A new momentum in Malaysia
By Sam Fraser 

Malaysia could be set for an increase in the number of international schools as global business and trade beyond Kuala Lumpur improve, more professional expatriates are enticed to the country, and international education options become affordable to more local families as the country prepares to achieve its aim of being a high-income nation by 2020. 

New infrastructure prepares the ground
Kuala Lumpur continues to experience major development, the highlight of which this year will be the completion of the Exchange 106 building. The capital’s new, towering, 106 floor, financial hub will become the tallest building in South East Asia. 

Elsewhere, the state of Johor in southern Malaysia, which links the country to Singapore, is beginning to see extensive urban development thanks to major infrastructure improvements. Most notable is the construction of HSR, a 350km high speed rail link between Kuala Lumpur and Singapore. Considered the world’s busiest international air route, the 90 minute journey from Singapore to Kuala Lumpur by high speed rail will offer a viable alternative with great potential for commercial and residential development along its route.

 

Also underway, but currently in review by the new Malaysian government led by Prime Minister Mahathir Mohamad, is the Chinese-financed East Coast Rail Link. By 2024 it is due to connect Port Klang on Malaysia’s south-west coast to Kelantan near the Thai border, spanning a total of 688km predominantly along the country’s east coast. If it goes ahead, the line would provide access to previously untapped areas of Malaysia as well as connecting the South China Sea to the Straits of Malacca. This could alter currently embedded trade routes in the region and open up additional areas for urban development. 

An education destination

Malaysia has, in recent years, positioned itself as an education destination, particularly for higher education. Several branches of international university campuses are now established in the country, allowing students the chance to attend and gain rigorous degree-level education and qualifications from reputable Western universities at affordable prices. 

The appeal of Malaysia as an education destination has attracted independent school brands too. Sister schools of Britain’s Marlborough College and Epsom College are both providing British independent school brand education to school age children in the country.  Johor’s Marlborough College has 45 different nationalities within its roster of 900 day and boarding students. 

More expatriates for Malaysia

Malaysia is a particularly popular destination for foreign workers right now as a result of the government’s Malaysia My Second Home (MM2H) programme. This allows a multi-entry visa purchase for an initial ten-year period which can be extended. This means that applicants who fulfil certain criteria are allowed to bring to Malaysia their dependents (spouses and unmarried children below that age of 21). It is proving a big incentive for foreign business workers and for families wishing to send their child to a boarding school with an accompanying adult

Between 2002 and 2017, the MM2H programme had approved over 35,000 participants led by China (27% of the visas) and Japan (12%).  

Local markets in waiting
Even so, until demographics change within its developing regions, Malaysia’s international schools market beyond Kuala Lumpur is one in waiting. Master at Marlborough College Malaysia, Alan Stevens, explains: “Johor development has created an infrastructure which remains largely unexploited at present. Without large-scale businesses moving to the area, Singapore remains the principal market.” 

Already making a notable move into Johor are families from Singapore, moving to better value housing and schooling options, and in anticipation of the improved transport links to Kuala Lumpur and Singapore. Graham Gamble, Head of Shattuck-St. Mary’s School in Johor’s Forest City which is due to open this year, says: “What is driving the development of Johor, that will influence demand for international schools now, is the increasing number of people who are choosing to live in the area because they want the attractive aspects of a Singapore lifestyle but with far less of a cost.” 

Future demand
According to the ISC Research Opportunities and Malaysia market reports, international school accessibility is now very favourable for an increasing proportion of the local population if the price is right. 

School fees, currently averaging USD$8,735 for the year, are affordable for a growing number of local families. Enrolment of up to 100% local Malaysians is allowed, resulting in Malays now making up the largest student nationality (currently 55% of all students). In addition, as the generous expat packages of old are shrinking, so some expatriate families based in Malaysia are turning to the more affordable reputable schools.

As a result, mid-price international schools are expected to see the most demand and development in the near future.

Staffing Malaysia’s international schools
British curriculum and examinations are the most popular amongst Malaysia’s international schools. The country is a popular destination for teachers from the UK who make up 33% of all international school teachers in the country.  

The recruitment of expatriate teachers to the country requires just two years’ teaching experience and, with no major visa restrictions, the hiring of overseas staff is not as excessive a challenge as in some other countries. Local skilled teachers are also employed in significant numbers, making up 41% of the current professional capacity of international schools, primarily in the mid and low-price international schools. HELP International School in Kuala Lumpur is an example. 

The school was opened in 2014 as a result of the government’s deregulation of education which created increased accessibility to international schools for local children. HELP offers the British curriculum from pre-school to A levels and appeals to middle income local families with approximately 90% of its students being Malaysian. Employing 50% expatriate teachers and 50% local teachers is a benefit says Davina McCarthy, Principal of the school: “We team up our teachers; two local teachers with two experienced expatriate teachers for mentoring,” she says. “Every week they sit down and plan together. The expat teachers are able to decipher the planning and explain it in a way that's accessible for the local teachers, while the Malaysian teachers are able to enrich the cultural experience and make sure the learning is relevant for the local students.” 

It’s a staffing approach that more of Malaysia’s international schools in the mid-price fee range are beginning to model and one that Davina believes works for everyone. “We grew from 50 to 150 staff in just two years, and we’ve expanded again,” she says. “In our first year, some teachers saw it as a risk coming to work with us, but this year it's been easy to recruit really good staff. Now teachers want to come and work at the school.”   

A bright future for the market
Prompted by the increased ease of opening and running education establishments in the country, Malaysian private equity and government pension funds are now showing a level of confidence in international schools as a possible long-term investment alternative to oil and gas. If support by the new government for development projects and international education remain, the future of the international schools market in Malaysia looks to be a positive one. 

Sam Fraser is Field Research Consultant for South East Asia at ISC Research. Sam collects intelligence and data to support ISC market reports including ISC’s Malaysia International Schools Market Report. You can contact Sam directly at sam.fraser@iscrsearch.com. For more information on any data or intelligence from ISC Research contact richard.gaskell@iscresearch.com 

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