Health & Education

Reform to Perform

Private sector dodges regulation to invest in training

As Saudi Arabia looks long term to a life after oil, the government is looking to implement a raft of reforms aimed at making it easier for the private sector to find the people it needs.

Riyadh, Saudi Arabia

Saudi Arabia is in the midst of a sweeping reform agenda. It is governed by two key documents: Vision 2030 and the National Transformation Plan, which lays out a clear opening volley of changes to be implemented by 2020.

The NTP calls for a vast increase in vocational and training institutes in the Kingdom’s education mix. Currently, the public sector runs the vast majority of schools, and the private sector often finds graduates ill-prepared for white collar jobs and unwilling to perform most labor intensive work.

According to the NTP, private-sector participation in the education sector should increase from 25% to 35%. Much of that increase is intended to come from vocational training institutes, not four-year universities. The skills required by the Saudi market are often vocational rather than academic, and the plan reflects this reality.
In the past, cultural expectations often pointed young people to university and then to a government job.

Today things are different. Having more vocational training would help to place nationals of all ages in a wider variety of jobs.

The private sector is responding to the NTP’s requirement for non-state participation in the education sector with investment.

Mohanad Dahlan, the CEO of UBT Company, a major investor in the Saudi education sector, said in an exclusive interview with TBY; “We have invested in new sectors through our new brand called UBT Academy, encompassing the English Institute and the Higher Training Institute. The latter will provide the knowledge and skills required to do a job directly, without any extra information. They will be completely job focused. In May, we will announce these new schools after getting curriculums developed and approved by the ministry of education and the TVTC respectively. We will operate the English Institute on a franchise basis throughout the GCC.”

This ambition fits well with the NTP, and may see significant uptake from the Saudi population during a time when government jobs are few and tuition at traditional universities is expensive for many and cannot be financed.

Although vocational training may prove highly beneficial for for-profit educators and the economy as a whole, there are issues for some investors, especially in the medical field. For example, every educational institution has to have its curriculum approved by the ministry, three government employees must sit on the board, and the dean of every institution must be a government employee. Permits must be obtained for many things, and the process can be lengthy.

Khalid Batterjee, the Chairman of Batterjee Educational & Training Academy, told TBY in an interview that: “We intend to do vocational training for all medical areas, and we started our academy in 2011 off the back of our large hospital business. We needed to train our own staff, and we wanted locals. But regulations are making it very slow. Approvals and other processes take a lot of time. We would like to be much larger than we are today.”

Batterjee is one of a pair of brothers who have built one of the largest private hospital businesses in the Kingdom, a business that was recently went to IPO, raising USD3.2 billion on the local stock exchange.

If any local investor should be capable of pushing through a robust medical education program to serve an existing market, it is the Batterjees. Their trouble is indicative of greater woes within the system.

There is hope though. Mohanad Dahlan has seen no such issues; “As far as regulation, I have had no issues. The fact that the industry is immature is a bigger problem than regulation for us. That said, there are some things we could do better regulation wise. For example, mixed education is more effective than gender segregated education. This is a fact.”

A key piece of the Vision is increased opportunities for women. This would seem a fertile area for reform, but entrenched opposition remains.

If anything, these examples show that while the new reform agenda has the teeth that previous efforts lacked, as well as broad backing from the private sector, there are significant legacy issues still to be tackled.

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