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THE ECONOMIC DETERMINANT OF THE EDUCATION SYSTEM
Veshapidze Sh.,
Ivane Javakhishvili Tbilisi State University, Georgia
Zoidze G., Batumi State University, Batumi State Maritime Academy, Georgia
Berishvili Kh.
Ivane Javakhishvili Tbilisi State University, Georgia
ABSTRACT
Achieving a high level of education is largely due to the country's economic development. According to international rankings that assess students' skills, the correlation between its outcomes and the country's GDP is quite high. However, investing in education is several times more profitable than in other sectors.
Achieving the desired level of education in Georgia, including higher education, depends significantly on the growth of the country's gross domestic product and, consequently, on education funding. Therefore, it is important to develop the skills of the population (invest in education) in order to increase the country's GDP.
Experience has shown that it is possible to achieve significant progress in a short period of time by using a progressive system of education, even in conditions of low economic performance. It is important for Georgia to focus on such principles of the system as: Interdisciplinary and multidisciplinary approach, orientation to the student with an individual approach, development of thinking skills, improving social security and labor relations, protection of efficiency and equality, orientation to innovation, inclusive and quality education.
Keywords: Economic development, expenditures on education, inclusive and quality education, long-term education reform.
JEL Classification: A20, H52, I20.
1. Introduction
Achieving a high level of education is largely due to the country's economic development. The prosperity of a country depends on its productivity, on factors such as: physical capital, natural resources, human capital and technology. Georgia is not rich in physical capital, the country has some natural resources (however, its proper use requires knowledge), knowledge needs technological progress as well, and human capital, in itself, implies the existence of knowledge and experience. Therefore, the rapid development of the education system, raising its quality, is a priority in Georgia.
Education in Georgia is a priority area of economic policy. The trend of spending on education in the country is increasing. Funding of education through the state budget in absolute terms, it can be said, indicates the need for its further rapid growth. Raising the level of the education system as a whole, including the level of higher education, depends on the economic strengthening of the country and its accelerated growth.
2. Correlation between the results of international education rankings and the GDP of countries
Various international rankings provide important information on the state of the country's education system and its quality. According to authoritative rankings, Georgia is beyond the top 100 in terms of education quality. In most of the rankings, the first places in terms of the quality of education are shared by Switzerland, Singapore and Finland.
Nevertheless, there is no one-size-fits-all approach to accurately defining the best and worst education systems. One such list was created by the Organization for Economic Co-operation and Development (OECD), which surveyed individuals between the ages of 25 and 64 who had completed a vocational training program or received a two- or four-year graduate degree [12, 13].
Based on these data, according to an OECD study published in 2021, Canada is the most educated nation. More than 56% of adults in this country have continued their education after high school. In second place is Japan. More than 50% of adults in this country have completed high school. Israel lags behind Japan, where 49.9% of adults have graduated from higher education. Based on these data, the highest levels of education are occupied by: South Korea, United Kingdom, United States, Australia, Finland, Norway, Luxembourg.
Another assessment of the most educated countries is made through the US News and World Report Rankings. This rating was based on 3 factors:
1. Well-developed public education system,
2. Rank of higher quality education,
3. How do respondents in this country view university studies.
According to this ranking, the United Kingdom is in the first place. In second place is the United States, where about 70% of graduates go on to higher education. Canada is in third place, followed by Germany and France [27].
International ratings show that the correlation between the results of these ratings and the country's GDP is quite high. Countries that rank high in international rankings are characterized by high GDP levels. Various fundamental studies have shown that investing in education is 4 times more profitable than in other sectors. Therefore, it is important to develop the skills of the population (invest in education) in order to increase the country's GDP. Otherwise, its economic growth will remain at a low level, a level commensurate with its human capital resources.
Countries with internal conflict, economic problems, or lack of funding programs are on the list of countries with poor education systems.
However, with reasonable reforms, it is possible to significantly increase achievements in the field of education even at a low economic rate. There are examples in the world to prove this. In the 1950s, the Republic of Korea was a war-torn country where very few people knew how to read and write. Nevertheless, in 1995, the country provided high quality universal education in secondary schools. In fact, South Korean students received the highest scores in international assessments of knowledge. Vietnam surprised the world when, in 2012, according to the OECD's Program for International Student Assessment (PISA), 15-year-old Vietnamese students showed the same level of knowledge as German students, even though Vietnam was a much lower-income country [11].
