Page 33 - IB August 2020

Opinion Opinion

To have a better handle on how to view the kind of institu- the Asian Development Bank (ADB) was extending to the uni-
tion USP is going to become in the future, it is prudent to versity at the time. The line of credit to an institution instead
revert to basics: to subject the institution, as it exists today, of member government was innovative then. But there was
to the regionality tests. more. ADB was willing to extend funding of mixed terms, soft
But, first, if USP was promoted as a regional good in 1968, a loans including grants and the prospects of convertibility of
more suitable nomenclature should have been suggested after loans to grants.
2000 - as a ‘subregional good’ since not all PIF members have The funding arrangement speaks volumes of the university
ownership of the university. The ‘regional good’ label however and its creditworthiness. This is likely to be pivotal in deter-
persisted. mining the direction USP may take, if and when the politics of
Under the market test, it can be noted that whilst the the sub-regional institution necessitates taking a new turn.
market may not initiate another sub-regional university in The duplication test needs qualification. There may not
the foreseeable future, the market however is initiating and be another sub-regional university in the region; and this box
has initiated a number of national universities in the region. can be ticked. However, the growth of national universities is
These national universities are essentially aimed at servic- likely to cast shadows on the finances and feasibility of sub-
ing the national demand for tertiary education. Over time, regional USP that may test its creditworthiness.
however, they are likely to adversely impact the demand for USP might have passed PIF’s subsidiarity test in 1968. But
places at USP in some areas of that is history. The growth of
study. That is likely to undermine national universities since then,
the economic and financial feasibil- as pointed out above, and despite
ity of USP. “ADB was willing to extend fund- their differences in their respec-
As regards sovereignty test, it ing of mixed terms, soft loans tive offerings of courses, can still
is noted that the recent USP saga including grants and the prospects contribute to USP’s unsustainabil-
can be justifiably explained by ity. That will be added food for
the feeling of relative ineffective of convertibility of loans to grants. thought for taking a new turn.
sovereignty that owners of the uni- The funding arrangement speaks Whither thou shall turn? From
versity, apart from Fiji, have over volumes of the university and its the regionality tests above, there
the institution. Fiji’s actions in the is the proposition that because
saga, seen by the other owners of creditworthiness. This is likely to USP does not tick all the boxes,
the university, as breaches of good be pivotal in determining the di- there may have been fortuitous
governance, are initiatives that are rection USP may take, if and when structural and functional trans-
difficult just to wish away. These formations of the institution over
can all be understood, but not nec- the politics of the sub-regional time. Therefore, the reference
essarily appreciated nor condoned, institution necessitates taking a above to USP as being a quasi-
through the political economy con- new turn.” public good was transitional and
siderations of inter alia, dominant time specific. After the USP saga
budgetary contributions to the of recent days, the transformation
institution. If another USP owner may have been re-energised.
was in the same position as Fiji, The prospect of USP being clas-
the political economy considerations are still likely to apply. sified as a ‘club good’ may already have been reached. That
USP can tick the regionalism test, even if it is a sub-re- is, whilst USP – the tertiary education provider - does not
gional good. It meets a number of criteria listed thereunder, dwindle in supply as students consume it, it may however be
e.g. realisation of economies of scale. It can also tick the already excluding some students due to congestion.
benefit test. I mentioned above gains in capacity building and Such a reformulation of the university may not necessar-
regional integration. ily hasten big changes in the immediate terms. However, the
USP would fail the political oversight test – USP being mix of political economy considerations and ‘club’ myopia,
a Council of Regional Organisations of the Pacific (CROP) intricately laced with local-level geopolitics, may just trigger
agency. Thus, it has its own governance structure. PIF Lead- nuances that may further undermine USP’s regionality that
ers, therefore have no scope in regulating the university. That will cast a long shadow at Pacific regionalism.
is the jurisdiction of the USP Council.
In terms of a risk and sustainability test, USP is likely to editor@islandsbusiness.com
get mixed results. The recent saga at the university and all
it connotes is a downside. Its implementation plan, however, The author is a former Fijian Ambassador and Foreign Minis-
has ensured over fifty years of successful existence. In terms ter and runs his own consultancy company in Suva, Fiji.
of funding, USP has developed a number of options. The 2015
report mentioned above noted the special line of funding that

Islands Business, August 2020 33