Archive for September 2012

Quality of education is a broad concept that involves constant development of curricula, processes and learning environments. While many of the efforts aimed at improving education in the GCC have revolved around enhancing curriculums and teacher training, little has been done to enhance school facilities to handle the changing needs of these economies. Research in a number of countries has shown that maintaining the quality of school facilities is important to enhancing overall education output as it affects the health of students, absenteeism rates, staff turnover, and student academic performance. To enhance the overall output of their education systems, countries in the region should focus on modernizing their school facilities.

Data released in 2011 by the Knowledge and Human Development Authority in Dubai indicates that a large percentage of public schools in the emirate have insufficient learning facilities. While no similar data exists for other GCC countries, we have reason to believe that this challenge is regional, rather than specific to Dubai in particular or the UAE as a whole.

Aside from denying students the chance to receive quality education, deteriorating facilities in public schools are also contributing to surging private schools fees in the UAE.. This is due to substitution behavior that results in education cost inflation: For example, in Dubai, parents, both Emirati and expatriate, seeking the best educational outcomes for their children are increasingly selecting private schools which are able to increase fees based on performance and inflation ranging from 3-6%. Higher performing schools can also apply for additional increases to carry out infrastructure or facility upgrades. While the intention of such a policy is to reward performance, the risk is continuing poor facilities in public schools due to the inability of public schools to shift the costs of facilities upgrades and maintenance onto consumers.

Public schools rely on federal and emirate-level budgets faced with multiple spending priorities, while private schools have an economic and profitability incentive to maintain and improve facilities. Facilities improvements in public schools require either a larger budgetary line item for education or an annual extra budgetary allocation devoted specifically to facilities maintenance which goes beyond financing of public schools’ day-to-day operations. This situation has created a situation in which private schools can raise fees since they face little competitive pressure from the UAE’s public schooling system that might temper education inflation. More importantly, such measures have the potential to create a two track system in which the UAE’s public schools continue to have inferior facilities and lower educational outcomes while the market and regulatory mechanism allows select private schools, which are predominantly attended by expatriate children, to pass on the costs of facilities improvements to parents and ultimately employers.

We estimate that the cost to modernize existing public schools in the UAE will require an investment of $1.35 billion which does not factor in ongoing maintenance or expansion to accommodate rising enrollments. To put things in perspective that is about 61% of the annual federal budget for K-12 education, which does not include emirate level line item spending for education since these amounts are not published.

These problems demand a strong and sustained partnership of federal and emirate entities in concert with the private sector since employers, through rising wages associated with employee education entitlements, are also affected. Modern public school education facilities are essential to create the schools the UAE needs to compete in the 21st century while ensuring equity and heading off education inflation. Investment in the UAE’s public schools is also a mechanism for job creation. Based on analogous figures from the American Jobs Act for Rebuilding and Modernizing America’s Schools, each $78,000 spent on school modernization leads to a job. An extremely conservative calculation, since wage levels in the construction industry are substantially lower in the UAE, would mean that approximately 17,000 jobs would be created in the process of modernizing the UAE’s public schooling system. Our methodology for deriving these figures are shown below with additional information on the UAE’s public school funding challenge.

Insufficient public school facilities in Dubai

A large percentage of public schools in Dubai have insufficient learning facilities; Emirati students make up nearly all of the students who attend these schools
Source: Knowledge and Human Development Authority 2011 Annual Inspection Report

Public schools in the UAE have a failing report card

Public schools have a failing report card when it comes to maintaining the UAE’s school buildings in Dubai; This is because their budgets don’t factor in spending on facilities
Sources: Knowledge and Human Development Authority 2011 Annual Inspection Report, Gulf News, OECD
Assumptions: * Assuming an average of 288 Emiratis attending each public school in Dubai
* *Assuming each student requires 10 square meters of space, public schools average 344 students, each square meter costs AED 7,500 to develop, and approximately 33 schools need modernization

Emirati public school enrollment in Abu Dhabi, Al Ain, and the Western Region

Abu Dhabi, Al Ain, and the Western Region are more dependent on public schools than Dubai to educate Emiratis
Source: Abu Dhabi Education Council 2010 Statistical Factbook Emirate of Abu Dhabi

Insufficient public school facilities in Abu Dhabi, Al Ain, and the Western Region

If facility lifecycles in the Emirate of Abu Dhabi are similar to Dubai, a number of public schools attended by Emirati students have insufficient learning facilities requiring major spending
Sources: Abu Dhabi Education Council 2010 Statistical Factbook Emirate of Abu Dhabi, Gulf News, OECD
Assumptions: * Assuming that a high estimate of the number of schools which require refurbishment is similar to the 42% which require facilities improvement in Dubai
** Assuming an average of 354 Emiratis attend each public school in Abu Dhabi, an average 304 Emiratis attend each public school in Al Ain, and an average of 152 Emiratis attend each public school in the Western Region
*** Assuming each student requires 10 square meters of space, public schools average 489 students in Abu Dhabi, 397 students in Al Ain, and 255 students in the Western Region, each square meter costs AED 7,500 to develop, and approximately 54 schools in Abu Dhabi, 55 schools in Al Ain, and 19 schools in the Western Region need modernization

In 2010, Berkshire Hathaway CEO Warren Buffet and Microsoft co-founder Bill Gates established the Giving Pledge to persuade American billionaires to donate at least half their wealth to philanthropy or charitable causes either during their lifetime or after their death. While the initial focus is on the wealthiest families and individuals in the United States, there is consideration to extend the Giving Pledge globally. A total of 81 American billionaires, representing close to 20% of US billionaires, are signatories which amounts to promises estimated at $125 billion.

