointed has now handed over their eleven-page report to the president. The media has reported that president has received the report duly and has been studying it. Obviously, when reading the report, the president might be looking for specific proposals that might be possible in resolving the SAITM crisis soon. Believe it or not, president might have found that this report is the worst report of any Presidential Committee appointed so far.

How a highly educated team of professionals could compile such a useless report in regard to the resolution of the issues related to SAITM. I have no answer for this question. But I guess, when someone become prejudice in what he is believing in, naturally such thinking would reflect in what he is writing. Or else, the other possibility is that they themselves do not aware the basics of economics, business and public policy principles but, since the Presidential Committee comprised of  a team of highly qualified professionals, we cannot imagine that they do not know the said basics. However, their report has now disappointed the whole nation, including Dr. Neville Fernando, the Chairman of SAITM. Now, I should give evidence for my conclusion.

What we are interested most are about the possible solutions proposed to resolve the main issue: that issue being what we want to do with SAITM. The committee has reported its solution on pages 3 and 4.

The proposals mentioned in the section 3.1.1 and 3.1.2 are the most important. Let me quote those two:

“3.1 Matters related to ownership and management of SAITM

1. Abolish the current shareholding and management structure of SAITM; i.e., the for-profit entity owned and controlled by Dr Neville Fernando and family.

2. In its place, create a new entity that is not-for-profit with a broad-based ownership structure. The best option will be to collaborate with one or more already established educational institutions along with some amount of public participation. It may take the form of a Public-Private-Partnership (PPP). This entity should conform to the (to be introduced) Minimum Standards and other quality control measures with improved governance over a specified period of time.” (quote ends)

The above two are the main proposals and the rest of others are just details or additional points that can be resolved easily.

Basically, the above proposals are not practical and would not resolve any issue. Anybody, must review these two proposals subject to the primary policy conditions set forth under the section 3.0 of this report. It says that;

“The Committee is of the view that any solution proposed to resolve the current issues related to SAITM must be in accordance with the Government’s commitment to enable some level of non-state higher education, including in medical education. The solution must be equitable to all stakeholders and not be a financial burden on the Government. It must be transparently implementable and monitored independently. It must be financially viable at the earliest and sustainable in the long term.”

Again, please read it carefully. It says that the solution must be equitable to all stakeholders and not be a financial burden on the government. The Chairman of the committee is Dr. Harsha de Silva who has a Ph.D. in economics. Forget about other members of the committee. My question to Harsha is how he explains the mechanism of the conversion of SAITM into a not-for-profit organization while ensuring fairness to the investments made so far by Neville Fernando without making any financial burden on the government.

For the above question his business solution is to broad base the ownership mentioned in the report under 3.1.1. It means a certain portion of the equity that is held by Neville Fernando must be issued to new investors. So, there is a possibility that the new entity would be a one with broad-based ownership and not-for-profit organization. All is good in theory. But investors want to make money on their investment. No one would come and invest to buy equity in a not-for-profit entity. If Harsha thinks otherwise, then one day, we will be able to issue not-for-profit bonds in the future. Perhaps, people would come and invest in not-for-profit SAITM, if investors get tax exemption. In the event, such tax exemptions would be a financial burden on the government. In short this is not a practical solution.

The other point is that the committee says that the current issues related to SAITM must be in accordance with the Government’s commitment to enable some level of non-state higher education, including in medical education. Does non-state higher education mean private education? Yet it is not what it means subjected to the solution proposed? The solution is for not-for-profit medical education under SAITM. This intimates that when come to medical education non-state hinger education means that it allows the establishment of not-for-profit medical colleges only. This is one step back than GMOA stance. In fact, as far as I know the GMOA is not against the setup of private medical colleges (but some students are) with the proper approval of Sri Lanka Medical Council and with a proper admission procedure. But what they oppose is the unscrupulous process and efforts of SAITM which the SAITM tries to get its recognition from SLMC with the support of possibly corrupt politicians.

Politics is real. Under the given political environment, the policy should be simple. I guess the best policy must be to change the SAITM’s business model in short term and allow it to transform into a private medical college in the long term ensuring wider private capital accumulation in this important sector. Like the GMOA, medical students of government colleges and the public in general would come to this economic reality soon. Hoping that, let me explain a little further about my idea. 

Let us assume that SAITM recruits 300 hundred students per year. Out of this, SAITM might recruit 100 or 200 foreign students who pay for their education. This part would be for-profit and everybody would agree on it. Then, SAITM has to make a decision in short term to recruit the balance number of students with the approval of University Grant Commission. For a few batches, the cost would be capitalized and the education would be free for them and that is what the students want right now- free medical education. Perhaps, part of this cost may be the price the SAITM has to pay for operating without SLMC’s prior approval. However, it is the government’s responsibility to educate all stakeholders that total free education means lack of opportunities for our young generations. Still, if our students and parents were not convinced then SAITM could possibly operate as a medical college for foreign students only. If it happened then GOMA and SLMC have to justify as to why our students has to go to private medical colleges in foreign countries while having a private college in the country itself.

I invite Dr. Harsha to think about a solution in short term and long term ensuring the expansion of capital accumulation in this sector, in the medium to long run as I briefly explained above. Definitely, not-for-profit medical school is not the solution for the issue of SAITM even though the report claims that it must be noted that these recommendations have already been in-principle agreed upon by the representatives of the SLMC with whom the Committee met, upon much deliberation, as well as Dr Neville Fernando (Chairman, SAITM).