Wednesday, February 14, 2007

Human Capital Development in Moldova: A Chicken and Egg Problem

There is an interesting discussion on Sandu’s blog about the existing differences between the intellectual elite in the US and Moldova. In the US, and by extension, in the Western Europe, the academic and professional elite are open to change, inquisitive, simple and flexible. In Moldova, however the intelegentzia, including university professors and students, is arrogant, narrow-minded, mediocre and unproductive. Initially, I found the family and pre-university education system as being the main factors that can guarantee high quality professionals (technocrats) and academic elite.

However, if you look at this issue from a larger perspective, we can see a more relevant picture. First, Moldova is an underdeveloped country. Many problems that the Moldovan society and economy is currently facing stem from a very low level of human development. In this sense, a nation’s human development is much more than mere financial well-being of its individuals.

Human capital, as input in the production cycle of an economy, is attained through consumption of education services. The better the education services, the more developed the human capital. But human capital is only an input. In order to achieve high quality outputs, you actually need a functioning economy. A rapidly developing economy demands better human capital via a vibrant labor market.

It is easy to see how the quality of the human capital is directly determined by the quality and dynamics of the labor market. In order to ensure development of human capital, there must be a strong motivation for investment into development. People need to perceive a promise of reward for studying hard, exercising critical judgment and being creative and innovative. Without it, peole, being what they are, won't be able to achieve and develop much. In the West, people pay a high price (including in financial and personal effort terms) and demand high quality education because they know it will eventually pay back (both in financial and esteem terms).

In Moldova, however, such motivation does not exist. There is really no promise whatsoever that if you study hard in school or work conscientiously at your workplace, you will be rewarded in any way. The Moldovan employers rarely require candidates to have previously-attained academic or professional achievements. Rewards are distributed in a random and inconsistent manner, which perpetuates all types of insecurity. There are no question asked, no promises made, and no guarantees. People are on their own with their conscience, and we very well know of what human nature, when left unattended, is capable of.

Comments:

Anonymous , February 25, 2007  

eyjaxnHuman Capital and Education- facing crisis here. I'm here as part of economic aid to your education system from the US. It's a real quagmire. I was asked by a rector of one university if our government would offer him an award for being such a good partner to work with. That was during a meeting about the internet that has been disconnected for more than a month. I explained that actually we might be finding it difficult to work with that university and that we DO provide/award many donations of materials, salaries, technology, and scholars throughout the year. Perhaps he wanted a gold bracelet. The internet at our teacher resource center- serving teachers of schools and universitites in Chisinau and all regions- was disconnected weeks ago because the school's accountant didn't transfer the payment to Moldytelcom before the university acounts were frozen. The US Grant money for the year's internet is already in teh school's account. THAT's not the end of the boondoggle. The University's account was frozen because the national minister of finance hasn't approved the school's budget yet - perhaps our rector owes that man a gold bracelet? Someone else said that minister is ill. So is there no one else to work on budgets? One person in all Moldova? And does any of that have to do with teaching children or a high value on education? With all these greedy MEN in charge, I think you might be right about Moldova. I am just trying to work with the teachers who want to teach. There are many many of them. And they get paid less than the cost of a gold bracelet each month.

Anonymous , February 27, 2007  

So sad. And you sit back wondering just what sort of leaders will raise to positions of influence in this type of environment.