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Global education standards sought

Released at: 15:46, 06/05/2018

Global education standards sought

Photo: Viet Tuan

Foreign investment in education is marked by greater competition and room for expansion and new institutions.

by Nghi Do & Hai Van

Just 20 minutes from central Hanoi, the British University of Vietnam’s second location, at the Ecopark campus, is this year ready to welcome thousands of students to experience an international-standard education. “The new campus is part of our development and expansion,” said Mr. Christopher Jeffery, Dean of the British University of Vietnam (BUV). “We have been successfully operating for over seven years and are now at the stage of opening new programs and faculties, such as IT and creative.” Now is the right time for the international university to expand and create a fabulous environment for students to learn and develop their skills.

In completing the Ecopark campus, BUV is also implementing a number of major projects relating to academics and personal development for students. Its British curricula and experienced international faculty guarantee that the most practical and up-to-date programs available will be provided. BUV also cooperates with domestic and international enterprises to build study programs with real projects, just like in an actual company. 

In January, the Ho Chi Minh City-based Cetana PSB Intellis School also opened a new campus, in District 7, after 14 years in Vietnam. Under a cooperative arrangement with PSB Academy Singapore, Vietnamese students will have the chance to study at PSB College as freshmen and then move to PSB Academy Singapore to continue their studies.

Figures from the Foreign Investment Agency at the Ministry of Planning and Investment show that foreign investors like BUV and PSB Intellis School are increasingly eager to invest in Vietnam’s education and training sector.

Existing investment

Vietnam had 390 foreign direct investment (FDI) projects in education with total registered capital of $761.8 million as at March 20, accounting for 0.23 per cent of total FDI. Professor Gael McDonald, President of RMIT Vietnam, told VET that as Vietnam is becoming increasingly accessible to foreign investment, FDI inflows into education have increased robustly. The figure in 2017 was $116.75 million and $60.45 million in 2016. “There has been a clear increase and no doubt there are more opportunities for FDI in Vietnam’s education sector,” she added.

Demand among Vietnamese seeking to study in an international environment is huge. Some $3 billion is spent each year on overseas studies, according to a recent report from the Vietnam Business Forum’s education and training working group. Numbers of such students increased 15 per cent last year compared to 2016, according to the Ministry of Education and Training (MoET). Indeed, “Vietnam is currently one of the best destinations for foreign investment in Southeast Asia,” according to a recent article from Asia Briefing, a subsidiary of Dezan Shira & Associates, a leading pan-Asian foreign direct investment consultancy firm.

Ninety per cent of these students are self-financed, which shows that Vietnamese families are happy to make a major investment in sending their children overseas to study at international-standard institutions. In operation for 16 years, RMIT Vietnam believes that Vietnam’s education environment continues to rapidly evolve. Clearly, “Vietnam is a very attractive location for education investment, with a large number of students in higher education and an emphasis from the government and families on the importance of education, as well as an international perspective and thirst for development,” Mr. Jeffery told VET. 

On top of rising incomes and confidence in the future, Vietnam’s demographics will also have a positive impact on the education market. As at 2017, nearly 60 per cent of the country’s population of some 95 million were under 35 years of age. With more disposable income than in years prior, young Vietnamese, with the support of their parents, are eager to obtain skills and knowledge that meet the ever-increasing demands in the labor market. 

Starting with just over 30 students and English and degree programs in 2001 in Ho Chi Minh City, and then in Hanoi in 2004, RMIT Vietnam now boasts a dynamic student body of over 6,000, including international students, who represent 7.5 per cent of the total. “We have seen tremendous development over the last 16 years,” said Professor McDonald. “I think it is also believed that we can be a useful influence in promoting quality in the tertiary education sector.”

Hurdles to surmount

Though a destination of some potential for investment, Vietnam’s education sector is now highly competitive. More international universities are being established here, Professor McDonald noted, and universities located overseas are increasingly attracting Vietnamese students. Students are also heading overseas to study at a younger age, attaining a high school education before attending university, and in doing so acculturate themselves more quickly. “But seeing our students enter the Asian business world boosted by the Australian education system is extremely satisfying and well worth the challenges,” she said. 

