Vietnams policy for foreign investment in higher education

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS VIETNAM’S POLICY FOR FOREIGN INVESTMENT IN HIGHER EDUCATION Specialization: International Trade Policy and Law PHAM THI THU HUYEN Hanoi, 2023 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS VIETNAM’S POLICY FOR FOREIGN INVESTMENT IN HIGHER EDUCATION Major: International Economics Specialization: International Trade Policy and Law Code: 821107 Fullname: Pham Thi Thu Huyen Supervisor: Dr. Ly Hoang Phu Hanoi, 2023 i DECLARATION I hereby state that the work is that of the author solely except where due acknowledgement has been made. The contents and results of this Thesis are completely honest. The information, data and documents which are collected from various sources for analysis and evaluation have been fully cited in the main content and in the references list of this master thesis as well.

I make this statement in full knowledge of and understanding that, should it be found to be false, I will not receive a grade and may face disciplinary proceedings. Pham Thi Thu Huyen July 2023 ii ACKNOWLEDGEMENTS It had been 10 years since my graduation from Bachelor of Business English, Foreign Trade University and I had one more time to be honored to be a student of Master course in International Trade Policy and Law, Foreign Trade University. But this time, I have more people to say thanks for their supports during my study with their knowledge, encouragement and sharing. My sincerest gratitude goes to my supervisor, Dr.

Ly Hoang Phu, for his intellectual advice and guidance over my thesis. His experts and wise comments are a compass throughout my work. I am deeply indebted to the lecturers for their devotion and knowledge during interesting sessions. Hoang Xuan Binh, Assoc.

Nguyen Thi Tuong Anh, Dr. Luong Thi Ngoc Oanh, to name a few, have enlightened me their enthusiasm and delication with sharing us their expertise. My special thanks go to the Faculty of Postgraduate Studies for their excellent support during the whole course, in which I and my classmates have a tight but effective schedule. Last but not least, the completion of the work can not be fulfilled without the unconditional love and unceasing encouragement by my family members, who always believe in me even I am not that good sometimes.

iii TABLE OF CONTENTS DECLARATION .ii TABLE OF CONTENTS. iii LIST OF TABLES. vi LIST OF FIGURES.vii LIST OF ABBREVIATIONS. Rationales for the Research.

Research Objects and Scope. The Structure of the Thesis. 8 CHAPTER 1 OVERVIEW OF THEORY AND PRACTICE OF POLICY FOR FOREIGN INVESTMENT IN HIGHER EDUCATION .1 Overview of Policy for Foreign Investment in Higher Education .1 Understanding Key Terms .2 Forms of Foreign Investment in Higher Education .3 Determinants of Policy for Foreign Investment in Higher Education.2 Analytical Framework for Policy for Foreign Investment in HE .1 Actors, Mechanisms and Principles .2 Host Country Governments’ Policy Rationales and Objectives of Foreign Investment in Higher Education .3 The Relationship Between Actors, Mechanisms, and Principles .3 Policy for Foreign Investment in Higher Education in some Asian Countries.4 Lessons learnt from the countries. 30 CHAPTER 2 POLICY FOR FOREIGN INVESTMENT IN HIGHER EDUCATION IN VIETNAM .1 Overview of Vietnam’s Policy and the Landscape of Foreign Investment in Higher Education in Vietnam .1 Evolution of Policies for Foreign Investment in Higher Education in Vietnam .2 The Landscape of Foreign Investment in Higher Education in Vietnam37 2.1 Policy for Foreign Investment in Higher Education in Vietnam .1 Actors, Mechanisms, and Principles in Policy for Foreign Investment in HE in Vietnam .2 Vietnamese Government’s Policy Rationales and Objectives of Foreign Investment in Higher Education .3 The Relationship Between Actors, Mechanisms, and Principles in Policy for Foreign Investment in HE in Vietnam .3 Influences of Policy for Foreign Investment in Higher Education in Vietnam .1 Positive influence of the Policy .2 Constraints of the Policy.

