The University of the West Indies (UWI) is embarking on new ways to finance its operations as it prepares to deal with the fallout from the COVID-19 pandemic, among other issues that have affected the region over the last few years, Vice-Chancellor Professor Sir Hilary Beckles,
Speaking at the start of the annual University Council Meeting, Sir Hilary said: “The Caribbean is facing a “Triple C” cocktail of challenges. These are: Climate Change, Chronic Diseases and now, COVID-19. The region has lost US$30 billion through hurricanes in the last five years; we are losing some US$5 billion per year in our containment and management of chronic diseases, and COVID-19 is expected to decimate 20 per cent of the region’s Gross Domestic Product, or some US$60 billion US. And to add to this, we continue to face aggressive pushback from the Organisation of Economic Cooperation and Development regarding the financial services sectors of the Caribbean economy, for example, the persistent blacklisting of these sectors in Barbados, the Bahamas and Jamaica. Petroleum prices are falling below production levels and costs, and all economies will be impacted by the decline in tourism.”
He commended the work the region’s Governments had done in recent years in clearing their debts owed to the university but said the current way the institution financed its operations was fraught with major constraints.
He added: “For the last 20 years, we have managed this institution with a financial deficit model. It has been a remarkable partnership with our regional governments because we recognise that the university is a developmental institution and must provide development despite its financial limitations. We have had a conversation with governments on receivables, and Barbados’ Prime Minister, Mia Mottley, and others have cleared their debts to the university.
“Yet, on aggregate government contributions are declining in terms of the university’s overall budget, so we have had challenges with receivables and write-offs, all of which contributed to the deficits in our financial accounts, but we believe we can manage these. We are also faced with the impact of unfunded health care strategies where we have to supplement our staff pensions, and this has been a burden on the university’s financing.”
Sir Hilary said prior to the pandemic, UWI had been looking at new financing models in an effort to reduce some of its expenses, and so far they have found one that has worked.
He told the council: “Six months before the COVID outbreak we held a retreat, and we saw the need to cut expenditure in critical areas of our operations by ten per cent in the next two years. Now, we have to look at how to handle our receivables, and secure ties and balances to enable resources to flow into the university.
“I am proud of the agreement made at the last CARICOM Heads of Government conference, where the leaders agreed that where substantial money was owed, we can have an assets-for-cash exchange. Trinidad’s Prime Minister Dr Keith Rowley has responded to this first and made the brand new TT$600 million Couva Hospital available to UWI as part of its future revenue stream.
“Beyond that, I wish to commend regional businesses who have agreed to help finance the university and to thank all the leaders of multilateral agencies who are helping us to develop. We are now certain the next step in the funding revolution for this university will be in corporate funding, in equity funding and debt exchange relationships. The Couva Hospital is the greatest single investment made into UWI by way of a facility over the decades.”
The Vice-Chancellor said the University Grants Committee, the main body which looks after the institution’s financial affairs, met last week and agreed to change its management structure for the next two years.
Sir Hilary said: “We commend the Minister of Finance in Trinidad for taking a leadership view and helping us to restructure the University Grants Committee to help us through the next two years. We are establishing a sub-committee which will move away form annual meetings to quarterly ones because a close intensive care management approach is what we need to help us get through this time.”
He concluded: “Now more than ever we require intimacy in the management of all of our affairs at the university and building trust. We will cut our expenditures significantly, we will bring new COVID budgets back to the Grants Committee for approval and begin the process of rolling out a new era of managing our assets so that we maintain our global status while working within our governments’ parameters.”
