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1) Lack of practical knowledge & excessive dependence on theory.
2) Grabbing business degrees without any work experience.
3)Lack of specialization.
4) Poor evaluation systems
5) Old school teachers who don't let the fresh blood enter in teaching by lobbying & politics.
Education is limited to formality only.
Teachers are not considered valuable assets to society. All problems arise from this simple fact.
A lack of practical education is the most important real defects
Education system in the third world countries is just like stagnant water. It's available to quench the thirst and the thirsty considers it a mighty treasure. In fact it is stinky and harmful for the healthy society.
It needs inflow of fresh water and outflow to remove the stinky one. In simple words the present education system is just repetition of certain knowledge and lacks the methodology to explore new avenues of modern approaches. Consequently degree holders are there but most of them can't compete the diploma holders of advanced countries.