56 CHAPTER 3 RECOMMENDATIONS FOR POLICY FOR FOREIGN INVESTMENT IN HIGHER EDUCATION IN VIETNAM .1 Strategic Vision of Policy for Foreign Investment in Higher Education in Vietnam .1 Raising Awareness of Foreign Investment in Education .2 Improving Institutions’ Capacity, Cooperation and Business Investment Environment .3 Moving from “Brain Drain” to “Brain Gain” .2 Opportunities and Challenges for Policy for Foreign Investment in Higher Education in Vietnam .2 Challenges Posed to Foreign Investment in HE in Vietnam .3 Recommendations and Solutions to Stakeholders .1 Recommendations for Vietnamese Government .2 Solutions to Vietnamese Higher Education Institutions .3 Solutions to Foreign Higher Education Providers. 70 LIST OF REFERENCES. 72 vi LIST OF TABLES Table 1.1 How the Analytical Frameworks are Used in this Thesis .1 Policy relevant to foreign investment in HE .2 Viet Nam’s WTO Commitments on Educational Services .3 Foreign-invested and Inter-governmental Universities in Vietnam .4 Distribution of Foreign Providers of Programs by Source Regions .41 vii LIST OF FIGURES Figure 1.1 Actors, Mechanisms and Principles.1 New transnational programs at HE level and Foreign-invested Universities in Vietnam Established each year (period of 1998 to 2021) .1 Top 10 Partner Countries for Partner-supported Program Delivery in Vietnam (as of July 2022) .2 Collaborative Programs by Number of Students Enrolled (as of July 2022).44 viii LIST OF ABBREVIATIONS BC The British Council BUV British University Vietnam CPCC Communist Party Central Committee DAAD German Academic Exchange Service FDI Foreign Direct Investment HCMC Ho Chi Minh City HE Higher Education HEI(s) Higher Education Institution(s) HERA Higher Education Reform Agenda IBC International Branch Campus ICD International Cooperation Department MOET Ministry of Education and Training MOF Ministry of Finance MOHA Ministry of Home Affairs MOST Ministry of Science and Technology MOLISA Ministry of Labour, Invalids and Social Affairs MPI Ministry of Planning and Investment NGO Non-Governmental Organisation OCED Organisation for Economic Co-operation and Development WTO World Trade Organisation ix ABSTRACT This presents findings of a study of the policy context around foreign investment in higher education in Viet Nam. The study provides insights into the policy context of the country from desktop research with data analysis and information collection.

The Thesis identifies policies, legislative contexts, interpretation, and practices, which facilitate and limit the foreign investment in higher education in Viet Nam. It summarises key trends and the major domestic imperatives Viet Nam and its higher education respond to and highlights significant differences from the neighbouring countries. The findings reveal that Vietnam's policy for foreign investment in higher education is driven by multiple objectives. These include enhancing the quality of education through the introduction of international best practices, promoting cultural exchange and cross-cultural understanding, expanding educational opportunities for Vietnamese students, and attracting foreign capital and expertise to the sector.

The policy framework encompasses the establishment of international universities, partnerships between domestic and foreign institutions, and the provision of favorable conditions for foreign investors. The report indicates the influences the policy context has on establishing and operating collaborative programmes, the standalone universities, and the international branch campuses of foreign HEIs. It also presents one or more examples of foreign investment of Vietnamese economy. On one hand, the presence of international universities and partnerships has contributed to the diversification of educational offerings, improved infrastructure, and the transfer of knowledge and technology.

These initiatives have increased the options available to Vietnamese students, attracting a more diverse student body and promoting global connectivity. On the other hand, challenges such as ensuring the quality and accreditation of foreign-invested institutions, managing cultural differences, and addressing concerns of educational equity and affordability persist. x Leveraging insights gained from the research undertaken for this study, the study concludes by identifying opportunities and challenges to enhance foreign investment into the higher education sector. While acknowledging the very significant differences of Viet Nam from the other countries and their respective higher education systems, the study identifies ways in which mutual efforts could help reduce barriers to the flow of foreign investment.

