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May 4, 2020

Private schools and you

Opinion

May 4, 2020

Much applause and many complaints are on display for the government’s response to Covid-19 thus far. This is to be expected. But an area that is not being focused on is what the private sector has to offer in these dire times.

It is the government’s duty to protect the citizenry. And while it is no obligation of the private sector, perhaps they should stand a bit taller than they are at present. One group that can afford to stand especially tall is Punjab’s increasingly privatized education sector.

The last decade has been kind to private education in Punjab. The number of private schools has ballooned in the thousands and now rivals the public sector’s 50,000 plus number. The most expensive private schools subscribe to Ray Kroc’s model of McDonalds-style franchising and enjoy massive profits. When confronted with angry parents, government officials, and the Supreme Court that respectively request, tell and order them to be more open-hearted to issues such as school fee increases, they entrench themselves in courts via legal battles. Some refuse to comply until, as a matter of law, they absolutely have to.

See how their opinion measures up to this one. A school fee increase cap issue, originating from the joint frustration of parents in 2015, was remarked upon in 2019 by Justice Ijaz-ul-Ahsan: “By starting with one school, the owners have 100 schools in different cities. Despite the cap of five percent, the profits of some schools are 30-40 percent. [The] average return equity of every school is amazing….”

It is not illegal to run a profitable business. Fee hikes for the sake of fee hikes may cause parents consternation that, to these schools, their child seems more a commodity to be accurately priced than the spark of learning brimming with potential promised them in glossy brochures slathered in so many SAT words that they would make an English Major blush.

But schools were not penalized till this government chose to make great strides towards enforcing the Supreme Court’s ruling. It is one thing to profit from the sweat of one’s brow. It is another to use market forces to corner consumers, clients, and children. Schools should be aware that Competition Commission laws are not kind, neither to monopolies nor monopolists.

The government asked private schools to comply with a 20 percent school fee reduction for the next few months to afford mothers and fathers of students some relief. Those that agreed required a great deal of cajoling before they accepted. They still deserve praise. And this is where the conversation gets difficult. If you are a profitable franchise in the years of fat, perhaps in the lean years, while not legally compelled to, there is a moral onus on you to be forgiving to the patrons who came to you when times were good.

Perhaps private schools with large coffers that so zealously defend their balance sheets should consider that a voluntary 50 percent reduction without government intervention would have won them a tremendous amount of goodwill. Perhaps they should practise good business sense and consider the long-term ramifications of their actions. Perhaps upsetting your clients to the point where they are forming united Facebook groups, issuing legal writs, and begging the government for assistance is a bad business strategy. Ford did not grow fat off slapping potential customers in the mouth each time they asked for a Model T.

Let’s do the math. Cuts of 20 percent for two months comes to a reduction of 3.33 percent of school fees annually. Other than school fees, no other school revenue (uniforms, books, etc) is being reduced. Losing less than 3.33 percent of revenues so that parents can continue to send their children to school is not the financial wrecking ball it is being made out to be. Of course, not all private schools are equally sized. Smaller ones will feel any reduction in any revenue far more powerfully than the largest private schools which can shrug off such small revenue reductions and still command large profit margins.

Pakistan is a charitable country. It contributes more than one percent of its GDP to charity (comparable to the UK’s 1.3 percent and Canada’s 1.2 percent) according to the Stanford Social Innovation Review. This is despite it being far from as wealthy as those nations. If our citizens are outliers in their charity, then why is there such a tussle over 20 percent school fee reductions? Why will the largest private schools not agree to temporary 50 percent fee reductions without government intervention?

If our most extraordinary citizens are not willing to exercise the innovation and will that made them what they are then perhaps they are not quite so extraordinary. Ask more of big business. It is not idealistic to do so. Helpers do exist in our society. Ask Hussain Dawood and his recent donation of Rs1 billion. Actions are loud. Words less so.

For institutions that are supposed to inform our youth of how to think, how to act and how to value actions over the words in thick card stock brochures, the top bracket of these schools is far from a passing grade.

The writer is a consultant working in education.

Twitter: @notsaadkhan