It is noteworthy that Peru made one of the most visible advances in education between 2009 and 2015, while in Liberia, Papua New Guinea and Tongo, as a result of results-based measures, the reading rate in primary classes improved significantly in a short period of time.
Achieving the desired level of education in Georgia, including higher education, largely depends on the country's GDP and, consequently, on the growth of education funding. These figures are shown in Table 1 and Figure 1.
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
GDP (in current prices, mln) 27 227 28 593 31 124 33 935 35 836 40 762 44 599 49 253 49 407 53 443
GDP growth in% (base year 2(112) 100% 105% 114.31% 124.64% 131.62% 149.71% 163.8% 180.9% 181.5% 196.3%
Education funding in the state budget 1,092.3 1,202.5 1,276.1 1,338.6 1,428.0 1,528.8 1,570 1,644.7 1,538.8 1,802.6
Increase in the share of education funding in% (base year 2012) 100% 110.1% 116.8% 122.5% 130.7% 140% 143.7% 150.6% 140.9% 165%
Source: Ministry of Financc of Georgia State Treasury; National Statistics Office of Georgia.
Data analysis clearly shows that education in Georgia is a priority area of economic policy. Funding of education through the state budget in absolute terms, it can be said, indicates the need for its further rapid growth. The trend of spending on education is
Increase in the Share of GDP and Education Funding (base year: 2012) GDP growth in % (base year 2012) Increase in the share of education funding in%(base year 2012)
£jU/0 200% 150% 100% 50% 0%
--- —^
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Figure 1. Increase in the Share of GDP and Education Funding in Georgia (base year - 2012) Source: National Statistics Office of Georgia, 2021
increasing. Its curve is ascending. Therefore, raising the level of education (including higher education) as a whole will largely depend on the economic strength of the country and its rapid growth.
The amount of money spent significantly contributes to the health of the country's education system. However, there is no unique recipe for what part of GDP funding should be in this area. It is also important to note that there is currently no research or rating in the world that evaluates and compares the education systems of countries. By country it is only possible to compare some parameters of the education system [2,3,4].
With the help of Georgia's strategic partners - the United States, NATO, the European Union, the United Kingdom - there are opportunities to raise the level of higher education in the country. The real possibility of this is conditioned:
S by visa-free travel to the EU, S dual citizenship introduced by the legislation of Georgia,
S wide opportunities for sending students abroad through exchange programs,
S favorable conditions for students leaving Georgia,
S the establishment of a world-class international university in Georgia, etc.
Today, higher education insignificantly increases the chances of employment in Georgia and slightly improves the salary supplement. Georgia's education system does not meet the requirements of the labor market. This means that the number of Georgian students who have gone abroad to receive quality education is increasing. According to Eurostat, in 2019, 11.3 thousand Georgian students studied abroad, and in 2013 - 7.1 thousand. As of 2019, more than half of the students abroad studied in Central and Eastern Europe,
35% in North America and Western Europe, and the rest (13%) in Asia.
Despite significant progress, Georgia needs further development of institutions that will enable us to realize the potential of the higher education system effectively. This is possible through long-term education reform. Such projects are supported by the World Bank in Georgia. It is noteworthy that during the 25-year cooperation with the World Bank, more than 4 billion USD have been invested in more than 100 projects of the World Bank in our country.
3. Analysis of gaps in knowledge assessment
Experience in American and European education considers self-discipline, hard work and choosing the right strategy as a prerequisite for a competitive, successful career. It is important to motivate pupils and students to master knowledge independently. They need to be able to solve problems and not use tools. It will be much more effective when they themselves understand why they need the tools.
One of the major disadvantages of modern programs is that they often delve deeper into the subject without clearly explaining the basics, key ideas, and contentious issues. It is important that knowledge be viewed as a semantic tree [8, 21]. First of all, let's understand the fundamental principles - it is a tree trunk and large branches. Only then should we move on to the leaves (details). Otherwise they will have nothing to "hang on to" [1, 7].
Testing knowledge in the form of current tests not only does not yield results, but also has a detrimental effect on learning. By itself, knowledge testing is needed, but not in the form of excessive test
assignments. Prestigious courses can be considered where they teach thinking and develop the skills needed for feedback when they can analyze their own mistakes impartially [17].
