Egypt looks to make the grade

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By Oxford Business Group

CAIRO: Moves to encourage greater private investment in education in Egypt could provide an important boost to the country, bringing in resources and supporting ongoing reform efforts.

Education is a key area in which Egypt is seeking higher levels of foreign investment, Minister of Trade and Industry Rachid Mohamed Rachid, who is also acting Minister of Investment, said in October at the first Egyptian-Saudi Investment Forum. He stressed the country’s desire to encourage Saudi companies to replicate their domestic success in education and other sectors, including healthcare and infrastructure, in Egypt.

Education is a rising sector across the Middle East, its expansion driven by a number of factors, first and foremost growing and youthful populations. The growth and modernization of regional economies has also led to a growing demand for highly skilled labor. Egypt, like some other countries in the region, recognized some years ago that the education infrastructure needed to reform to meet the future needs of the economy, and the past two decades have seen education remain a consistent national priority.

Due to this commitment, major public investments have been made in the system, providing much-needed resources. Egypt’s 2010-11 budget increased education spending to LE 48.37 billion (€6 billion) from LE45.933 billion (€5.8 billion) in the previous fiscal year — though it is worth pointing out that it accounts for 22.7 percent of social expenditure, with Egypt’s costly subsidy system taking a 47.7 percent share.

Despite expenditure cuts made in response to the global economic crisis, with the overall state budget trimmed by 10 percent in 2009-10, education expenditure rose by 16 percent.

Private capital and expertise can make an important contribution to enhancing education, and reforms are being introduced to enhance the quality of teaching and put more emphasis on the skills needed for a knowledge-based economy, including IT literacy and creativity.

Part of this process is increasing the autonomy of schools considered to have the capacity for greater independence, and, crucially, a growing role for the private sector in many areas. Changes are taking place not only in the classroom, but also at administrative level, with funding structures, data management and policy-making all being re-examined.

Decentralization was also a crucial component of the first stage of Egypt’s national educational reform plan, which saw the launch in 2007 of three pilot programs giving schools direct control over their finances. Funds were first delivered directly last year, and initial results suggest that money is being spent more efficiently.

An important project for modernization was the Egypt Educational Reform Program (ERP), conducted in partnership with the Egyptian government and several other organizations. The ERP, which ran from 2004 to 2009, put schools and school autonomy at the heart of the reform process and aimed to deliver better teacher training, girls’ education, the creation of multi-grade schools, greater community participation in schooling, and date-driven decision making in the system.

Teacher training is another vital area of focus. A teacher testing pilot program started in 2008, offering pay rises of up to 50 percent for those who pass and possible dismissal for those who repeatedly fail to make the grade.

The private sector’s role holds potential for expansion, and a number of successful education schemes already exist, sponsored and part-developed by firms including Microsoft and Oracle. This could also enhance Egypt’s international appeal as a destination for IT outsourcing and business process outsourcing (BPO).

“Many Egyptian graduates are highly skilled, well-educated and multi-lingual. There is a much larger pool of fluent speakers in numerous languages than in other emerging market countries which are limited almost entirely to English,” Medhat Khalil, the chairman and CEO of the telecommunications firm Raya Holding, told OBG.

Egypt has a proud tradition of education, but more private investment will be needed to support the ongoing modernization efforts and to ensure that school and university systems do not fall behind regional leaders. Egypt has a proud tradition of education, but more private investment will be needed to support the ongoing modernization efforts and to ensure that school and university systems do not fall behind regional leaders. –This article was first published by Oxford Business Group.



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