I saw this article by Roger Stone which makes a series of irresponsible accusations about two organizations that I know well. The article confuses two very different groups and contends that Laureate Education received millions from the State Department. This specific claim is untrue, Laureate has never received money from the U.S. Government, but the entire article is filled with misrepresentations and gaps in logic.
I do not write this as a defender of Hillary Clinton–I think my Republican credentials are pretty strong. Both organizations mentioned in the article, Laureate Education and the International Youth Foundation (IYF) solve important (and related) global problems. Laureate is the largest private (read “for-profit”) university educator in the world. IYF is one of the largest non-profits solving the challenge of the “youth bulge.”
The problems they are trying to solve are related but they are two totally different and independent organizations. I have been familiar with both organizations in various capacities over a long period of time. I currently do not have a relationship with Laureate or IYF (although my day job employer has a small, unrelated, partnership with IYF). I have never received money from either organization. I feel obligated to defend these organizations because they make important contributions to global development.
Let me start with Laureate Education. One of the biggest challenges in the developing world is that the higher education system is often “free.” In these countries, many of the universities are close to 100% publicly funded. We have heard a lot about “free university education” this electoral cycle in the U.S. and free education is great—except “free” systems ration out very few slots. These “free universities” do not have enough slots for students, are poorly administrated, and often teach materials that are technically out of date or irrelevant.
Many developing nations are (thankfully) experiencing significant economic growth and developing a robust middle class. These societies need more capable workers with up to date skills that these “free” publicly funded universities cannot provide at the scale that these countries need.
One alternative is for-profit universities that offer accounting, computer training, hotel management and general business degrees. These schools skip the football stadium, don’t offer art history or sociology, and stay away from campus politics. The students are there to get skills to improve their lives and the lives of their families. While the debate around for-profit universities in the U.S. context has become heated and politicized, for-profit universities fill a critical gap in many developing countries.
I did so because I was sure there were projects that Laureate, the largest private sector provider of higher education in the developing world, and IFC, one of the largest investors in for-profit solutions to education in the developing world, might do together. I left the World Bank Group in 2010 but I always thought that IFC and Laureate would work together to help solve the problems I described above.
IFC did ultimately make an investment in the privately held Laureate in 2013 but did so because it was an investment that helped expand higher education in developing countries while also providing IFC a financial return. IFC is run on a for-profit market basis, and would not put money into a poorly run or a money losing company. Such an investment would have to be approved by a very large and contentious board that includes representatives from Canada, Australia, Japan and a whole “United Nations” of other countries.
A completely different organization, the International Youth Foundation, for its part, is one of the most highly respected NGOs in the world. IYF has received tens of millions of dollars from the State Department and the U.S. Agency for International Development (USAID), but they have won all this money competitively through request for grant proposals from the U.S. Government. I championed giving grants to IYF when I was in the Bush Administration because IYF understands that the best social program is a real job. IYF also understands that solving youth employment challenges requires governments, educational institutions (especially non-college technical training centers), and private companies.
IYF confronts the “global youth bulge,” which is one of the biggest challenges facing the world in the coming decades. Today there are hundreds of millions of young people living in developing countries, many of whom have no prospects for employment or self-advancement. These young people need opportunities and the promise of a better life. If they are not productively employed in their home countries, there is a fear that they will turn their energies towards destabilizing activities like crime or terrorism or “large unplanned emigration.”
Given the growing challenge of the “youth bulge” and IYF’s ability to deliver effective youth-oriented development programs, I am not surprised that IYF received more money for programming over the last seven years. In the last seven years, the global youth bulge has become an increasing concern—all you have to do is turn on the TV to see the waves of young people hitting European and American borders. Part of the global refugee crisis can be traced to an unemployed “youth bulge” and it’s understandable that the U.S. Government and others would try to deal with what are called “root causes.”
IYF has had so much success training hundreds of thousands of young people that USAID under the Bush Administration gave them an award for innovative partnerships in 2006. I served on the review board that included civil servants and foreign service officers of USAID that decided that the IYF training program in the Americas was worthy of being recognized.
I was not surprised when Doug Becker, a civic-minded entrepreneur, agreed to serve as (non-executive) Chair of IYF back in 2007. I know the long time CEO of IYF, Bill Reese. Bill, as the CEO, runs IYF–not Doug Becker. Doug Becker must see the “youth bulge” problem as something that higher education (something Laureate provides for a fee) cannot solve alone. In this context, it makes sense for him and Laureate to give time and money to support IYF’s approach of finding apprenticeships, and support (subsidized) vocational training programs in developing countries.
As a partisan Republican who does not want to see Hillary Clinton elected, this is a manufactured controversy. There are plenty of “fruitful” lines of criticism of Hillary Clinton without going down this path. IYF and Laureate are two very different and unrelated organizations. They each, in their respective way, help meet important global challenges—specifically, improving higher education and addressing the youth bulge in the developing world.
Article Published in Forbes.com on June 17, 2016.