Eye on Dubai

MSU continues commitment to Middle East as area's economy suffers

By Jacob Carpenter and Justin Harris (Last updated: 04/09/09 10:56pm)

Halfway around the world in a country roughly the size of Michigan, the school year is wrapping up for about 50 MSU students. They are the inaugural class at MSU Dubai, the university’s newest campus, located in the Middle East. MSU has joined several leading American universities in moving to the Middle East, a migration that some have called an “educational gold rush” to one of the world’s largest emerging markets.

Last August, MSU became the first public American university to open a campus in Dubai, United Arab Emirates, a commercial and industrial utopia carved out of the desert.

Yet with the economic collapse — the credit crunch, in particular — the once-booming Dubai has grinded to a halt.

Endless construction, terrible traffic and cramped malls have been replaced by abandoned projects, vacant streets and unpopulated commercial centers. News reports say the population, made up of 80 to 90 percent foreigners, are fleeing the blight of Dubai by an estimated 1,000 people per day.

Its effect on MSU Dubai cannot yet be determined, university officials say, but the campus’ future has somewhat darkened in what was once the brightest economic beacon of the Middle East.

Heading East

Twelve years ago, university officials including then-President M. Peter McPherson and then-Provost Lou Anna K. Simon sat down to discuss MSU’s lack of presence in the Middle East.

They decided the university would pursue an educational program in the Middle East, but agreed that any endeavor there would require cooperation from a host country.

University officials set out several provisions that would need to be met — MSU would have complete control over admissions, faculty, curriculum and degree requirements; methods of teaching could not be challenged; research and outreach opportunities must be present; and the host country would have to invest in a campus.

MSU received about six serious inquires from countries including Egypt, Saudi Arabia and Kuwait, but each proposal failed at least one of the required provisions.

Three years ago, officials from Dubai Holding, a multi-industry conglomerate in the United Arab Emirates, approached MSU officials about opening a campus in its new Dubai International Academic City.

In May 2007, after Dubai Holding agreed to abide by MSU’s provisions, the university’s Board of Trustees approved opening the campus. One of Dubai Holding’s companies, TECOM Investments, agreed to give MSU a grant and loan at “very reasonable rates, cheaper than we could loan money to ourselves,” said John Hudzik, MSU’s vice president for global engagement and strategic initiatives.

The grant from Dubai Holding was for $2.7 million and MSU has received $3.2 million in loans from the company, although the Board of Trustees has approved up to $5 million in loans, said Corinne Reardon, budget officer for the provost’s office.

With the funding needed to pay for about $1 million in start-up costs and hire about 20 faculty members, MSU Dubai opened in Fall 2008.

Following a trend

The university set out to recruit about 50 students who would meet the university’s academic requirements, which are the same at MSU Dubai as in East Lansing.

The result was an incredibly diverse freshman class with students from 23 countries.

“We always expected that most of the enrollment would come from the families living in Dubai, but we also expected to enroll students from other nations who, rather than travel to the United States, would travel to Dubai because it was shorter and it was closer to home,” MSU Provost Kim Wilcox said.

“For some families, the United States has a whole bunch of images about it, from movies and other sources, that isn’t quite what they would want for the children, especially their daughters.”

While MSU is the only public U.S.-based university in Dubai, neighboring Qatar features campuses set up by Cornell, Carnegie Mellon, Northwestern, Texas A&M and Virginia Commonwealth universities.

The Middle East movement is reminiscent of a rush by American universities to open campuses in Japan in the 1980s, said Peggy Blumenthal, executive vice president at the Institute of International Education, a nonprofit organization that promotes educational expansion outside American borders.

The experience in Japan, where nearly all campuses have left since the 1980s, offered lessons to American universities setting up campuses abroad, Blumenthal said.

“It pointed to the importance of making sure that the assumptions are very clearly spelled out on both sides about what the financial arrangements will be and what the academic-level expectations will be,” Blumenthal said.

Bridging cultures

While many of the students at MSU Dubai are well-traveled, the university has offered a few challenges to a diverse pool of students.

Each student came to MSU Dubai with different levels of English comprehension, causing some adjustment periods in classrooms.

Suzan Tasleem, a media management and research freshman at MSU Dubai, said students who aren’t proficient in English are enrolled in English as a Second Language classes. Students also receive help from faculty, who teach about 10 students on average in each class offered by the university.

“Professors do go out of their way to explain certain words or pieces of information which they think some students might not have encountered before,” Tasleem, who lived in Pakistan and Qatar before the United Arab Emirates, said in an e-mail this week.

“The smaller class size allows the professor to pay more individualized attention to such students.”

Also, the American educational system differs from many others in the world, where more emphasis is placed on memorization and recitation.

Robert von Bernuth, an assistant dean in the College of Agriculture and Natural Resources who teaches in Dubai, said American educational methods are a “significant change” for many students in his two classes.

“For example, the other day I presented a table that had to do with selection of materials for a variety of uses in construction,” von Bernuth said.

“It was a fairly detailed table and the students asked me if they should memorize that table. I said, ‘No, not at all, but you need to be able to explain that table.’ That brought a few odd looks.”

