A learning curve: Kuwait's bid to boost funding into education

Kuwait is keen on boosting investments in the private education sector as part of its economic diversification plans, but the varying standards of education, a preference among nationals for free public schools and reduced state spending could all hinder the market’s development, analysts say. Earlier this year, Kuwait laid out a long-term development strategy known as “New Kuwait 2035” aimed at reducing the country’s reliance on hydrocarbons. 

Investments in a private education system that enrolls around 40 percent of the country’s pupils is an important element for the state’s economic growth, according to a report published last year by the Oxford Business Group (OBG).

According to the official Kuna news agency, Kuwait is forecasted to spend 1.5 billion Kuwaiti dinar ($4.97 billion) from its 21.2 billion dinar 2017-18 budget expenditure on developmental projects, which includes education projects and services.

“The government is really serious about attracting investments to the education sector, there is no doubt about that but there are several challenges concerning the quality of education, cuts in state spending and hardships in finding teachers, as most western teachers prefer to work in western countries for social and culture reasons,” Prashant Garg, director of corporate finance at consultancy firm RSM Kuwait Albazie, told Zawya in an interview. 

“But the state is working very hard on developing the school curriculums as it really wants to attract more investment to the sector,” he added.

Kuwait ranks among the wealthiest nations in the world. Its gross domestic product (GDP) grew by 3 percent last year, but is likely to slow to 2.5 percent this year as a result of cuts to oil production, before expanding to a longer term rate of 3.2 percent, according to the World Bank. 

The country also has a high literacy rate of 96.3 percent among its 4.4 million people, according to recent official data.

An anticipated growth in the number of students in Kuwait as a result of population growth makes education an attractive business opportunity. The average expenditure per student in Kuwait is higher than the Gulf Cooperation Council (GCC) average by $3,300, according a report by local investment banking firm Global Investment House issued in February this year. 

“During the 2010-2015 period, the number of private schools grew from 460 to 507, and enrolment grew at a CAGR (compound annual growth rate) of around 4 percent,” said Sally Jeffery, education and skills practice leader for PwC Consulting in the Middle East.

“While growth in private enrolment could be fuelled by factors like high per-capita income and perceived better education quality, the demand for public schools remains healthy, probably due to preferences for fully-funded education of relatively reasonable quality,” Jeffery said.

She added that the preference of 80 percent of students - mostly Kuwaiti nationals - to opt for public education poses a challenge to investment in the private sector.

Yet despite the high levels of total spending on education in the country, the percentage of the government’s budget allocated to education is lower than its neighbours, according to consultancy firm Alpen Capital. It argued that Kuwait spends 9.5 percent of its budget on education, compared to a GCC average of 15.6 percent.

As a major oil exporter, Kuwait’s economy has been hit by the decline in energy prices and its government has been proposing subsidy cuts, but these were fought by the country’s powerful parliament.

As a result, the state’s budget for the current fiscal year (which started on April 1) envisaged a deficit of 7.89 billion dinars ($26 billion), Reuters reported. 

Jeffery said that the oil price crash has focused minds across the region on “human capital and education investments,” adding that Kuwait is focused on encouraging investment in the higher education market.    

“When it comes to higher education, the government is a supporter of the strong participation of private investment; where currently there is a good range of programmes aligned with vocational training needs and employability skills. This helps in relieving pressure on the Kuwaiti public higher education institutions, as well as government-funded international scholarship budgets.”

“It is a joke”  

Over the past few years, Kuwait has initiated an education reform programme and partnered with several international entities to help it develop teaching standards. But teachers in Kuwait say the reforms have not yet improved the quality of education in free-of-charge public schools. 

“It is a joke, to say the least,” said a Kuwait-based teacher who works in a private school, who asked that neither she nor her school be named.  

“I would never work there. Everything is wrong in public schools and it starts from the attitude of the parents and students to the teachers that are being hired.”

The teacher said that some Kuwait parents and students look down on expat teachers, which makes their jobs difficult both in public and private schools.  

She also said that some parents still questioned her ability to teach English, because she is from Kuwait. 

“Some (parents) came to meet me to test my English,” she said.  

Kuwait ranked among the lowest countries in the 2015 Trends in International Mathematics and Science Study (TIMSS) study, which provides an international assessment of the mathematics and scientific knowledge of students around the world, according to PwC analyst Jeffery. “This shows a significant need for quality education in Kuwait,” she added.

However, efforts are being made to improve things. RSM Kuwait Albazie’s Garg said that in 2011, Kuwait initiated a nine-year education reform programme called the Integrated Education Reform Programme (IERP). Its aim has been to improve school curricula, the quality of teaching and the management of schools.  

In 2015, the ministry of education partnered with the World Bank to launch a five-year technical cooperation programme dedicated to improving the quality of education as well as strengthening the government’s ability to implement reforms, according to the World Bank’s website.

Political tensions

Spending on education across the GCC was expected to grow at 3.6 percent per year between 2015-2020, according to Alpen Capital. It said there are currently more than 500 educational projects underway worth over $50 billion.

However, political tensions across the region – especially the recent dispute between Qatar and a number of its neighbours - could lead to investment decisions being delayed, including in the education sector, said Garg.

“The geopolitical situation in the region continues to remain volatile, with the recent Qatar situation making things worse,” he said. Read more on Qatar. 

“However, we believe that the investment in the education sector will continue to remain a top priority for governments in the region. There is a strong focus on social expenditure especially, as education, social development and health have received the lion's share of the budget in the region,” he said.

The Alpen Capital report states that the GCC’s population is expected to reach 60 million by the year 2020, of which the number of people aged below 25 years is projected to surpass 22 million. The total number of students in the region is expected to reach 15 million by 2020, up from 12.6 million in 2015.

According to Jeffery, governments in the region are encouraging private investment in education, to increase the variety of courses offered and to spread the burden of capital investment. In order to attract its share, Kuwait may need to change. The Kuwaiti teacher who spoke to Zawya said that with fees per pupil currently standing at 4,000 dinar and are expected to increase by 500-600 dinar next year. 

“Invest in schools,” she said. “You already make billions. The buildings of most schools have not changed since the 1970s.” 


Appearing in Zawya, on August 16, 2017 - click here to read more

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