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Education Sector Overview Annexure Financial Solutions August 2019 Uzbekistan Market Education Sector Overview General Overview of Education Sector Schoo School age population Annexure Financial Solutions Until 2017 in Uzbekistan the government had played almost l age exclusive role in education sector. The involvement of private Milllions Firdavs Olimov, CFA | Managing Partner sector in Education had been highly limited. The reforms in 2017 2.0 1.9 +86 21 5472 1773 had crucial effect on improving education sector and increasing 1.8 1.7 1.7 [email protected] 1.5 1.6 1.5 private sector participation in private sector. The Education 1.4 1.3 system of Uzbekistan is managed by three ministries - Ministry of 1.4 1.2 Kenneth Lai, CFA | Managing Partner Preschool Education (MoPSE), Ministry of Public Education 1.2 +6012 2252251 (MoPE) and Ministry of Higher and Secondary Specialized 1.0 [email protected] Education (MoHSSE). 0.8 The population of Uzbekistan is growing fast and consists of 0.6 Shawn Abdurakhimov | Research Associate largely young people. Between 2009 and 2016, the population 0.4 +998 71 212 1194 grew from 27.5 million to 33.3 million, 20.8% increase in ten 0.2 [email protected] years. About 37% of the population is under age of 19, indicating 0.0 0-4 5-9 10-14 15-19 that the demand for education is driven by demographic pressure. Men Women Compared to other CIS counties, the government of Uzbekistan has been much larger portion of its budget in education. In 2017 Source: The State Committee of Uzbekistan on Statistics the government spent 6.4% of its GDP on education, which is more that did other CIS counties such as Kazakhstan (2.8%), Tajikistan (5.2%), Belarus (5%), and Russia (3.8%). (WorldBank, 2018)1 Study programs for academic lyceums have been condensed to two years. Upon completing 9th grade, students can choose to attend academic lyceums instead of general secondary schools for grades 10 and 11. To make it more flexible and aligned with the labor market, the government is reforming vocational educationBefore the reforms, students could choose to attend either academic lyceums or vocational Preschool Education colleges. However, under new scheme, students can choose to continue their studies at vocational colleges Preschool education in Uzbekistan is managed by Ministry of only after finishing 11th grade. Depending on the specialization, the programs of vocational colleges will last Preschool Education (MoPSE), which was established in from six months to two years. Several colleges are planned to operate under Public-Private Partnership September 2017 to improve preschool education sector. In (PPP) scheme. Uzbekistan, Children can attend preschools at the age of 3. The number of children preschool age has been increasing at a fast rate over the past twenty years. However, according to the World Bank, the number of preschools in Uzbekistan has decreased by Higher Education 45% over the past 20 years. Today only 0.8 million out of 2.5 Ministry of Higher and Secondary Specialized Education (MOHSSE) manages the higher education system million preschool age children have access to preschool in Uzbekistan. There are currently 109 higher education institution in Uzbekistan out of which 30 are education. (World Bank 2018)1 universities, 35 are institutes, 2 academies, 29 branches of HEI, 1 conservatory, 1 highest school, and 7 In spite of the fact that preschool enrollment rate has increased affiliations of foreign institutions. Besides, the participation of the private sector is limited despite the from 20% in 2007 to 29% in 2017 following the measures taken Government Laws does not limit its participation. Uzbekistan spends very small portion of its education by the government, it still remains low. Although the government budget (5%) on higher education compared to 20% spend by most countries. The enrollment rate is very low invests as much in preschool education as OECD countries, its due to limited capacity of education providers. The supply of higher education is limited mainly because of rate in Uzbekistan remains extremely low compared to such the quotas set by state universities/institutes and very small number of private universities/institutes. countries as Kazakhstan (60%), Finland (79 percent), Moldova Although the number of enrolled students has been increasing over the past twenty years, the gap between (82 %), Russia (85 %), Japan (90 %), and Brazil (82 %). The the number of applicants and enrolled ones has been increasing simultaniously, indicating the increasing costs of preschools impose barrier to enrollments. Especially in demand. rural areas, with low-income population, preschool enrollments are extremely low. To address this issue, government has invested considerable Demand