Define privatization as shifting the delivery of services

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Michigan Education Association (2009) defines privatization as "shifting the delivery of services" from public employees to private sectors. Private sectors are set up for many different reasons. One of it is to boost the economic growth or rather to increase the innovative capacity of the economy. When there are more sectors or businesses to compete in the mainstream, productivity and quality can also be increased. The government bodies are pushed to 'step up their game' in order to perform as good as the private businesses. Moreover, with the current state of downfall of economy, private businesses help to reduce the size of public sectors and ease the expenses on the government's part.

With so many advantages to creating private businesses, education has also been made private. Privatization shifts the management of education sectors from the government to other private bodies. For instance, in Malaysia, privatization of education in Malaysia has led to the growth of numerous institutions for all the primary, secondary and tertiary level. Apart from creating opportunities for more citizens to further studies, privatization has opened up the market and increase the economic status in the country. On the other hand, it also sheds negative effects that may hinder the effectiveness of the education system as a whole.

Private schools are also known as independent schools. Independent means that the schools are not ministered by local, state or even national government. The schools have they own way of administration. At the same time they retain the right to select their students and are funded in whole or in part by charging their students tuition, rather than relying on public or government funding. Plus, students can also get a scholarship into a private school which makes the cost cheaper depending on a talent the student may have e.g. sport scholarship, art scholarship, academic scholarship etc. In Malaysia, private schools still follow the Malaysian National Curiculum as well as National examination such as Ujian Penilaian Sekolah Rendah (UPSR), Penilaian Menengah Rendah (PMR) and Sijil Pelajaran Malaysia (SPM). There are many private schools establish in Malaysia either primary or secondary such as Sekolah Seri Cahaya (primary and secondary), Sekolah Seri Suria (primary and secondary),Sekolah Seri Garden (primary and secondary) and many more.

There are still differences that can be noticed from private schools and public schools in school system. The accreditation of private international school is under National Accreditation Board (LAN) or nowadays it has changed to Malaysia Qualification Agency (MQA). MQA is responsible to ensure that the private international schools follow all the qualifications needed for a school to establish as education center. Meanwhile public school is totally under Ministry of Education who is responsible for accreditation. There are tuition fee for private international school as tuition fee is one of their source to run the schools. But for public school the fee is free or minimal and affordable for parents to pay. Usually tuition classes at public school will be sponsored by the government. Then, private schools must generate their own funding, which typically comes from a variety of sources such as tuition; private grants; and fundraising from parents, alumni, and other community members. Plus, if the school is associated with a religious group, the local branch may provide an important source of funding as well. But public schools are complicated, often underfunded operations influenced by political winds and shortfalls. Financed through federal, state, and local taxes, public schools are part of a larger school system, which functions as a part of the government and must follow the rules and regulations set by politicians. The government plays important role to ensure that public schools are on the right track for education. The potential benefits of private schools accrue from their independence. Private schools do not receive tax revenues, so they do not have to follow the same sorts of regulations and bureaucratic processes that govern and sometimes hinder public schools. This allows many private schools to be highly specialized, offering differentiated learning, advanced curriculum, or programs geared toward specific religious beliefs. There are exceptions to such generalizations charter and magnet schools are increasingly common public schools that often have a special educational focus or theme.

Private Higher Institutions

Privatization is one of the hottest issues currently being debated in the education sector. It is fast becoming a widespread trend when considering education reform, as it eases the pressure on governments to meet increasing demand and relieves them of excessive costs. Private higher education sector in Malaysia is compelled to cater for students who just passed their schooling and do not have any place to further their study in the public higher educational institutions. Limited availability within the public university system allows for the development of private institutions of higher learning. By establishing more private higher education sector, it gives more access opportunities to tertiary education to students and today, it is acknowledged as an essential element for the sustainable growth of the nation. Besides that, the Asian economic crisis in 1997 pushes Malaysia to devise innovative ways to improve qualities in higher education by encouraging private sector to meet the needs of tertiary education resulting in a market sensitive educational system. Every institution starts to compete with each other to enroll more students in their institutions so that they will gain more money.

Private Higher Educational Institutions are also known as institutions not funded by government and they are included non-university status institutions such as private colleges. All of the private higher educational institutions in Malaysia use English as their medium of instruction. There are three types of private higher institutions and they are foreign university branch campuses, universities supported by government business agencies and university supported by political parties in the present alliance government. For foreign university branch campuses, five international reputable universities have set up their branch campuses in Malaysia since 1998. A branch campus can be seen as an 'off-shore campus' of the foreign university, which offers the same courses and awards as the main campus. Both local and international students can acquire these identical foreign qualifications in Malaysia for a cheaper price. The examples of foreign university branch campuses in Malaysia are Monash University Malaysia Campus and University of Nottingham Malaysia Campus.

