Friday, February 15, 2008

Is this the best way to provide technical assistance?

I have been concerned for some time about the lasting effects of technical assistance. USAID, EBRD, among many others provide funding for training in many aspects of governance as well as the transition of the country to a market economy. These agencies, and the donor countries in general, have been quite generous. However, a common feature of most of these programs is that universities are by-passed in this process, both in terms of training faculty as well as funding that is devoted to set up new bureaucracies where the training is to take place.

Take the recent announcement for actuarial training to commence in April. There are no actuaries to speak of in the country. And so it is difficult to imagine how the insurance industry will take off without the skilled labor. As such the country is truly lucky to have USAID fund a new program to train actuaries in the country. Granted that this will be the first time such training is made available, but this begs the question of why this is not taking place in the mathematics, statistics, or even the business schools at the various universities in Yerevan who are desperate for training and funding? What happens when the funding is over? Who trains the next generation? Who undertakes research on future developments in the various underlying markets? Who will write the future textbooks?

Faculty salaries are low by any measure, and textbooks in various subjects of actuarial and management sciences, finance, and economics, among many others, do not exist for the most part. Donors have been very generous, but one would hope that they would take steps to more aggressively engage academia, that is if they wish to leave a lasting legacy.

6 comments:

Nanul said...

Very good point. I 100% agree. Usually these aid contractors set up a new non-governmental organization to continue the project after its completion, but in most cases those are failed attempts. Whereas the higher institutions severely lack new textbooks, and the professors keep teaching outdated material.

David said...

If we were told that $100s of millions of the people's money were stolen or wasted, all hell would break loose. But the outcome of the current practice is not much different. I have no way of explaining the silence!

Anonymous said...

In 2001 PADCO, with USAID funding established a master’s degree actuarial science program at Yerevan State University, NORQ, http://norq.am/eng/services/analysis1.htm. In 2002 again PADCO/USAID established an actuarial center at Nork Information-Analytical Center NORQ http://norq.am/eng/services/analysis.htm through RA Ministry of Labor and Social Issues. I checked the web site of the Yerevan State University and I didn’t see the master’s degree in Actuarial science. What happened to that program? If it was discontinued, then what was the reason?

In December of 2005 Armenian International Policy Research Group, AIPRG, published a report on pension reform in Armenia based on an actuarial analysis, http://aiprg.net/UserFiles/File/aiprg_report.pdf. The actuarial computations were implemented by a mathematician from Armenia, Gohar Jerbashyan.

Now USAID is providing the funding and is establishing the actuarial training program through Central Bank of Armenia, CBA. I agree with David that the training for actuarial science should be done through universities. It is important to revitalize the master’s program of actuarial science at YSU.

Related to this topic there is another concern. The CBA, which is independent from the government and elected officials, is expending its jurisdiction beyond monetary policy and banking and now is involved with the pension system and insurance markets. Should the regulation and control of pension systems and insurance markets be part of government ministries or part of the independent, undemocratic CBA?

Ara

richard said...

Sorry to be so late to the post.

The FSDP Project is, in fact, cooperating with Yerevan State University in delivering the actuarial training, and in expanding YSU's current Actuarial Mathematics program to one of full Actuarial Training, in order that the training carry on after the end of the project. YSU itself realizes that it has neither the personnel nor financial resources to provide this training at this time. Accordingly, the most promising students in the training are being groomed to become trainers to meet YSU's needs. The Project is also in the initial stages of assisting the successful students to develop a recognized Actuarial Society, with the eventual goal being to have the Society assume responsibility for curriculum development, continuing education, licensing and disciplinary matters. So the concerns expressed by other posters are, in fact, being addressed.

David said...

Thanks Richard.
The goal should be to strengthen the actuarial program at YSU (and other universities) leading to the creation of master's and doctoral programs. Obviously YSU does not have the resources, but it is not clear how creating a training program outside the university will help it develop its own!

Anonymous said...

We are not trying to create a training programme; rather, we are trying to create knowledgeable trainers that YSU can then use to create and expand its own programme. Some of the current students have, in fact, been targeted by YSU for delivering future training. YSU does not have an actuarial programme--it has an actuarial mathematics programme. There is a mindset in developing countries that actuarial equals mathematics. l This is untrue. Mathematical ability and knowledge is only one component of actuarial expertise and knowledge. When this training was given in other countries, amongst the failing students were three university professors of higher mathematics. Of the original class here of 36 students, only 20 still remain in the course, and this will probably decrease by the end of the course. All 36 of the original students had mathematical backgrounds--but mathematical proficiency alone is not enough to pass the course. The goal is not to create further masters and doctoral programmes. The goal is to develop professionals who can use their skills in the real world. Academia is merely a means toward this end, not an end in itself. In many countries, in fact, the training programme is developed and delivered by the professional actuarial association, not by an academic institution. This reflects the fact that there is more to the actuarial profession than pure theory, and that universities do not have a lock on all knowledge.