Markaz Sector Report 2013

GCC Education
A Multi Generational Enterprise

Research Highlights

Analysing the status of GCC Education Sector, highlighting current and expected enrollment trends, market-size, challenges and investment opportunities

MARKAZ SECTOR RESEARCH GCC Education - January 2013

Research M.R. Raghu CFA, FRM | Head of Research rmandagolathur@markaz.com Murtaza Pattherwala | Senior Analyst mpattherwala@markaz.com

Support Jenevivu Lasrado | Secretary, Research jlasrado@markaz.com Nael Aboul Huda | Manager, Media & Communications naboulhuda@markaz.com

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MARKAZ SECTOR RESEARCH GCC Education - January 2013

Table of Contents
1. 2. Executive Summary .................................................................................. 7 GCC Education Sector Overview ............................................................... 9 Introduction ........................................................................................... 9 Structure of Education System in the GCC ................................................ 9 GCC Education Sector Market Size ......................................................... 12 Public vs. Private Education Institutions.................................................. 13 Private Schools Types by Curriculum ...................................................... 14 Gross Enrollment in the GCC ................................................................. 16 Country-wise Gross Enrollments For Different Levels ............................... 17 3. Pre-primary Level Education in the GCC................................................. 19 Total number of enrollments at pre-primary level .................................... 19 Enrollment forecast .............................................................................. 21 Pre-primary level enrollments share of total school students .................... 23 4. Primary Level Education in the GCC ....................................................... 24 Total number of enrollments at primary level .......................................... 24 Enrollment forecast .............................................................................. 26 Primary level enrollments share of total school students .......................... 27 5. Secondary Level Education in the GCC ................................................... 28 Total number of enrollments at secodary level ........................................ 28 Enrollment forecast .............................................................................. 30 Secondary level enrollments share of total school students...................... 31 6. Tertiary Level Education in the GCC ....................................................... 32 Total number of enrollments at tertiary level........................................... 33 Enrollment forecast .............................................................................. 34 Share of public educational expenditure on tertiary education .................. 35
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MARKAZ SECTOR RESEARCH GCC Education - January 2013 7. Growth Drivers for the GCC Education Sector ........................................ 37 Favorable demographics ....................................................................... 37 Increasing Income................................................................................ 39 Government support and initiatives ........................................................ 40 To increase employability ...................................................................... 41 Social Needs ........................................................................................ 43 Demand Supply Gap ............................................................................. 43 8. Opportunities for Private Sector............................................................. 45 Growing size of education market .......................................................... 45 Opportunities in higher education market ............................................... 46 Government support to private sector .................................................... 46 Growing preferences to enroll in private educational institutions ............... 48 Investment in the ICT development for the education sector.................... 49 Private School market witnessing Consolidation and Private Equity Deals .. 50 9. Regulatory Aspect ................................................................................. 52 Constraints for Investors in the private Education Space .......................... 52 Controls on Tuition Fee Hikes ................................................................ 53 Restrictions on Foreign Ownerships of Education Companies .................... 53 Control over Students Enrolment ........................................................... 53 10. Challenges faced by the Sector .............................................................. 55 Low enrollment rates at higher education level ....................................... 55 Imbalance in enrollment among specializations ....................................... 55 Shortcomings of Faculty ........................................................................ 57 Questionable quality of programs and curricula ....................................... 57 High Cost of Establishment.................................................................... 59 Speed of Reforms ................................................................................. 61 Need for Better Vocational Training........................................................ 61

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MARKAZ SECTOR RESEARCH GCC Education - January 2013 11. SWOT Analysis. ................................................................................ 62 Strengths............................................................................................. 62 Weaknesses ......................................................................................... 62 Opportunities ....................................................................................... 63 Threats................................................................................................ 63 12. Annexure....................................................................... 65 Appendix 1: Overview of Select Listed Education Companies in the GCC ... 65 Appendix 2: Overview of Select Unlisted Education Companies in the GCC 68 Appendix 3: Key GCC Education Projects in Execution ............................. 71 Appendix 4: United Arab Emirates: Federal Subsidies and transfers, 2003-11 (Millions of U.A.E. Dirhams) ................................................................... 74 Appendix 5: Forecasting Methodology .................................................... 75

