La guerra de 1941

Higher education across the world is undergoing differentiation horizontally and vertically. Horizontally as new providers enter the market and vertically as institutions proliferate. Variety of institutions pursuing different goals and audiences is best able to serve individual and national goals.

Population of Afghanistan is incessantly increasing. In the year 1390 (2011 – 12) total

population was 26.5 million14. University age population amounted to be about 2 million (1.03

million males & 990 thousand females) which made 8 percent of total population15. The total number of students in both public and private higher education institutions was about 112 thousands (92 thousand males & 20 thousand females) with 13,652 higher education graduates.

In Afghanistan total value of private investment in higher education system up to the date

August 2012 was around USD 14 million16 making 0.58 percent of total investment of services

sector, which is not sufficient enough as more investment is needed by establishing new higher education institutes as well as new innovations in this sector. There exists a high demand for higher education in the country now than before, as the country has left at least 3 decades of devastating war behind which left social, economic, political and educational infrastructure destroyed. Higher education is one of the most demanded and profitable sector where exists fruitful opportunities of investment from within and outside the country. There is a need for establishing higher education institutes not only for boys, but also equally for girls who have comparatively lesser access to higher education and the most vulnerable section of the society in this context.

Demand for higher education in Afghanistan is increasing day by day. Current higher education institutions are unable to fulfill the growing demands, due to low investments in the sector or less availability of funds and shortage of resources and facilities for quality high education. It is of great importance to increase private investment in this sector in order to improve quality of education on the one hand, and wider accessibility to willing students on the other hand. According to the statistics disseminated by CSO, the percentage of population aging below 24 years is around 63 percent, which is university age in Afghanistan. The figure shows that there exists demand for higher education that has remained unsaturated in the past and in the present as well. To meet this unsaturated demand & to give access to higher education to those who are currently out of the reach, establishment of quality higher education institutes in the form of professional, research, technical universities etc. are necessary. There are potential investment opportunities in the sector too. To clarify the investment opportunities further, we bank upon the data published by the authentic sources, as the following.

14_{Statistical Yearbook 2011-12, CSO.}

15_{We have assumed university age to be 20-24, given the situation in Afghanistan. If we take it to be 15-19, then it}

would make 9 percent of total population.

Research &Planning Department, AISA 2012

In the year 1390 (2011-12) the number of the students registered for matriculation test (Kankor

or University entrance test) was 150,00017. A similar number of students are expected to appear

in matriculation test in 1391 (2012-13) too. Among 150,000 students registered and appeared for university entrance test, only 55 percent found their way to higher education institutes – private and public, while the remaining 45 percent students involuntarily were left out of the reach of higher education. Table 1 below, exhibits the fact in nutshell.

Table 2: Students appeared in University entrance test and result (1390) Number of Students appeared in the Entrance Test

Number of Students got admission in the Universities (Including

Vocational, Technical, Teacher training &

Medical Sciences Institutes) Total Admission given Admission given to students appeared for the

entrance test (%) Total Admission given (%) Students unwilling to pursue higher education or did not

make it to higher education institutes (assumed) (%) Students involuntarily left out of the higher

education institutes

(%)

Public Private Public Private

150,000 68,253 14,465 82,718 45% 10% 55% 20% 25%

Source: Afghanistan Statistical Yearbook 2011-12, CSO and Authors own calculation based on disseminated data.

Research &Planning Department, AISA 2012

As it is evident from table 1 above, the absorption capacity of public higher institutions is less than 50 percent of the total students appeared for the entrance test (45 percent). This clearly signifies that the government higher institutions cannot cater to the market demand for higher education and the supply of the same is lagging behind. In other words, there is an excess demand of higher education in the country. This is also one of the reasons for higher cost of higher education in Afghanistan. At the same time, private higher education institutions could only offer admission to almost 10 percent of the total students appeared for the entrance test. Public and private higher education institutes jointly have absorbed 55 percent of the total students hoping to pursue higher education.

Given the situation in Afghanistan, we assume that at most, 20 percent of the total students wrote entrance test were unwilling to pursue higher education due to personal, financial or any reasons, or due to lack of fulfilling the minimum marking criteria for university education.

The remaining 25 percent of the total students are involuntarily out of reach of higher education, though they are willing to attain higher education. There can be at least two reasons for this argument. (i) Either they cannot afford to bear high expenses for pursuing higher education in private institutes, (ii) or there is low absorption capacity in both public and private higher education sectors to cater to their demands for higher education. The former logic can hardly be a reason for preventing the willing students to attain higher education in private higher education institutes because; firstly there are private higher education institutes who help poorer students financially in order to assist him/her pursue higher education. This can be in the form of partial or full fee waiver to outstanding students, providing study materials at lower cost, providing free transportation facilities etc. Secondly, the cost of higher education in private higher education institutes are not sky-high to be out of reach of most of the students. Many students, hard or easily, can afford to pursue higher education in private sector.

As mentioned earlier, currently the private investment undertaken on higher education is approximately USD 14 million. Given the above analysis of the table, with this amount of investment, the private sector has been able to offer admission to only 10 percent of the total students appeared for the entrance test. The willing 25 percent students who remained out of the higher education system cannot be given admission in public higher education institutes due to their limited absorption capacity. In this situation, the only option these students are left with is to turn to private higher education institutes for admission. However, due to low absorption capacity of private higher education institutes, they cannot too admit these students. This fact undoubtedly indicates the need for investment in this sector and investment opportunities for potential investors. If USD 14 million private investment responds to the demand of only 10% willing students, there will at least investment of USD 35 million is needed further in the sector to cater to the demand of 25 percent involuntary left out students. For this amount of needed investment, we assume that private higher education institutes are equipped with basic minimum facilities, which are required for their smooth functioning. If private investors are willing to establish world class higher education institutes with advanced systems and sophisticated facilities, the amount of required investment can increase even further.

Apart from investment in higher education institutes, there exist investment opportunities in other spheres of higher education also. There is a demand in providing facilities such as

internet based libraries, medical laboratories, smooth transportation facilities, innovations in the sector based on new technology, establishment of private coaching classes, University entrance test preparation centers etc. Private potential investors can invest in these areas where there are extensive demands for each in the country.

Besides, investors, individual students and parents maybe in need of education loan for attaining higher education. In this wake, there is a need for the establishment of ‘Higher Education Development bank in order to provide loans to these category of people so that to culminate in growth of the sector. Income-contingent loan schemes (where repayment plans are tied to post-graduation earnings) should be provided by government, and establishment of higher education development bank (public private partnership) to provide loans to individual students, parents and higher education institutions for capital development.

Furthermore, there is need for establishment of quality higher education institutions in the form of professional universities18, research universities or build partnerships with current public/ private higher education institutions to improve quality of education that could respond to

market demand19, expand opportunities for females, standardization of current education system

establishing training institutes for lecturers by foreigners plus workshops and seminars for students are needed.

As a result, the higher education sector is among the most potential sectors for private investors where there are opportunities for gainful investments.

18_{Professional institutions provide training in a specialized field. Most developing countries have an urgent need for}

individuals with specialized professional skills so this plays a critical role in national development.

19_{Establishment of higher education institutions can provide job opportunities for lecturers. Permit the participation}

Research &Planning Department, AISA 2012