university merger

Stocks and shares but not for sale – More reorganization in Kazakhstan’s universities

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stacked cats
Reorganizing cats – easier than herding them

The Kazakh government has typically paid a very active role in the organization and governance of higher education in the country. Over time the particular policy instruments du jour have changed depending on the main aim being pursued by the state. Of late, there has been an uptick in the number of university mergers as well as the (pseudo-)privatization of the many state funded universities and specialized institutes. 

In the most recent round of reorganization in October 2019, 25 universities have been affected. The top-down directive switches their status from ‘republican state enterprise*’ (i.e. state funded) to ‘non-profit joint stock company’. This isn’t quite an act of privatization as the new status transfers all shares in the new company to the Ministry of Education and Science!

This status of non-profit joint stock company (NPJSC) is unusual: joint stock companies tend to be profit-making, which make sense given their ability to make the company’s stocks available to buy and sell. According to the Kazakhstani Law on Non-Profit Organizations (2001), a non-profit organization may be created as a joint stock company or in several other formats (e.g. religious association, public association, foundation).

NPJSCs are described in article 16 of the law as ‘a legal entity that issues shares with the aim of attracting funds to conduct its activities whose income used exclusively for the development of this company’. It may not issue preference shares, derivative and converted securities and it cannot later become a profit-making organization.

The economic aim of the status change appears to be to move the burden of funding these universities away from the state, although if as suggested the only shareholder so far is the Ministry of Education, this must be a long-term goal. It appears there is a secondary (also longer term) mission to diversify ownership of these universities through the transition to a shareholding organization, but without the ability to make profit from the shares, it’s not clear to me which individuals or companies might like to part-own a university.

The October reorganization also envisages the merger of a number of universities – Taraz State Pedagogical University is to be brought together with Taraz State University to become Taraz Regional University; the same fate awaits the State and State Pedagogical universities of Kostanay. In addition, various so-called ‘daughter state enterprises’ – research institutes and laboratories – of the Al-Farabi National University are to be folded into the university.

As usual, it’s a blur of activity in Kazakhstan, with the latest changes reflecting the state’s continued interest in higher education and its creativity in applying new legal and organizational statuses to universities. For more background, check out other posts I’ve written on this topic at Universities for sale in KazakhstanPrivatizing Kazakhstan’s universitiesMergers and acquisitions in Kazakhstan’s universities and I’d close some universities if I could – Kazakh Ambassador to Canada.

 

 

*In Russian, this is республиканское государственное предприятие на праве хозяйственного ведения, often shortened to РГП на ПХВ which translates more specifically as ‘republican state enterprise on the right of economic management’ – can any legal experts out there help explain this in lay terms?

The end of science in Turkmenistan?

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cat-doing-science
Support cats doing science. And Turkmenistan’s scientists.

The Academy of Sciences in Turkmenistan is facing major budget cuts that will see a third of its personnel lose their jobs and structural changes that may see the Academy disappear from the science scene in the country.

As an institution, the Academy of Sciences brings together researchers from across disciplines, historically separating them from their teaching counterparts in universities and specialized institutes. Although the Russian Academy of Sciences was founded under Peter the Great in 1724 [ru], it is the Soviet-era version that was propagated around the Soviet Union, reaching Central Asia in the 1940s/1950s.

Fast forward to the dissolution of the Soviet Union in 1991, and the Academy of Sciences – now divided into national branches, no longer held together as a single entity – has met varying fates. In Russia and Kazakhstan, there have been moves to get rid of the Academy by merging its functions with universities, whereas in other states like Kyrgyzstan and Tajikistan, its work continues moreorless in the same format as was inherited in the 1990s (even if the structures and disciplinary groupings have changed).

Turkmenistan’s Academy of Science was already dealt a near fatal blow in 1995 when it was closed down, also leading to the closure of postgraduate studies in the country as the Academy of Sciences is also responsible for training the next generation of researchers.

But with a change of president in 2007, the Academy was reopened in 2009. A government sanctioned list of its achievements testifies to the variety of science and research activities being undertaken (or at least reported to the government).

