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Spotlight: Vietnam, an effervescent market for int'l education

Source: Xinhua| 2018-11-30 22:34:44|Editor: Mu Xuequan
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by Tao Jun, Nguyen Thanh Xuan

HANOI, Nov. 30 (Xinhua) -- Vietnamese people's great desire for international standard education, coupled with their higher affordability, and the government's bigger openness are making the Southeast Asia country a promising destination for education investors.

Earlier this week, Singapore-headquartered private equity firm Northstar Group invested 50 million U.S. dollars in a Vietnam-based online education company, Topica Edtech Group, marking the biggest financing of its kind in Southeast Asia.

Previously, Topica raised money from other foreign investors, including Patamar Capital (the United States), CyberAgent Ventures (Japan) and EduLab Group (Japan). The online education company claims to have offered services to one million working adults, besides students, in forms of English tutoring, online bachelor's degree programs and short skill development courses.

According to the Vietnamese Ministry of Planning and Investment, the number of foreign-invested education projects has surged in recent years, to 374 by the end of 2017 from 111 in September 2012.

The most popular form of foreign investment in Vietnam's education is the setting up of language training centers and international schools, mainly in such expat-friendly cities as Hanoi, southern Ho Chi Minh City and central Da Nang city.

International schools include a wide network of kindergartens, primary, secondary, all-through schools, and universities, gathering some 28,000 Vietnamese students, according to the country's Ministry of Education and Training.

By the end of last year, 340 joint programs had been held by 85 local tertiary institutions in collaboration with 258 foreign partners from 33 countries and regions, enrolling some 86,000 students, of whom 48,000 had graduated.

The Vietnamese culture always values education, which is seen by many people as the ultimate path to success, and a way to fulfill one's filial duty and make the family proud. Teachers are highly respected in Vietnam and parents are willing to go to great lengths to ensure that their children receive good education.

According to a report released earlier this year by the EU-Vietnam Business Network, education takes 20 percent of the Vietnamese government's annual expenditure. Vietnam's spending on education constituted 6.3 percent of its GDP in 2017, the highest among ASEAN nations and higher than that of more economically developed countries.

The high esteem in which education is held, together with the rapidly growing demand for a high quality labor force, has put improvement of education at the forefront of Vietnam's economic strategy.

The Vietnamese government has been paving the way for foreign investment in education by simplifying procedures, offering more incentives and removing barriers.

Most recently, it lifted the cap that limits the proportion of Vietnamese children attending a foreign-owned school. Since August, international schools can accept up to 50 percent of Vietnamese students, compared to only 10-20 percent last year.

The business community believes that the relaxation will herald a significant growth in Vietnamese international schools over the next few years.

There is a huge desire for international education in Vietnam, making this a market with great investment potential.

"We are willing to invest a vast part of our income in our children's education," Nguyen Thuy Trang, who sends her 4-year-old boy to a foreign-owned kindergarten in Tay Ho District, Hanoi, told Xinhua on Friday.

Trang said the school provides her son with both internationally recognized curricula and Vietnamese teaching courses, so that he can get access to advanced studying without losing his Vietnamese cultural identity.

According to consultant firm Savills Vietnam, the local education market is falling short under demand, offering chances for foreign investors.

"Public universities and colleges in Vietnam can grant admission to only 600,000 over 1.8 million applicants each year, indicating the enormous demand for post-secondary education," said Troy Griffths, deputy managing director of Savills Vietnam.

He added that many graduates from local universities have been struggling to find a job due to their lack of practical skills. This leads to a wave of students looking for more career-focused teaching at international universities.

Nguyen Phuong, a high school student planning to apply for the Tokyo Human Health Sciences University Vietnam next year, told Xinhua that she chose the school as it offers great practice in the nursing major.

"It's an international standard education but at a far lower cost than actually going overseas to study. I believe that the degrees here will be more highly recognized by foreign companies in Vietnam and abroad," Phuong said.

However, not all foreign investors could grab a bite of the Vietnamese market. Many had to leave after failing to explore local customers' psychology.

For instance, in 2013, the U.S. investment fund Blackshore Asset Management decided to withdraw capital from the Institution of American Education, an American vocational training college, and transfer ownership to a group of domestic investors.

Local experts pointed out that vocational training school was an inappropriate form of investment at that time.

"As Vietnamese people value degrees, few students would attend vocational schools," analyzed Cao Ha Phuong, general director of the EF Education First Vietnam, a foreign-invested overseas study consulting provider.

Meanwhile, a wide range of joint programs offered at affordable prices by local universities, though quality not guaranteed, have caught students' attention.

To join the market, foreign investors should bear in mind Vietnamese people's preference for degrees, and the principle of "good products at reasonable price," Phuong concluded.

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