Fair Education Game for Higher Employment Rate
24 October, 2013
Fair Education Game for Higher  Employment Rate
The Georgian private sector calls the state for fair redistribution of state support on education market between the higher and vocational education as well as the state-run and privately owned colleges in order to remedy the labor market skills and ultimately boost employment.
Recent report of International Monetary Fund predicted a 1.7% increase of unemployment rate in Georgia this year to 16.7%. Moreover, this indicator is expected to go up to 17.3% in 2014. Georgian business worries that the excessive
and inadequate state interference that kills competition at the private segment of Vocational Education and Training (VET) market is one of the factors undermining the employment level. It is a common knowledge that the quality of business activity and production is equivalent to labor force skills and VET is the key source raising the overwhelming majority of skilled workforce. Keeping this in mind, Georgian authorities address reforms in this sector and aim to enhance its involvement in private business. However, they neglect the opinion of the latter, as the entrepreneurs complain. No changes were made officially so far; however, possible estimation of additional regulations makes entrepreneurs nervous. The upcoming reforms in the VET sector and partnership between the state and business in this field were discussed at the 3rd International Conference of Private Education Institutions and Business on Vocational Education and Training held on 10 October 2013. Private sector complains that the state goes ahead with reforms without proper market research or consultation with business that may bring an irretrievable harm on labor market and economy eventually.
“We have always been interested in VET promotion and supported this sector as far as there is a serious gap in skilful workforce. However, what the authority intends to do now may have only negative impact on labor market. They define priorities and support programs without market research and allocate state budget resources only on the state colleges whereas they are simply stagnated, give no due skills to students and are not developing at all to respond to the real market demands, “Mikheil Kordzakhia, Vice President of Employers Association of Georgia, said in the interview to Georgian Journal. “On the one hand, this state support spent on state colleges is still scarce compared to the funding given to schools and higher education. On the other hand, the state withholds finances to privately owned colleges that raise proper personnel and in pursuance to the state donor organizations also shuns offering help to them.”
According to statistics, there are 16 state VET colleges and 4 middle level colleges against the 43 privately owned VET, and more than 20 higher education institutes and 12 schools. The total state funding to schools, colleges and higher education this year makes GEL 425.1 million, GEL19.7 million and GEL 129.2 million respectively however the trick is that if students get the state financing they are not allowed to take financing to private colleges.
“This is obvious discrimination if we take into consideration that it is business that pays taxes in the State budget whereas this money goes only to state colleges and students apparently prefer to go there. Three of pretty decent colleges have already been shut down as they could not bear competition with the State,” Kordzakhia elaborates. “And the problem is that the State obliges us to hire only the workforce certified by the colleges with the state accreditation while we actually prefer to hire people without official diplomas and retrain them at our discretion. This decreases the employment rate.”
Now the projected amendments envisage compelling business to participate in the financing of colleges. Business finds this burdensome and suggests introducing the funding scheme via special VET supporting Funds plus taxation preferences, in particular with the value added and income taxes.

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