In my last blog I discussed the expansion of higher education institutions in The United Arab Emirates. This entry will present a background piece on expansion in the UAE K-12 education market, opportunities and challenges.
What do the Numbers Say?
The most recent UAE population reports state that the UAE has a population, according to the National Bureau of Statistics, is 8.2 million at the end of 2011. The breakdown consists of:
- 1 million UAE Nationals and the expats from:
- 1.7 million from India,
- 1.2 million from Pakistan
- 700,000 the Philippines
- 600,000 Bangladesh
- 400,000 Iranians
- 300,000 Egyptians
- 300,000 from Sri Lanka
- 300,00 from Afghanistan
- 300,000 from Indonesia
- 250,000 Jordan
- 250,000 British
- 150,000 Lebanon
- 125,000 from Nepal,
- 100,000 South Africans
- 50,000 + from the US and Canada
In the budget for the fiscal year 2010, the education sector consisted of about 23% (Dh 10 billion or $2.7 billion US) of the total national budget of Dh 43.6 billion according to Mr. Ahmed Mohammed Al Midfa, Chairman of the Sharjah Chamber of Commerce and Industry.
More than 2,000 schools operate in the UAE, with the private sector quickly growing. The private schools are a major business generating over $1 billion US dollars in tuition. So a question to be asked is where does the tuition payments come from? If you say the government or employers pay for everything you are in for a surprise.
In a May 4th 2013 story in The National, WhichSchoolAdvisor.com reported its survey results. A key finding stated: “Almost one in five families spends more than 30 percent of their household income on school fees. The survey with 596 responses revealed 62 per cent of respondents cover the entire cost of their children’s school. 24 percent receive a contribution from their company and 13 percent have their school fees paid in full.
When asked whether the school fees paid represent ‘good value for the quality of school offering the results were:
- 54 per cent of those who have fees paid think those fees represent ‘good value’
- 27 per cent of those who pay in full themselves think those fees represent ‘good value’.
In spite of the cost constraints on parent’s budget, more than six in ten parents surveyed would recommend the school their children attend to other parents. However just 49 per cent of parents at Indian schools would do so. The most important criteria to parents is not the cost by rather the ‘Qualifications of Teachers’ followed by ‘Choice of Curricula’.
Numerous companies are establishing schools in the UAE. Example, of the 148 private schools in Dubai, 116 are for-profit and the other 32 operate on a not-for-profit or non-commercial basis. GEMS education is the for-profit market leader and their 19 schools in Dubai which captures 25% of the private school students.
It is not just the growth in Dubai the UAE is experiencing. Investors stated at a recent education forum in Abu Dhabi their plans to build their schools in remote areas of Abu Dhabi, Al Ain, and the Western Region. GEMS, which owns four schools in Abu Dhabi as well as its holdings in Dubai, plans to open seven additional schools across the Emirate for 30,000 students. It is also important to note that companies like GEMS are offering parents diverse schools (Indian, International, American etc.) and programs which will meet the needs of multinational population. In addition for profit schools can generate other high margin revenue for transportation, books, food, and facilities.
Where is the UAE K-12 Headed?
The for profit education companies believe the market is underserved and with a growing population the education market will expand for the foreseeable future. The data supports the view that expansion will be successful assuming tuition increases do not outpace the employee and employers ability to pay.
However a major stumbling block is the recruitment of teachers with proper qualifications. If parents determine the teachers aren’t worth the cost of tuition they may well look at alternative methods. In an upcoming blog I will discuss the difficulty in recruiting teachers from the UAE, Middle East and the West.
Sources: The National April/May 2013, UAE National Bureau of Statistics, and ICEF Monitor Country Snapshot UAE February 2013