Empowering Southeast Asia: The Impact of Transnational Higher Education on Regional Development

In an article by Fulcrum, Damon Chee investigates how the rise of transnational education in Southeast Asia shapes the region’s educational landscape.

Since the opening of Monash University Malaysia in 1998, the region has witnessed a rise in the establishment of foreign university campuses, known as international branch campuses (IBCs). These campuses may either be wholly owned or established through joint ventures with local universities and institutions, representing a form of transnational education (TNE). TNE is where students in their home country receive education from an institution founded and based overseas. With the rise in ASEAN’s middle-income families, higher education attainment is seen as a ticket to secure better-paying jobs for young Southeast Asians.
This was the case in Malaysia when demand for higher education swelled during the 1990s, as Malaysia transitioned to an upper-middle income country. However, the number of higher education spaces was limited, compounded by the government’s implementation of a 55:45 Bumiputera quota, which reserved a higher proportion of slots for indigenous Malaysians. To cope with the shortfall, the government liberalised higher education, including enacting the Private Higher Educational Institutions Act (1996) to allow foreign universities to set up IBCs in Malaysia. Monash University was the pioneer in Malaysia and has now become one of the nation’s premier private universities.
Demand for higher education is projected to increase in other significant Southeast Asian markets such as Indonesia, whose higher education enrolment is forecast to be among the world’s top ten by 2035. Some higher education providers in the UK view Indonesia as a market with one of the highest growth potentials for TNE. The number of top-tier universities in Indonesia is not keeping pace with the projected increase in demand and enrolment. Indonesia lacks top-quality universities and has precious few IBCs; its permanent teaching positions in state universities were opened up to foreigners only in 2018. Just five of Indonesia’s domestic campuses placed in the Quacquarelli Symonds (QS) World University Rankings 2024. They are Universitas Indonesia (237th), Gadjah Mada University (263rd), Bandung Institute of Technology (ITB) (281st), Airlangga University (345th), and Institut Pertanian Bogor (IPB) (489th).