Saudi Arabia spends 5.6% of GDP on education

Saudi Arabia spends 5.6% of GDP on education
Updated 19 June 2013

Saudi Arabia spends 5.6% of GDP on education

Saudi Arabia spends 5.6% of GDP on education

Kuwait Financial Centre (Markaz) recently published the executive summary of its report on GCC education sector. In this research note, Markaz analyzes status of the GCC education sector and highlights its current and expected enrollment trends and market size. The report also discusses challenges and investment opportunities in the GCC education sector.
Based on the report’s estimates, in 2012 the education market in the GCC was worth $ 60 billion. The bulk of spending (84 percent) is by the government and the private sector accounted for a meager $ 9.6 billion.
The report notes that demographic structure of GCC countries is tilted toward young population, making education imperative. Even though the GCC is blessed with oil resources and wealth, paradoxically it also suffers from a high level of unemployment, mainly due to disconnect between skill sets and market needs.
The GCC countries have realized this gap, and effected reforms and established various governing bodies to improve overall education structure. The GCC governments, on average, spend about 3.3 percent of their GDP on education lesser than 4.4 percent of the world average. Saudi Arabia in particular — spending 5.6 percent of GDP on education — is leading the way by giving a plenty of emphasis to improvements in the education sector.
Generally, all the GCC countries have divided their education system into four broad levels — pre-primary, primary, secondary and tertiary. Additionally, there are vocational training institutes designed specifically to provide job-oriented skills to students.
Except for the UAE, the majority of students in all other GCC countries are enrolled in the public institutions — primarily due to free education provided by governments to their respective nationals. The expatriates enroll in private schools.
In the GCC countries, mainly four types of private schools exist — Arabic, bilingual, Western and Asian. Of them all, Western schools are most expensive distantly followed by bilingual schools. Arabic and Asian schools have more or less the same tuition fee structure.
The total number of school students (from pre-primary to secondary level) enrolled in the GCC have increased from 8.4 million in 2008 to 9.1 million in 2011 and expected to reach 12.5 million by 2020. Qatar has recorded the highest CAGR of 5.8 percent between 2008-2011.
The report expects the enrollments at pre-primary level in the GCC to grow from 521,005 students in 2011 to 606,480 students by 2015 and 751,030 students by 2020. "As per our forecast, the number of enrolled students at primary level (grade 1-6) is likely to grow to about 5 million by 2015 and reach 5.8 million by 2020 at an estimated annual growth rate of 3.2 percent."
In 2011, there were over 4.1 million secondary school students enrolled in all the GCC countries. "Based on our estimates, the enrollments at secondary level in the GCC is expected to grow at a CAGR of 4.8 percent between 2012 and 2020, reaching almost 5 million by 2015 and just over 6 million students by 2020. A total of 1.3 million students were enrolled at tertiary level in 2011 in the GCC countries.