In the wake of the federal government’s proposed new caps on international student numbers, is it time for Australia’s universities to thrive in Transnational Education (TNE) beyond their established presence in Southeast Asia and venture into new promising markets such as the Middle East?
In August this year, the Australian government announced its intention to introduce caps on international student numbers starting in 2025. If legislation is passed, the education minister would gain the authority to cap international students at 270,000 based on education provider, campus location, and course. With these recent measures in government policy, it has become imperative for universities to rethink their approach to TNE.
The combination of these new caps and the existing setups of education providers has coincided with rising costs of living and affordability of studying in Australia. Treasurer Jim Chalmers said in May during his federal budget speech that international student places had outpaced the creation of dedicated student housing, making it harder for ordinary Australians to find a rental house. Government statistics show that as of May 2024, there were 810,960 international student enrolments, with 55 per cent coming from China (21%), India (16%), Nepal (8%), Philippines (5%), and Vietnam (5%). According to available statistics for 2022, RMIT had the highest number of international students, with 26,590 students, followed by Monash University with 22,140. While housing reports debunk the treasurer’s statement, the issue remains a live one for the Australian electorate.
While some of Australian universities have made direct investments in South East Asia, the Middle East is lagging behind. According to Industry ARC, the Middle East Education and Corporate Training market size is estimated to reach $9.4 billion by 2030. In 2023, countries in the Gulf Cooperation Council (GCC) spent about 13.3 per cent of their budgets on education.
For example, Saudi Arabia is expected to lead the GCC education market, with approximately $50 billion allocated to the sector in 2023. According to Dr Mounira Alaboudi from the Saudi Ministry of Investment, the Kingdom plans to push the private sector for more investments in education, anticipating an increase in student enrolments from 15% to 25% by 2030 – equivalent to almost 900,000 additional students.
Success in the Middle East relies on three important pillars: the university’s own capacity, its approach, and the characteristics of the targeted market. Having said that, universities must be aware of the risks involved in seeking quick profits from the Middle East market. To offset revenue losses due to the proposed new caps on international students, university leaders would be wise to carefully navigate their international strategies, particularly in the TNE space, when considering new markets.
Universities’ own capacity is a determinant factor in their internationalisation agenda; it requires alignment with their priorities, transitioning them to become leaner and more efficient, and ultimately driving them to become revenue-generating. Senior-level support and adequate resources to deliver on internationalisation goals are required at first because, without it, it would be impossible for TNE to take place anywhere. Once this is established, universities must carefully consider their strategies, allocate adequate resources, leverage experience, and develop long-term plans when considering the Middle Eastern markets. These considerations include the higher education landscape, market assessment and risk evaluation of the Middle East target market, including the regulatory environment, government policies, challenges and opportunities in the host country. This is something universities such as Wollongong, Murdoch and Curtin have done successfully in the UAE.
The approach to entering the Middle East market can be made in diverse ways, such as the establishment of international branch campuses, franchise programs, distance education, partnership programs, and joint universities. The mode of entry and its associated factors, such as location, market characteristics, regulations, availability of well-trained staff in-country, and affordability of study in the host country, can determine the likely success of market entry. In this context, Australian universities should craft their market entry strategies by fully engaging with the rapidly evolving education system in the target market. This will ensure they can pursue educational goals, achieve economic targets, and enhance two-way research integration.
Assessing the target market requires universities to fully understand the characteristics of the market, including the host country’s needs, priorities and approach to education. The quality and impact of TNE programs offered in the host country should enrich students’ experience and address graduate employability. In that respect, additional factors need to be explored and examined, such as the current schooling system, culture, and education development direction of the host country, which all affect TNE expectations about learning, teaching and ultimately achieving success.
For example, Saudi Arabia holds the largest single education market in the Arabian Gulf countries where 95% of students study at government universities. A shift in direction is taking place where the government is encouraging private investors to take a role in education, leading the government to turn its role from education provider to regulator. This presents a great opportunity for education providers in Australia to invest in this lucrative market.
International student mobility flow in Australia is now under the hammer; it is a real opportunity for universities to capitalise on the government’s unprecedented student cap by harnessing their TNE provisions and experience beyond Southeast Asia and start exploring the new promising markets of the Middle East. The current cap on international students introduced by the federal government could catalyse universities’ need to work towards an effective offshore delivery model of higher education.
Gus Olwan has 18 years of experience in the international education industry, having worked with the Saudi Arabian Cultural Mission in Canberra and providing consulting services across the sector. He leverages his expertise to develop global strategies that expand networks and connections both within Australia and internationally, with a particular focus on the Middle East and North Africa (MENA) region.
He has been published across various media platforms, both in Australia and abroad, including Policy Forum, Policy Space, Al-Jazirah Newspaper, and Alyaum Newspaper. He holds a Bachelor’s and a Master’s degree in International Trade from Victoria University, a Master’s degree in International Policy Studies from La Trobe University, and a PhD in Government from the University of Canberra.
The views Gus expresses in Koala News are based on his own research and opinions and are not associated with his current or former employers.
