Market environment

Economic growth for the year 2006 was expected to remain strong with GDP estimated to grow by 5.8 percent. However, given the impact of persistent high oil prices, increasing inflationary pressures, higher interest rates and geopolitical tensions, the global economy for the year 2007 is expected to be only moderate, with a slightly lower growth rate of 4.7 percent in 2007 compared with 4.9 percent in 2006. In order to soften the impact of slower global growth on the Malaysian’s economy, the Government would adopt an expansionary fiscal policy, besides implementing measures to further stimulate the activities of the private sector. With this in place, it is hoped that the projected GDP for the year 2007 in Malaysia could increase by 6 percent.

The Malaysian Government is determined to make Malaysia a regional and international centre of education excellence by ensuring that the higher education institutions offer quality education. Education is a major investment in human capital as more people sought to acquire knowledge, skills and technology. It is also one of the key focuses of the Ninth Malaysian Plan (2006 – 2010), where it is agreed upon that approximately RM 50 billion would be invested in education infrastructure.

The Government’s commitment in education could be clearly reflected in the Malaysia’s budget for the year 2007, where RM 33.4 billion is allocated for operational and development expenditure, accounting for 21 percent of the overall 2007 Budget. Of this, RM 6.7 billion is for primary education, RM 6.2 billion for secondary education, RM 10.4 billion for higher education and RM 10.1 billion for training programmes.

Market characteristics

In brief, the education system in Malaysia is categorised into three levels, primary, secondary and tertiary. Most Malaysians would have completed their studies until the secondary level. With Malaysia’s aspiration to increase the number of 17 to 23 years old in higher education from 30 percent to 40 percent in 2010, more students would have the opportunity to pursue their studies at a tertiary level.

Students usually have the option to pursue their tertiary studies either at a local university (which is usually taught in Bahasa Melayu) or a private education institution (which usually uses English as its medium of instruction). Recently, there has been an increase in demand for overseas education programmes taught partly in Malaysia, with numbers of students on twinning/international joint programmes (programmes completed via TNE) now larger than those on overseas programmes. This is mainly due to the perception that the cost of study overseas is relatively higher when being compared against academic programmes which are completed locally.

The education industry in Malaysia continues to grow rapidly. Seeing this, many countries, namely Australia, USA, New Zealand and Canada, are making their presence felt in the market here. Russia has successfully positioned itself as a medical destination while countries like Germany, Japan, China, Taiwan and France are increasing their marketing activities.

Market opportunities

The Ministry of Higher Education, universities and other institutions of higher learning will play an important role in the development of human and intellect capital. This is inline with the Government’s priority to produce quality graduates and achieve the objectives of Vision 2020.

The Government has set a target for at least 40 percent of the population within the age cohort of 17 to 23 to obtain tertiary education by the year 2010. Besides that, the Government had also set a target of recruiting 100,000 foreign students by then. To ensure that students would be taught by qualified lecturers, the Government had put aside a substantial amount of investment for lecturers to pursue PhD studies. With this initiative, it is hoped that the Government’s target of 60 percent of its academics having PhD by 2010 could be achieved.

To increase the number of professionals with the required skills, the Government will award scholarships to outstanding students to pursue courses, such as science, pharmacy, medicine and engineering at graduate and postgraduate levels, in local and renowned foreign universities. Besides these courses, biotechnology has also been highlighted as a new source of growth for Malaysia, and a substantial amount has also been allocated for the development of this sector.

Education institutions in Malaysia had been urged to link themselves closely with the industries, especially in engineering, technology and bio-medical fields, to keep abreast with current progress in the private sector.