Malaysia education reforms result in more opportunities for private sector participation

Malaysia’s ongoing commitment to education is evident in the amount it invests in the sector each year, usually at least 20% of the annual budget for all levels of learning, according to the World Bank. The result of this has been a sustained improvement in access to education, with close to universal enrolment at the primary and secondary level.

However, the 21st-century world poses significantly different challenges to those that faced the nation in its early years of independence more than 60 years ago, and the government is now focusing its attention on improving the quality of education to ensure that young Malaysians have the thinking skills, creativity and entrepreneurial spirit to help them prosper in a globalised world.

Far-reaching strategies have been drawn up for schooling and higher education in blueprints, each with measurable targets. The challenge for Malaysia now is implementation, and how to transform a culture that is focused on rote learning and high-stakes examinations into one that values a holistic approach, designed to nurture critical thinking and creativity. Lee Yee Cheong, chairman of the UNESCO International Science, Technology and Innovation Centre for South-South Cooperation, which aims to introduce enquiry-based science to schools, told OBG, “Passing exams and getting good grades is engrained in our culture. With these hands-on systems that let the child discuss and problem solve, parents say you are wasting time, you are not helping my child pass their exams. There is a great deal of resistance.”

Education Blueprint

In 2012 Malaysia placed in the bottom-third of 65 countries who took part in the 2012 edition of the OECD’s Programme for International Student Assessment (PISA), an international benchmark for reading, mathematics and science proficiency at the secondary-school level. In 2013 the government moved to address the declining performance of the national school system through the launch of the Malaysia Education Blueprint 2013-25, a reform programme aimed at transforming the country’s 10,000 state schools. Among the issues to tackle include establishing a clear process to review and make changes to the national curriculum, which remains outdated and improving teacher training.

Released in September 2013, the blueprint seeks to lift Malaysia into the top third of countries – both in PISA and the Trends in International Mathematics and Science Study, carried out by the Institute of Education Sciences in the US – by 2025, through eleven major policy shifts. The aims of the reforms include improving the quality of teachers and encouraging teaching to become a profession of choice; shifting the curriculum and methods of assessment away from rote learning; and closing the gap that exists between rural and urban schools.

The document also envisages much closer cooperation between schools, parents and communities, and posits a greater role for the private sector in improving the quality of education. “This is not about access to education,” Sudhir Shetty, chief economist of the East Asia and Pacific region at the World Bank warned in a 2015 speech on Malaysia’s economic challenges and opportunities. “It’s about whether [children] learn anything in school and whether, by the time they make it to university, they have the basic maths, reading and science skills to succeed in a knowledge-based economy.”

Higher Education

The higher education sector is also undergoing reforms, under the National Education Blueprint for Higher Education 2015-25 (Higher Education Blueprint) rolled out in 2015. Although the portion of the national budget given to the sector, has consistently been high – over 5% on average – spending has decreased since 2010. In that year, 6.8% of the budget – RM13bn ($3.2bn) – was allocated to higher education, according to the media. By 2015 that figure had decreased to 5.8% of total spending – RM15.8bn ($3.9bn) – and in 2016 just 5% – RM13.4bn ($3.3bn) – was given to the sector.

The Higher Education Blueprint envisages raising the quality of higher education institutions and bringing more international students to Malaysia. By 2025 the country expects graduates to be more employable, for more local universities to be recognised globally for research quality and for 250,000 foreign students to be enrolled at Malaysian institutions, both public and private. As part of its quality-raising plans, the blueprint also places a focus on improving governance at public universities. However, as the appointment of vice-chancellors continues to be made by the government, this has led some education professionals to question whether this results in leaders with the expertise and leadership skills necessary to improve the institutions they head.

Public-Private Potential

The government’s Economic Transformation Programme (ETP), launched in 2010 to help the country reach developed-nation status by 2020, stresses the need for the private sector to take a leading role in all areas of national development, including education. The ETP consists of 12 sector-specific National Key Economic Areas (NKEAs). The Education NKEA is managed by PEMANDU, an agency attached to the prime minister’s office, and carries out education-focused initiatives through entry point projects (EPPs). EPPs have so far focused largely on special needs provision and technical education and vocational training (TVET).

Tengku Azian Shahriman, the director of the Education NKEA at PEMANDU, believes public-private partnerships (PPPs) have an important role to play in reforming Malaysia’s education system. She is a supporter of private involvement in education infrastructure, education services and financing programmes, such as vouchers. “There is a lot of benefit if we push for PPPs, as they will reduce [our] operational burden,” she told a forum organised by the IDEAS think-tank in 2015. “I’m a great believer in raising competition in the school sector. Quality will rise. It will give parents more choice.” She also indicated that PEMANDU would hold a lab to develop a framework for PPPs in education in the third quarter of 2016.

Opportunities for private sector involvement in state schooling remain fairly limited. The Ministry of Education (MoE) retains overall control, including key areas of budget and staffing, with opportunities for private companies mainly focused on providing outsourced services, such as cleaning or catering.