Universities supported by government business agencies are universities that obtained support from the government and complemented by the active participation of the private sector. The examples of universities supported by government business agencies are Multimedia University of Malaysia (MMU) which is under Telekom Malaysia, National Power University of Malaysia (UNITEN) which is under Tenaga Nasional Berhad and Petronas National University of Malaysia (UTP) which is under Petronas. The last type of private higher institutions is university supported by political parties in the present alliance government such as University Tunku Abdul Rahman (UTAR), an education arm of the Malaysian Chinese Association, a political party.

In the early 1990s, there are approximately 200 private colleges but no private university. As of December 2005, there exist 11 private universities, 11 private university colleges, 5 foreign university branch campuses and 532 private colleges. Now, there is lot more universities that have been established such as Lim Kok Wing University of Creative Technology which is founded as technical institute, turns to be university college status and now upgraded to full university status. The increasing number of private higher institutions in Malaysia gives more students to enroll in tertiary level. According to Malaysian Association of Private Colleges and Universities (Mapcu), there are some 450,000 students at private institutions of higher learning as at December last year.


Q4: What are the opportunities provided by private school and private higher institution.

Even private schools still follow the Malaysian curriculum but still there are many extra subjects offered by the private school such as music, performing art, drama, martial arts and many more that usually not being offered by public schools. Therefore, through these extra subjects in private schools, children could sharpen their talents and learn something new instead of what they learn in usual classroom. Then, students will also gain another advantage when they join private international school such as the International General Certificate of Secondary Examination (IGCSE). This kind of certificate gives a chance for students to pursue their study abroad easily as it is internationally recognized.

Meanwhile for private higher institutions, they offer more courses that are suitable for students' qualification especially for students who are previously from technical schools. At the same time, this private higher institution gives students another alternative to pursue their study if they do not get the chances to enroll public higher institution. It can be their second chance that they value so much. Other than that, some prefer to enroll private higher institution when public higher institution does not offer the courses that they want or based on their qualification.

Q6: Are private universities that good?

According to the STAR online (2009), "Some of these institutions have expanded so fast that their quality of education has failed to keep up." An industry analyst warns that the growth of PHEIs may not always be accompanied by improvements in the delivery of quality teaching and research.

Q7: Is Malaysia a dumping ground?

Higher Education Minister Datuk Seri Mohamed Khaled Nordin said that "Malaysia should not be made a dumping ground for students who could not get placement elsewhere and institutions of higher learning (IPTs) should upgrade their academic management system". Private universities and university colleges have been asked to enroll only qualified foreign students to avoid being branded as "diploma or degree mills". To avoid to be called as 'dumping ground', all the foreign students will be graded in the Rating System for Malaysian Higher Education Institutions (Setara) to benchmark their performance starting next year. The ministry has set a minimum CGPA of 2.0 for all foreign students and private institutions are advised to abide by the benchmark. Unqualified foreign students should be turn away in order to protect the good name, image and reputation of the IPTs in Malaysia. Surprise checks also will be conducted on private institutions of higher learning to monitor the students. It is learnt that a Nigerian Education Minister has accused Malaysia of offering low quality degrees at the recent 17th Conference of Commonwealth Education Ministers in Kuala Lumpur.

Q8: The opportunity given is for public or public with money?

It is believed that private higher institutions give opportunity for all those people who do not have the chance to enroll in public of higher institutions. However, does the opportunity given by private of higher institutions is for all the public or to public with money? This is one of the issues rises from the privatization of education. Firstly, we will see the opportunity for poor and rich people. Is there any equality for rich and poor students in enrolling in the institution? If we look at the fees for enrolling in private higher institutions, we can see that the fees are quite high and for rich students, higher fees are nothing for them as they can afford it. But for poor students, to pay for high fees will be problem because they do not have money to pay for the fees and as a result, they have to seek for loan. This shows that only public with money can enroll in private higher institution. We will also look at the equality between bumiputras and non-bumiputras. According to Tan Ken Liang (2009), from The EDGE Malaysia, majority of non-bumi Malaysians cannot afford private universities' fees too. He states that the enrollment of bumiputeras in Private Institutions of Higher Learning is low (10% ) as they could not afford the fees but majority of the non-bumiputeras Malaysian too cannot afford the fees of the private universities. However, limited options for non-bumiputera Malaysians who wish to further their education in the country has forced them to enroll in local private universities even though the fees are high.

Q9: Is there any competition between public and private university?

