Science and education

It is an indisputable truth that investing in education serves as the cornerstone for a nation's development, progress, and enduring prosperity. Much like how substantial economic investments in the business sector can revolutionize entire industries, education has the power to bring about profound transformations in the lives of individuals. These individuals, in turn, become the pillars upon which a flourishing economy is built.

This is an issue of paramount importance for Azerbaijan, one that demands focused attention as the country looks toward the future. Historically reliant on oil exports, Azerbaijan has successfully hosted COP29 and is now critically assessing its economic transformation strategies. Undoubtedly, the education sector will play a pivotal role in unlocking the nation's full potential, serving as a cornerstone in the creation of a sustainable, resilient, and prosperous future.

The experiences of countries like South Korea and Singapore offer compelling evidence of how prioritizing education can fuel economic transformation. In South Korea, corporations such as Samsung and LG have taken proactive steps by offering corporate scholarships to talented youth, enabling them to thrive in the digital economy. Meanwhile, the National University of Singapore stands as a beacon of excellence, producing graduates who not only meet world-class standards but are also specialized and globally competitive. By embracing a similar strategy, Azerbaijan has the opportunity to align its education system with its broader economic vision, equipping students with the skills and expertise needed to excel in the industries of the future.

Azerbaijan has long understood the vital connection between education and economic prosperity, a recognition embodied in the "Strong Education – Strong Nation" initiative. The country proudly boasts an impressive literacy rate of nearly 99.8%, along with a steadily growing number of university graduates. In recent years, significant investments, amounting to hundreds of millions of dollars, have been channeled into a comprehensive school modernization program. Furthermore, the government is working in close partnership with UNESCO to implement the "Leave No One Behind" initiative, which aligns with the 2030 Sustainable Development Goals. In this context, collaboration with the private sector can serve as a powerful catalyst, accelerating the advancement of Azerbaijan’s education system and furthering its broader national objectives.

The objective of drawing private investment into education is both clear and compelling. By aligning educational offerings with market demands, private investment can foster industry-focused courses, enhance individual skill development, and provide crucial financial support to low-income students. Additionally, it can bolster educational institutions by introducing state-of-the-art facilities, innovative extracurricular programs, and cutting-edge technologies, all of which enrich the learning experience. Moreover, the infusion of private capital into the education sector holds the potential to elevate the quality and standards of public schools, gradually bridging the divide between the private and public sectors. This collaboration can ultimately pave the way for a more equitable and inclusive education system, one that offers greater opportunities for all students.

International private schools play a pivotal role in enhancing the effectiveness and value of both current and future educators by optimizing the learning experience. Through their wealth of expertise in pedagogical training and teacher development, these institutions can significantly elevate the standards of education within the country. By fostering stronger collaboration between the public and private education sectors, this partnership can enrich the teacher training process, facilitating the exchange of invaluable resources, knowledge, and best practices. Notably, joint initiatives with the Ministry of Science and Education, along with the Institute of Education, serve as clear and impactful examples of such productive and beneficial cooperation, paving the way for a more dynamic and advanced educational landscape.

Moreover, graduates of international schools are more likely to gain admission to renowned higher education institutions globally. This advantage not only benefits the students by expanding their academic and professional opportunities but also proves valuable to the country, as these individuals bring back the knowledge and expertise they have gained abroad to contribute to local development.

Therefore, the government should not only welcome investment in the private education sector but also actively support it. It should encourage the establishment of strong cooperation between the private and public sectors in education, grant schools the flexibility to tailor their curricula to meet real global demands, and create clear pathways to diverse professional careers.

We witness similar trends growing exponentially in the Persian Gulf countries and believe that Azerbaijan can benefit from their experience, given the parallels between the economic systems of the two regions. The governments of the Gulf Cooperation Council (GCC) member states are actively encouraging private sector involvement to mitigate budget deficits caused by the volatility of oil prices and international commitments related to the transition to a more sustainable, eco-friendly economy. According to a report by the audit and consulting firm PwC, the education sector in the Middle East ranks second in terms of private investment, with the region leading the world in private investment in education.

Middle Eastern governments have already recognized the critical need to promote education as a means to achieve diversified economic development and improve the well-being of their young populations. By aligning economic growth with investment in education, these countries are generating positive externalities that stimulate key sectors such as technology, healthcare, and renewable energy, ultimately strengthening their economies.

A clear example of such cooperation can be seen in a program by the Higher Colleges of Technology in the UAE. In collaboration with the digital technology company Oracle, this higher education institution has offered artificial intelligence courses to 500 UAE citizens, a profession in high demand in the labor market. Such productive partnerships typically flourish in environments that foster their development. For instance, Dubai Science City serves as one such environment, acting as a free economic zone for educational institutions where they can operate with full ownership.

