Reaching the marginalized: EFA global monitoring report, 2010; 2010

THE AID COMPACT: FALLING SHORT OF COMMITMENTSReforming the Fast Track Initiativepredictable donor commitments (FTI Secretariat,2008c). The Catalytic Fund’s balance sheet tells itsown story. Signed pledges from donors amountedto US$389 million in 2008 but fall to US$26 millionfor 2011 (FTI Secretariat, 2009b). 34 This is not asecure basis for commitments over a typical threeto five year medium-term expenditure cycle. Asthe number of countries with endorsed FTI plansrises, the Catalytic Fund faces the prospect of largefinancing deficits. Estimates by the FTI Secretariatput the projected deficit by the end of 2009 atUS$324 million (FTI Secretariat, 2009b). 35 Withsixteen countries expected to have education plansendorsed in 2010 or 2011, the deficit is likely to grow.If the FTI is to emerge as a viable multilateralmechanism, a new financing model is imperative.There is an urgent need for increased predictabilityand a firmer donor commitment over longerplanning cycles of five to ten years. Recognitionof the problem has prompted several donors tosupport calls for a replenishment mechanismthat mobilizes around US$3 to 5 billion between2009 and 2012, with an initial US$1.2 billion foreighteen months from 2009 (FTI Task Team onReplenishment of the EFA - Fast Track Initiative,2009). Such longer-term arrangements are acharacteristic of multilateral initiatives in health,discussed further in the final section. With pledgesfor 2009 amounting to US$228 million, this impliesa rapid scaling up of donor support (FTI Secretariat,2009b). Unfortunately, the FTI’s poor disbursementrecord deters donors from providing the rapidincrease this mechanism would require.Countries affected by conflictProviding aid for basic education in countriesaffected by conflict is both an imperative anda challenge. These countries account for a largeshare of the world’s out-of-school population,suffer from acute shortages of teachers and oftenhave severely degraded education infrastructure.Their ability to handle aid is typically weak, withbasic finance and public management systemsunlikely to meet donor reporting requirements(Berry, 2009). Conflict-affected countries shouldbe at the centre of multilateral financing initiativesin education, enabling donors to pool risks andreduce transaction costs (Dom, 2009). Instead,they are on the periphery.One of the most serious design flaws in the FastTrack Initiative is that its rules shut out many ofthe countries and children in the greatest need ofsupport from aid donors. The basic requirementsfor joining the FTI – a poverty reduction strategypaper and a sound education plan – effectivelyexclude many countries that are in conflict,undergoing post-conflict reconstruction or sufferfrom extreme capacity limitations for other reasons.Reform efforts have been piecemeal and largelyunsuccessful. They concentrated initially ondevelopment of a ‘progressive framework’ forplan endorsement. Initially, the broad idea wasto attribute ‘interim status’ to countries moving inthe right direction but unable to meet the rigour offull FTI endorsement. Then, with donors unable toagree on how to proceed within the FTI framework,the focus shifted instead to creating a separateEducation Transition Fund to provide large-scalesupport in crisis and post-conflict settings.However, negotiations stalled (see details below).The upshot is that conflict-affected countries stilllack access to a multilateral financingmechanism in education.Difficult journeys throughFast Track Initiative processesSeveral conflict-affected countries have travelledthrough the FTI endorsement process. In 2007,Liberia and Sierra Leone were endorsed, followeda year later by the Central African Republic andHaiti. Southern Sudan is a prospective endorsementcandidate in 2009. Unfortunately, plan endorsementhas not always led to aid delivery.In Sierra Leone, the government identifiededucation system reconstruction as a priority afterthe 2002 peace agreement. Abolition of primaryschool fees resulted in enrolment doubling between2001 and 2004, to 1.3 million. Many new entrantsfaced the prospect of dilapidated schools lackingbooks and trained teachers (UNICEF, 2009a;World Bank, 2007b). The FTI Education ProgrammeDevelopment Fund facilitated preparation of adraft education plan, developed with supportfrom UNICEF and the World Bank. Three monthsafter the FTI endorsed the plan, Sierra Leone wasapproved for US$13.9 million in Catalytic Fundsupport (FTI Secretariat, 2009b). Retroactiveapplication of the IDA rules, however, severelydelayed disbursement. As of March 2009, twoyears after the allocation decision, Sierra Leonewas still awaiting its first disbursement.The process effectively pushed Sierra Leone backinto the status of a newly applying country andbrought its education sector capacity problems toEstimates by theFTI Secretariatput the projecteddeficit by the endof 2009 atUS$324 million34. In March 2009, the FTIbalance sheet showed anadditional US$14.4 millionin unsigned pledges.35. Taking into accountunsigned pledges wouldreduce this figure toUS$197 million.259