GLOBAL: Massive growth in private tertiary sector

The opportunity for massive growth in the private university sector, especially in the developing world, has been highlighted by a major conference staged in Washington DC by an arm of the World Bank. The International Finance Corporation-organised Investing in the Future: Innovation in Private Education conference heard middle classes were globally the fastest growing segment of the population.

Editor of Foreign Policy magazine, Moises Naim, stressed in a keynote speech that middle class people - usually supportive of education - already represented 30% of the population and were projected to be 52% of the world population within the next 12 years - an additional 1.8 billion people.
Naim said this was especially true in emerging economies: India's middle class would be 10 times larger in the next decade.

"Demand for education will rise as people have higher aspirations for their children's future - government in many emerging economies are unable to respond to growing demand, and thus the role of the private sector will increase," he said, adding that technical and vocational education would be especially popular in these growing economies.

Agreed conclusions from the conference were that governments and the private sector needed to work more closely together to ensure the greatest possible coverage of education across all sectors, operating under sound and transparent regulations for private and public providers.
Participants received a discussion paper from John Fielden, of Britain's CHEMS Consulting, and Norman Larocque, policy adviser to the Education Forum in New Zealand. They identified barriers to developing private education and set out eight suggestions for governments regulating private sector education. As regards the tertiary sector, this included:
*Providing a sound policy framework for operating a private education sector;
*Introducing clear, objective and streamlined criteria and processes for establishing and regulating private education institutions;
*Allowing for-profit higher education;
*Permitting private universities and colleges to set their own tuition fees;
*Providing incentives and support for private higher education institutions;
*Furnishing parents and students with information to help them select quality private education services;
*Establishing quality assurance and monitoring processes; and
*Developing the capacity of governments to implement policy and manage private education providers.

The conference also heard how the IFC had been investing in education. As of June 2007, it had pumped US$254 million into the sector, leveraging some US$928 million in total funds. Almost 60% of that investment was in the tertiary education sector and the corporation recently launched a new facility providing student loans.

In a private note to University World News, the IFC stressed the OECD had estimated there were now around 132 million students enrolled in tertiary education globally, up from 68 million in 1991.
"This represents growth of over 5% per year over the period of 1991 to 2004," the IFC note stated. "[We] anticipate that this demand will continue to grow. While access to education is important at all levels, it is conventional wisdom that tertiary education is a requirement for real economic change."
IFC Executive Vice President and CEO Lars Thunell later added: "The IFC has been most active in investing in tertiary education to date."

As well as funding student loans systems, Thunell stressed the organisaton had been involved in brokering relationships with local or regional foundations to support education projects by helping underwrite interest rates and supporting losses.
"It is innovative thinking like this where IFC can help play a central role for private sector involvement in education," he said.