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# **Education and the Options for Improving Growth Prospects**

The previous section showed that Malaysia and Thailand have a mixed record of success in preparing their labor forces for sustained higher growth rates. They have achieved inclusive access but clearly need to improve the relevance and quality of their education systems.

It is tempting to turn to South Korea and attempt to duplicate what was done to enhance the quality and relevance of its education system. Countries in East Asia, though, are at different stages of development, and it is not clear whether the education policies used by the relatively wealthy and high performing countries are necessarily suitable for those that have lower institutional capacity and higher rates of poverty and inequality. Since the 1960s, Korea’s GDP increased 40 times, something that Lee (2008) largely attributes to the country’s education system. In what follows we point out that, while useful lessons can be drawn, rather than trying to duplicate South Korean policies, thoughtful adaptation is advisable.<sup>3</sup> We suggest six options to address the salient issues we identify above – of sequencing the quantity of education, addressing quality and relevance concerns and assuring broader access for left-out groups.

# _Set budget priorities_

Given budget constraints, governments must set priorities. South Korea carefully sequenced the expansion of its public schooling system. Primary school enrollment expanded first, until approximately 90 percent of eligible children were enrolled by the early 1960s. Then, secondary enrollment became the focus and was expanded throughout the 1960s and 1970s. But it was not until middle and upper secondary schooling became nearly universal, higher than 80 percent, that the focus turned to tertiary education. Between 1990 and 2005, the tertiary enrollment rate increased from 23 to 62 percent. Low and middle-income countries, however, are not following this same sequence. Thailand had a net secondary enrollment rate of 72 percent in 2010; whereas when Korea had the same GDP per capita, its net secondary enrollment rate was 57 percent (UNESCO Institute of Statistics). In fact, almost all low and middle-income countries have secondary enrollment rates that exceed those reached by Korea at the same stage of development, suggesting that these countries are taking a different approach to that of Korea.

There are similar trends at the tertiary level. The share of public spending on tertiary education as a percent of GDP had grown from 0.3 percent in 1970 to 0.67 percent in 2009. Some low and middle-income country governments are spending about the same as Korea did at the same stage of development while other countries, notably Malaysia, are spending much more. Malaysia’s public expenditure on tertiary education is 1.4 percent of GDP, which is nearly three times more than South Korea’s expenditures at the same stage of development (World Bank 2010b).

What is apparent is that Malaysia and Thailand both began to expand secondary and even tertiary systems even before their primary systems achieved high levels of quality, at least relative to Korea. Perhaps they had no choice. After all, low and middle-income East Asian countries are much more integrated into the global economy than South Korea was at the same stage of development. Thailand and Malaysia have manufactured exports equal to around 50 percent of GDP. As a result, Malaysia has a level of manufactured outputs as a percent of GDP that is 1.8 times what South Korea had at the same stage of development, and Thailand has 2.5 times