Resources for education is an issue worldwide and Vietnam is no different, according to Mr. Jeffery. Over time, issues such as enrollments, licensing and staffing, he believes, will be resolved and the processes streamlined, as a more risk-based approach is adopted and qualitative measures become more dependable, alongside quantitative metrics such as the student/faculty ratio. 

However, the greatest challenge, he believes, is transparency in rules and regulations as well as continuity in terms of decision making and implementation. “Investors don’t like changes, and this will be a major requirement for continued and growing investment in world-class higher education,” he said.

Any investor will also look at a country’s support initiatives. As one of the two first international schools in Hanoi, Hanoi International School (HIS) focused on enrolling Vietnamese students as well as those with other nationalities. The proportion of Vietnamese students increased after government policy on foreign investment in education changed in recent years. “This change is a good thing for any foreign investor wanting to invest in the market,” Mr. Terry Hamilton, Principal at the Hanoi International School, told VET. 

Identifying obstacles in existing regulations, MoET recently proposed a draft decree to replace Decree No. 73 issued in 2012 on foreign investment in education. This would change procedures and investment conditions, to boost competitiveness and help foreign investors enter the sector, according to the ministry’s International Cooperation Department. The draft also eliminates regulations on the proportion of Vietnamese students at education institutions. Decree 73 regulates that foreign nursery schools cannot recruit Vietnamese students, while foreign primary and secondary schools can enroll Vietnamese students but no more than 10 per cent of the total at the primary level and 20 per cent at the secondary and high school levels. 

Foreign investors can also use temporary infrastructure for five years before building a school under the draft, whereas Decree 73 requires they secure permanent infrastructure prior to opening. “The draft decree is much more open,” Mr. Nguyen Xuan Vang from the Department told local media. “It favors foreign investment in the education sector, including a better climate for doing business and the removal of the prescribed ratio of Vietnamese to foreign students.”

According to Mr. Jeffery, the draft decree is part of the development process for the higher education sector in Vietnam. It’s not perfect, he added, but no decree is ever perfect or fully satisfying for every stakeholder. It’s nonetheless a good step forward and has allowed for dialogue to be maintained between the government and providers. “The licensing and investment requirements will still put off some investors,” he believes. “But if they are serious and long term then the decree will give them some additional confidence in taking the decision to invest in and contribute to the continued development of Vietnam.”

Present & future

FDI into Vietnam’s education sector remains quite modest compared to regional countries such as China and Thailand, according to Mr. Hamilton. “But it is better than Laos and Cambodia and is developing,” he said. 

The amount of FDI certainly lags behind the region, Mr. Jeffery agreed. This is partly due to the large investment required for educational projects as well as the physical requirements to be granted a license. The result is that only those with the capacity and long-term vision can invest in education in Vietnam.

Indeed, investing in the sector is not a short-term investment. It takes more than ten years to see a return on investment, Mr. Hamilton believes. With rising demand for studying at international schools in Vietnam, he expects foreign investment in the sector to hold promise into the future. FDI or joint venture investment like HIS are the more common initiatives. In regard to HIS’s expansion plans, he said it will expand locations in the future but maintain its current status for the time being.

■ “I believe Vietnam is and will continue to be a very attractive market for foreign investors given its growth potential.” 

Professor Gael McDonald, President of RMIT Vietnam

■ “I believe that education is fundamental for any country and the government is determined to ensure that this is maintained, which is excellent for students and also for long-term educational partners.”

Mr. Christopher Jeffery, Dean of British University of Vietnam

■ “Vietnamese parents want to keep their children in Vietnam. The country’s education market has more potential than in other regional countries and this attracts foreign investors.” 

Mr. Terry Hamilton, Principal of Hanoi International School

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