Malaysia as an international hub for higher education: too much or not enough?

Posted on 14/06/2012

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Recently, several announcements have been made of foreign universities opening branch campuses in Malaysia (Herriot-Watt and the University of Reading from UK) or expanding their operations (Manipal from India opening a 20000 students campus). More importantly, the Ministry of Higher Education has indicated that it currently has 25 other applications from foreign universities to open branch campuses. This last information triggered lots of reactions by the existing players, including trying to convince the Ministry that it would deteriorate the competitive landscape. If such reactions are quite normal in any industry, it is interesting to discuss if they are reasonable or not.
First, a few figures on higher education in Malaysia. There are currently around 1.1 million students in Malaysia, including 500.000 studying for a bachelor and 400.000 for a diploma. 400.000 new students enroll each year and 250.000 graduate. On those 1.1 million, there are 80.000 foreign students, with 5 countries representing half of the foreign students’ population (China, Iran, Indonesia, Nigeria and Yemen).
These students are served by 21 public HEIs, 23 private HEIs with university status, 5 International university branch campuses and 21 private HEIs with university-college status. In fact, many more foreign institutions are already active in Malaysia through twinning programs with the university colleges, certainly more than 20.
So, would 25 new players affect negatively the competitive landscape? Several elements of answers:
. Malaysia aims clearly at becoming a higher education hub. While it invested in marketing higher education internationally much later than Singapore, it already has more foreign students and this foreign students population has doubled since 2006. The new objective is now to reach 200.000 foreign students by 2020. Of course, it certainly means to diversify the sources as the current major ones could be subject to internal political changes, which could suddenly affect the number of students sent. For example, Oman has recently announced that it would send up to 4.000 students per year in Malaysia (compared to 400 in 2010). And students’ intakes from India, Egypt and neighboring countries such as Thailand or Vietnam are very low compared to their potentials (only 1.400 students from India for example).
. There is a natural growth of the local student’s population. Malaysia’s economy is doing very well and employers have more and more needs for qualified staff. In Malaysia, the bachelor degree has become the minimum sesame to land a first skilled job. We can expect the students’ population to grow and moreover, we can expect that higher degrees will soon be more in demand. There are currently “only” 63.000 students at the Master level and 21.000 at the PhD level.
. Malaysia is taking a clear stand on quality. While at the start of the internationalization process, and as many other countries did, quantity was more important than quality (see the recent issues in Vietnam for example), Malaysia is now very carefully monitoring the quality of the existing institutions (public and private) and is becoming more and more exacting when studying applications of new players. And the implementation of a very detailed and stringent rating of the universities (the SETARA rating) is raising the standards. In the field of business for example, public institutions have also been asked to go for the international accreditations (EQUIS or AACSB). Not compromising on quality will certainly give an edge to convince local students to study in Malaysia. Currently around 80.000 Malaysians are studying abroad, 30.000 sponsored and 50.000 self-sponsored. And it will also raise the attractiveness for international students, particularly from countries where the number of HEIs is still too low to meet the internal demand and/or where the move toward quality has not been yet clearly implemented.

So, on overall, I don’t share the concerns of some of my colleagues on the competitive risk. On the contrary, I believe that more competition can help to strengthen the path toward a better quality and wider offer for Malaysian students and for international students in Malaysia and will reinforce the current vision of becoming an international hub.

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