In 2015, Muhyiddin Yassin, then Malaysia’s education minister, midwifed an ambitious Education Blueprint 2015-2025 that laid out a vision to make the country a regional education powerhouse drawing on foreign students from Africa, India, Pakistan, Sri Lanka, the Middle East, Central Asia and China.
Muhyiddin, now the country’s prime minister, envisioned a foreign and domestic student population of 2.5 million in 2025 in a regional hub similar to the United Kingdom and Australia to cash in on foreign students. But like so many of the country’s past grandiose plans, with only a cursory nod to reform of a system already regarded as hopelessly hostage to religion and saddled with corruption, the rush to build an industry grossly overestimated potential demand in regards to domestic and foreign students.
Today, Malaysia’s private higher education system is operating well under its capacity and accruing substantial debt now exacerbated by the onset of the Covid-19 coronavirus. Lower-than-estimated foreign student intakes have dismally failed to fill the private university and college capacity void as the country has failed in its bid to shine internationally.
Domestic graduate unemployment has been slowly rising, with the Ministry of Education reporting that 57,000 of 173,000 graduates remained jobless six months after graduation. As an indication of the mismatch of graduate qualifications with workforce needs, of 1.47 million job vacancies, 86.9 percent are for low skilled jobs. Only 4.7 percent of those advertised require any tertiary qualifications. Graduate unemployment was 9.6 percent or 204,000 at the end of 2018.
According to a prominent Malaysian industrialist who asked to remain unnamed, economic opportunities usually generate “me too” responses from corporations in the pursuit of quick profits instead of systematic development of businesses and markets. Thus, lucrative open market-space quickly fills up on the promise of copycat early successes up until that market space becomes overcrowded. This has occurred with palm oil refineries, oleo-chemical plants, rubber glove factories, golf courses and private hospitals. Private universities and colleges are no different, as education was regarded as an easy sector to enter and operate.
That has led to the dire financial situation highlighted by Professor Geoffrey Williams, former deputy vice chancellor on Universiti Tun Razak two years ago that Asia Sentinel reported on April 2.
The private higher education industry evolved from early tuition centers designed to prepare secondary students for examinations. Eventually, some centers began offering Cambridge O and A level examinations which would entitle entry into UK universities. Some colleges franchised British and US diploma and degree courses locally in Malaysia. These diplomas and degrees were easy to organize and operate, with study packs prepared for students and examinations internally corrected, with few students failing. Local employers and professional bodies recognized it for what it was, a short-term profit-oriented activity.
The Malaysian government allowed the upgrading of colleges to university colleges and universities at the end of the 1990s to help them position themselves for the foreign student market. During the next decade there was a rush to establish private higher education institutions built on expected exponential market growth. However, a decade later this bubble burst, leading to the closure of around 12 percent of registered private institutions.
Those that have remained strong are ones owned and managed by dedicated educators and those owned by foundations and corporations with a long-term view. These institutions have developed reasonably high educational standards, as have foreign branch campuses.
Up to now, private higher-education institutions have been stringently controlled by the Ministry of Education under the -Private Higher Education Act of 1996. Through long drawn out procedures, private schools must seek permission to launch courses and get them accredited through the Malaysian Qualifications Agency (MQA), an equally bureaucratic process. Thus, to a great degree the ministry is responsible for allowing the glut in student places.
In a quest to provide more autonomy, the ministry under former education minister Maszlee Malik prepared an internally-produced vision document titled Way Forward for Private Higher Education Institutions: Education as an Industry (2020-2025). Former Prime Minister Mahathir Mohamed, who took over the ministerial role after Maszlee’s departure, promised that the document would be a source of reference for the industry. It was prepared internally through a structured brainstorming session with private institution owners and senior management.
The actual documents itself covers five specific areas; agile governance, institutional stability, transformed delivery, innovation and teaching excellence and internationalization. What is striking is that there has been no formal situational audit of the industry. The comment that private higher education is recession-proof indicates this. Further, the narratives relating to each section are of a general nature, rather than outlining any specific strategic plan for each section.
The document is ministry-centric rather than beamed at institutions and students. There is very little about the upward mobility and job security of academic staff, or specific problems and issues facing students. There is very little about how the industry can attract back foreign students. Financial stress facing the industry even before the Covid-19 crisis is ignored.
The ultimate test of any plan is how it can assist in times of crisis. This one can’t. The coronavirus crisis, which is making a mockery of the proposition that education is recession-proof, will force a rationalization of institutions. The private schools will have to re-invent themselves to survive the other long-term challenges confronting them.
The first option for private institutions is to go all out to produce graduates superior to public-university graduates to convince potential employers to prefer students for available jobs. Most foreign branch campuses, along with a select few private schools, have achieved that. The better the employer reputation, the easier it is for these institutions to recruit students.
The second option is to provide education that is not directly dependent upon the job market. This means going for the entrepreneurial education space, where graduates seek to become entrepreneurs, following the example of other universities like the exemplary entrepreneurship institution Monterrey Institute of Technology near Puebla in Mexico. This is easier said than done. Truly entrepreneurial students won’t have the patience to sit through three years of classes before engaging in a start-up. Secondly, although students can learn entrepreneurship, teaching the art of entrepreneurship requires a very unstructured class-space.
In addition, entrepreneurship curricula without a technical base is like teaching only half a course. There must be a heavy technical/vocational aspect to maximize student competence. University Malaysia Kelantan, a publicly-funded school, has been fairly successful with embracing entrepreneurship within the core of its disciplinary pedagogy. Universiti Malaysia Perlis with the bachelor of Technology Entrepreneurship is now very popular, with 85 percent of graduates either finding employment or undertaking start-ups after graduation.
Education pundits are quickly jumping onto the online teaching model that has sprung up during the Covid-19 crisis. Such ventures are not new and very few have been very successful. Very few Malaysian academics are enthusiastic about online teaching. One lecturer said that “although students are tech savvy, multi-tasking, and prefer lecture recordings, they prefer the peer environment so they can socialize and network.” Online teaching can’t replace that.
Chapter four of the ministry report recommends mergers between some private institutions as a solution to lack of institutional sustainability. However, unless a merger brings a campus closure, where staff are drastically cut, the merged entity will also be just as financially weak as the two institutions were before the merger.
Pamjit Singh, president of the Malaysia Association of Private Colleges and Universities (MAPCU) argues tar most private institutions, unable to recruit overseas students, are running into cashflow difficulties, especially now with the Movement Control Order (MCO), because of the Covid-19 crisis. Singh calls for a government stimulus package to bail out the industry.
However, a straight bail-out wouldn’t correct the structural financial practices that have contributed to the current plight. According to Dr Geoffrey Williams study, many schools were technically insolvent long before the Covid-19 crisis. RM 4.7 billion was taken out of private institutions in the form of dividends between 2010 and 2016, equivalent to almost 30 percent of funds paid to the industry in student loans during the same period. In addition, RM672 million went to vice chancellor and CEO salaries and perks during that period. These funds could have been used to manage and steer the respective private schools sustainably while to achieving the required quality.
Santhara Kumar Ramanaidu, a Parti Keadilan Rakyat MP for Segamat, Johor, and former CEO of Masterskill Education group, said the government could use Petronas, the state-owned energy company or the Tenaga Nasional Bhd state investment fund, to buy up struggling schools under a special purpose vehicle umbrella, or bail out the viable ones via a soft loan regime.
Originally published in the Asia Sentinel.