1. 1 Higher Education in a Market and Trade- oriented Society: Kazakhstans Educational Reforms as Import of Western Market Ideas

2. 2 Issues facing Kazakh Higher Education System declining funding base for public higher education (HE) institutions, deteriorating academic standards of state- funded HE and research, emergence of private HE sector, new labor market demands, exposure to international education cooperation.

3. 3 New philosophy for Higher Education in the market-driven Kazakhstan Marketization as a major idea for HE reforms. That means: 1. HE primary goal should be serving the needs of the market economy 2. HE should be driven by labor market demands and competitive 3. Governments role in HE is to offset imminent market failures such as information asymmetry, externality, and undersupply of public good.

4. 4 History of recent HE policies in Kazakhstan 1991-1994: Developing new legislation to lay the ground for HE reforms. 1995-1998: Modernizing HE system. 1999-2000: New student admission model, tuition funding, and privatization of HE institutions. 2001 – onward: Designing and refining a new national HE model ?

5. 5 Overview of current HE situation Kazakhstan HE system comprises 171 civil HE institutions (HEI) including: 34 public HEIs, 122 private HEIs, 12 joint-stock companies, 3 international institutions. Besides, there are also: 124 affiliations, and 12 non-civil higher education institutions.

6. 6 Overview of current HE situation HE student enrolment augmented from 272,000 in 1995 to 442,000 in 2001. Out of the total number of students (514,000), 35.6 percent (183,000) were enrolled in private HE sector. Kazakhstan counts 298 students per 10,000 of its citizens.

7. 7 Overall list of Kazakh HE policies Liberalizing HE sector, Privatizing most HE institutions, Licensing and attesting HE institutions, National student admission model, Government grants and loans program, Integrating HE and academic research, Fostering international cooperation in HE.

8. 8 Generic policies for Kazakh HE-1 Freeing market forces in HE sector (marketization): 1.Deregulation of HE sector: free entry-exit 2.Privatization of HE institutions 3.Academic liberalization 4.Opening up for international cooperation

9. 9 Generic policies for Kazakh HE-2 Fiscal policies (taxes and subsidies) to support HE thru: 1.a student grants and loans program (demand-side subsidy) 2.public grants for research by HE institutions in particular areas (supply- side subsidy)

10. 10 Generic policies for Kazakh HE-3 Direct public provision of HE services: 1.Selecting and upgrading 10-15 public HE institutions in key areas of national interest 2.Opening a few new leading State Universities

11. 11 Generic policies for Kazakh HE-4 Government regulation of HE: Government licensing and periodic attestation of HE institutions National standardized student admission thru a system of public testing Centers Regulatory standards for curricula for the list of state-stipulated specializations

12. 12 Goals for generic policies for Kazakh HE-1: Addressing government failures (monopoly and inefficiency) thru: Deregulating HE sector (increasing academic standards and efficiency thru fostering competition) Privatizing most HE institutions (lowering public HE costs and bureaucratic inefficiency) Academic liberalization (offsetting excessive centralization in management and educational process)

13. 13 Goals for generic policies for Kazakh HE-2 Countering market failures (information asymmetry) thru: 1.Government licensing and attestation of HE institutions 2.National student admission system 3.Regulatory standards for curricula for the list of state-stipulated specializations

14. 14 Goals for generic policies for Kazakh HE-3: Countering market failures (public goods and positive externality) thru: Direct supply of HE services thru state- funded HE institutions (to counter the public goods undersupply problem), Fiscal policies to support HE thru the public student grants and loans and research grants programs.

15. 15 Goals for generic policies for Kazakh HE-4: Countering market failures (negative externality) thru: Government licensing and attestation of HE institutions National student admission system Regulatory standards for curricula for the list of state-stipulated specializations

16. 16 HE Privatization Principles 1. Gradual privatization: should be contingent on institutions' readiness to start this process. 2. Voluntary character: privatization will be carried on individual basis and only when specific University expresses its willingness. 3. New legal status will be chosen by the University itself: open or closed joint-stock company, partnerships, sole proprietorship, and non-profit institution. Personnel of these institutions can also participate in their privatization.