Sadly, notwithstanding the re-emergence of the Academy, it will mark its tenth anniversary as the latest institution to be hit by a series of state funding cutbacks. Budget belt tightening has been underway for three years, as the ever reliable (and very witty) Bruce Pannier of Radio Free Europe/Radio Liberty’s Qishloq Ovozi reported in December 2018.

Government funding for the Academy is due to be phased out over the next three years and 30% of staff will lose their jobs [ru] in the immediate future. That’s around 200 researchers from the nine research institutes that remain. Mergers will also be underway, bringing the Biology Institute into the University of Engineering and Technology, for example.

Turkmenistan Chronicle tells the sombering tale [ru] of how 2,000 people – including 450 researchers at the Academy of Science – were obliged to attend an event lasting several hours, in which they were ‘treated’ to 23 songs in honour of the President before hearing the Rector of the University of Engineering and Technology give a speech extolling the virtues of the President’s latest great idea. Imagine what it must have felt like sitting in that audience, either knowing or being able to make an educated guess about your unlucky fate.

Even before the news broke, the future for science in Turkmenistan has not been looking promising. Just 300 people in the country hold a Candidate of Sciences (PhD equivalent) degree, and fewer than 100 have the higher level Doctor of Sciences. Of the 12 people awarded a Doctor of Sciences in recent years, only four are working in science and research. And while on a more positive note, 1,200 people have written a Candidate thesis, none have been allowed to defend it.

The science pipeline is not leaky in Turkmenistan anymore. It’s not even burst: it seems to have completely dried up. And that is not a situation that any country with a plan for the future should want to find itself in.

Mergers and acquisitions in Kazakhstan’s universities

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mergersIn an expected but still noteworthy move, the Kazakh-British Technical University (KBTU) in Almaty, Kazakhstan has now officially been merged with Satpayev Kazakh National Research Technical University (known by its Russian acronym as KazNITU). Announced in 2015, the merger is the brainchild of Kazakh President Nursultan Nazarbayev [ru] that aims to strengthen the engineering and technical specialties found in both institutions. To smooth the acquisition from the side of the junior partner (KBTU), the President has appointed Iskander Beisembetov – formerly Rector of KBTU – as the Rector of the newly enlarged institution.

Other than a short story covering the merger in Forbes Kazakhstan [ru] in April 2017, there is very little outward evidence of the change. The only mention I could find on the universities’ websites about the merger was a small link to KBTU’s website next to KazNITU’s on the latter’s homepage, and the story noted above from November 2016 about the appointment of the Rector.

Both institutions have interesting histories. KBTU was an early initiative of President Nazarbayev in higher education, being founded in 2000 by agreement with Tony Blair, then Prime Minister of the United Kingdom (as an aside, this helps set into perspective the longer-term working relationship maintained by the two leaders, which has been reported on rather incredulously from the West as if it was something more recent). KBTU has always been a specialist science and technology university and leads national rankings in these areas.

In contrast to KBTU’s positioning as being part of a ‘new generation’ of universities, KazNITU in its various iterations is one of the oldest higher education institutions in Kazakhstan, with a history dating back to 1934. Founded as the Kazakh Mining and Metallurgical Institute, it now has a mission much like KBTU’s, namely, to be a leading provider of high quality teaching and research specialising in technological education.

For the two institutions, it looks like – for the moment, at least – very little will change. But for the higher education system in Kazakhstan, this represents an important moment. Mergers reflect a change in the way institutions are governed and the context within which they operate. In the late 20th and early 21st centuries, mergers are often symbolic of a shift towards a managerial logic in higher education. Out are the old practices of academic collegiality and the pursuit of knowledge for its own sake (and at whatever cost), ushering in instead governance by tuition fee in a (pseudo-)market environment.

The good governance of universities is critical to their effective running, and there are doubtless cases where the introduction of new forms of governance (that may include mergers and acquisitions, as well as the closure of institutions) has helped universities and the system they operate in. Yet there are also concerns that the imposition of externally driven reorganizations may reduce institutional autonomy and differentiation or damage academic morale. And whether they improve the university’s core ‘business’ of teaching and research is, as well-known British higher education scholar Michael Shattock has argued, unproven.

 

Reference

Shattock, M. (2006). Managing good governance in higher education. Open University Press.