Cabinet gives the green light to establish a free trade zone of international universities

The cabinet has green-lit a proposal to develop a "free trade zone" of international universities, approved by the Board of Investment (BOI), to attract foreign and non-resident students to the country.

Co-Cabinet spokesman and minister of higher education Bandula Gunawardena told reporters today that the aim of the so-called ' free trade zone ' (in the words of the minister) is to make Sri Lanka an international educational hub for branches of world-renowned universities.

Higher education institutes will be welcome to set up shop in Sri Lanka depending on their global ranking, and will enjoy tax concessions and state-funded infrastructure facilities, the minister said. After analyzing Malaysia's Putrajaya Educational City led by Malaysian Prime Minister Mahathir Bin Mohamad as a way to bring foreign exchange to Malaysia, he said the plan took root.

About 21,000 students leave the nation for higher education resulting in a foreign exchange loss of Rs 50 billion per year, the minister noted. If this continues, it will cause the rupee to depreciate, leading to higher living costs, he added.

The government hopes that Sri Lanka will see a spike in the number of international students entering the country through the proposed project, accompanied by an increase in foreign exchange revenue as fees for the international universities can only be paid in foreign currencies and not in Sri Lankan rupees.

In Sri Lanka’s quest to become a knowledge hub for Asia, Education and Training have undoubtedly become the key sectors of focus. Although Sri Lanka has a very high literacy rate and is producing graduates who are of ever-increasing quality, there is very much room for improvement in the sector.

The government policy of creating a dynamic education sector with the involvement of the private sector to create competition and breathe new life to a system that may have stagnated has created a wealth of business opportunities in Sri Lanka for those who are interested.

Sri Lanka has provided high and equitable access to primary and secondary education for several decades (World Bank, 2011). The net enrollment rate (NER) is 99 percent in primary school and 84 percent in junior secondary, and there is gender parity in both (figures O.1). In senior secondary education, NER is 70 percent, which is relatively high for middle-income countries. On average, Sri Lankan students attend school for about ten years, compared to six years in South Asia.

OSL Take: The focus of the newly elected government in enhancing the education sector is a clear indicator of the emerging business/investment opportunities in Sri Lanka’s higher education sector. Sri Lanka has given priority to the country’s education sector in line with Sri Lanka’s long term development plans. Many foreign universities have opened pathway colleges in Sri Lanka as well. Therefore international businesses/investors could explore business opportunities in Sri Lanka’s higher education sector.

VBS/AT/20200303/Z_TB3