Pioneer Projects

However, the trust schools programme, originally set up five years ago by Yayasan AMIR, a foundation established by Khazanah Nasional, Malaysia’s sovereign wealth fund, has experienced a certain degree of success. The project first got under way with a pilot group of ten schools, and has since created a larger network of schools with a degree of autonomy. Khazanah Nasional funded the programme with an initial investment of RM100m ($24.8m) and raised additional funding in 2015 through the sale of its first social-impact sukuk (Islamic bond).

Under the programme, which has been inspired by private sector participation in schooling initiatives overseas, including academy schools in the UK, charter schools in the US and companies in Sweden that are able to “adopt” specific schools, usually in their local neighbourhood. So far, most of the sponsors of the Trust Schools have been government-linked companies, although Sunway Construction joined in 2015 through the Jeffrey Cheah Foundation.

While these institutions remain under the MoE’s purview, they have been given autonomy enough to implement an independent five-year training and transformation programme to improve teaching quality and raise school performance. In theory, under the agreement signed with the MoE, these schools are also expected to be able to choose their own staff, but in practice this has not yet happened. Nevertheless, available data for 2012-13, published by Yayasan AMIR, shows improved teaching competencies and better academic performance at both primary and secondary level.

There are currently a total of 50 trust schools in Malaysia and in 2015 the government set aside RM10m ($2.5m) to build 20 more in Johor, Sarawak, Selangor, Perak, Negri Sembilan and Kuala Lumpur. Having set an initial target of 500 Trust Schools by 2025, the government has now raised that bar to 700 and is appealing for more corporate sponsors. The programme is designed to work with schools’ existing resources, and the expectation is that as more schools adopt the training programme, costs will come down as economies of scale improve.

International Schools

Most private involvement in schooling in Malaysia is in international schools. Their popularity has partly been attributed to the declining quality of the public schools, which has also given rise to a billion dollar tuition industry.

The government has actively encouraged the participation of foreign educational groups in this area by removing ownership restrictions. Under the ETP, 100% foreign ownership is permitted, not only for international schools, but also for skills training centres and private institutions of higher education. Furthermore, in 2012 the rule which allowed Malaysian students to make up no more than 40% of a school’s enrolments was removed, triggering a surge in demand from parents looking for an English-language education for their children.

Of the 17 education EPPs under way, the scaling up of international schools has been the most successful, according to PEMANDU. There are now 106 international schools, surpassing the government’s initial target of 87 by 2020. Enrolment, however, is 45,050 – below the target of 75,000 students by 2020. About 55% of students are Malaysian. The sector has become highly competitive, according to Lim Si Boon, the executive director of Tenby Schools, a local chain of private and international schools that was established in Ipoh in 1960. In 2015 ILMU Education Group, part of Ekuiti Nasional (Ekuinas), a private equity company linked to the government, bought a 70% stake in Tenby Schools for about RM70m ($17.3m). It also owns Asia Pacific Schools, another international and private school chain, as well as Cosmopoint, a college, and Unitar, a local university. Ekuinas has said that it is considering a public listing of its education unit.

International school brands are also entering Malaysia, targeting the region’s wealthy. Among those setting up shop is St. Joseph’s Institution, Epsom College and Marlborough College, which is located in the new EduCity development in Johor, close to Singapore. These investments are creating a cluster of top-tier schools, which have benefitted from a strong brand name and native English-speaking teachers.

Private Sector In Higher Education

Ever since 1996, when foreign and private universities were allowed to establish branches under the Private Higher Education Institutions Act, the number of private colleges and vocational training institutions has been growing, and there are now more than 400.

The resulting rise in places has allowed more Malaysians to continue into higher education and has also drawn more international students. However, the level of competition between institutions for students has raised concerns about the quality of education provided and the financial stability of some institutions. Research from the Penang Institute, a think tank, found that 35% of all private universities and colleges had debts exceeding their assets.

Malaysia imposed a two-year moratorium on new private colleges from 2013-15. A five-year freeze on new medical courses was also imposed in May 2011 and proposals for nursing colleges have been suspended since July 2010. Improving quality and integrity have been identified as crucial to the growth of tertiary education, and licences will now be issued only to “highly selected and quality institutions only,” according to PEMANDU’s “ETP Annual Report 2014”.

The Malaysian Qualifications Agency, the body that accredits academic programmes, and the international student services company Education Malaysia Global Services (EMGS) will lead efforts to ensure programmes are of a high quality. Maintaining high standards is crucial to achieving the goal of attracting more foreign students – 200,000 by 2020 – since the intake of public universities is almost all local.

Starting with Monash University in 1998 and the University of Nottingham in 2000, Malaysia now hosts several branch campuses, which it sees as an important way of enhancing Malaysia’s global reputation in the education industry. In 2014 Edinburgh-based Heriot-Watt moved into its campus in Putrajaya with 454 students, while in 2016 Xiamen University, the first Chinese university with a branch campus in Malaysia, took in its first undergraduate students at its purpose-built campus near Putrajaya.