In this regard, the example of Finland, one of the countries with a successful education system, is important (Figure 2).
Figure 2. Education Management System, Finland Source: Compiled by the authors, based on materials from the Finnish National Education Agency and the Finnish Ministry of Education and Culture.
The Finnish education system is one of the most successful in international evaluations. Consequently, it is interesting for other countries, including Georgia, to focus on certain elements of this system, which have allowed the country to make significant progress in a short period of time. Its main principle is:
> interdisciplinary and multidisciplinary approach,
> student-centered individual approach,
> development of thinking skills, especially at the elementary level.
This means introducing this multidisciplinary approach in such a way that one phenomenon is considered and studied by different disciplines. It is important to have a mindset rather than memorizing information (understanding the information provided). The national model of the Georgian education system focuses on the transfer of these elements, of course, adapted, within the capabilities that Georgia has [23].
The World Bank Executive Board approved on May 29, 2019, and on June 18, a financing agreement was signed within the framework of the Education Reform Project in Georgia. The project is fully in line with the World Bank's 2019-2022 Partnership Strategy and assists the Government of Georgia in implementing the Education Reform Agenda for 2018-2023.
Education reform in Georgia, as recommended by the World Bank Group, should promote inclusive
growth, enhance competitiveness, invest in human capital, and improve the country's resilience. It is important to reduce the gap between learning outcomes and labor market expectations in terms of staff qualifications. Among the main goals of this project are: to promote preschool education and increase access to it; Improving the quality of teaching; Improving the higher education funding model and bringing it closer to international standards; Strengthen the system and improve communication between stakeholders; Improving the project management, monitoring and evaluation system.
Over the course of six years, the infrastructure component of the project will provide for the construction of five new schools, the rehabilitation of approximately 60 existing schools, as well as the introduction of more than 150 child-focused and modern preschool education programs for school preparation. In total, the project will benefit approximately 116,000 preschool and secondary school students [12, 27].
The project also provides support for vulnerable groups of the population on the principles of gender equality (students with low socio-economic status in rural and mountainous regions, ethnic minorities and students with different educational needs). Through up to 45 grants allocated to upgraded academic programs
in line with labor market requirements, the project will also assist students in higher education institutions.
In addition, in Georgia, according to the regions, there are different opportunities for proper education compared to Tbilisi. Therefore, the level of education in the regions is low and needs to be raised.
4. Conclusion
One of the major disadvantages of modern education programs is that they often delve deeper into the subject without clearly explaining the basics, key ideas, and contentious issues. It is important that knowledge be viewed as a semantic tree.
However, countries with internal conflict and / or economic problems are on the list of countries with poor education systems.
As for the education system of Georgia, it needs systemic changes. To improve education system of Georgia, it is important to implement long-term reforms based on innovation, inclusive and quality education, adherence to the principle of efficiency and equality, regulation of social issues according to European standards, increasing access to pre-school education, providing a favorable learning environment, human development.
It is also important to improve the higher education funding model and bring it closer to international standards, strengthen the system and improve stakeholder communication, improve the project management, monitoring and evaluation system.
The main thing is to create an advanced education system in Georgia. This means continuous and consistent education, as well as rapid and long-term growth opportunities for development in all areas of the economy, business, science and public life.
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ОЦ1НКА ВПЛИВУ ПАНДЕМП COVID-19 НА ФУНКЦ1ОНУВАННЯ М1ЖНАРОДНОГО РИНКУ
FINTECH
Заяць О.1.
д.е.н., доцент кафедри мгжнародних економ1чних в1дносин, факультету мгжнародних економ1чних в1дносин Ужгородського Нацюнального Утверситету, Украна
Деяк Х.В.
студентка 2-го курсу магютратури, факультету мгжнародних економ1чних в1дносин Ужгородського Нацюнального Унгверситету, Украша
ASSESSMENT OF THE IMPACT OF THE COVID-19 PANDEMIC ON THE FUNCTIONING OF THE
FINTECH INTERNATIONAL MARKET
Zayats O.,
Doctor of Economics, Associate Professor Faculty of International Economic Relations Uzhhorod National University, Ukraine
Deyak K.
2nd-year student of a master program, Faculty of International Economic Relations Uzhhorod National University, Ukraine
