Monday, January 29, 2007

Oaxaca, Mexico: Juarez University shut down, again, and yet again..


Well, what is it this time? Friday, it was for a march led by the university's rector, Francisco Martínez Neri, (you remember him from here, and here, and here, and here, and here), in demand of 80 million pesos in additional money from the state government. Neri said that the university's budget is "a pittance". If one stops by the university to see all of the recently completed buildings and views the ongoing major construction projects, one justifiably could question that pittance description.

Today, Juarez University, as well as satellite campuses in Tehuantepec and Huajuapan, has been closed by the university's teachers union. It is demanding, among other things, bigger food baskets, the elimination of 200 non-union employees, land for housing and better health insurance. That is in addition, of course, to the 80 million pesos that the rector wants.

Relative to the food baskets: It is a common practise, and a popular one, in Mexico to give some portion of a worker's pay in the form of food. This is popular because the cost is deductible for the business and is non-taxable income for the employees. In most Mexican businesses, everybody up to and including the top executives receive a weekly food basket, called a "canasta básica". The rules are pretty strict. Everybody gets the the same sized "basket" and there is a limit to the value of the "basket", above which it is no longer deductible. In other words, the boss's "basket" can't contain champagne and a worker's "basket" mere beer. I italicize basket because it's not a real basket. It's usually a sack or box or, most common of all, coupons called "vales de dispensa" which are redeemable at all the grocery stores.

In any event, the rector wants more money and closes the university in demand of his money and the union wants more money and closes the university in demand of its money. With the university closed so often these days, why do they need more money? There is nobody there. But these people don't offfer any suggestions as to how to get that money. They have no ideas for generating any money. They don't proffer proposals for attracting investment or reducing expenses or cutting back here and there to save money.


There was a great article in Reforma or El Universal a few months ago which I can no longer find, in which a Mexican think tank warned the universities, from gigantic UNAM on down, that they had best start looking for ways to raise their own capital, ala the USA. Because of the clauses in the Mexican constitution guaranteeing free education to everyone, everyone has sat back and waited for the money to roll in. Most people think the constitution guarantees a higher education, but it does not. It only guarantees primary and secondary education. However, the historical subsidies paid to the universities have fostered this belief. When that money is not forthcoming, the students, the unions and the university officials all take to the streets.

The think tank suggested that Mexican universities begin to build their own endowment funds which they currently do not have. Try to imagine an American uninversity surviving without an endowment fund. Harvard's is the biggest, at 29.2 billion dollars as of June 30, 2006. That fund's return on investments through the first half of 2006 was more than 16% annualized. That's about 2.75 BILLION DOLLARS in new money added to the fund in 2006 alone. No one at Harvard will be marching in the streets demanding a bigger food basket.

Harvard may be a bad example because it is so big (19,500 students compared to UNAM's mere 155,000 students plus 105,000 high school students . . . ahem). Let's take another example. The endowment fund for tiny Grinnell College in Grinnell, Iowa, student body 1566, is about 1.4 billion dollars. And why does a small liberal arts school in Iowa have such a gigantic endowment fund? Because the school's founders and its administrations down through the years didn't sit on their butts waiting for money from the state or federal governments. They also didn't march in the streets demanding bigger food baskets. They went out and raised money. Their own money. Independent money.

UNAM recieves 90% of its funding from the government. Indiana University receives only 25% of its funding from the state. IU gets another 25% from tuitions paid by students and the rest it gets from endowments, endowment fund income generated by investments, gifts and the selling of its research services to the state, the federal government and private businesses and NGO's. (Crest toothpaste was developed at IU's school of dentistry. How many millions did the schoool get paid by Proctor & Gamble in licensing fees for the Crest recipe?) In other words, the university and its staff, students and teachers must earn half of the money they need to operate the university. That would be anathema to students and educators in Mexico if they were told they actually had to do some work to raise their own money. They'd burn down the universities first.

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