One-Stop Shop

Further south, EduCity, a new development designed to house several different education providers in one place, reported a 63% increase in students in 2014, the latest year for which data is available, from 1733 in 2013 to 2822 in 2014, well above projected enrolments. Institutions to join the site include Newcastle University, which provides medical courses, and the Netherlands Maritime Institute of Technology, with various programmes, including shipping and logistics management. In 2014 the development added a new tenant: the Malaysian Multimedia University, offering a cinematic arts programme in collaboration with the University of Southern California, while another tenant, the University of Southampton, has expanded its course offerings to include a Master of Engineering in Aeronautics.

The development of higher education also involves nurturing specialist expertise in key disciplines, such as Islamic finance, health sciences, engineering, hospitality and tourism, game technology and accounting. The government is encouraging Malaysians – in the private sector and in government service – to take higher degrees under the MyBrain15 programme, which aims to produce 60,000 PhD holders by 2020.

PEMANDU anticipates that opportunities will arise for closer education-industry collaboration in areas such as oil and gas, as well as the provision of English language teaching, with a view to serving people from China, India and Korea. The Education NKEA is also keen on nurturing collaboration between universities and the private sector to develop future income streams for universities. For public universities, a scheme is under way to bring together Malaysia’s top institutions and private investors to commercialise academic discoveries. Called the Malaysian Innovation Hub and set up under the Ministry of Higher Education (MoHE) in 2015, the scheme, under the University of Malaya’s former vice-chancellor Ghauth Jasmon, aims to secure funding from international sources to fund product development. Within five years, it hopes to create 200 companies with foreign collaborators, placing Malaysia in the top-20 countries in the Global Innovation Index.

English Language

Malaysia has long been concerned that its students are failing to acquire the necessary level of proficiency in English. A quarter of Malaysian graduates are still out of work six months after graduation, and this is partly attributed to insufficient English language skills. Improving these skills are, therefore, a key part of the government’s reforms, starting with programmes to raise the standard of teachers’ English.

In January 2016 the Dual Language Programme (DLP) was introduced at 300 schools nationwide. Under the DLP, schools can opt to teach maths and science in English, providing they have parental approval and sufficient resources to teach the subjects effectively. There has been some opposition to the plan, which was first announced in the 2016 national budget. Previously, an initiative to teach maths and science in English, which was introduced in the early 2000s under Dr Mahathir bin Mohamad, the former prime minister, was shelved in 2012 amid opposition from nationalists who felt it threatened the position of the national language, Bahasa Malaysia. The government also dropped plans to make English a compulsory pass for the Malaysian Certificate of Education, the national exam for high-school students, because it feared too many would fail.

TVET

Technical skills and performance in science, engineering and maths are also a focus of reforms. Malaysia anticipates technical and vocational education training (TVET) will become a big area of growth as a result of its membership in the ASEAN Economic Community, which will increase mobility for skilled workers among the 10 member states. Malaysia aims to have 16,000 students in skills training by 2020. To achieve this, the sector may need to work to change the perception of TVET as inferior to traditional academic programmes and to promote the pathway as a viable option for good students. There is also concern that there is a lack of quality technical universities in Malaysia to provide pathways for TVET students.

In the 2015 budget, the media reported that an estimated RM1.2bn ($297m) had been allocated to TVET. Some RM100m ($24.7m) was provided to fund 10,000 places at private technical colleges, with RM50m ($12.4m) given to the Council of Trust for the People to develop its TVET courses. In the 2016 budget, RM4.8bn ($1.2bn) was awarded to TVET institutions and the Ministry of International Trade and Industry, which was tasked with setting up an industrial skills committee to coordinate training programmes with industry. Skills training centres are funded according to performance, which is assessed every two years by the Department of Skills Development. Across the country there some 370 private accredited centres that have a rating of at least three stars.

International Students

The MoHE has signalled its intention to encourage more international students to choose Malaysia to study and has set a target of enrolling 200,000 by 2020 and 250,000 by 2025. In 2014 Malaysia had 108,000 foreign students, according to the Higher Education Blueprint. Two-thirds of these were enrolled at private institutions, and the remainder at public universities. Most come from other Asian countries, notably China and Indonesia, followed by Africa and the Middle East.

Certain restrictions lessen Malaysia’s competitiveness to recruit international students. Working whilst a student in Malaysia is not allowed, and obtaining a work visa upon graduation is not easy. However, the government is promising to loosen up some of the bureaucracy surrounding immigration procedures. In January 2016 officials began issuing visas for the duration of each student’s course rather than on a yearly basis. In addition, the newly-created EMGS system, designed as a one-stop shop for potential students, has also made finding programme information and applying to universities easier.

Outlook

The Malaysian government’s reform plans are a sign of its determination to improve the quality of the education it provides to young people. They are also an indication of its plans to strengthen its position as an education provider globally, offering students, both at home and overseas, the opportunity to gain a quality education at an affordable price.