Private schools face fight to survive amid competition



DUBAI // Private schools face a battle to survive amid increasing competition for fewer pupils and the need to raise salaries to attract the best teachers.

The number of schools is expected to increase from 1,184 in 2014 to 1,406 by 2020, fuelled by high, tax-free family incomes – but there are challenges ahead.

With 173 private schools already in Dubai and a further 20 due to be opened by next year, the market may be shifting to an oversupply of school places, leading to greater competition and pressure on revenue.

“I think with so many new schools opening that we might be approaching a saturation point where places outstrip the number of pupils,” said Natasha Ridge, executive director of the education think-tank Al Qasimi Foundation in Ras Al Khaimah.

“This coupled with trying to pay higher salaries for the best teachers means there will be more downward pressure on profit margins at private schools.”

This could also lead to lower-income schools stuck in a vicious cycle in which they cannot attract good teachers and so standards decline.

“It could mean that some of the smaller ones don’t survive and the market consolidates around three or four major education providers.”

Many teachers also felt they were becoming “de-professionalised” because of the lack of worthwhile training and career development at their schools, Dr Ridge said.

A new report on education in the GCC says governments in the region continue to invest in the sector, but continued lower oil prices may have an effect.

“We could see cutbacks in other sectors or less spending on infrastructure, which will mean fewer expatriates coming and others leaving,” said Mahboob Murshed, managing director of the investment bank Alpen Capital, which produced the report.

“However, we feel that due to the UAE’s more varied economy it will be less adversely affected than, say, Saudi Arabia.”

Recruiting and retaining quality teachers will also prove costly to school operators, Mr Murshed said.

Cultural differences, poaching by other countries in the region and the transitory nature of the expatriate lifestyle made it hard to maintain teacher numbers. “We find that many teachers only stay for an average of two years so schools have to constantly look for new staff.”

Mohan Valrani, chairman of the Arcadia Preparatory School in Dubai, said that the increasing number of schools was making private education a buyers’ market.

“With the opening of schools this year, for the first time we will see a situation of more seats than students,” he said.

“Availability of skilled teachers remains a major challenge. To cope with growing competition, schools need to be willing to change in line with technology and be able to finance this change.

“Offering continuous professional development for teachers is also very important.”

It a common problem across the GCC and has led to more competitors poaching skilled teachers with greater incentives, Mr Valrani said. This put more pressure on operating costs to meet higher salaries.

There are an estimated 1.1 million students in the UAE attending private and public schools, universities and higher education, a growth of 6.2 per cent since between 2009 and 2014.

According to the Alpen report the UAE allocated 21.2 per cent of its Dh48.48 billion budget for this year to education, putting it second in the region to Saudi Arabia on 22.8 per cent, but well ahead in percentage terms of developed countries such as the US, UK and Germany.

Two-thirds of K-12 enrolments were at private schools making it the highest in the GCC. “The number of students attending private schools across the K-12 education system increased by more than 7 per cent annually between 2009 and 2014, faster than that at primary and secondary public schools,” said the report. “The country has the largest number of English-medium international schools in the world and a growing preference for international curricula among both expatriates and nationals.”

Overall the total number of students in the GCC is projected to reach 15 million by 2020 at a compound annual growth rate of 3.6 per cent from 12.6 million in 2015.

The trend is for more international schools in the GCC together with greater use of technology to support learning.

Governments in the GCC, particularly the UAE and Qatar, have placed greater emphasis on higher education to help solve the skills gap required by the labour market.

And both countries are emerging as regional education centres for higher education as they are now home to many international universities and institutions.

Clive Pierrepont, director of communications in the UAE for Taaleem, one of the largest education providers in the Middle East, struck an optimistic note.

“There is a growing preference for international curricula, especially the British curriculum,” he said.​

“This coupled with trends including increasing confidence in the region, shifts in technology, new school places to meet demand and linking the chain of schools, universities and other higher education institutions with potential employers, will contribute to the growth of the sector.”

nhanif@thenational.ae

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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What went into the film

25 visual effects (VFX) studios

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German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

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Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
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What should do investors do now?

What does the S&P 500's new all-time high mean for the average investor? 

Should I be euphoric?

No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.

So what happened?

It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.

"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."

Should I buy? Should I sell?

Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.

"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.

All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.

Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.

Will the rally last?

No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.

"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."

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Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

RESULTS

4pm: Al Bastakiya Listed US$250,000 (Dirt) 1,900m
Winner: Yulong Warrior, Richard Mullen (jockey), Satish Seemar (trainer)

4.35pm: Mahab Al Shimaal Group 3 $200,000 (D) 1,200m
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5.10pm: Nad Al Sheba Conditions $200,000 (Turf) 1,200m
Winner: Jungle Cat, William Buick, Charlie Appleby

5.45pm: Burj Nahaar Group 3 $200,000 (D) 1,600m
Winner: Kimbear, Patrick Dobbs, Doug Watson

6.20pm: Jebel Hatta Group 1 $300,000 (T) 1,800m
Winner: Blair House, James Doyle, Charlie Appleby

6.55pm: Al Maktoum Challenge Round-3 Group 1 $400,000 (D) 2,000m
Winner: North America, Richard Mullen, Satish Seemar

7.30pm: Dubai City of Gold Group 2 $250,000 (T) 2,410m
Winner: Hawkbill, William Buick, Charlie Appleby.

The biog

Name: Abeer Al Shahi

Emirate: Sharjah – Khor Fakkan

Education: Master’s degree in special education, preparing for a PhD in philosophy.

Favourite activities: Bungee jumping

Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.

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