Education Transformation: A Catalyst for Economic Breakthrough in the GCC

Education Transformation: A Catalyst for Economic Breakthrough in the GCC
A picture taken on March 9, 2020, shows the closed entrance of a private school in the Saudi capital Riyadh. (AFP)
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Updated 08 September 2024
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Education Transformation: A Catalyst for Economic Breakthrough in the GCC

Education Transformation: A Catalyst for Economic Breakthrough in the GCC

RIYADH: Education quality needs to be improved across the Gulf if the region is to truly unlock its economic potential, experts have told Arab News.

Leading figures from the World Bank and regional consultancy firms, together with a range of recent reports and studies, argue that it is not just access to schooling that needs to increase, but the standard of education.

A report from the World Bank in May highlighted that according to its Human Capital Index, a child born today in the Gulf Cooperation Council region is expected to reach only 62 percent of their full potential productivity, mainly held back by low education quality

Speaking to Arab News, Safaa El-Tayeb El-Kogali, World Bank country director for the GCC: “Improving the quality of education is critical for fostering long-term economic growth and prosperity in the GCC.”

GCC countries are currently undergoing a significant transformation, driven by the need to diversify their economies in response to rapid technological advancements and escalating regional and global challenges. 

This dynamic environment necessitates economies that are diversified and resilient, where knowledge and skills play a critical role, and El-Kogali said: “Quality education is critical for GCC countries in reaching their ambitious development goals.”

In recent years, governments across the region have made notable strides in expanding access to schooling and improving student learning outcomes. However, foundational literacy and numeracy skills still elude many students in the region, posing a major obstacle to human capital development and global competitiveness.

El-Kogali highlighted the importance of early investments in quality learning, saying: “Realizing the full potential of human capital in GCC countries requires smart and early investments in the quality of learning that children receive.”

Building solid foundational skills from an early age is crucial as they form the cornerstone of future learning and skills acquisition. Without this, children risk falling behind, becoming disengaged from school, and failing to acquire the advanced skills demanded by today’s labor market.

Effective teaching is pivotal in enhancing learning outcomes at all levels, making it essential to provide educators with the right knowledge and support mechanisms. 

“Education contributes to long-term development and prosperity by improving people’s well-being and labor market prospects, leading to better employment opportunities and higher wages,” added El-Kogali.

Education also boosts individual productivity, propelling economic growth and building resilient economies that can adapt to a constantly changing environment.

The potential of education to spur economic growth is only achieved when it is of good quality and improves relevant skills and knowledge. 

Increasing access to education is vital, but it is ultimately the skills people develop through high-quality education that determine its contribution to economic growth.

In a study conducted by El Mostafa Bentour for the Arab Monetary Fund in 2020, the contribution of human capital to GDP growth in 12 Arab countries was compared to Asian and OECD developed countries. 

It found that Arab countries fell short, especially when compared to OECD economies, where a 1 percentage point increase in human capital leads to a 0.9 percentage point increase in GDP. 

In contrast, the Arab world sees only a 0.5 percentage point increase, while Asian countries see a 0.6 percentage point increase.

A 2008 research paper published in Journal of Economic Literature also found that a 100-point improvement in standardized test scores is associated with a GDP increase of up to 2 percentage points. 

Academics Gabriel Heller-Sahlgren and Henrik Jordahl further extended this analysis to 2016, revealing a 1.3 percentage point increase in GDP per capita for each 100-point improvement in test scores. 

The role of private education

The GCC K-12 private education market is experiencing significant growth, driven by population increases, rising income levels, government initiatives, and a growing expatriate population. 

Increased awareness of the importance of primary education and the need for high-quality options are key drivers of this growth.

Mansoor Ahmed, executive director for healthcare and education at Colliers in the MENA region, told Arab News: “Government initiatives such as Saudi Vision 2030 aim to enhance the quality and accessibility of education.” 

Despite these positive trends, the market faces challenges such as high construction costs and the affordability of tuition fees, which limit accessibility for lower-income families. 

However, opportunities for growth abound through technological advancements, partnerships with international institutions, and the development of specialized education programs in areas such as science, technology, engineering, and mathematics as well as artistic endeavors. 

Mansoor Ahmed, executive director for healthcare and education at Colliers in the MENA region, told Arab News: “The GCC K-12 private education market presents a lucrative opportunity for investors, educators, and stakeholders aiming to capitalize on the region’s growing demand for high-quality education.”

Saudi Arabia’s educational landscape

Among the GCC nations, Saudi Arabia stands out due to its size and demographic trends. The Kingdom, with a population of 32.2 million in 2022, has a higher proportion of nationals compared to expatriates. This demographic reality suggests that K-12 education operators should focus primarily on Saudi nationals to attract sustainable demand, a Colliers report told.