As incoming class sizes grow, MSU Dubai will open an academy designed to help prospective students with English, math and study skills before attending the university.

Last summer, the United Arab Emirates Ministry of Education decided to transition to a more American style of education and schools will start teaching English in kindergarten.

Dubai goes downhill

When MSU decided to set up shop in Dubai two years ago, the city was seen worldwide as an economic mecca for new business.

Financial sectors were booming, the communication industry took off and construction couldn’t be stopped. The city was widely known as one of the most liberal havens in the Middle East, a place where foreigners could live, women could drive cars and business moved freely.

“It was almost unreal,” said Christopher Davidson, a professor at Durham University in the United Kingdom and author of “Dubai: The Vulnerability of Success”.

“I used to call it the ultimate sunshine state. You could open the newspaper every day and there would be good news.”

Most of this success in building business was the result of a city built of credit, allowing for construction even though funds weren’t necessarily on hand.

But when the credit market crashed, lenders tightened their belts and oil prices plummeted, Dubai tumbled as fast — if not faster — than any city in the world, Davidson said.

In the summer of 2008, a few months before MSU Dubai was to open, the boom went bust in the city.

Whereas other metropolitan Middle Eastern cities, such as Abu Dhabi, United Arab Emirates, and Doha, Qatar, were buoyed by the sale of oil, Dubai’s businesses were left with mountains of debt and less reliable revenue sources.

Simon and Hudzik visited Dubai two weeks ago and Simon said the effects of the economic crisis were easily visible.

“There’s much fewer cranes operating, traffic is down and the kind of things you see economically are all there,” she said.

Unemployed foreigners in Dubai are required by law to leave, which has hastened the massive flight from the emirate, Davidson said. Local media have reported that as many as 3,000 cars are left abandoned in the Dubai Airport — a reminder of how many foreigners once lived in Dubai.

Economic impact on education

Although Dubai has been hit hard by the credit crunch, university officials aren’t sure how MSU will be affected.

Enrollment numbers for Fall 2009 are up to about 85 or 90 applications.

“Right now, knock on wood, we have not seen a direct impact,” Wilcox said. “We have not had students dropping out, which would be the first measure. We are working, recruiting students for next fall. We are ahead in our recruitment for next fall from where we were last fall.”

Simon said, however, that the demand for graduate programs has lessened due to the economy. Companies are no longer paying for graduate programs because money isn’t available to hire new employees.

With numbers up for next year’s class of Spartans in Dubai, MSU officials remain positive that Dubai’s economy wouldn’t have any severe effects on enrollment.

However, when Simon and Hudzik went to Dubai at the end of March, they met with representatives from TECOM to discuss the economy and an assumption of lower enrollment than originally planned.

“I am concerned about (the economy), which is one of the reasons I wanted to go there — to be sure that the partnerships that we had with the government and with Dubai Holding are strong and are sufficient to bridge us through their economic difficulties,” she said.

With about 80 new students planned for next year, the university would like to enroll 120 students per year starting in 2010.

After four years, the goal is to have a student body of about 650 to 850, with graduate students included, Hudzik said. At that time, MSU Dubai will economically break even, and begin to make a profit based on tuition.

“We expected to break even sometime between the end of year three and the start of year four,” he said. “With the economic downturn in Dubai, that probably pushes out about a year.”

In their discussions with TECOM, Hudzik and Simon said the company remained supportive of MSU Dubai and its future.

“(They) gave us assurances of support no matter what happens,” Hudzik said. “They underscored their support for us as MSU Dubai develops and the economic situation becomes more known. Essentially their response to us was, ‘We’re in this with you for the long term, just like you’re in it with us for the long term.’”

The commitment comes on the heels of George Mason University announcing in February that its campus in Ras Al Khaimah, United Arab Emirates, located about 50 miles northeast of Dubai, will be closed in May.

There are stark differences between campuses set up by George Mason and MSU — George Mason’s campus was in a smaller market and funded almost completely by a royal family in the area — but George Mason’s rate of growth illustrates difficulties in building a campus. The campus, which opened in 2005, started with about 40 students and never exceeded a total of more than about 125.

“These kind of ventures take time to build,” George Mason spokesman Daniel Walsch said. “I think we underestimated that.”

Future of Dubai

As Dubai’s high-rise architecture dots the skyline, serving as a reminder of what the emirate once was — and what it can be — MSU officials as well as officials in Dubai and the United Arab Emirates are hopeful the area’s boom town days return.

Simon said Dubai’s government “believes that their turn around will be faster than what might be in a place like Michigan.”

Although Simon and Dubai officials are positive, Davidson said it might be some time before Dubai becomes the booming metropolis it once was.

“The best case scenario is that the West picks itself up fast, and toxicity in the international system gets under control,” he said. “That would seem to be unlikely if you’re following the stock markets today. I think we’re in for a few good years of recession.”

When Simon and Hudzik went to Dubai two weeks ago, they took part in an international education conference hosted by the United Arab Emirates Ministry of Education. Simon met with the Minister of Education, a connection Hudzik called “very important.”

(We heard) directly from the federal level that we are viewed as a top-tier institution,” Simon said, “and an important part of their future plans.”

Originally Published: 04/09/09 10:45pm