Early starters a target for private learning in Dubai

05 March 2012

Dubai’s large expatriate population and its demand for early-years learning institutions ensure that private investment in the education sector far exceeds government support

Key fact

Throughout Dubai, 7,594 children were enrolled at 84 nurseries during 2009

Source: Knowledge & Human Development Authority

There is little motivation for GCC governments to invest in education services for expat children who are likely to have left the region before they can contribute significantly to the economy. Pre-school education in the emirate of Dubai is no exception. The private sector dominates both nurseries and kindergartens. Nurseries provide play facilities for children up to four years old; kindergartens are more learning-focused and cater to children aged between three and six, when schooling becomes mandatory.

Demand is much higher than supply. So some kindergartens charge … the price of a university place

Abdulla al-Karam, Knowledge & Human Development Authority

A 2009 report, Early Childhood Education and Care in Dubai, commissioned by the Knowledge & Human Development Authority (KHDA), found almost all nurseries relied on private investment support. The exceptions were two state-funded facilities, which at the time served only 43 children. Throughout Dubai, 7,594 children were enrolled at 84 nurseries.

High demand for education

Demand for early childhood care and education (ECCE) is significant in Dubai, and enrolment is subsequently high. The report finds that 90 per cent of age-appropriate children enrolled in kindergartens. The latest United Nations Educational, Scientific and Cultural Organisation (Unesco) figures found UAE pre-primary enrolment rates to be 85 per cent in 2007. This is much higher than the Arab world average of 19 per cent and the global average of 41 per cent.

Abdulla al-Karam, chairman and director of KHDA, told the International and Private Schools Education Forum at the start of March that “the future of education will depend on private [investment]”.

“Dubai is largely expatriate. And if you look at the emirate’s demographics, the majority of the population is aged in their thirties and forties, and are couples with younger children. This [ensures] demand is much higher than supply. So some kindergartens charge AED30,000-50,000 [$8,167-$13,612] a year, the price of a university place,” he told MEED.

Children could easily leave one kindergarten and join another, but the same does not hold for schools

Amit Garga, The Parthenon Group

At the same conference, Amit Garga, senior principal at US education consultancy The Parthenon Group, said the UAE can be more tolerant than other markets to a high price point for education services. “It is a very expat-dependent market,” he said. “Expats are typically on company packages; they therefore [are willing to] pay higher [rates] and are less price-sensitive.”

Sonia Ben Jaafar, director of Dubai-based EduEval Education Services consultancy, says: “It’s a suppliers’ market. If you’ve got any kind of quality at all, you can charge fees that are [relatively] high. People who want their kids to attend early childhood centres, such as nurseries or daycare, end up paying quite a bit for that service.”

With high demand unbalanced by supply, standards can drop. “Quality is variable, but standards [are rising],” says Ben Jaafar. “The Social Affairs Ministry, which is responsible for nurseries, has [developed] a set of standards that has been delivered to all nurseries.”

These guidelines cover areas including financial management, community responsibility, technical development, health and safety, and the rights of children and parents.

John Bennett, visiting research fellow at the University of London’s Thomas Coram Research Unit, authored the 2009 KHDA report. He found quality ‘variable’. “While some kindergartens provide excellent early childhood education, in others, there is room for improvement,” he wrote.

Facilities tend to be of a high standard, but kindergartens and nurseries are often let down by poor staffing. Many kindergarten teachers lack the specialised qualifications in education required in other markets, but are generally qualified to degree level and paid the same as primary teachers.

“By contrast, staff in nursery settings are more likely to have varied backgrounds, ranging from no training whatsoever to a professional/vocational education or a diploma,” writes Bennett. As only 5 per cent of nursery staff speak Arabic, national and Arab expatriate children tend to be taught only in English.