Despite vast resources and investments, Saudi Arabia has the lowest total student penetration rates in the region for private sector K-12 education, with only 15 percent attending such institutions.

Saudi Arabia’s private education sector holds significant potential for growth, particularly by targeting the Kingdom’s nationals. The growing population and young demographics underscore the need for additional schools, with projections indicating that the school-going population will increase from 7.5 million to almost 9.4 million by 2030.

Opportunities are particularly on offer in second-tier cities such as Makkah, Madinah, and Al-Ahsa, as well as Abha, and Taif. 

These cities currently lack high-quality private schools but are undergoing major expansion plans, creating increased demand for K-12 education. 

The rise in white-collar expatriate populations and the opening of international branded schools in main cities are expected to drive the growth for private education.

Affordability remains a crucial factor, with average tuition fees in the GCC region and Saudi Arabia ranging from $10,000 to $30,000 per annum.

According to Ahmed: “The sweet spot for international private schools would range between $15,000 to $20,000 per annum.”

The transformation of education in the GCC is paramount for unlocking the region’s economic potential.

By focusing on quality education, the region can build a skilled workforce capable of driving long-term economic growth and prosperity. 

This strategic investment in human capital is essential for the region to navigate the challenges of a rapidly changing global economy and to achieve its ambitious development goals.


Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting

Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting
Updated 25 September 2024
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Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting

Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting
  • IMF executive board scheduled to meet today to discuss approval of $7 billion loan for Pakistan

ISLAMABAD: Prime Minister Shehbaz Sharif said on Wednesday Pakistan had met the “tough conditions” set by the International Monetary Fund with the help of Saudi Arabia, the UAE and China, as the global lending agency’s board meets today to discuss the $7 billion loan program for the country.

Pakistan reached a staff-level agreement with the IMF in July for a fresh loan to keep its fragile economy afloat. Finance Minister Muhammad Aurangzeb had earlier expressed hope of sealing the deal by the end of August. However, delays were caused by an external financing gap, which prompted Pakistan to seek commitments from key allies and request debt reprofiling.

Just a day earlier, the finance minister again expressed optimism about securing the loan program after the IMF board meeting, while emphasizing the government’s commitment to structural reforms.

“[Today] is the IMF board meeting, and we have fulfilled all of their conditions, very tough conditions, but praise be to God, we have completed them,” he told the media in New York on the sidelines of the 79th United Nations General Assembly Session. “I want to express my heartfelt gratitude once again, to our trusted brother nations, Saudi Arabia, China and the UAE. Without their immense support, this would not have been possible.”

“At the final stage, the conditions were related to China, and just like in the past, the Chinese government once again held Pakistan’s hand and offered immense support,” he added. “I am deeply grateful to the Chinese leadership.”

Pakistan’s last $3 billion IMF program helped avert a sovereign default in 2023 amid a sharp decline in foreign exchange reserves, currency depreciation and record inflation.

The government has already maintained that the country’s macroeconomic indicators have improved, though it needs the 37-month-long IMF program to solidify those gains.

“You have to grow and build from a stable base,” Pakistan’s finance minister said on Tuesday while addressing a high-level private sector dialogue, ‘CPEC-II and the Region.’ “We have reached that level now. Now, we can say that we have a good foundation on which we can build from here.”

“Now we need to move forward and stay with the reform agenda whether it’s on the taxation or energy side [or] on the state-owned enterprises or privatization side,” he added.


Closing Bell: Saudi main index gains 75 points to end at 12,343

Closing Bell: Saudi main index gains 75 points to end at 12,343
Updated 25 September 2024
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Closing Bell: Saudi main index gains 75 points to end at 12,343

Closing Bell: Saudi main index gains 75 points to end at 12,343

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 75.3 points, or 0.61 percent, to close at 12,343.72. 

The total trading turnover of the benchmark index stood at SR7.09 billion ($1.89 billion), with 136 stocks advancing and 83 declining. 

The Kingdom’s parallel market, Nomu, dropped 30.99 points, or 0.12 percent, to close at 25,653.38, as 26 stocks advanced and 33 retreated. 

The MSCI Tadawul Index added 9.85 points, or 0.64 percent, to close at 1,545.63. 

The best-performing stock of the day was Saudi Printing and Packaging Co., which surged 10 percent to close at SR14.52.  

Other top performers included Saudi Industrial Development Co. and Saudi Fisheries Co., whose share prices rose 9.93 percent and 9.9 percent, respectively. 

National Medical Care Co. was the worst performer, with its share price falling 2.47 percent to SR213.60.  

Other underperformers were Gulf Union Alahlia Cooperative Insurance Co. and Saudi Reinsurance Co., which saw their share prices decline by 2.28 percent and 2.17 percent to SR16.26 and SR36, respectively. 

On the parallel market, Al Mohafaza Co. for Education was the top performer, with its share price rising 9.21 percent to SR23. 