and supply for seats in universities, 2009-2018 amount to this sector. In December 2016, the government approved the “Program for Further Improvement of the Preschool thousands 800 730 20% Education System from 2017 through 2021” with the aim of 19% 680 700 663 18% improving the quality of preschool education. In 2017 the 606 16% 600 15% 543 government announced its plan to achieve 100% enrollment for 5- 14% 481 14% 500 13% 419 432 12% 12% 6-year-old children by 2021. It will be compulsory for all 6-year-old 386 11% 400 351 10% 10%10% children to be enrolled in preschool education starting with the 9% 9% 300 8% 2021/22 academic year. 6% 200 4% 67 57 57 56 57 58 58 58 67 69 100 2% 0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Admissionss Applications Admission rate, % General Secondary Education and Secondary Specialized Vocational Education Source: The State Committee of Uzbekistan on Statistics General secondary education in Uzbekistan consists of 11 years of compulsory education. The government spends in general Moreover, education market of Uzbekistan was recently opened to foreign suppliers owing to the secondary education in line with EU and OECD countries. implemented reforms by government. The government exempted all foreign higher educational institutions Uzbekistan is in the process of reforming its secondary education accredited in the country from payment of all types of taxes until January 1, 2023. Following these reforms, a system. Until 2017, general secondary education in Uzbekistan decent number of foreign univeristies expressed interest in both providing the service and cooperation with consisted of 9 years of compulsory education. In the 2017/18 local universities and institutes. Namely, in 2018 Webster University (USA) started offering courses on the academic year, general secondary education was expanded to 10 basis of Tashkent University of World Languages, NCUK has launched admission to its foundation programs, years and in 2018/19 academic year the 11th year was added. Amity university established its branch in Tashkent and will offer courses in IT, 1 World Bank. 2018. Uzbekistan Education Sector Analysis. © World Bank. Annexure Financial Solutions Monthly Report - August 2019 Page 1 Annexure Financial Solutions August 2019 Uzbekistan Market computer Science, economics and tourism administration starting Schoo Incentives for investments into preschool and general secondary education sector from 2019-2020 academic year. Besides, following universities l age In order to develop preschool and general secondary education sector, increase private sector have announced intentions to open affiliated branches in participation and improve the quality of education, the government of Uzbekistan now provides the Uzbekistan: following incentives for the providers of preschool and general secondary education in Uzbekistan: - National Research Technological University - Moscow Institute of Steel and Alloys - Bauman Moscow State Technical University School type Privileges Obligation - Sechenov First Moscow State Medical University Investor should build necessary - Moscow Architectural University Exemption from all taxes until infrastructure and provide high - Russian Technological University (Russia) January 1, 2021, refund of half quality education services. - Nanjing Polytechnic Institute (China) Private kindergartens of the electricity and gas bills He/she should also set - Yeoju Technical Institute (South Korea) until January 1, 2023. Buildings reasonable prices and support - Universiti Teknologi Malaysia (Malaysia) are given for nil price. children from low-income families. Investor should build necessary infrastructure and provide high quality education services. Private general secondary Exemption from all taxes until He/she should also set schools January 1, 2021. reasonable prices and support children from low-income families. Incentives for investments into higher education sector According to the Presidential resolution “On forecast of the main macroeconomic indicators and parameters of the State Budget of the Republic of Uzbekistan for 2018”, which was signed on 29 December 2017, until 1 January 2023, foreign universities are exempt from all types of taxes and mandatory contributions to state trust funds in the framework of their educational activities in Uzbekistan. Moreover, the universities will not pay a single social payment and personal income tax in part of the labor fund of foreign workers. Annexure Financial Solutions Monthly Report - August 2019 Page 2 Annexure Financial Solutions August 2019 Uzbekistan Market Capital Markets Update Uzbekistan stock market performance, in UZS Top UZS Exchange Rates Major Sectors 31-Jul-19 28-Jun-19 30-Apr-19 MoM QoQ CBU Rates 31-Jul-19
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