Education spending lags behind economic boom

Public spending on education (2.1 percent of the total wealth created in Macau) is far behind the average for the OECD countries (European Union members and the US) which is of 5.2 percent

Public spending on education has failed to keep up with Macau’s economic growth. In addition, the share of wealth channelled towards education is one of the lowest in the Asia-Pacific region, an international report shows.
In 2010, the government spent almost MOP 4.5 billion on education, but this figure is less than 2.1 percent of the total wealth created in the territory – known as Gross Domestic Product (GDP) – which reached MOP 217.3 billion.
According to the ‘Society at a Glance Asia/Pacific’ overview released by the Organisation for Economic Cooperation and Development (OECD) last month, the GDP share invested on this sector has dropped from 2.5 percent in 2009.
Perhaps even more worrying, during the last decade this figure has fallen to almost half, the report shows. In 2000, the first full year since the handover, the government spent 3.7 percent of the GDP on education.
As of yet there are no figures available for last year. But the 2011 public budget set aside a slice of MOP 8.5 billion for education. Although this is five times higher than the MOP 1.7 billion share in the 2000 budget, education spending lags far behind economic growth.
During the same period Macau’s economy has soared from just MOP 49.8 billion at the beginning of the 21st century to MOP 207.6 billion, just for the first three quarters of last year.
The numbers are much more positive when it comes to the share of the public budget that is spent on education, which was at 10.1 percent in 2010. However, even this represents a decrease from previous years.
In fact the budget portion for this sector has been decreasing consecutively since 2007, when it was up at 16.2 percent.
Last year’s budget, though, promised a rebound as education spending accounted for 12.4 percent. But the 2012 budget, approved at the Legislative Assembly, again sees this sector’s share reduced to just 10.8 percent.

Low ranking

“Education spending represents society’s response to providing its children with the social and economic skills needed to be self-sufficient in life,” the OECD report stresses.
And public education spending as a share of GDP “differs greatly across the Asia/Pacific region”.
“There is no link between GDP per capita and public expenditure on education,” the overview adds.

A big part of the population is now aged between 55 and 64 years and Macau’s birth rate, even though it has picked up in the last few years, is still too low to balance the big number of people reaching retirement

Although Macau has one of the highest GDP per capita in the world, MOP 414,444 in 2010, that is not reflected in education investment.
In fact, only three countries in the region – mainland China and Azerbaijan (1.9 percent), Cambodia (1.6 percent) and Myanmar (1.3 percent) – spend a smaller share of its GDP on public education spending.
The 2.1 percent figure registered in the MSAR is about a quarter of the investment made by Maldives, 8.1 percent, which takes up the first spot of the ranking. East Timor comes second with 7.1 percent, followed by Kyrgyzstan with 6.6 percent.
The territory is also far behind other developed countries. For instance New Zealand spends 6.2 percent of its GPD on education, while the average for the OECD countries – which include the European Union members and the US – is of 5.2 percent. Even in neighbouring Hong Kong the investment is higher at 3.3 percent.

Few children

The OECD report also confirms Macau’s worrying aging trend, as the territory has the second lowest fertility rate in the Asia/Pacific region.
The MSAR currently has the second best demographic profile in the world, only behind Qatar, as the working age population is far greater than the number of dependents, which include children and elderly people.
The preliminary results of the 2011 census show that an increase in the number of immigrants and non-resident workers has been the main factor. In fact, Macau is the regional territory with the highest percentage of people born outside, 57 percent.
But the situation could change dramatically in the next few years. A big part of the population is now aged between 55 and 64 years and Macau’s birth rate, even though it has picked up in the last few years, is still too low to balance the big number of people reaching retirement.
In 2010 the territory had 1.1 births per woman, far below the 2.1-births rate necessary to keep the population at a steady level. This figure is actually an improvement from the 0.8 births per woman registered in 2002.
According to the OECD overview, Macau has managed to overtake Hong Kong (1-birth per woman) but is still far away from the Asia/Pacific average of 2.5 births.
“Fertility rates tend to be much lower in richer countries and economies,” the report acknowledges. “There is a negative correlation between GDP per capita and births per woman.”
“Improvements in human development, such as higher health care expenditure, improved life expectancy, reduced mortality and increased female education and labour force participation play an essential role in reducing fertility rates,” the document adds.
One other factor might be the low number of people who get married in Macau. In 2008 only five out of every 1,000 inhabitants decided to marry.
This is the second lowest figure in the region, just better than Samoa, as well as a far cry from the situation in mainland China, where 79 percent of the adult population is currently married.