Other top performers on Nomu were Armah Sports Co. and Balady Poultry Co., with their share prices increasing 5.33 percent and 4.49 percent, respectively. 

Banan Real Estate Co. was the worst performer on Nomu, dropping 7.8 percent to SR5.44. 

Other notable decliners included Academy of Learning Co. and Leen Alkhair Trading Co., with their shares down 6.73 percent and 4.55 percent, respectively.  

On the announcements front, Saudi AZM for Communication and Information Technology Co. confirmed the award of a new project from the General Entertainment Authority.  

The project aims to provide guidance and support to entrepreneurs and businesses in the entertainment sector, reflecting a strategic push to foster industry growth aligned with Saudi Arabia’s Vision 2030. 

The project’s value exceeds 5 percent of AZM’s total revenues for the 2024 financial year. Its scope includes advisory services to strengthen the capabilities of entertainment sector stakeholders. 

This initiative builds on the existing partnership between AZM and GEA. Previously, AZM collaborated with GEA on a major digital transformation project that modernized the authority’s operational framework. 

Through that collaboration, AZM implemented IT solutions that enhanced GEA’s digital infrastructure, improving efficiency and service delivery. The project involved upgrading critical systems, automating processes, and integrating advanced technologies.


Saudi Arabia to host Global Logistics Forum in October 

Saudi Arabia to host Global Logistics Forum in October 
Updated 25 September 2024
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Saudi Arabia to host Global Logistics Forum in October 

Saudi Arabia to host Global Logistics Forum in October 

RIYADH: Saudi Arabia's transportation and supply chain sector evolution will be a central topic as top leaders discuss innovative strategies and advancements at the Global Logistics Forum in Riyadh. 

The event, set to take place from Oct. 12-14, comes as investment in the sector is surging, with a 76 percent increase in new businesses registered in the second quarter of 2024, making logistics the fastest-growing sphere in the Kingdom. 

Spearheaded by the Ministry of Transport and Logistic Services, the sector is undergoing significant changes to solidify the Kingdom's pivotal role in global trade. This transformation focuses on using advanced technologies to promote sustainability and improve infrastructure and transportation solutions, the Saudi Press Agency reported. 

The forum highlights the Kingdom's initiatives to develop and strengthen logistics centers, improving domestic and international connectivity. 

The three-day event is expected to gather over 100 speakers and participants, including industry leaders and government representatives.

This year's forum will also attract over 10,000 participants from leading global organizations who will address pressing logistics challenges with discussions on sustainability, supply chain resilience, workforce advancement, and technology adoption. 

The agenda includes keynote speeches, dialogue sessions, and bilateral meetings, fostering innovative, sustainable visions for the industry's future.

The event falls in line with Saudi Arabia's strategic location as a trade corridor between Asia, Africa, and Europe and aligns well with the nation's goal to consolidate its position as a global logistics hub under Vision 2030 and the National Transport and Logistics Strategy. 

These initiatives and efforts have propelled Saudi Arabia up 17 positions in the World Bank's Logistics Performance Index.

The Kingdom's port standings have also advanced, with the country climbing to 15th place globally in annual container handling. 

Three Saudi hubs were mentioned in Lloyd's List One Hundred Ports 2024, a testament to the country's growing influence in logistics and support for economic growth.  

The civil aviation sector is equally dynamic, highlighted by the Saudia Group's record-setting purchase of 105 Airbus planes and growing investment opportunities at airports. 

These developments are establishing new standards for global connectivity and infrastructure.  

This momentum marks a new era of leadership and innovation, aligned with national ambitions to redefine global trade and logistics under the ministry's sustainable and technologically progressive leadership.

The Kingdom presents substantial opportunities for global logistics players. With a population of approximately 36 million and a gross domestic product of $1.81 trillion in purchasing power parity as of the end of 2023, Saudi Arabia is a central hub for expansive trade routes supported by world-class infrastructure.  

Another major catalyst for growth is the Kingdom securing the bids for Expo 2030 and the 2034 FIFA World Cup — both of which will attract substantial global business opportunities, opening new channels for trade and commerce.


New customs agreement to boost UAE, US economic ties

New customs agreement to boost UAE, US economic ties
Updated 25 September 2024
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New customs agreement to boost UAE, US economic ties

New customs agreement to boost UAE, US economic ties

RIYADH: The economic partnership between the UAE and the US is poised for significant expansion with the introduction of a new customs cooperation agreement. This initiative aims to reduce customs violations, combat illicit trade, and enhance technical collaboration between the two nations.

The agreement was formalized during UAE President Sheikh Mohamed bin Zayed’s visit to the US, marking a crucial step in streamlining customs operations and strengthening trade relations. Ali Al-Shamsi, chairman of the UAE Federal Authority for Identity, Citizenship, Customs, and Port Security, and Troy Miller, acting commissioner of US Customs and Border Protection, signed the accord.

