Continuing on its decade-long trend of GDP growth (6.8% per year on average from 2000 to 2009), the education sector of Malaysia has been the subject of a renewed focus for the government, as well as from private investors both in Malaysia and abroad. The government has identified the sector within its Economic Transformation Programme (ETP) as the Education National Key Economic Area (NKEA), focusing on four prioritised segments based on existing market share and potential for future growth: early childcare and education, basic education (primary and secondary), technical education and vocational training, and tertiary education (both domestic and international students). The government is spending RM50.2bn ($16.2bn) on sector in 2012, plus RM1bn ($322m) for building maintenance and construction, up from RM39.5bn ($13bn) in 2011 and RM30bn ($9.6bn) in 2010. However, the ETP forecasts that private investment will account for 92% of the RM1.4trn ($451bn) required for the National Key Result Areas (NKRAs) from 2010 to 2020, including education.
KEY INDICATORS: Malaysia’s education sector has improved in leaps and bounds in the past couple of decades. The sector has been driven by generous and consistent government spending over the past 20 years, although this figure has grown sharply recently, with a 60% increase in the last two years. The government said it spent an average of RM3354 ($1082) for every primary school pupil and RM4039 ($1302) for a secondary student yearly in the past three years.
According to the World Economic Forum’s “Global Competitiveness Report 2011-12”, this investment in education has been bearing fruits: Malaysia’s overall higher education sector is ranked 14th (out of 142 countries), and its primary education is ranked 21st. However, enrolment rankings for primary, secondary and tertiary levels, 61st, 101st and 66th, respectively, demonstrate that there is room for improvement in having a greater proportion of the Malaysian youth benefit from the quality of their country’s education. Indeed, figures from 2010 show that only 27% of the skilled workforce had tertiary qualifications, up from 23.7% in 2007. A goal set in the 10th Malaysia Plan is to reach 50% by 2020.
Private schools have enjoyed rapid growth over the past decade, reflecting the rise of the middle class, particularly in urban areas. The ETP gave priority to public-private partnerships in the education sector.
The Early Child Care Education programme, as part of the ETP, is also enabling the private sector to tap into the kindergarten market. Preschool enrolment figures of 77% (732,902 children aged four- to five-years-old) in 2011 were below target, however, the government was able to maintain its goal of 87% enrolment by 2012 and 92% is expected on schedule by 2015 – the stated objective being near-universal pre-schooling (97%) by 2020. Capacity is being expanded, with 3089 preschools added in 2011, while 6421 new private preschool teachers graduated from public and private higher education institutions. The ETP forecasts the need of an additional 30,000 new teachers by 2020, more than doubling today’s figures.
As public sector growth neared stagnation in the 2000s, the number of private primary and secondary schools has shot up from 3003 in 1999 to 5753 in 2007, a 90% rise. Incentives to create more private schools registered with the Ministry of Education and complying with stipulated regulations include a five-year income tax exemption of 70%, double deduction for overseas promotional expenses to attract more foreign students and import duty and sales tax exemptions on all educational equipment.
IMPROVING THE SYSTEM: The government launched the National Education Blueprint (2013-25) in September 2012, which aims to usher in a major overhaul to the country’s education sector. The blueprint outlines 11 reforms to be enacted over the next 13 years, which will transform the national education system to a calibre on-par with that of developed nations. The government has also developed the School Improvement Programme (SIP), which aims to transform all (but particularly under-performing) schools into excellent institutions. A centralised data collection system and self-help tool called the School Improvement Toolkit (SIT) assists head teachers in planning, monitoring and managing their schools more efficiently, resulting in a more motivated and well-organised teaching community. The goal is to reduce the gap between the top-performing schools and the lowest-performing ones.
Meanwhile, growth in the tertiary levels followed the same path as its counterparts, under the Ministry of Higher Education. In 2011-12, Malaysia had 20 public and 26 private universities, 23 private university-level colleges, 28 polytechnics, 74 community colleges, 434 private colleges and a number of branch campuses for foreign universities. The EduCity development project in Iskandar is to be the site for several international branches, which will settle there in the coming years.