17. 17 New national admission model and government grants and loans program Since 1999, all HE prospective students have to take combined tests at 34 regional test centers throughout Kazakhstan, which offer standardized computer-based tests on subjects taken previously at secondary schools. Kazak government has launched a state grants and loans program, which now involves both state- owned and private HE institutions.

18. 18 In 2001, the government provided for 12,360 grants and 9,610 loans for students. Besides, 370 grants and 100 loans were appropriated for Kazakhs coming from abroad. Overall, this funding amounted to about $62 million. Graduate level studies with grant funding in 1999 were as follows: aspirantura- 655, Masters – 500, Doctoral studies – 54. This policy is urged by relatively low academic standards of faculties in HE of Kazakhstan. Among 20,914 faculty members of public HE sector, those with kandidat nauk degree constituted 33.3 percent and those with doktor nauk - 5.9 percent.

19. 19 Academic Research Reform Research institutions are being merged with some major state Universities. Mergers should contribute to accumulating intellectual and financial, and academic resources in fewer HE institutions able to improve standards and scope of research. New research centers are being opened at different Universities, which receive financial support of the Ministry of Education and Science. International cooperation in research has been fostered with such agencies as Soros Foundation, UNESCO, IREX, ACCELS, DAAD, International Consulting Group on Agricultural Research, and others. This provides funding for various research projects in social, natural, and technical sciences.

20. 20 Policies for International Cooperation in HE Inter-country agreements on academic study, exchange, and research programs; Kazakh government scholarship Bolashak; Mutual recognition of academic degrees awarded in Kazakhstan and foreign countries; Emergence of joint HE institutions Promoting direct partnership relationships between some US and Kazakh Universities; Fostering international recognition of Kazakh HE institutions and degrees

21. 21 Summative HE policies assessment as based on the following criteria: HE effectiveness in meeting demands of national economy and labor market, Ability to secure adequate academic standards and growing match with international HE standards, Social equity and equal opportunity through access to HE.

22. 22 Summative Remarks: Pros These HE policies in Kazakhstan based on the liberalization and mixed HE concepts, seem to contribute to the following HE outcomes: lower public budget pressure wider choice of HE programs and services better match of human resource supply with labor market demands gradual, though uneven, upgrade of overall HE academic standards and trend toward matching international standards international cooperation benefits gained by more advanced private and public HE entities.

23. 23 Best private HE institutions: Are decently equipped with teaching facilities and computers Take active part in extra-curricular activities Collaborate with other Universities, authorities, and local community Publish their own newspapers and newsletters Encourage best students by different tuition waiver schemes Participate in the government grants and loans program More prone to cooperate with foreign institutions and donors Politically more active through the Association of private institutions and the Council of Rectors Have better image among students More exposed to innovations and developing new programs Responsive to needs for modern bibliography.

24. 24 Summative remarks: Cons This laissez-faire policies in HE aimed at liberalizing and privatizing HE in view of initial lack of HE policy analysis, design, and implementation capacity has also led to certain extremes and abuses of this freedom. Repercussions: decrease in overall funding for HE and subsequent deteriorating academic standards of most public HEIs institutional and financial instability of many HEIs, growing social inequity concerns about loss of HE access for low income level citizens and gradual social stratification and marginalization.

25. 25 Some general policy recommendations: Kazakh policy-makers might address market failures thru additional HE policies such as: 1. Supply- and demand-side subsidies: tax exemptions and credits for HEIs and students 2. Insurance provisions and cushions: adopting and enforcing mandatory insurance for HEIs maintaining public funding level for key HEIs, faculty, specializations, and research of national interest 3. Human capital building steps: securing retaining of outstanding faculty and HE managers/ specialists thru differentiated compensation and long-term career benefits initiating targeted funding and post-study recruitment for promising students for PhD studies overseas in selected key areas and ensuring attractive careers for them.

26. 26 Thank you !!!