What Azerbaijan can learn from the UAE’s approach to education

Investment in education has long been recognized as fundamental to a country’s development, growth, and overall prosperity. While large-scale economic investments by businesses can transform entire industries and elevate economies, it is education that has the power to change the lives of individuals—and those individuals form the foundation of thriving economies, writes European Azerbaijan School founder Tale Heydarov.

For Azerbaijan, this is a priority that deserves careful consideration moving forward. The country, historically reliant on oil, is at a crossroads following its hosting of COP29 and its desire to diversify economically. Undoubtedly, the education sector will serve as a crucial pillar in unlocking Azerbaijan’s full potential and shaping a sustainable future.

Countries like South Korea and Singapore, for example, demonstrate how prioritising education can drive economic transformation. In South Korea, corporate scholarships from companies such as Samsung and LG equip young talent with the skills needed to excel in the digital economy. Similarly, significant private investment in Singapore’s top institutions, such as the National University of Singapore, helps maintain world-class standards, producing graduates with globally competitive qualifications. By following a similar approach, Azerbaijan can align its education system with its broader economic vision, ensuring students are prepared for the industries of the future.

In fact, Azerbaijan has long recognised the vital link between education and economic success, as reflected in its ‘Strong Education-Strong Nation Initiative.’ The country has achieved considerable progress, boasting a literacy rate of nearly 99.8% and rising university graduation rates. Hundreds of millions of dollars have been invested in modernizing schools in the last three years and the Government is working hand-in-hand with UNESCO to achieve the ‘leaving no one behind’ element of its 2030 Agenda. It is in this endeavour that partnering with the private sector can serve as a powerful catalyst for accelerating Azerbaijan’s progress in education.

The case for private investment in education is clear—it can address market demands by funding industry-relevant courses, skills development, and financial aid for disadvantaged students. It can also enhance institutions through modern facilities, extracurricular programmes, and updated technologies, enriching the learning experience. This, in turn, can help improve the quality and standards of public schools, gradually narrowing the gap between the sectors and fostering a more equitable education system.

In addition to improving the student experience, international private schools bring significant value to both prospective and current teachers. By leveraging their expertise in areas such as teacher training and development, they can help raise educational standards. Strengthening this collaboration, as demonstrated by the Azerbaijan Teacher Development Centre and the Ministry of Education, through public-private partnerships, can further support teacher training, offering invaluable resources and expertise.

Furthermore, graduates from international schools often have better opportunities to attend prestigious international universities, which not only benefits the students but also the country when they return with valuable knowledge and skills.

It is, therefore, crucial for the Government to not only embrace but actively champion such investment, fostering robust public-private education partnerships that will give schools the autonomy to align their curricula with real-world needs and create clear pathways to careers.

We are seeing a similar trend taking off exponentially in the Gulf, an example Azerbaijan can draw inspiration from given the two regions’ similar economic foundations. Governments in the Gulf Cooperation Council (GCC) countries are actively encouraging private-sector involvement to alleviate budgetary strains caused by fluctuating oil prices, and their growing commitments to greener economies. According to PwC, the education sector ranks second in terms of private equity transactions in the Middle East, while the Middle East itself ranks first globally in terms of private equity transactions within the education sector.

The Middle East has recognised that in order to diversify their economies and support the growth of their young populations, national missions must emphasise education. By intertwining economic diversification with educational investment, these countries are creating the positive externalities that help grow key sectors such as technology, healthcare, and renewable energy, thus strengthening their economies.

A compelling example is the UAE’s Higher Colleges of Technology (HCT), which partnered with digital technology firm Oracle to train 500 UAE nationals in artificial intelligence—an area with clear market demand. Such partnerships are often facilitated by favourable policies, such as those found in Dubai’s Knowledge Village, an education free zone that allows institutions to retain full ownership.

Governments also have a role to play in promoting and showcasing the benefits of investing in their education sectors. Many GCC countries have earmarked a significant portion of their budgets for education, with Saudi Arabia allocating 17% of its total budget—far higher than countries such as the US, UK, and Germany. This is the kind of commitment investors are looking for. According to IndustryArc, the MENA education sector is projected to reach a valuation of $175 billion by 2027—an undeniably attractive opportunity.

To achieve similar success, the Azerbaijani Government could consider giving greater precedence to public-private sector partnerships. Encouraging private investment through incentives such as tax breaks, grants, or perhaps offering increased autonomy to educational institutions willing to collaborate with industry could be a potential approach. This can be done while ensuring that best practice is maintained in these schools, whether it’s keeping class sizes sustainable or protecting students’ rights to learn the Azerbaijani language.

This is especially relevant for international private schools, which, despite curriculum flexibility, sometimes overlook teaching Azerbaijani students their national language, history, and culture. To align with Azerbaijan’s growth vision, it is essential to ensure all Azerbaijani students receive education on national values, and strengthening oversight and accountability can help uphold these standards.

Returning to the topic of taxation, tax concessions, in particular, play a key role in this discussion. While private schools in Azerbaijan are already exempt from income tax, further enhancing this support could drive significant economic benefits, similar to those in the gulf. The contributions that private schools make to the economy, both locally and nationally, could be strengthened by removing VAT on educational infrastructure and extending tax concessions to educational materials and services, as seen in countries such as Australia.

Such initiatives will stimulate investments across Azerbaijan, beyond the capital. The Government’s decision to open Karabakh University in Khankendi—with around 2,000 students—sets an important precedent. Tax concessions, for example, can incentivise similar projects, leading to more universities and development initiatives in other regions, driving nationwide growth.

Despite this, the fact of the matter is, investors are seeking clear indications that governments are committed to long-term projects capable of transforming economies and showcasing confidence in their populations. This includes offering incentives, such as tax credits for donations to scholarships and investments in education, which can further demonstrate a commitment to building a skilled workforce.

For most private schools, a relatively short payback period is essential to attract investment and cover operational costs. To achieve this, creating an environment that enables investors to anticipate returns within a reasonable time frame is vital for fostering sustainable growth in the education sector.

While immediate returns may be limited and sector regulation discussions continue, investors typically expect returns within a 5-10 year period. Without conditions that align with this timeline, investments may not materialise.

By establishing a secure and supportive environment, the Government can; therefore, provide the stability needed to inspire confidence in both local and foreign investors, encouraging long-term trust in the country’s future.

Supporting investment in the country’s education sector is not just about addressing a single policy area—it is about shaping the future of the nation. Education is not merely a social obligation but a cornerstone of sustainable development and economic resilience.

By prioritising such investments, fostering public-private partnerships, and aligning educational initiatives with the demands of tomorrow, Azerbaijan can build a foundation for enduring prosperity. The choices made today will define the nation’s trajectory, and there is no better time than now for the Government to act decisively in supporting the country’s transition in a world beyond oil.

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