New rules could stymie education FDI

Experts have objected to several provisions of a draft decree on foreign investment in education saying they need further clarification and revision.

They expressed their opinions at a consultative workshop held last week on a draft decree prepared by the Ministry of Education and Training (MoET).

"The draft is set to replace Decree 73 issued in 2012, and change procedures and investment conditions to boost competitiveness and help foreign investors enter the Vietnamese education sector," said Nguyễn Xuân Vang, head of MoET’s International Co-operation Department.

According to Foreign Investment Agency under the Ministry of Planning and Investment, as of March 20, 2017, Việt Nam had attracted 320 foreign direct investment (FDI) projects in education with a total investment of US$ 684.3 million, accounting for 1.3 per cent of the total number of FDI projects and 0.2 per cent of FDI capital.

Experts said at the workshop that the provision that investors need a secured investment fund of at least VNĐ 1 trillion (US$ 44.5 million) to establish a foreign higher education institution in Việt Nam could prove problematic.

Võ Thanh Bình of the Association of Universities and Colleges Việt Nam said that Decree 73 required investors to prepare a minimum investment capital of VNĐ300 billion, so the new decree would raise this by more than three times to VNĐ1 trillion.

“What is the increase based on?” Bình asked, implying that the increase could be a barrier to investment in education projects.

Nguyễn Kim Dung, head of Legal and Governance Relations of British University Việt Nam, said the increase in capital investment was reasonable, but it would be unreasonable to require this capital to be in cash.

“When applying for investment licences and establishing schools, investors can prove their ability through auditing reports that list their equity and assets, as well as through loan agreement contracts between bank(s) and the investors.”

"So, it is not reasonable to treat just cash as capital investment," Dung said.

A representative from the ASEAN College in Hưng Yên Province said that the investment of VNĐ1 trillion could be enough to develop economic or foreign language schools, but would be insufficient for an institution teaching technology.

“If the increase is made without a firm foundation, the decree will require several guiding documents, which will cause difficulties for investors,” he said.

Vang responded that the “secured investment fund for foreign higher education school project is the same as that of Vietnamese schools.”

He said that the fund would not cause difficulties for foreign investors, noting that some foreign universities in Việt Nam, like Việt Đức University or Việt Nhật University had investments of US$100 million-200 million.

Compulsory content

Hồ Thúy Ngọc, Head of International Training Faculty of the Foreign Trade University, said that under the draft decree, students have to complete “compulsory content” determined by Minister of Education and Training before attending foreign programmes.

“Our foreign partners will not agree to add Việt Nam’s complulsory content to their training programmes. They grant students certificates and they want the students to learn authentic programme,” she said.

“The additional content will also be a barrier for students and education institutions when they try to access fully-imported training programmes,” Ngọc said.

Dương Thị Hoài Sơn of the Sakura Montessori School said she disagreed with the draft decree provision that requires teachers at nursery schools to be college graduates.

She said this condition was not necessary because nursery teachers taking care of babies aged 12 months to 18 months did not need higher education qualifications.

“Enthusiasm and love for children are more important,” she said.

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