The bitter leadership row at the world’s most pan-national university has so far cost it almost half a year’s revenue, in an escalation of the economically and politically fuelled funding insecurity that bedevils the institution.

Staff at the University of the South Pacific (USP) said the institution’s biggest contributor, the Fijian government, has withheld F$78 million (£30 million) of promised funding since its dispute with vice-chancellor Pal Ahluwalia erupted in 2020.

Fiji is easily the biggest of the 12 island states that jointly own the university, hosting more than 75 per cent of its staff and providing about 55 per cent of its students. Its government now refuses to hand over its share of operating funds, normally about one-sixth of institutional revenue, until Professor Ahluwalia is replaced.

The government’s opponents are outraged. National Federation Party leader and former USP academic Biman Prasad has promised to reinstate Fiji as “a sound and reliable” USP member that “honours its promises” if he and running mate Sitiveni Rabuka, who heads the People’s Alliance party, win the general election due later this year.

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“Everybody knows who is right and who is wrong in the USP saga,” Professor Prasad .

Premila Kumar, the education minister, said the USP grants would not be paid until the government’s allegations against Professor Ahluwalia, which now include , had been . USP’s two staff unions said the allegations against Professor Ahluwalia, who is now based in Samoa, had already been dismissed in five independent inquiries.

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that having failed to remove Professor Ahluwalia for exposing financial mismanagement and misconduct by his predecessors, the government was taking it out on the “premier regional university” and its students.

The dispute caused consternation at this year’s Pacific Islands Forum in Suva in mid-July. But while a  issued after the forum highlighted the importance of education, it contained no reference to the USP funding row.

Asked about the impasse, Penny Wong, Australia’s foreign minister, said it should be “worked through” within the region. “Given…how many young people enter the labour market each year across the Pacific, it is imperative we invest in their skills,” she said.

Economic difficulties in USP’s three biggest member countries – Fiji, the Solomon Islands and Vanuatu – have also curbed the supply of loans and allowances. In 2020, Fiji slashed funding for its Tertiary Education Loan Scheme (TELS) by more than one-third.

As a result, the school mark threshold for loans eligibility was increased while the value of associated scholarships was reduced.

TELS has become increasingly unaffordable for the Fijian government, largely because of low repayment rates.

Meanwhile, Solomons and Vanuatu students routinely face protracted delays in receiving their government living allowances, leaving them vulnerable to “loan sharks” and unscrupulous landlords in Fiji, according to the .

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All this threatens what has become an increasingly important income stream for USP, with student fees contributing 39 per cent of institutional revenue by 2018, up from 19 per cent a decade earlier.

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Former USP law lecturer Tess Newton Cain said the university’s current financial crisis was a dramatic example of the challenges it faced fairly routinely, as one or other of its member states failed to hand over its “stake”.

“Solomon Islands had years of struggling to pay its way at USP because they just didn’t have the wherewithal to keep up the payments,” said Dr Newton Cain, who now heads the Pacific Hub at Griffith University’s Asia Institute. “If a country can’t afford to pay, then they can’t afford to pay.”

But now the biggest member country is the defaulter, to the gall of other states that have long envied the economic benefits Fiji enjoys as host of the university’s headquarters and easily its biggest campus.

“The economic spillover effects are much more pronounced in Fiji than anywhere else,” Dr Newton Cain said. “They get all the professional, support and ancillary jobs, and businesses in Fiji do well out of students.”

The resentment had been exacerbated by a perception that Fiji had monopolised USP’s capital spending while campuses elsewhere had been left to wither.

Fiji has rubbed salt in the wounds by denying its citizens eligibility for TELS loans if they study at USP’s overseas campuses, a move that undermined enrolments in Vanuatu – home to the university’s law school – and the Samoa campus, which specialises in agriculture.

In his 2019-20 , Fiji’s economy minister, Aiyaz Sayed-Khaiyum, justified the change on taxpayer justice grounds. He said students had been “abusing the current system” by moving to other cities to “pursue degrees that were available at their local campuses”, leaving taxpayers to “support their room, board and meal allocations”.

With the dominant member state now refusing to pay its way, the university faces a particularly tough 2022. It plans to seek additional contributions from its major donors and to find “new development assistance partners”, according to its .

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john.ross@timeshighereducation.com