The Kosovo crisis has brought to the forefront the urgent need for sustainable development, lasting peace, prosperity and stability in South Eastern Europe. It has, moreover, placed education at the forefront of the bridging process that will afford South Eastern Europe equal socio-economic opportunities in the 21st century to that of other European nations. However, although the education systems of South Eastern Europe were a ’good fit’ with the planned economies of authoritarian political systems, they are a ’bad fit’ with the global economic structure of open political systems. To make matters worse, budget pressures on the education sector in conjunction with the increase in price for some education inputs, have led to less public funds for education.

Private sector development in education in South Eastern Europe needs to be seriously considered. Within education there are many private sector investment possibilities, including primary and secondary schools, vocational schools, and universities, as well as supporting activities such as textbook publishing, student loan financing, and computer learning centers.

This study then aims to analyze the current role of private sector activity in the education sector and to project the outlook for private sector investment in education in South East Europe (specifically in: Albania, Bulgaria, Croatia, the Former Yugoslav Republic of Macedonia and Romania). Information currently available from national, regional and international sources will be drawn upon to review the existing structure of private sector participation in the education sector along a number of dimensions including: the present level of private activity; the structure (legal status, size, etc) and kinds (level and focus area/s) of private institutions currently operating; key drivers and expected growth areas for private education; and key issues and constraints faced by the private education sector.

The main source of data for this study is interviews and meetings with government officials, senior politicians, businessmen and women, educationalists, researchers, NGO representatives, directors of educational institutions, bank managers, and others. This data is supplemented by: (a) published data provided by the World Bank, IFC, OECD, UNDP and other national and international organizations; (b) unpublished information provided by public and private local and international organizations; and (c) background information provided locally by government agencies. Information gathered will be used to: (a) analyze the legal and regulatory framework; (b) create an inventory of market opportunities in private education; and (c) develop a regional, on-line information platform for education investment exchange (http://edco.orama.net).