Implications of the Recent Financial and Health Crises on Institutions of Higher Education in Arab Countries: Revisiting Existing Financial Models

Abstract

AbstractThe effects of the recent financial and debt crises, as well as the effects of the more recent sanitary crisis have had widespread and devastating consequences on institutions of higher education worldwide. Higher education in the US, as well as, in the Arab World have been particularly affected, with many institutions having either to adapt quickly to external pressures or shut down. No one knew what the full effects would be of what is now being called an economic and sanitary meltdown. In this chapter, we will first analyze the impact of the recent financial crises on higher education in the US, followed by an examination of the COVID-19 pandemic on Arab universities, drawing parallels with the impact on US universities. Initial data indicate that real wages for full-time faculty in the US has been on the decline for the first time since the Great Recession, and average wage growth for all ranks of full-time faculty was the lowest since 1972. In the Arab world, the situation is not that different, with data indicating that full-time faculty real wages have also been on the decline since the onset of the pandemic. Universities in the Arab region have implemented a wide range of actions/measures in response to financial difficulties stemming from the financial and debt crises and the COVID-19 pandemic. Under these measures, a new financial model is now emerging under which Arab Universities are now adapting to the new realities. Moreover, and in response to the pandemic, many Arab institutions that were already struggling to balance their budgets had to immediately lower their expenditures by implementing hiring freezes, salary cuts, fringe benefit cuts, furloughs, and layoffs. Finally, and under the new financial model, the newly implemented university budgets had to change various items under their expenditure and revenues sections in order to adapt to the new financial realities as dictated to them by the pandemic.KeywordFinancial crisisHealth crisisCOVID-19Higher educationArab countries