MORE & BETTER PRIMARY SCHOOLS: The abolition of all primary and secondary school fees was introduced in 2012. Until then, students in primary and secondary schools paid annual fees of RM24.5 ($7.90) and RM33.5 ($10.8), respectively, to cover co-curriculum, internal test papers, Malaysian Schools Sports Council fees and an insurance premium. This is therefore a largely symbolic gesture, particularly as the government also introduced minimum wage legislation that will set the bar at RM800 ($258) in Eastern Malaysia, to RM900 ($290) in Peninsular Malaysia per month.
Nevertheless, this is a strong and clear sign of the government’s commitment to universal education. Higher standards are also being introduced for basic skills, such as the target of 100% literacy for year-three primary students from 2012 (excluding special-needs students). The Literacy and Numeracy Screening (LINUS) programme was introduced to achieve this and has been showing positive results: in 2011, for example, primary-two pupils achieved 97.5% literacy rate and 98.6% numeracy rate, which exceeded the 2011 target of 95% for both, according to the 2011 annual report for the Government Transformation Programme (GTP).
Quality control and incentives are the Ministry of Education’s leitmotiv for primary and secondary schools. The “2011 GTP Annual Report” listed the 12 primary and 20 secondary schools that were granted high-performing school (HPS) status, rewarding them with a RM700,000 ($225,000) grant. Launched in 2010, the New Deals initiative targets its incentives at head teachers and principals, rewarding their performance delivery, innovation and pro-activity for their school. In 2011 403 heads (5.23% of the profession) received the New Deals award, exceeding the ministry’s 3% target. Under this initiative, primary and secondary schools were also ranked by academic excellence and achievements.
SECONDARY SCHOOL TROUBLES: Maths and science programmes were a source of controversy for the Ministry of Education in 2011. The subjects were taught in English until the 1970 National Education Policy made the switch to Bahasa Malaysia. As concerns over the level of Malaysians’ English-language abilities and employability were raised in the 1990s, the government decided to revert to English for teaching maths and science in 2003. Eight years later, under pressure and after a lengthy retraining process for Malaysian science teachers, the Ministry of Education announced it would switch back to Bahasa Malaysia yet again.
This move was not welcomed by some parents and may be contributing to the shift to private education, according to some analysts. Concerns have centred on students’ global competitiveness. In the 2009 Programme for International Student Assessment (PISA), which involved 75 countries, Malaysia ranked 56th in reading ability, 55th in mathematical ability and 53rd in science. The ongoing debate queries whether allowing teachers to teach in the local language will result in lower rankings later this decade. Proponents of the recent change back to Bahasa Malaysian contend that teachers’ unsatisfactory English-language skills were behind the comparative decline of Malaysia’s maths and sciences results, vis-à-vis other countries. UNIVERSITIES –QUALITY VERSUS QUANTITY:Major challenges in skilled labour needs will require further efforts and investments: the Ministry of Higher Education expects the need for qualified hospitality personnel to reach 50,000 by 2020 – up from 20,000 in 2009. Skilled labour shortages are a bottleneck for economic growth and have been identified as the fifth-most-cited “problematic factor for doing business” in Malaysia in the “Global Competitiveness Report 2011-12”. Building capacity for higher learning is a top priority for the Malaysian government, especially within the private sector. With over 500 institutions now established, the higher education sector is building capacity to meet the targets of plans like the ETP, which call for more university graduates to manage priority sectors, including tourism, health, biotechnology and education itself. “We are witnessing tremendous growth in demand for degree programmes in the hospitality and tourism segments, due to demand from China; art and design degrees are also growing in enrolment,” Teo Chiang Liang, the chief executive of the KBU International College, told OBG.
This quantitative boom has yet to produce a global-standard institution in Malaysia: the QS 200 World University Rankings 2011/12 ranked the government-run University of Malaya 167th worldwide (39th in Asia), up 40 places from 2010. The Times Higher Education 400 Top World University Ranking 2011/12, however, did not include a single Malaysian institution in its list, but rank two from Singapore and one from Thailand. Nonetheless, Malaysia has increased its attractiveness as a tertiary education provider in the global marketplace. There are 70,509 international students in Malaysian higher education institutions (25,263 in public institutions and 45,246 in private ones). Some 9000 of the international students are pursuing PhDs, 11,673 master’s and 35,347 bachelor’s degrees, while the remaining students are attending diploma and certificate-level courses. The government enrolment target in the country’s higher institutions for 2020 is 200,000.