Al-Shamsi underscored the agreement’s importance, stating it would broaden trade opportunities and facilitate the exchange of customs expertise, alongside enhancing national capabilities through targeted training programs.

He told the Emirates News Agency, WAM: “Bilateral trade between the two nations continues to grow steadily, driven by our deep political and economic ties. This growth brings numerous advantages, particularly in fortifying customs relations and expanding trade scope to navigate challenges that may impede the seamless flow of goods.”

The UAE and the US enjoy a robust economic relationship, with bilateral non-oil trade skyrocketing to $31.4 billion in 2023, up from $23.8 billion the previous year. Notably, US exports to the UAE surged by 19 percent, totaling $24.8 billion. The UAE remains the largest market for US goods in the Middle East, highlighting its vital role as a trade hub.

This burgeoning trade dynamic yields substantial benefits for both economies. US exports to the UAE supported approximately 125,000 jobs across the US in 2023. Meanwhile, the UAE’s exports to the US reached around $6.6 billion, featuring a diverse array of products including aluminum and precious metals, reflecting the complementary nature of their trade.

Al-Shamsi further emphasized that the customs cooperation and mutual assistance agreement underscores the UAE’s pivotal role as a regional gateway for global trade. Its strategic location connects Asia, Europe, and Africa, making it an essential transit hub.

With the US, the world’s largest economy, as a historical partner, the UAE's non-oil trade strategy and investments in sectors like real estate, technology, and manufacturing highlight the mutual interest in nurturing a vibrant trade and investment relationship.


KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  
Updated 25 September 2024
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KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

JEDDAH: Saudi Arabia will accelerate hydrogen fuel cell research after two local entities joined with Toyota Motor Corp. to increase decarbonization efforts in the transportation sector and beyond.

King Abdullah University of Science and Technology and Abdul Latif Jameel Motors have embarked on a strategic partnership with the Japanese firm to implement cleaner energy solutions.

At the heart of this initiative, KAUST has acquired proton electrolyte membrane fuel cell modules from Toyota, establishing a cutting-edge laboratory within its Clean Energy and Research Platform.

This facility is poised to play a crucial role in the Kingdom’s hydrogen innovation efforts, particularly in adapting fuel cells to the region’s specific environmental conditions, KAUST said in a statement.

Saudi Arabia aims to deliver around 2.9 million tons of hydrogen by 2030, offering competitive domestic and export costs, and this collaboration aligns with the Kingdom’s commitment to reducing greenhouse gasses and achieving net zero emissions by 2060.  

Mani Sarathy, professor of chemical engineering at KAUST, said they are excited to collaborate with TMC and Abdul Latif Jameel Motors to drive the adoption of hydrogen fuel cell technology in Saudi Arabia.

“Through our Clean Energy Research Platform, we are focused on advancing research that will optimize hydrogen fuel cells for the region’s specific conditions, ensuring their efficiency and reliability,” Sarathy said.

He emphasized that this partnership demonstrates their commitment to pioneering innovations that support sustainable solutions and contribute to a greener future for the Kingdom and beyond.

Sarathy and his CERP team are currently leading research efforts to explore the performance, durability, and environmental integration of PEM fuel cells, supported technically and financially by TMC and Abdul Latif Jameel Motors, the authorized distributor of Toyota vehicles in Saudi Arabia since 1955.

The team is undertaking a series of modeling and experimental studies to evaluate factors such as temperature sensitivity, humidity effects, and overall efficiency, aiming to optimize the environmental advantages of these fuel cells within the Kingdom’s infrastructure, KAUST said in its release.

Mazin Ghazi Jameel, managing director of Toyota marketing operations at ALJ Motors, commented that his company is dedicated to facilitating the development and adoption of solutions that benefit both local and global communities.

“A key focus is promoting fuel cell technology to establish Saudi Arabia as a key contributor to sustainable mobility. This strategic partnership reaffirms our commitment to enabling a future of cleaner, efficient and smarter mobility accessible to all, supporting the transformational needs of businesses and individuals in the Kingdom of Saudi Arabia,” Ghazi said.

Nobuyuki Takemura, chief representative of the Toyota liaison office for mobility and energy in the Kingdom, remarked that for more than two decades, TMC has been a leader in environmentally friendly mobility solutions, showcasing a steadfast commitment to a zero-carbon future through ongoing innovation and significant global investment.

“In partnership with the KAUST research team within CERP and Abdul Latif Jameel Motors, we are bringing this technology to Saudi Arabia, supporting its decarbonization goals. Toyota is dedicated to contributing to the research at KAUST and to advancing the Kingdom’s economic diversification and circular carbon economy, in alignment with Vision 2030,” he said.