By Stelios Orphanides
In 2015, the Cypriot government spent 5.7 per cent of its economic output on education compared to 4.7 per cent of the euro area average and got the lowest value-for-money, according to the Fiscal Council.
“Cyprus’s government expenditure on education as a percentage of gross domestic product (GDP) is among the top-three in the European Union and the highest in the euro area,” the Fiscal Council, a body tasked with monitoring fiscal policy to prevent fiscal derailment, said in its spring report released on Wednesday. “A much higher degree concerns staff earnings excluding retirement benefits”.
Excluding pension benefits, Cyprus spent 4.4 per cent of its economy in 2015 on salaries, compared to an average 3.1 per cent in the euro area, which translates into a ratio of 77 per cent of total government spending on education in Cyprus and 66 per cent in the euro area, according to the council. In other words, this means that only 1.3 per cent of GPD was allocated for investment in other areas such technology and infrastructure in Cyprus, compared to 1.6 per cent in the euro area.
Also in 2015, the Programme for International Students Assessment (PISA) of the Organisation of Economic Cooperation and Development showed that Cyprus was the worst performing among 17 countries of the euro area included in the survey that focused on student achievements in the areas of mathematics, science and reading.
Still, the ratio of government spending on education compared to the sum of overall spending on education, including that of the private sector, is the lowest in the EU, the Fiscal Council said adding that Cypriot households had to foot the bill for 25 per cent of overall spending on education in 2012, which is roughly two thirds more than the average in the EU “despite the very high government spending percentage”.
On top of that, Cyprus is included in a group of countries in which shadow education flourishes, which includes Greece, Indonesia, Lebanon, Nigeria and Russia, the council said citing reports prepared by the University of Cyprus and UNESCO.
The inefficient use education spending results in addition to a comparably low participation of workers in vocational training and to a low representation of graduates with degrees related to innovation, even as the share of total degree holders in the population is comparably high, the council said.