OTHER PARTNERS: There are also promising instances of South-South cooperation in the higher education sector that do not show up in the rankings, due to their specialisation. Operating between university-level and vocational training, the Cooperative College of Malaysia (CCM) is one such example. Formerly under the Ministry of Agriculture, the CCM is now offering cooperative management masters of business administration and bachelors of business administration, as well as degrees in cooperative human resources management and accounting, to help run Malaysia’s 5170 cooperatives. Through its Malaysia Technical Cooperation Programme, the CCM works with counterparts in Brunei, China, Iran, India, Indonesia, Japan, Nigeria, Mauritius, Pakistan, Sri Lanka and several Pacific Island nations.
COVETED BY NEIGHBOURS: Malaysia is in a strategic position to widen its appeal as a destination of choice for overseas students, especially from the region, but also further abroad, in particular Muslim countries. As the middle classes in some Muslim nations grow, so do aspirations for their offspring and their available income. The number of Pakistani students was 3000 in 2011, and the Cyberjaya University College of Medical Sciences has seen its first class of Bosnian students. Meanwhile, Quest International University Perak (QIUP), a private research university, “is targeting 40% overseas students, with most likely studying at the post graduate level,” Kumar Das, vice-chancellor and chief executive of QUIP told OBG. “Graduate programmes are easier to build and market for new universities than undergraduate.” Among the more popular areas of study, Islamic banking and finance are among Malaysia’s strengths, in addition to engineering, hospitality and health sciences, that were identified by the Ministry of Higher Education as a priority to attract foreign students. The Asia-Pacific Institute for Information Technology (APIIT) is to introduce an Islamic finance programme, with emphasis on IT, and has 8500 students, 65% of whom are from overseas.
As capacity increases in Malaysia, its close city-state neighbour Singapore has started to take advantage of the affordable quality education lying at its doorstep. The Singapore Polytechnic (SP) contracted the Universiti Teknologi Malaysia (UTM) and Universiti Teknologi Mara (UiTM) to train 50 education specialists from 2012 to 2014. The funding comes mainly from a $465,000 grant from the Singaporean Temasek Foundation; the two Malaysian entities together committed about half as much. These universities are located near Kuala Lumpur, not in the Iskandar development corridor bordering Singapore. Once it is fully operational, the EduCity complex in Iskandar is expected to allow for a substantial increase in Singaporean enrolment numbers at Malaysian faculties.
The health education sector is a notoriously remunerative and exportable commodity – be it for Malaysians finding employment abroad, or for foreign students selecting one of Malaysia’s institutions to earn a bankable degree. Only 5% of Allianze University College of Medical Science’s (AUCMS) 6000 medical students are currently there studying abroad, but the school’s president, Dr Zainuddin Wazir, has ambitious plans for his institution, the courses of which cost one-third of an equivalent programme in Western countries. “We aim to have 50% overseas students by 2015, by which time we should have three to five branches outside the country. We plan to open projects in Indonesia, Thailand and Sri Lanka, and perhaps in Timor-Leste,” he told OBG. With over 35% of the faculty also foreign, AUCMS is poised to become one of the most cosmopolitan schools in the country. It is also one of the most widespread: “We have sought a licence from the Ministry of Higher Education to open 14 branch campuses in the country and 200 clinics by 2015. However, we expect by that time that AUCMS’s operations will be more important globally rather than in Malaysia.”
STUDY ABROAD: According to Nor Rubaiha Mohamed, the CEO of Yayasan UEM, “The overwhelming majority of Malaysian university students studying overseas select the UK over Australia due to the reduced cost of living.” Some 14,528 Malaysian students are studying in the UK, of which 11,074 students are privately-sponsored and 3454 are government-sponsored. There are 1441 British students studying in Malaysia, with 1422 of them attending private tertiary institutions and 19 at public tertiary institutions. To keep more Malaysians studying in their country and to become a key player regionally and globally, Malaysian universities are focusing on quality and innovation.