This includes multilateral cooperation on quality assurance and credit recognition, as well as greater collaboration on online education. 1 INTRODUCTION Vietnam, according to the World Bank, has been a “development success story”. The country has emerged as a vibrant middle-low-income economy in just one generation, with economic expansion at an annual average of nearly 7 percent since 1986, leading the country to attract high levels of foreign direct investment across multiple sectors. With a clear development roadmap to becoming an upper middle-income country by 2035 and a high-income country by 2045, the Government of Viet Nam has made education and human resource development a strategic priority for the whole socio-political system to ensure the supply of higher productivity workers.

Several policies and incentives have been put in place to support the domestic higher education system to implement a comprehensive and radical reform of the education sector, promoting internationalization of Vietnamese education to increase the international competitiveness of the workforce for the country’s targeted economic productivity. Rationales for the Research Over the recent years, research into the policy for foreign investment has been emerged as one of the key themes of discussions on its significance in enhancing and governing educational internationalization (Kosmützky & Putty, 2016). Meanwhile, there are a few publications that address the spectrum of national policies and regulatory frameworks for cross-border mobility of programs and providers on an overall worldwide arena, such as studies by Ilieva and Peak (2016); McBurnie and Ziguras (2006); Verbik and Jokivirta (2005b); Ziguras and McBurnie (2015). However, these studies have been mainly conducted from the perspectives of exporting countries, with an aim to obtain an understanding of the policy contexts generally, build policy frameworks, and categorise the studied countries into relevant groups to understand the opportunities and challenges of managing foreign investment activities in host countries.

2 On the other hand, a number of studies have investigated internationalisation policies in specific regional and local contexts, with a focus on the individual host countries, such as China, Hong Kong, Japan, Korea, Malaysia, and Singapore (Aziz & Abdullah, 2014; Byun & Kim, 2011; Chan & Ng, 2008; Daquila, 2013; Huang, 2003b, 2006a, 2009; Lee, 2014, 2015b; Maclean & Lai, 2012; Mok, 2011; Peak et al., 2018; Richardson, 2015; Sidhu et al. However, a review of these studies reveals a dearth of analysis of the policy for foreign investment in HE. In Vietnam, where educational internationalization has been embraced over the last two decades, policy for foreign investment in HE in Vietnam have received considerable attention from a handful of researchers (e., Hoang et al., 2018; Nguyen & Shillabeer, 2013; Nguyen & Lee, 2020; Nguyen & Tran, 2018, 2019; Ziguras & Pham, 2014, 2016). The country has also been included within the scope of research studies conducted by organisations such as OECD and the British Council (Ilieva et al., 2017; Ilieva & Peak, 2016; Knight & McNamara, 2015; McNamara et al., 2013; Peak et al.

These earlier studies focused on the analysis of policy documents, with empirical data and insightful views from relevant policymakers, government officials and relevant context informants such as academics and managers from Vietnamese and foreign higher education institutions/providers. Policy document analysis is useful in providing a foundation for understanding these government policies. However, earlier studies offer limited insights into the determinants on the process of framing the policy for foreign investment in HE in Vietnam, nor the spillover effects of those policy on higher education and investment environment in Vietnam. In an attempt to address some of these gaps, this study focuses on the policy for foreign investment in Vietnam.

Vietnam presents an interesting case study because it is a fast-growing site for internationalization in education, and potential growth in foreign investment in education is projected. As a result, insights into the 3 country’s policy for foreign investment in HE are essential for the host government in their efforts to develop a properly informed regulatory framework. Research Objects and Scope Acknowledging that there are various ways to investigate the policy for foreign investment in HE and phenomenon, this section defines a set of limits to guide the study.