Wooing Foreign Students


Economic News

22 Jul 2010
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With a dramatic growth in the number of private universities over the past decade and the arrival of four international universities, Malaysia is aspiring to draw more foreign students and become a regional centre of excellence in education.

There are currently 50,000 foreign university students in Malaysia hiling from over 150 countries. Prime Minister Abdullah Badawi recently stated that the number is rather small compared with the facilities available and that he intends to double this number by 2010.

The country boasts 942,000 students catered to by 18 public higher education institutions, 27 private universities and 4 foreign branch campus universities. These include Australia's Monash University, Swinburne and Curtin and the UK's University of Nottingham. Each arrived after the government relaxed legislation in the early 1990s to allow foreign universities to enter the country.

It is estimated that earnings from international students will contribute $200m in 2007 to Malaysia's GDP, compared to $170m in 2006, according to the Malaysia Statistics Agency. In addition to the direct earnings from tuition and housing, the government is also banking on the prospects for educational-based tourism.

Ahmad Zubir Murshid, CEO of Sime Darby, the Malaysian conglomarate that will be developing the country's Northern Corridor, under which both tourism and education will be two sectors earmarked for development, told OBG, "China is sending hundreds of thousands of students a year overseas, and Malaysia is a nice place for them due to proximity and strong historical ties. Every student we attract could bring in visitors throughout the year, and for those whose families can afford it, even second homes."

Malaysia has been a net exporter of international students as the local system could not meet with domestic demand for higher education, both in terms of quantity and quality. Moreover, the racial quotas in public universities aimed at enrolling a majority proportion of ethnic Malay students induced many students of Chinese and Indian background to pursue their studies abroad. In terms of most popular destinations for outbound Malaysian students, Australia leads the way with 19,000 students, followed by the UK and the US.

However, since the government announced a reduction of enforcement of racial quotas in 2002, along with rising standards of local universities, more students are choosing to get their degrees at home. Another factor luring more Malaysians to study at home was the late 1990's Asian financial crisis.

Tan Sri Limkokwing, founder and president of Limkokwing University in Kuala Lumpur, where more than half of the student population is international, told OBG, "In 1998, the financial crisis came and we started to receive students who could not afford to study overseas at the time because of the ringitt devaluation."

At present, the majority of foreign students in Malaysia come from Indonesia, China, Africa and the Middle East. Indonesians and Chinese students are comfortable in Malaysia due to language and cultural similarities, while Middle Eastern and Muslim students from Africa have been the fastest growing international student segment due to the difficulties associated with going to the US and Europe following the events of 9/11.

With political stability, ethnic diversity, reasonable cost of living and widely spoken English, Malaysia feels it has the right assets to attract more students from neighbouring southeast Asian nations, China and west Asia.

Professor Brian Atkin, CEO of the University of Nottingham, Malaysia Campus, told OBG "Malaysia was the first country outside of the UK that we expanded to. We selected Malaysia because it is a low cost country with a supportive government that offers economic and political stability."

To capitalise on the country's potential to become the choice country for foreign students to pursue higher education abroad, the ministry of higher education, which was formed in 2004, recently introduced a National Higher Education Action Plan aimed at making the country's institutions more competitive. The action plan calls for university boards to be given greater autonomy in decision making, the appointment of vice chancellors to be done through open advertising and selected by an independent committee, and changes in the pay scheme for lecturers to attract better staff.

One particularly interesting facet of the plan will be the establishment of an "Apex University". Based on a predetermined set of criteria that take into account their strengths and long-term development plans, one or two universities will be designated "Apex Universities" and given more freedom with regard to student intake and staff remuneration. In turn, the expectation is that those selected will rise to the top in international rankings and take the lead for the country's reputation in the same way that the UK has Oxford and Cambridge and the US has ivy league institutions such as Harvard and Yale.

The main concern about higher education is driven by the challenge that the government is not responding fast to the granting of student visas and that universities are not responding fast to the pace of industrial development.

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