Many of the signatories amassed their wealth through entrepreneurship that had a transformative impact on the business world. Through their philanthropic activities, they seek a social impact. The underlying goal of the Giving Pledge is to engage American billionaires in an open way to mobilize more money for philanthropic causes which target particular issues of global concern and increase the efficiency of how social investments are deployed.

While there have been some notable philanthropic donations (such as Sheikh Mohammed’s $10 billion endowment of his namesake foundation the Mohammed bin Rashid Al Maktoum Foundation in 2007) and strategic philanthropy has entered the agenda, no similar initiative to the Giving Pledge exists in the Arab World. The Forbes Middle East’s Arab billionaires ranking includes 36 individuals, a number which is understated since the list does not include members of royal families, with a net worth estimated in the range of $120 billion. Assuming a similar volume of Arab billionaires signed a pledge to donate their wealth to philanthropy, an estimated $24 billion would be mobilized (based on an average Arab billionaire net worth of $3.4 billion). This raises an interesting question – what are Arab billionaires doing to contribute to the development of the Arab World through philanthropy? In this post, we review the Forbes Middle East’s Arab billionaires ranking to see how Arab billionaires based in the region are giving back to the region.

Forbes Rank 2012Name
Nationality
Net Worth (in billions)
Background
Causes
3Mohammed Hussein Al AmoudiKSA$12.5
Corral Petroleum Holdings and MIDROCHeathcare, R&D
4Mohamed Bin Issa Al Jaber
KSA
$7.0
MBI International & Partners
Higher education, cultural understanding
6,7,10
Sawaris Family
Egypt
$11.1
Orascom Group
Employment creation and training, microfinance, health, community development
8,9
Mikati Family
Lebanon
$6.0
Investcom
Health, nutrition, social, educational, cultural and social services
11
Miloud Chaabi
Morocco
$2.9
Ynna Holding, Riad Mogador, Aswak Assalam
Health, education, social services, culture, sport, and environmental issues
12Abdul Aziz Al Ghurair
UAE
$2.9
Mashreq Bank
Education, microfinance, sports, youth
13,22,33,34
Hariri Family
Lebanon
$6.8
Saudi Oger
Education, health, training, social services, culture
15
Othman Benjelloun
Morocco
$2.3
RMA Watanya, BMCE Bank
Early education quality, rural education
21,24,29
Mansour Family
Egypt
$4.8
Mansour Group
Education, illiteracy, poverty, microfinance, health

Mohammed Hussein Al Amoudi

Al Amoudi has funded several research centers and academic chairs and pledged $20 million to the William J. Clinton Foundation to combat AIDS.

Mohammed Hussein Al Amoudi

Mohammed Hussein Al Amoudi

Mohamed Bin Issa Al Jaber

The MBI Al Jaber Foundation is a UK registered charity that provides scholarships to graduate students from the Arab region and sponsors educational and cultural projects.

Mohamed Bin Issa Al Jaber

Mohamed Bin Issa Al Jaber

Sawaris Family

The Sawiris Foundation for Social Development is an Egyptian charity organization established in 2001 that supports initiatives that encourage job creation through training, education, and access to microcredit.

Naguib Sawiris

Naguib Sawiris

Mikati Family

The Azm wa Saade Association is a Lebanese non-governmental organization founded in 1988 that focuses on issue related to health, nutrition, education, culture, and social services.

Najib Mikati

Najib Azmi Mikati

Miloud Chaabi

Chaabi donated 10% of his fortune to build the first American university in Morocco. The Miloud Chaabi Foundation supports activities in in the areas of health, education, social services, culture, sport, and environmental issues.

Miloud Chaabi

Miloud Chaabi

Abdul Aziz Al Ghurair

Al Ghurair sits on the Board of Directors of Emirates Foundation, UAE Higher Colleges of Technology. He is also a supporter of UNICEF, UNESCO, Planet Finance, and the UAE Disabled Sports Federation.

Abdul Aziz Al Ghurair

Abdul Aziz Al Ghurair

Hariri Family

The late Rafic Hariri established the Hariri Foundation in 1979, which has helped over 34,000 Lebanese students, attend universities globally. The Foundation also operates schools, clinics, a university, and technical institutes, provides health and social services.

The late Rafic Hariri

The late Rafic Hariri

Othman Benjelloun

Benjelloun’s BMCE Bank Foundation works in the field of education focusing on quality and rural accessibility.

Othman Benjelloun

Othman Benjelloun

Mansour Family

The Mansour Family is linked with two social sector organizations: Established in 2003, Lead is a non-profit NGO that provides poor and low-income entrepreneurs with microfinance services. The Mansour Charity Foundation, founded in 2001, was the first donor NGO to be fully funded by an Egyptian family.

Mohamed Mansour

Mohamed Mansour