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MARKAZ SECTOR RESEARCH GCC Education - January 2013

Charts
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4.1 4.2 4.3 4.4 4.5 4.6 4.7 5.1 5.2 5.3 5.4 5.5 5.6 5.7 6.1 6.2 6.3 6.4 6.5 7.1 7.2 7.3 7.4 7.5 7.6 7.7 GCC Education System Structure Technical and vocational training enrolment ration Public spending on education as percentage of GDP Public spending on education as % of total government expenditure Estimated education market-size in the GCC, 2012 Percentage of students enrolled in public schools National vs. expatriate students and type of schools they are enrolled in Gross Enrollment Ratio World, N. America, GCC and MENA Gross enrollment ratio at pre-primary level in the GCC Country-wise number of students at pre-primary level, 2011 Percentage of private enrollments, Pre-primary - 2011 Pre-primary level enrollment estimates and forecast for the GCC Male (2012-2020) Pre-primary level enrollment estimates and forecast for the GCC Female (2012-2020) Pre-primary level enrollment estimates and forecast for the GCC Total (2012-2020) Pre-primary enrollment share of total school students in the GCC (2012-2020) Gross enrollment ratio at primary level in the GCC Country-wise number of students at primary level, 2011 Percentage of private enrollments, Primary - 2011 Primary level enrollment estimates and forecast for the GCC Male (2012-2020) Primary level enrollment estimates and forecast for the GCC Female (2012-2020) Primary level enrollment estimates and forecast for the GCC Total (2012-2020) Primary enrollment share of total school students in the GCC (2012-2020) Gross enrollment rate at secondary level in the GCC Country-wise number of students at secondary level, 2011 Percentage of private enrollments, Secondary - 2011 Secondary level enrollment estimates and forecast for the GCC Male (2012-2015) Secondary level enrollment estimates and forecast for the GCC Female (2012-2015) Secondary level enrollment estimates and forecast for the GCC total (2012-2015) Secondary enrollment share of total school students in the GCC (2012-2020) Gross enrollment rate at tertiary level in the GCC Country-wise number of students at tertirary level, 2007-2011 Percentage of repeaters in secondary level (avg. 2000-2011) Gross outbound enrolment ratio (avg. 2000-2011) Public educational expenditure on tertiary education as % of total public education expenditure Population Growth in GCC (Million) Population Breakdown in the GCC by Age-group, 2009 Population Breakdown in the GCC by Age-group, 2020 Average GDP per Capita (PPP) in USD in GCC Region Average GDP per Capita (PPP) USD - 2011 Number of public schools in the GCC country-wise (2009) Number of private schools in the GCC country-wise (2009) 8.1 8.2 8.3 10.1 10.2 10.3 10.4 10.5 10.6 10.7

Charts
Growth in total number of students in schools across the GCC (2012-2020) Current private school spend and parental willingness to spend (Nationals, By Country; in USD) Current private school spend and parental willingness to spend (Expatriates, By Country; in USD) Tertiary Gross Enrollment Ratio by Region, 1970 to 2007 Distribution of students in higher education in the GCC by broad fields of study, 2008 Distribution of students in higher education by specialization, 2008 Pupil- Teacher Ratio (Primary) Quality of Higher Education and Training in the GCC Education quality and economic competitiveness Primary Education Education quality and economic competitiveness Higher Education

Tables
2.1 2.2 2.3 2.4 7.1 7.2 8.1 10.1 Public spending on education (USD) Indicative annual private schools fee structure by education level, (USD) Gross Enrollment Ratio by level and countries Total school students in each GCC country, 20082011 Expatriates Population 2010 Jobs Created and taken up by Nationals, 2000-2010 Major M&A deals in the GCC Education Sector International school building costs per m2 of internal area, 2011

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MARKAZ SECTOR RESEARCH GCC Education - January 2013

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