Financing Education / pdf - Unesco

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CHAPTER 4
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Education for All Global Monitoring Report
Figure 4.13: Breakdown of aid commitments to education by level,
2004 and 2005 average
France
IDA
Japan
Germany
United States
EC
United Kingdom
Netherlands
AsDF
Canada
Norway
Spain
Basic
Belgium
Australia
Secondary
Denmark
Sweden
Post-secondary
AfDF
Austria
Unspecified
UNICEF
Finland
Portugal
Ireland
New Zealand
FTI
Italy
IDB Spec. Fund
Greece
Switzerland
Luxembourg
0.0 0.5 1.0 1.5
Constant 2005 US$ billions
Notes: Only direct aid to education is broken down by level.
AfDF = African Development Fund; AsDF = Asian Development Fund; EC = European Commission; FTI = Fast Track
Initiative Catalytic Fund; IDA = International Development Association; IDB = Inter-American Development Bank
(Special Fund).
Source: OECD-DAC (2007c).
13. The increase may be
overstated to the extent
that the definition of
poverty-reducing
expenditure can become
more comprehensive
within a country over time.
It may also vary from one
country to another.
of finance for education in Latin America and the
Caribbean (Box 4.3). The second additional source
is countries outside the twenty-two OECD-DAC
members, and private foundations. Sixteen non-
DAC countries report aid activities to the DAC
Secretariat. Of these, only the Czech Republic,
the Republic of Korea and Turkey report aid for
education. Most goes for scholarships in tertiary
education, with very little for basic education.
Other sources of aid for education are the Islamic
Development Bank and the Gulf Cooperation
Council. At a meeting of bilateral and multilateral
donors in November 2006, these two institutions
pledged US$109 million for education in Yemen,
out of a total of US$307 million pledged
(Government of Yemen, 2007). China has recently
emerged as a potential source of external finance
for African countries. However, the focus of the
US$5 billion China-Africa Development Fund is
on natural resources, infrastructure, large-scale
agriculture, manufacturing and industrial parks.
Few, if any, of the funds are likely to be directed
to basic education.
In addition to governments, some private
foundations are becoming active in basic education
in developing countries. In May 2007, the Soros
Foundation pledged US$5 million for Liberia if a
matching pledge could be found, and the Gates
and Hewlett Foundations have committed
US$60 million over three years for programmes
aimed at improving learning achievements in lowincome
countries. The largest initiative reported so
far is the US$10 billion endowment of a foundation
to raise educational standards and literacy in the
Middle East, announced by the ruler of Dubai at
the World Economic Forum in Jordan in June 2007
(The Guardian, 2007).
Debt relief moves up the list of priorities
The Dakar Framework for Action argued that
higher priority should be given to debt relief linked
to expenditure on poverty reduction programmes
having a strong commitment to basic education.
While the recent debt relief programmes have
benefited only a subset of the world’s low-income
countries, for those that have benefited the
programmes have been among the most effective
international initiatives to increase government
resources.
The introduction of the Enhanced HIPC Initiative
for debt relief in 1999, which expanded the previous
programme begun in 1996, required countries
to prepare and implement a poverty reduction
strategy as a condition for qualification. Thirty
countries have since qualified for relief – twentyfive
in sub-Saharan Africa, four in Central America
and the Caribbean, and one in South America –
and a further ten are eligible. All are least
developed countries. On average, the ratio of debt
service to GDP in these countries fell from 3.6%
to 2.2% between 1999 and 2005, and the ratio
of debt service to government revenue fell from
23.5% to 11.7%, allowing governments to increase
expenditure on domestic programmes (IDA/IMF,
2006). Part of the HIPC process is monitoring
spending on poverty-reducing measures. Across
the thirty countries, expenditure on such activities,
in which education is always central, increased on
average between 1999 and 2005 from 6.4% to 8.5%
of GDP and from 40.9% to 46.1% of total
government expenditure. 13 The absolute increase
in poverty-reducing expenditure was far larger
than the decline in debt service payments. This
suggests that governments have used not only
funds freed by debt relief for their poverty
reduction programmes, but also other resources.
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