New legislation is paving the way for foreign investment in the education sector. This move is expected to support increased capital inflows and raise the standard of education through increased competition. While some challenges remain, investor appetite looks set to increase once regulations around quality assurance in the private sector are introduced.
Liberalising the Sector
Myanmar’s private education sector was opened up to increased foreign investment on April 20, 2018 following a notification issued by the Myanmar Investment Commission. This allows foreign firms to fully own and operate institutions that offer either the curriculum prescribed by the Ministry of Education (MoE) or an international syllabus. Although this is expected to attract interest from investors and foreign education providers, some local players have suggested that domestic demand is not yet in place.
With an expanding middle class and a growing university-aged demographic, there was already rising international interest in Myanmar’s private education segment prior to the passing of the new regulations. For example, London-listed Myanmar Strategic Holdings (MSH) and Singapore-based Auston Institute of Management announced a joint venture to establish and operate a private school in Yangon in April 2018. Furthermore, upon the relaxation of the foreign ownership restrictions, the Directorate of Investment and Company Administration (DICA) reported interest from education service providers from Singapore, Australia and New Zealand to establish operations in the country. As well as the opening of a number of institutions by UK-based companies, global provider Kaplan – a subsidiary of US-listed Graham Holdings – opened Kaplan Myanmar University College in June 2018.
While the new legislation appears set to increase interest in the country among foreign investors, a number of barriers remain. These include the country’s currently underdeveloped financial services and persistently high land prices. In addition, there are linguistic barriers to foreign enterprises looking to enter the market. The country performs poorly in terms of English proficiency, ranking 86th out of 100 countries worldwide and 19th out of 25 in Asia in Education First’s 2019 English Proficiency Index.
This can pose challenges in terms of staffing but also offers an opportunity for domestic partnerships, as well as for education technology solutions that enable the remote teaching of multiple classes simultaneously. Furthermore, this provides a market for English language schools. Indeed, MSH operated three Wall Street English language centres in Yangon as of November 2019. The firm has announced the opening of a fourth centre by January 2020, this time in Mandalay, as a step towards the target of 10 centres across Myanmar by 2027. Moreover, the MSH is the owner of the American School of Yangon, which was granted an investment permit of $1m to open for academic year 2019/20.
However, while there is a regulatory framework in place for private school registration under the MoE, this applies only to schools within the basic education segment that follow the syllabus prescribed by the ministry. Meanwhile, private schools who offer an international education, while bound by regulations under DICA, operate unregulated by the MoE.
The regulation of international schools is becoming an increasingly prominent issue as the number of these institutions increases, having already doubled from 25 in 2012 to 50 in 2017, according to ISC Research, a UK-based institute providing international school data. While these issues remain unresolved, there are signs that the authorities are moving in the right direction, with the Parliament approving a proposal to improve the assessment of certificates issued by private schools in August 2019.