August 2016

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<p class="p1">This article looks at how those high-level goals cascade down through the recently published National Transformation Program and what opportunities and challenges there will be for foreign participants in an education sector which is by some margin the most significant in the GCC.</p>
<p class="p3"><span class="s1"><strong>The Vision</strong></span></p>
<p class="p1"><span class="s2">The Vision is about transitioning the Saudi economy away from an over-reliance on oil revenues to a more balanced, investment based model. It states:</span></p>
<p class="p4"><em>Our goal is to attract and retain the finest Saudi and foreign minds, and provide them with all they need. Their presence in the Kingdom will contribute to economic development and attract additional foreign investment.</em></p>
<p class="p1"><em><span class="s2"> To this end, we will prepare a modern curriculum focused on rigorous standards in literacy, numeracy, skills and character development. We will track progress and publish a sophisticated range of education outcomes, showing year-on-year improvements. We will work closely with the private sector to ensure higher education outcomes are in line with the requirements of the job market [….].</span></em></p>
<p class="p1"><em> We will continue to improve and reform our regulations, paving the way for investors and the private sector to acquire and deliver services – such as…education – that are currently provided by the public sector. We will seek to shift the government’s role from providing services to one that focuses on regulating and monitoring them and we will build the capability to monitor this transition.</em></p>
<p class="p4">This outward looking perspective sets the tone for much of the Vision. It is reflected in the strategic objectives of the NTP which include:</p>

<ul>
 	<li>Improving recruitment, training and development of teachers</li>
 	<li>Improving the learning environment to stimulate creativity and innovation</li>
 	<li>Improving curricula and teaching methods</li>
 	<li>Improving students’ values and core skills</li>
 	<li>Development of financing methods and improvements in financial efficiency</li>
 	<li>Educating students to address national development requirements and labour market demands</li>
 	<li>Increasing Private Sector Participation in the Education Sector.</li>
</ul>
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<p class="p4"><span class="s2">The last two points are perhaps the key strategic objectives, but what form this private sector participation may take and how it may be targeted to achieve national development goals remains to be seen, especially in the context of the recently updated Companies Law promulgated by the Ministry of Commerce and Investment which has broadened the potential for foreign ownership in Saudi corporates but does not address the education sector. That said, there are current Saudi Arabian General Investment Authority policies which: </span></p>

<ul>
 	<li>based on a decision by the Council of Ministers, have suspended foreign investment (for the time being) in the construction, management and operation of elementary, intermediate and secondary schools; and</li>
 	<li>permit foreign investment (with prior approval from the relevant Ministries)in the construction, management and operation of institutes, colleges or universities for education and granting graduation degrees.</li>
</ul>
<p class="p4">In the short term the NTP sets out thirty-six specific initiatives with projected costs on a five year basis which are intended to be launched in 2016. Interestingly, the costs stated are expressed not to include the contribution of the private sector in a particular initiative – which is certainly consistent with the strategic objective relating to finance indicated above. It also indicates that some form of PPP structure is contemplated in a number of cases. Unlike some other GCC states, there is no specific PPP law in the Kingdom (although ministries can and do promulgate their own regulatory systems in this regard and similar projects of various types have been undertaken).</p>
<p class="p3"><span class="s1"><strong>Accountability</strong></span></p>
<p class="p1">It is also clear that there is a high premium being placed on accountability within the Ministry of Education in terms of securing delivery of the plan. Education is a fundamental building block of the Vision as a whole and its progress is likely to be scrutinized carefully. Highlights include:</p>

<ul>
 	<li>A comprehensive framework for the professional development of teachers and educational leaders</li>
 	<li>Developing a national strategy to upgrade the teaching profession by raising the professional level of teachers, improving the profession’s ecosystem and raising the quality of services provided to teachers</li>
 	<li>Development KPIs at Ministry level</li>
 	<li>Establishment of a Transformation Office and an office of strategy management at Ministry level to implement the relevant sections of the NTP</li>
 	<li>Shifting to digital education to support teacher and student progress</li>
 	<li>Encouraging the private sector to invest in public education including at kindergarten level</li>
 	<li>Attracting private investments to finance school’s construction</li>
 	<li>Develop the Independent Schools model to reach 2000 public schools run by small establishments</li>
 	<li>Establishment of the King Salman University for Technical and Vocational education</li>
 	<li>Establish a practical framework to align university graduates with labour market needs</li>
 	<li>Life-long Learning (Sustainability).</li>
 	<li>Taken together these measures represent a sea-change in the education sector in the Kingdom, and one which must be delivered at a critical period economically.</li>
</ul>
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<p class="p3"><span class="s1"><strong>Conclusion</strong></span></p>
<p class="p1"><span class="s2">The scope of private sector involvement in the financing and construction of education infrastructure is clear; whether the same access will be given to the actual delivery of educational services is less so. However, the potential for joint ventures around items such as technical curriculum development and teacher training is significant. The franchise model, adjusted as necessary to accommodate the specific traditions of the Kingdom, also has potential to play a role.</span></p>
<p class="p1"><span class="s2"> The precise mix of measures adopted by the Ministry of Education remains to be seen, however we anticipate that the last quarter of 2016 should see a flurry of activity in the sector as initiatives are launched.</span></p>