Education for profit in the Arab world (page 1 of 3)

Meet Sunny Varkey, a Dubai-based entrepreneur who made his fortune with for-profit elementary schools in the UAE, and whose company also owns a construction firm and hospitals.

"We take care of you," says the founder of the Varkey Group, "from the cradle to the grave." The Indian-born Varkey is the child of school teachers who first arrived in Dubai in 1959 - a time when the emirate was little more than desert, with scattered developments along the coast and inland.

Varkey's parents shortly began teaching English to local students in Bur Dubai, for a fee of 25 Indian rupees a month, and that small business grew into Our Own English High School, which was founded in 1968. Meanwhile, young Sunny was studying at a boarding school in India, then went on to complete his education in Britain.

In 1977, Varkey returned to Dubai. After a stint at a local bank, he opened a small trading company, then became part owner of the Dubai Plaza Hotel.

Meanwhile, Varkey's parents continued to teach English at their makeshift institution until, in the early 1980s, the Dubai authorities told them that they either had to construct a purpose-built facility or shut down. That's when Sunny stepped in - and took the first small steps towards building his vast fortune.

GEMS across the globe

Today, Varkey's for-profit educational empire - run under under his Global Education Management Systems (GEMS) business unit - stretches across much of the globe. Described as "an educational management consultancy and systems provider, offering total education management solutions," GEMS manages schools in the UAE, Qatar, India and Britain, and is looking to expand in the near future to the United States.

Varkey's venture has proved highly controversial in Britain, where local councils are objecting to his plans and have proved hostile to any form of competition to state-run education.

While the Blair government has been pushing for private-public partnerships in a range of sectors - and while a recent poll in Britain showed that 53 percent would opt out of public education if they could afford to - doubts have been raised about how GEMS schools can compete on both price and quality.

In Britain, independent school fees can exceed £20,000 a year; Varkey's schools will charge as little as £5,000. How, critics ask, does Sunny Varkey do it?

I recently spoke to the self-made millionaire, who chatted with me via speakerphone in his car while driving through Dubai. "We have budget, mid-market and premium schools," he says. "Think about Mercedes-Benz: you've got S-class to E-class, but there's quality running all the way through. We have the same thing. Take another analogy. On an airplane, you've got economy, business and first class. There are some things that are common in each class but, at the same time, there are things that are different."

These are unsettling analogies. While we are all born into different circumstances - rich or poor, with apparently limitless opportunities or seemingly none at all - the role of the state should be to level the playing field, not to exacerbate inequality. And to the extent that for-profit education necessarily promotes the latter, its mission seems misguided.

But whether you're a committed free marketeer or a diehard socialist, the real questions aren't ideological, but practical. How will for-profit education impact society? Will economy, business and first classes of early education increase social inequality? And, most simply, how can a businessman like Varkey offer more (or the same) for less?

"Education is a highly labor-intensive activity, with wages usually accounting for 80 percent or more of the school budget," says Henry Levin, a professor at Columbia University.