Mongolia’s rapid economic growth and development is catalysing the expansion and internationalisation of its higher education system. A dynamic, if fragmented, private sector has emerged over the past two decades, competing with solid public institutions. Demand is rising steadily as new job opportunities open up and disposable income rises. This trend is likely to continue over the next several years. Other factors at play are consolidation and continued reform across the sector.

COUNTING UP: Enrolment in higher education institutions continues to increase, reaching 170,126 in 2010/11, up 3.2% on 164,773 in 2009/10. Some 34,211 students graduated in 2010, up from 29,599 two years earlier. The private sector accounts for 35.5% of students in higher and continuing education.

There were 7200 teaching staff at universities, institutes and colleges in 2010/11 and 2100 at technical and vocational schools. The pupil-to-teacher ratio is 21.5 at technical and vocational schools and 23.7 at universities, colleges and institutes. This is relatively low by the standards of the world’s top systems, but is respectable given Mongolia’s history and economy.

As the system has shifted from a Soviet model to a more Western-looking one, universities have moved to retrain lecturers and other academics, particularly by building English language skills. Salaries are low, with professors earning as little as $300 per month, according to the World Bank – much the same as a school teacher and well below the wages offered by the mining sector – making staff recruitment and retention a serious issue. Teacher training is performed by universities themselves, putting pressure on resources.

Popular subject areas include commercial and business management, accounting, engineering, education and pedagogy, medicine and social sciences. Most Mongolians choose courses directly related to certain professions, as is common both in former communist countries and emerging markets as a whole. According to Sergey Gromov, the chairman of Chinggis Khaan Bank, “People were trained during the Soviet era and were mostly in manufacturing and production, not in banking or management. Some time is needed to reeducate the key workforce. There are a good number of educated repatriates, but they are not enough to meet the demand and support economic growth.”

As the World Bank noted in its 2010 assessment of tertiary education in Mongolia, public spending per student is still well below developed country levels. As a consequence, the report warned, tertiary institutions have been relying on mass admissions to boost revenues, compromising standards as a result.

REFORM AND DEVELOPMENT: With the government focusing on developing basic education, universities have been taking the initiative to reform themselves, creating new course offerings and increasing business ties where possible. The next several years will see reform intensify, supported by an Asian Development Bank (ADB) higher education reform project that is due to start in January 2012, funded by a $20m loan.

The project aims to improve the quality and relevance of higher education courses, linking them to the needs of the modern economy and enhancing access. To this end, it will include human resources development, in-service teacher training, funding for the development of research facilities, the construction of e-learning centres in provincial areas, and consultancy services on institutional restructuring. “The main aim of the programme is to align education with international standards,” I. Lonjid, the social sector officer at the ADB’s Mongolia resident mission, told OBG.

INVOLVING BUSINESS: Increasing scope for public-private partnerships in higher education is a priority, including improving ties between the sector and businesses and encouraging private investment to improve standards. While there are some institutional impediments to business cooperation with the sector, certain opportunities have emerged.

The Business Council of Mongolia, an investor organisation, is planning to expand its interaction with public and private universities by organising “enrichment lectures” on topics such as business ethics and entrepreneurship. “Links between universities and business are growing,” E. Gulgee, the head of the British and American Studies Department at the Ulaanbaatar-based University of the Humanities, told OBG. “Businesses can contribute to courses, helping to make them more relevant to the needs of the job market.”

AMERICAN UNIVERSITY: A potential game-changer for the higher education sector is the proposed American University of Mongolia (AUM). In recent years interest in the establishment of an American university in Ulaanbaatar has grown, with private investors, US officials and representatives of existing institutions abroad all involved in discussions. The AUM would follow a similar model to American universities elsewhere, with instruction in English and US-accredited courses. As of 2011 the project was still at the feasibility study stage, but momentum behind it is growing.

If successful, it is unlikely to be the last international university to enter the Mongolian market. Elsewhere in Asia and other emerging markets, branch campuses of major international universities and colleges have been established to cater to growing local demand. Moreover, the internationalisation of education and the economy in Mongolia is already encouraging incumbent institutions to raise standards. “Right now there is little serious competition,” Robin Charpentier, a consultant at the National University of Mongolia (NUM), told OBG. “But competition is coming. Universities are waking up and realising they have to reform.”

PRIVATISATION: Increased competition would likely result in a reduction in the number of private institutions, and the privatisation of all but three or four of state universities, completing a process that began in 1990. Privatisation would reduce the burden of the segment on the public purse and open the institutions to private capital, dynamism and business expertise. It would be far easier for the major universities to expand, bringing about an increase in competition, which in turn would drive up education standards in the sector.

NEW CAMPUSES: The AUM is expected to be another significant development in the higher education scene. The proposal is to create a self-contained “education city” with universities, student housing and support services. This will bring several benefits, including moving universities to more modern and suitable premises, making use of economies of scale, and sharing of facilities and the possible development of a “knowledge cluster” to stimulate the growth of knowledge-intensive and high-tech sectors.

The ADB is participating in the Nalaikh project, providing funding for study tours to similar developments abroad. Top private universities, as well as the major public institutions, are looking to move to Nalaikh. To keep standards high, only the best and biggest will be able to set up at the cluster. The development is expected to be limited only to establishments with 5000 or more students and a “Western” syllabus.

Furthermore, they will be expected to construct their own campuses, meaning that only those with access to capital will be able to participate. The creation of the cluster could catalyse the process of consolidation, with some of the smaller and lower-quality universities and colleges unable to make the move to Nalaikh going out of business or merging.

RESEARCH: Expenditure on scientific and research institutions has more than doubled in the past few years, reaching MNT21.64bn ($16.88m) in 2009/10, from MNT10.12bn ($7.89m) in 2007/08. There are 65 such institutions in Mongolia, employing 4045 people.

Research has traditionally been carried out by national academies, which stand separate from universities. The Ministry of Education hopes to merge the research functions of the academies into the relevant departments at universities, bringing the system in line with international norms and supporting university development. There is some resistance to this plan from within the academies and Soviet-era conservatives.

Research is still a relatively marginal concern in Mongolia, but several dynamics are at play that are changing this. The growth of the economy is expanding the financial resources that both the public and private sector can commit to research, while the rising competition and internationalisation in the sector will make it ever more important for universities to develop research capacity that complements their teaching commitments and raises their profile. Mongolia’s economic diversification efforts, which seek to enhance value-added sectors of the economy and increase the quality of products that they export, will also require investment in research and development.

While government attention has to an extent been focused on the school system, higher education in Mongolia has developed rapidly, with the private sector taking the lead. Expansion has been such that standards have sometimes been compromised, and there is a consensus that the system is too fragmented. Donors and major investors are showing increasing interest in the sector, not least due to growing demand. The next few years should see investment and internationalisation that will boost competition and improve results.