Menal spent her childhood watching the female members of her family travel overseas for education. Eleven years ago in 2005, it was her aunt who travelled to Australia under the newly launched King Abdullah Scholarship Programme (KASP) from the Saudi Arabian government. Seven years ago, it was her sister’s turn to travel to Victoria on the west coast of Canada. And finally four years ago, it was her turn.
She applied to the Saudi bureau for a scholarship and in 2012 – accompanied by a male guardian, her brother – travelled to British Columbia to study English. Eighteen months later, she started her MBA programme at Vancouver Island University (VIU). Her passion had always been fashion design, and she hoped to launch her own retail clothing brand in Saudi Arabia someday.
When Menal applied to attend the MBA programme in Canada, she became one of over 207,000 students (and dependents) whose international studies were supported by the King Abdullah Scholarship Programme (KASP). The Middle East is known for its generous government funded education scholarships, but at a cost of 22.5 billion riyals (USD 6 billion), the KASP is one of the largest in the world. The Saudi government invests approximately 10 percent of its annual budget in higher education.
The ripple effects felt globally
Menal travelled home in August 2015 for the summer holidays and was full of positive stories of her international experience. She encouraged her friend Zainab to apply but unfortunately Zainab was unsuccessful. Her application was made right around the time the Saudi bureau had begun reviewing scholarships, and as an aspiring Arts student she did not meet the eligibility criteria.
The new restrictions also required applicants to attend one of the world’s top 50 academic programmes in their field or top 100 universities, as determined by the Saudi Education Ministry, and so there was absolutely no chance Zainab would be able to take a Master’s programme at VIU, one of around 40 mid-sized Canadian universities.
Located on the west coast of the country, VIU’s strengths are a focus on teaching and small class sizes. But its strengths are also what make it particularly susceptible to the changing fates of Middle East economies. In February 2016, credit rating agency Moody’s Investors Service warned that the Saudi government’s decision to make its scholarship programme more academically selective would be felt across the global higher education sector and that small and mid-sized tertiary level institutions should brace for a decline in enrolment figures.
North American schools that have strong English-language programmes are considered to be particularly vulnerable since they are at the front line for international students. Enrolment numbers at Vancouver Island University’s English as a Second Language (ESL) programme have already declined, and a survey by the American Association of Intensive English Programmes found that 80 percent of US institutions had seen their numbers drop. VIU’s Saudi numbers dropped by nearly 50 percent in the six months after the Saudi Bureau introduced new requirements.
“Five years ago, we had a ton of Saudi students in our ESL program,” says Bruce Condie, director of International Marketing, Recruitment and Business Development at VIU. “But now we are experiencing a rapid decline. It’s like a tap has been turned off.”
Saudi students are one of the largest international groups at VIU. The statistic is not unusual for British Columbia which is home to 28.9 percent of the country’s international student population (second after Ontario with 43 percent), according to the Canadian Bureau of International Education (CBIE).
Kuwait, Libya and Qatar also offer education scholarships to their citizens but their value is significantly lower and they have a smaller representation in North America institutions. Kuwait’s Ministry of Higher Education, for instance, awards 5,000 international scholarships a year. The US, Australia and UK attract 75 percent of Kuwaiti students; Canada is allocated just 25 spaces annually.
The Libyan-North American Scholarship Programme sponsors 2,500 students in North America and is worth USD 2.58 billion. It is experiencing its own rocky period, and in 2015-16 payments to universities and professional training courses were delayed. The lack of funding was attributed to governance challenges and reduced oil output following the country’s second Civil War.
In March 2016, Qatar also announced modifications to its scholarship policy, which include the Ministry of Education and Higher Education vetting institutions and courses, supposedly to align student interests with the needs of the economy. And so the changes to the KASP in July 2015 were one in a wave of many, the ripple effects of which are being felt on education institutions as far away as the Pacific.
Lower oil prices have spurred most Arab states to tighten their 2016 spending. Saudi Arabia will experience a deficit of 19.5 percent this year, because of sinking oil prices and its involvement in the war in neighbouring Yemen. The Saudi government is considering domestic and international borrowing to finance the deficit. It has already reduced national subsidies on domestic fuel prices and may sell stakes in state-owned entities within five years.
