Private education is still a minority pursuit, but poor results from state-run schools mean its popularity is growing in most parts of the region
Last year, the number of students in the GCC education system was about 12.6 million, according to Dubai-based Alpen Capital. The figure is growing by 3.6 per cent a year and is projected to reach 15 million by 2020. That fast rate of growth puts pressure on the authorities to provide ever more classrooms and teachers. More than 7,000 new schools need to be built in the next five years alone, most of which are needed in Saudi Arabia.
Underlying those overall figures are some other critical trends. The vast majority of students attend a state school, but their numbers are only expected to grow by 2.6 per cent a year between now and 2020. In contrast, student numbers at private schools are expected to rise almost twice as fast, by 5.1 per cent a year. By 2020, there will be some 3 million students in private education versus 2.3 million now.
Even those numbers do not tell the full story. The private sector is particularly strong in some corners of the region, but relatively weak in others. Private schools are dominant in the UAE and Qatar, while in Saudi Arabia, Bahrain, Kuwait and Oman the public sector is the main education provider. In the UAE the private sector educates about 70 per cent of pupils, but in Dubai, the most advanced market, 90 per cent of students attend a private school. In Saudi Arabia, the reverse is true, with less than 13 per cent of pupils in private schools. Things are changing there, but very slowly. The proportion of Saudi students in public schools fell from 89 per cent in 2009 to 87.3 per cent in 2014.
Private schooling is not necessarily better than public education, but in the Gulf it often is. The state system tends to provide poor teaching, based on outdated curriculums that emphasise rote learning above critical thinking and do little to prepare pupils for working life. The Swiss non-profit foundation World Economic Forum rates GCC education systems badly compared with the rest of the world. Out of 133 countries ranked by quality of education, Saudi Arabia is rated 45, followed by Bahrain (68), Kuwait (71), Oman (72), the UAE (90) and Qatar (91). In that context, it is not hard to understand why private schools are so popular.
In this part of the world, the government has been spending a lot of money on education; about 20-25 per cent of the budget is invested in education, says Mahboob Murshed, managing director of Alpen Capital. But the results are not very encouraging in terms of people being prepared for the jobs market. There is still a long way to go.
The growth of international private schools in places like Dubai has been fuelled by the presence of expatriates, most of whom are keen to give their children an education similar to the one they received; the tax-free environment means many of them have enough disposable income to make it affordable. But locals are also increasingly keen. For them, the private sector is often perceived as providing better quality education and there is a desire to give their children internationally recognised qualifications and a good grounding in foreign languages, particularly English.
Parents are looking for international education for their kids. Locals who can afford to, at least in the UAE, Kuwait and Qatar, send their children to private international schools, says Murshed. The ultra-rich send their kids overseas for education at the school level, not just at the university level.
The popularity of different international curriculums varies from place to place. In Dubai, the British curriculum is most popular, while in Abu Dhabi the American syllabus tends to win out, partly as a result of the presence of US oil companies. In Saudi Arabia, the US curriculum is also popular due to the desire of students to study at American universities, but the International Baccalaureate is also gaining in popularity, as it is elsewhere around the region. Across the GCC there are also schools catering for expatriates from Japan, France, India, Pakistan and elsewhere, offering the curriculums from those countries.
All this presents a clear opportunity for private sector operators of schools and universities, as well as the investors that support them. According to Alpen Capital, some 500 education schemes are currently under way around the region, with a total value of more than $50bn.
It is not always plain sailing, however. Teacher recruitment is an ongoing issue for all providers. The recruitment of staff, especially experienced staff, becomes more competitive annually, says Clive Pierrepont, a spokesman for Taaleem, which runs 11 schools in the UAE. Salary packages are important, but teachers are also looking for professional development and career progression.
The staffing issue is particularly tricky for operators in Saudi Arabia, where social conditions make it hard to persuade international teachers to come. Another issue is fees, particularly with the slowing economy and a rise in job insecurity. The downturn in the regions oil and gas industry in particular means some families have left and there is now overcapacity in school places in the UAE, prompting some school operators to resort to discounting of fees, sometimes disguising them as scholarships or special rates for newly opened schools.
According to Ashwin Assomull, managing partner at UK-based consultancy Parthenon EY, the long-term health of the private schools sector relies on having variety and making it easy for school operators. To have an affordable and varied school sector, you need to make it easy for schools to open up, but also for teachers to come and live there, he says. If you create the right ecosystem to attract the schools to come and make it easy for teachers to come, you can provide education at various price points to satisfy the whole market.
Around most of the GCC, those conditions are being met to some extent or other. The one major exception is Saudi Arabia, and not just because of the difficulty with recruitment. School operators complain that the kingdoms regulatory system is inconsistent and many potential local investors are too driven by the pursuit of short-term profits rather than the idea of building a sustainable long-term business. Unfortunately, it is the one country that arguably needs the investment more than any other. In the current outlook, most of the thousands of new schools that will be needed in Saudi Arabia will have to be built by the government.