Private higher education in Malaysia has its ups and downs which they have problems to attract and retain students. This is because there are about 500 private of higher education institutions in Malaysia. Therefore, it makes education as a competitive arena. On top of that, the number of places available in the public tertiary education system has been rising rapidly. In 2002, public universities, polytechnics and community colleges took in 89,500 students. Last year, the number of admissions was more than double that. Elaj Solan Mohan, the president of The National Association of Private Educational Institutions (Napei) states that "It's becoming more and more challenging for us. The public system has become our competitor because the number of public universities and community colleges is increasing. Previously, the private sector played a complementary role to the public sector. Now the public sector is challenging us." This shows that the privatization of education used to have important role of giving more opportunities for the students to enroll in the tertiary level however, the increasing number of public universities and community colleges have made the private institutions to face problems in attracting students to enroll in their institutions. The competition becomes worst when the public institutions also offer the courses that used to be found in private higher institutions. Even though the competition is tough, but for the private education sector, they believe the competitions have made them to become more creative and innovative so that they can attract more students. Indeed, weekly write-ups in education sections of the Malaysian newspapers seem to suggest that the quality of education offered by private tertiary institutions is on an escalating mode.


There are many advantages and disadvantages that should be taken into consideration for those who would like to enroll private institution. Parents play an important role in order to decide what is the best for their children. Therefore, they should get more information and background regarding the private institution that they want their children to join.

In order to improve private higher institution, government should empower parents by removing the financial barrier and at the same time ensure schools compete to improve their performance. The main reason of parents not sending their children to private institution is because they cannot afford the expensive fee which would burden the parents later. Such barrier should not exist anymore in the world of globalization. Therefore, government should come out with the meaningful ways to remove the financial barrier and at the same time promote good competition between public institution and private institution.

Firstly, introduce a targeted voucher system to parents who cannot afford to pay the fee for private institution. The voucher system has been proven to work in countries from America and Britain to Bangladesh and Colombia. It works in developed countries just as it works in developing countries. The targeted vouchers give parents with low household income the necessary funds. The vouchers can only be used to pay for education. Through this system, schools no longer get automatic funding from the state. Instead, "vouchers" are given directly to parents who can then use the vouchers to pay for their children's education needs at a school of their choice. Having the funds in hand, they are no longer compelled to send their children to the school that is closest to home. They can use the funds to cover the costs of enrolling into a better school that maybe a bit further.

Second, set up a National Education Fund funded solely by corporate and individual donations. The National Education Fund would be funded by the private sector and individual contributions, not Government. Companies and individuals who donate would gain tax relief, as an incentive for them to donate. Money from this Fund can be used to top-up the vouchers if necessary, especially to assist the very poor to pay for other costs like transport, books and school uniform. Removing school-based funding and giving money directly to parents would effectively make schools become like any other private companies offering a service. In this case, they are, effectively, becoming private schools.

Imagine too how much taxpayers' money can be saved by axing the intermediaries between the Ministry of Education and individual students. If we remove the bureaucrats in Jabatan Pelajaran Negeri and Pejabat Pelajaran Daerah, and give the saved funds directly to parents, imagine how better off lay-people would be. When parents make informed choices, there is no need for these intermediaries. Schools must compete to offer services that are the best value for money, and schools have to prove that they are delivering the results parents demand. Otherwise, schools would lose money and risk closure because parents would simply not send their children there.

Thirdly publish a school league table every six months. The six-monthly league table would provide parents with a tool to compare performance of schools and therefore help their decision making process. It would also inject more competition to improve the schools. If Government wants to be bolder, they should stimulate growth of private schools in all parts of Malaysia so that there is more competition between schools. Malaysians must get out of the mindset that says private schools are elite expensive institutions. In many African and South Asian countries, there are thousands of private schools catering for the very poor and charging very low fees. If parents have the vouchers, there is no reason why they cannot afford to pay.

Under the proposed system, parents are not adversely affected by the "privatisation" of schools as they hold in their hands the necessary funds to pay for whatever fees schools charge. Parents have the vouchers and they therefore have the power. The proposed "privatisation of schools" brings choice and empowerment to all parents regardless of their household income, and puts pressure on schools to improve. Privatisation of schools coupled with the voucher system therefore brings huge benefits to everyone, including and especially to the poor.

Similar systems have been proven to be effective in countries around the world. The report submitted to the Minister of Education by Malaysia Think Tank London provided evidence of these successes.

In an article published in October this year, John Blundell argued that the best way to improve schools is to turn schools into enterprises and teachers into entrepreneurs. Schools that are not up to standard would have to improve or be closed down.

Wan Saiful Wan Jan (2006)