financing

An Uzbek experiment: Self-financing for universities

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Hot on the heels of being awarded The Economist’s ‘Most Improved Nation‘ in 2019 and just ahead of parliamentary elections that may pave the way for future steps towards political openness, the government of Uzbekistan is not resting on its laurels.

Uzbek HEIs demand to be given all the bills

In early December it was announced that ten higher education institutions (HEIs) in Uzbekistan (of a total of 74) will be part of an experimental reform that will see them become self-financing. This is a huge shift from the top-down state-centric way that public HEIs have been funded and governed until now.

The HEIs, listed below, were chosen because of their “high research and teaching potential, financial stability, adequate resource base and high demand for their courses”, according to a post by the Ministry of Justice.

As of January 1, 2020, the HEIs will be allocated “additional tasks” that will enable them to earn income from non-state sources. These include expanding course options, offering professional development courses and introducing other paid services.

This experimental reform is part of a Presidential Decree signed on 11 July 2019 that is called ‘Measures to Introduce New Principles of Governance in the Higher and Technical and Vocational Education System’.

Many new principles, and still no sign of the Uzbek energy for reform flagging…

List of HEIs to shift to self-financing on an experimental basis from 2020:

  1. Samarqand State University of Foreign Languages
  2. Samarqand Institute of Economics and Service
  3. Tashkent State University of Law
  4. Tashkent State University of Economics
  5. Tashkent Institute of Finance
  6. Tashkent State Institute of Oriental Studies
  7. Tashkent Institute of Pharmacy
  8. Uzbek State University of World Languages
  9. Urgench State University
  10. Tashkent Institute of Railway Engineering

Planning ahead in Kazakhstan

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The Ministry of Education in Kazakhstan is about to launch a new savings plan to help parents save towards the cost of their children’s higher education. After an initial deposit, subsequent instalments can be variable both in amount and frequency. On top of the bank’s interest rate, the government has committed to add in 5-7% as a ‘premium’. Both the flexibility of the options for saving and the government premium act as strong incentives to make use of the facility and I imagine it will be popular, particularly amongst a) middle and high earning families and b) families with a history of higher education participation. But in a country where great value is placed on education, perhaps it will also motivate those outside of those two obvious groups to make their contribution towards their family’s future.

I think this is a great initiative and credit is due to the Ministry of Education. It shows a country that is comfortable with (or at least, accepting of) the concept of families contributing towards the cost of higher education and there is a lot that the UK, still licking its wounds from the introduction of GBP£9,000pa fees, could learn from.

Here’s the full story from Tengri News http://en.tengrinews.kz/finance/In-April-2013-Kazakhstan-to-launch-education-savings-plans-17770/ (copyright):

Thursday, 14.03.2013, 13:12
In April 2013 Kazakhstan to launch education savings plans

Zabira Orazaliyeva, Financial Center LLP President. Photo courtesy of rus.azattyq.org
In April 2013 Kazakhstan will launch education savings plans, Ms. Zabira Orazaliyeva, Financial Center LLP President, said at a press-conference at the country’s Education Ministry March 14.“Any citizen of Kazakhstan can open a savings account with an eligible bank to accumulate funds to cover his or her children’s tuition fees in future”, Ms. Orazaliyeva said.

According to her, the major distinguishing feature of the state-run education savings plans is that the state offers a premium making up 5-7% of the amount [depending on the social status of the depositors] in addition to the bank’s interest on the deposited amount.

“Halyk Bank, Kazkommertsbank and Temir bank are among the first banks to participate in the state-run program. A number of other major banks also meet the standards to participating banks”, she added.

All the data on the participating banks will be available at the Financial Center LLP’S website.

Tengrinews.kz reported mid-January that Kazakhstan’s President had enacted law on the state-supported education deposits to be introduced as a tool to help families accumulate funds to cover their children’s tuition fees.

According to the law, depositing a certain amount in the name of their child, parents enjoy both the bank’s interest and a special premium from the government.

The minimum obligatory amount to be deposited in 2013 shall be 4854 tenge ($32). The amount of all the following installments and frequency thereof shall be at the discretion of depositors. The premium offered by the government shall make 5%, with the figure standing at 7% for some categories of population.

When presenting the draft legislation in the country’s Parliament, the Education Minister cited an example of how the scheme will work: “”Let’s assume a family open a deposit in the name of their 10-year-old child. The first deposited amount makes up 5000 tenge ($33), with all the following monthly deposits standing at 15 000 tenge ($100). By the time the child turns 17, the amount of the deposit will make up 2 075 000 tenge ($13 800), with 60% of the amount being the depositors’ money, 23% provided by the bank as an interest on the deposit and the other 17% provided by the government as a premium”.