E-learning is also being fostered through public and private ventures. KL-based Asia e University boasts enrolment of over 3000 students. The institution saw a 50% increase in students in the 2011/12 school year, as it opened its operations in Indonesia, New Zealand and Vietnam via its e-learning centres in Malaysia, Bahrain, Cambodia, India, Saudi Arabia and Sri Lanka.
PRIVATE SECTOR GROWTH: The number of primary and secondary private schools is growing, particularly in the higher end of the quality chain. There are currently 71 international (primary and/or secondary) schools catering both to the growing expat and local demand, mostly located in Kuala Lumpur and Selangor. Over 400 private colleges and universities (both domestic and foreign) are offering courses in Malaysia now, and their numbers have been growing every year since the sector was liberalised in 1996.
The goal of these expansion efforts, aside from catering to expatriates, is also to widen the choice of schools for the Malaysian elite so more of them will enrol their children in Malaysia-based schools and universities. However, rapid growth has brought issues for quality control. Following audits, inspections or complaints from the public, the Ministry of Higher Education has issued compounds to 61 private institutions, compared to 28 in 2010. Mergers and acquisitions were few but significant in the first half of 2012. Private equity company Navis Capital Partners purchased a 26.5% stake of SEG International, and government-linked Ekuiti Nasional (Ekuinas) spent RM276m ($89bn) buying 90% of privately owned Cosmopoint. With 11,000 students in its seven faculties, Cosmopoint was the first in what could become a long list of educational institutes that are slated to be acquired by Ekuinas, which already has the APIIT Group’s three faculties in its portfolio.
Ekuinas’s takeover of a 51% stake of APIIT was instrumental in the institute’s plan for doubling its student body to 20,000 by opening a new RM500m ($161m) campus, the first phase of which is due to be complete by 2013. One of Ekuinas’s potential upcoming acquisitions could be another publicly traded firm, Masterskill, which specialises in health education.
MEGA-CAMPUSES: According to QIUP’s Das, “Domestic industry in Malaysia is not research oriented; therefore it creates a less than ideal scenario where universities actually have to actively pursue industry for collaboration.” Malaysia is doing so with two massive private-public partnerships. The 305-acre campus at EduCity Iskandar, which is set to be fully operational by 2015, will be shared by no fewer than eight international schools from the UK, the US, the Netherlands, Australia and Singapore, alone with one as-yet unknown entity. As universities worldwide see South-east Asia as the largest area of growth for education needs in the world, several are looking to Malaysia as a base in the region. EduCity is owned by Education@Iskandar, which is a branch of the Iskandar Investment, itself owned by the Ministry of Finance and Johor State.
Mahender Singh, the rector of the Malaysia Institute for Supply Chain Innovation, told OBG, “A stronger relationship needs to be forged between industry and academia in Malaysia. This will create a virtuous cycle that fuels applied research, while philosophically aligning academic, business and government interests.”
The medical field is one area where industry and academia are already cooperating. AUCMS, for example, was a small college in 2002, but has now upgraded to a university to accommodate the growth in demand for medical qualifications from students and industry alike. Additionally, the first private teaching hospital, which is under construction along with a medical faculty and an international school, is part of a 160-acre ETP project to “establish a strategic link between education, health and research” called Premium Health Education Cluster. Situated in Bandar Springhill (State of Negeri Sembilan), this RM904m ($291.6m) project has attracted regional partners such as Thailand’s Bumrungrad and the Duke NUS Graduate Medical School of Singapore, as well as Malaysian health care providers.
Just as in the tourism and hospitality sector, the growth of the health sector has created a high demand for skilled graduates, and the 21 private institutions are likely to be joined by other players. The aim of the Premium Health Education Cluster, located relatively close to the Kuala Lumpur International Airport, is to bolster the country’s growing health tourism industry.
OUTLOOK: Education, whether in the public or private systems, is expected to see healthy growth in coming years. Private primary and secondary schools are catering to a growing middle class, and universities and vocational schools are opening branches throughout the country to widen their appeal in resource-constrained settings. The only real risk is that there may be an oversupply of graduates, which may result in economic migration. However, government incentives schemes and the nation’s growing economy now limit this effect.
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