3.0 Growth of Private Higher Education

There are now close to 600 private higher learning institutions in Malaysia offering degrees and diplomas in various fields of study¹. They complement the work of the public universities in delivering higher education. What economic and political developments spurred the growth of private higher education in Malaysia? Rapid economic growth is certainly an important factor in growth of private higher education in Malaysia. In the first twenty-three years of independence (1957-70), the Malaysian economy grew at the rapid rate of 5.8% (Rao 1976, cited in Jomo 1990), and averaged at 7.8% between 1971-80 (Fourth Malaysia Plan, cited in Jomo 1990). For the period 1992-97, real GDP oscillated between 7.8% (1992) and 9.5% (1995) (Economic Report 1997-98). Since Independence, the country used export earnings wisely to improve living standards by building infrastructure (roads, railways, telecommunication, hydroelectric projects etc), schools, hospitals, universities, etc. and to pay subsidies to the poorer strata of society, such as smalltime farmers, and other low-income families². As incomes of families improved over time, the demand for higher education grew. The public sector alone could not cope with this rising demand. At the height of the economic boom of the 90s, Malaysia wanted to speed up the production of its knowledge workers in an attempt to sustain the high economic growth (that is, up to 1997). So, in 1996, the Malaysian Parliament passed the Private Higher Educational Institutions Act (PHEIA) to allow the private sector to enter the higher education market in a big and more regulated way. This Act opened the floodgates! The business sector, seeing this golden opportunity, did not waste much time (not necessarily to make huge profits) and immediately rushed in to set up colleges offering tertiary programmes that could be completed in a shorter time after the SPM (school certificate). The Act also empowers the Minister of Education to approve or disapprove the setting up of private colleges and to invite selected companies to set up private universities [Article 6(1)]. With the Act, a new post (Registrar General of Private Higher Educational Institutions) was created in the Ministry of Education to 'supervise' these private institutions and to regulate them, creating a 'highly regulated' industry in the process-as perceived by some in the business.

Enrolment in the private colleges (now around 100,000) gained momentum soon after the economy went into tailspin in July 1997 when the Malaysian Ringgit plummeted from RM2.5 to the US Dollar to RM4.2, before being rescued by the government through capital control. Today, the Malaysian currency stands fixed at RM3.8 to the Dollar. At this rate of exchange, many Malaysians (including the government) who have been sending their children (and in the case of the government, their sponsored students) overseas for higher education, find the going rather tough financially, as Malaysians are now 34% poorer than before, in Dollar terms). As a result, many parents have recalled their children; and the Malaysian government has drastically reduced the number of students sent abroad, in favour of local universities. Three public and four private universities were founded during the present decade to meet the demand for higher education, not counting the hundreds of colleges that enter into twinning arrangements with foreign universities (the so-called '3+0' programmes that replaced '2+1')³.

The rapid growth of information technology (IT) globally during this decade has also spurred the growth of private higher education in Malaysia. Many private colleges were established with the primary purpose of imparting computer knowledge and skills which were (still are) in high demand in the private sector. This euphoria gained further momentum when the Malaysian government announced the development of the Multimedia Super Corridor in Putrajaya where IT companies from all over the world will be housed and given tax breaks to carry out IT business there. Just to underscore the seriousness of the government in IT, it devoted a whole chapter in the Seventh Malaysia Plan to IT development. One government-linked private university, Universiti Telekom, has even changed its name to "Multimedia University" to capitalize on its special area of focus.

The Malaysian government's plan to make Malaysia a center of excellence in education in the Southeast Asian region is another factor that has encouraged the business sector to expand their education arms to attract foreign students. To facilitate this, the government has eased the requirements for student visas to foreign students.

¹ Malaysia has eleven public universities/colleges: UKM, UM, UPM, USM, UTM, UUM, UNITMARA, IIU, UNIMAS, UMS and Kolej Tunku Abdul Rahman, with an estimated enrolment of 150,000 students. They offer limited opportunities for foreign students as they use the Bahasa Melayu, the National Language, as medium of instruction, except at the post-graduate level, where there is more flexibility. KTAR, founded by the Malaysian Chinese Association, a political party in the ruling coalition, is also another exception on language policy, as it uses mainly English in its teaching.

² See N. F. Yaakub & A.M. Ayob. "Higher Education and Socioeconomic Development in Malaysia: A Human Resource Development Perspective." Paper presented at the ASAIHL Seminar on Liberal Arts Education and Socio-economic Development in the Next Century, held at Lingnan College, Hong Kong, 27-29 May 1999.

³ In July 1998, a year after the economic crisis, the Ministry of Education approved ten private colleges to offer '3+0' twinning programs, by which students spend the entire 3 years in Malaysia to complete a foreign degree and need not go overseas in their third year (Molly N.N. Lee, 1999: 81). Many more have now joined the club and made this their selling point when trying to attract students to enroll.