The UAE is expected to run a deficit of 2.4 percent according to the International Monetary Fund, after its total revenues fell by 22 percent. The country’s diversified sources of revenue are hoped to offset drops in global oil prices. Qatar is projected to reflect a QR 46.5 billion deficit. It plans to finance the shortfall by issuing debt instruments in local and international financial markets. Many state-funded organizations in Qatar, including Qatar Museums, Qatar Foundation and Al Jazeera, have already reduced programming and laid off expats. Kuwait meanwhile forecasts a deficit of 12.2 billion dinar (USD 40.2 billion), nearly 50 percent higher than in 2015.
Despite tough times ahead for oil producing countries, most continue to prioritize social development and public services. In the UAE, over 50 percent of an AED 48 billion budget has been allocated to education, social development, public services and health with 21.2 percent dedicated to education. Similarly, in Qatar the largest share of the budget – 45.4 percent or QR 90.9 bn – has been earmarked for infrastructure, health and education, with education receiving QR 20.4 bn (down from QR 26.3 bn in the last year). In Saudi Arabia, only 35 percent of a SAR 840 bn budget will be spent on education with the sector experiencing a 12 percent slash to SAR 191 bn from SAR 217 bn in 2015.
Nearly 6 percent of total students who travelled to Canada in 2015 originate from Saudi Arabia and Iran, according to the CBIE’s 2015 report; a number made all the more significant when contrasted to just 4 percent from neighbouring United States. Admittedly the smaller Arab countries do not have as strong a presence at Canadian universities as the Saudis. Figure 1 indicates the student proportions from Arab countries at Vancouver Island University.
As a result of reduced enrolment numbers from Saudi Arabia, VIU and other international universities are stepping up recruitment in other regions. Their first stop is other countries in the Middle East and in 2015 VIU’s International Marketing & Recruitment Coordinator Gareth Jones visited Kuwait, Qatar, Egypt, Lebanon, Jordan and the UAE. Even though his trips to the region are costly, he believes face to face contact with parents and students is key to building brand familiarity in an international market. He usually takes part in the Edu-Canada tour and the Saudi government sponsored fair in Riyadh (cancelled in 2016, ostensibly due to budget cuts).
Representation by offshore offices is also growing since they offer an on-the-ground presence which reduces delays brought on by geographical distance and varying time zones. The student numbers in the Middle East, however, have never been high enough to justify an offshore office. China and India are the obvious choices because of their population size. Canadian universities are also turning to other regions to offset the downturn in Middle East enrolment, and expanding into East and Southern Africa, Central and South America, the Philippines and Indonesia.
Keeping it local
The growing presence of foreign campuses in the Middle East is also a phenomenon that international education providers are watching. The Arab economies – home to between 10 and 40 foreign university campuses each – are arguably the most vibrant of foreign campus destinations. Condie, however, does not see them as competitors but rather as conduits to his university. He says they serve as pathway institutions that allow Middle East students to start a four year degree programme at a satellite campus and complete it overseas. Dr Khalid Al-Saad, the Undersecretary of Kuwait’s Ministry of Higher Education, concurs with Condie and in a 2012 presentation he said enrolling scholarship students in Middle East campuses of international universities was nowhere near the equivalent of sending students abroad since it defied the objectives of exposing them to new cultures, values and mind sets.
Make or break potential
Despite the downturn in Middle East figures, international student figures are expected to rise globally and Project Atlas’ 2015 study, which tracks student migration trends, predicts that by 2025 international students will rise to 8 million (from 4.5 million in 2012).
The ability of international students to make or break a country’s fortunes is also being increasingly debated. In January 2016, the Economist highlighted how education is now Australia’s biggest export, with a quarter of its tertiary students coming from abroad, a bigger share than any other country.
It adds that Canada is rapidly following in Australia’s footsteps – an initiative its government has facilitated by streamlining visa applications and allowing international students to stay and work for up to three years after graduating.
The US is described as complacent with only 5 percent of students on campus being foreign, and Britain ranks at the bottom of the pile with its unfriendly immigration policies. VIU’s Condie however describes the US as the elephant in the room, and notes it has started competing more aggressively in international education markets.
In June 2016, Menal will return to Saudi Arabia with a Canadian MBA and a digital scrapbook filled with memories of her experiences. Her studies in Canada’s British Columbia have certainly been a success for her. But with Middle East economies bracing for tough times ahead, it is difficult to say how many more Arab students will be able to say the same in the next five years.