Alternative plots for pre-school facilities

More pre-school facilities are likely to be built as the government makes land available to investors. Al-Karam says during the building boom of 2002-07, areas such as Palm Jumeirah and Dubai Marina became synonymous with profitable residential developments, deviating from plans that allocated space for educational facilities. Land is now being freed up, however, and government bodies are looking at alternatives to stand-alone school plots.

“Kindergartens require smaller spaces [than schools]; they don’t have to be on ground level,” he says. “We are working on regulations to set them up in those communities.”

While schools, which may have their own kindergartens attached, will tend to have a larger catchment area, stand-alone pre-school facilities tend to be more localised. “Kindergarten is a hyperlocal business,” says Garga. “Schools incur a higher capital expense, but have access to a larger catchment area for attracting business. On the other hand, kindergartens are hyperlocal. Parents don’t want to send their children too far from home.”

ECCE establishments are also less ‘sticky’, he says. “Children could easily leave one kindergarten and join another, but the same behaviour does not hold for schools. When parents take children out of schools they take a long time to decide before they [do so].”

Domestic care for children in Dubai

Internationally, the twin factors of size and stickiness mean kindergartens and nurseries can prove less profitable than schools. They cannot be scaled up as easily, and they must spend more on marketing and customer retention. However, in Dubai, these factors are mitigated by high demand, meaning parents are prepared to send their children farther afield. If children do leave, their places can be easily filled.

The benefits of childcare extend beyond the pupils themselves; parents are also able to go to work. In Dubai, the need for child-minding in national families is often met by nannies. The Bennett report finds: “Many expatriate women work and believe that nurseries provide better developmental opportunities than an in-home nanny or maid. By contrast, the national culture in Dubai is based on extended families and homecare services, a tradition that probably lessens demand for extra-domestic care.”

Among Emirati households, 94 per cent have a maid, with those households employing an average of 1.7 maids each. By contrast, only 5 per cent of non-national families employ an average of 1.1 maids each.

Employing a nanny can also be cheaper than enrolling a child in a pre-school institution. Bennett found that maids receive wages of AED700-1,184 monthly, equivalent to an annual income of AED8,400-14,208.

In 2008-09, kindergarten fees ranged from AED1,500 to AED71,000 a year. Nursery places were priced between AED5,000 and AED50,000. However, maids generally tend to be untrained and inexperienced in childminding, as well as being under-educated and possessing poor English and Arabic language skills.

Attitudes to ECCE are changing. “Many years ago, kindergarten or nursery was an option for a large number of parents,” says Al-Karam. “Now, many parents are being educated about the added value that kindergarten and nursery [education can offer] the child, and therefore they are becoming more of a real must-have.”

Ben Jaafar adds that from a purely economic standpoint, ECCE is a good investment for parents and the state. “We know that the biggest return on investment [ROI] happens the earlier you invest,” she says. “If you look at the graph of ROI in terms of economic development, the earlier you invest in a child’s education, the higher your rate of return is.” Quality early-years education prepares children for school and means they perform better academically and socially later in life.

Private-sector dominates education industry

In other markets, the benefit society receives from ECCE drives government spending, but in Dubai that driver largely does not exist. With a transient expatriate community, state investment in education is taken out of the country when parents move on, taking their families with them.

This means Dubai’s pre-school market, as with other areas of education in the emirate, is likely to remain dominated by the private sector. Demand for education and child care keeps rising, driven by a growing population that is constantly demanding more and better facilities for its children.

“I believe that there is room for quality, affordable early childhood education as well as parental awareness programmes in this region because of the ROI of ECCE,” says Ben Jaafar. “It is like a race: if kids don’t arrive at the starting line on time, with their gear on and ready to go, how do you expect them to finish with any kind of decent time? By the time those unprepared kids start running, the rest of the kids are already half way to the finish line. This is a systematic, large-scale problem in the Middle East and the for-profit sector is the one addressing it. So the supply-demand imbalance becomes a factor for access and quality.”

With demand and prices still high, and the standards of education requiring improvement, Dubai looms as a boom town for those prepared to invest in developing high-quality education facilities for young children.

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