One of the key responsibilities of governments is to actively support investment in their country's education sector and implement policies that highlight its benefits. Many GCC countries are already putting such practical policies into action. For example, Saudi Arabia allocates 17% of its budget to education, although this figure still lags behind countries like the US, the UK, and Germany. Investors are increasingly seeking this kind of investment-friendly environment. According to IndustryARC forecasts, investments in the education sector across the Middle East and North Africa are expected to reach $175 billion by 2027, presenting highly attractive opportunities.

The Azerbaijani government could consider placing greater emphasis on public-private partnerships to achieve similar success. Incentivizing private investment through tax breaks, grants, and offering greater flexibility to educational institutions willing to collaborate with industry would be a highly beneficial strategy. This approach can be implemented while preserving the core values of these schools, such as maintaining stable class sizes and safeguarding the rights of students to learn the Azerbaijani language.

This issue is particularly relevant in international private schools, where, despite the flexibility and appeal of the educational programs, teaching Azerbaijani students their native language, history, and culture is sometimes superficial. To better align education with Azerbaijan's development plans and prospects, it is crucial to offer Azerbaijani students opportunities to receive an education rooted in national values. These standards can be set and upheld by strengthening oversight and increasing accountability in education. In this regard, involving local authorities would be a highly effective approach. This can be achieved by preserving key values in these schools, such as maintaining stable class sizes and safeguarding students' rights to learn the Azerbaijani language.

The government's tax and tax relief policies play a pivotal role in shaping the discussion around this issue. While private schools in Azerbaijan are currently exempt from income tax, expanding this support further could yield substantial economic benefits, similar to the outcomes seen in the Gulf countries. To enhance the contribution of private schools to both local and national economies, extending VAT exemptions to educational infrastructure and applying tax relief to education-related materials and services could be highly effective. This approach has proven successful in other countries, such as Australia, where similar policies have fostered a more robust and sustainable educational sector.

Similar initiatives have the potential to extend the stimulation of the investment climate beyond the capital and into the regions. The establishment of Karabakh University in Khankendi, to educate 2,000 students, represents a significant and forward-thinking precedent in this regard. Tax incentives could serve as a powerful catalyst for similar projects, encouraging the establishment of universities in other regions and spurring development-related initiatives. By fostering such growth, these incentives could help expand and spread educational opportunities across the entire country, driving regional development and economic diversification.

However, the reality is that governments are seeking clear signals that they are genuinely committed to long-term initiatives capable of driving substantial economic transformation and instilling confidence in their citizens. They are waiting for bold, decisive steps. This includes a range of incentive measures, such as tax credits for scholarship contributions and targeted investments in education. Such measures would play a pivotal role in cultivating a highly skilled and experienced workforce, which will, in turn, make a significant contribution to sustainable economic growth in the long term.

For many private schools, recovering costs as quickly as possible is essential, as it directly influences their ability to attract investment and cover operational expenses. To foster sustainable development within the education sector, it is crucial to establish an environment where investors feel confident that their investments will yield returns within a reasonable and mutually beneficial timeframe. This assurance of profitability will not only stimulate further investment but also contribute to the long-term stability and growth of the sector.

When investments fail to yield immediate returns and legal frameworks in certain sectors are still under discussion, investors typically expect to see a return on their investments within a 5-10-year period. If payment schedules do not align with this timeframe, there is a risk that the investment may not come to fruition.

By cultivating a safe and conducive investment environment, the government can establish the stability required to earn the trust of both domestic and international investors, thereby fostering long-term confidence in the country's future. Supporting investment in the education sector transcends being a mere policy initiative in one area—it is a fundamental strategy for shaping the future of the state and the nation. Education is not just a social responsibility; it is the cornerstone of sustainable development and economic resilience, serving as the bedrock upon which a prosperous, stable society can be built.

By prioritizing such investments, fostering collaboration between the public and private sectors, and aligning educational initiatives with future demands, Azerbaijan can lay the groundwork for long-term prosperity. The decisions made today will shape the country's development path in the years to come, and there is no better moment than now for the government to take bold, decisive action. By doing so, Azerbaijan has the opportunity to position itself among the world’s leading nations, not only in the oil sector but also in emerging, non-oil industries, ensuring a diversified and resilient economy for the future.

Tale Heydarov,

Founder of the European Azerbaijan School, TEAS Press Publishing House, and the Libraff bookstore chain