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

0120CHAPTER 1Education for All Global Monitoring ReportGovernmentsin the world’spoorest countriesurgently needan increase indevelopmentassistance tooffset revenuelossesThis chapter has five core messages:The economic slowdown has far-reachingconsequences for education financing in thepoorest countries. Slower growth and decliningrevenue are jeopardizing public spending plansin education. For sub-Saharan Africa, theresources available for education could fall byUS$4.6 billion a year on average in 2009 and2010, or more than twice the current amountof aid to basic education in the region. Spendingper primary school pupil could be as much as10% lower in 2010 because of the effects of therecession. This potentially damaging outcomeunderlines the importance of real time budgetmonitoring, with a focus on adjustments to 2009budgets and spending outcomes, and theformulation of 2010 budgets.Increased international aid would help reducebudget pressures. Governments in the world’spoorest countries urgently need an increase indevelopment assistance to offset revenue losses,sustain high-priority social spending andundertake the countercyclical investmentrequired to create the conditions for recovery.New evidence set out in this chapter shows thatlow-income countries in sub-Saharan Africa havea limited ability to shield public spending fromthe effects of the downturn, but a significantcapacity to productively absorb increased aid.In addition, a temporary moratorium on officialdebt payments would reduce pressure ongovernment budgets, potentially releasingresources for spending in areas such aseducation and health. Such a moratorium wouldbe in the spirit of the fiscal stimulus packagesdeployed in developed countries, attenuating theimpact of the global crisis on economic growthand poverty reduction efforts. The cost of thedebt moratorium for forty-nine low-incomecountries would amount to around US$26 billionfor 2009 and 2010 combined.The international response to the financial crisishas failed to address major human developmentconcerns. Global summits and domestic policiesin rich countries have played a crucial role instabilizing financial systems and establishingthe foundations for early recovery. By contrast,the response to the crisis unfolding in theworld’s poorest countries has been markedby systemic indifference. ‘Smoke and mirrors’financial reporting has produced large headlinenumbers for financial transfers while obscuringthe modest level of real resources mobilized.Sub-Saharan Africa stands to lose someUS$160 billion in government revenue in2009–2010 as a result of slower growth andreduced revenue. Best estimates of theinternational response for low-income countriessuggest that additional concessional finance forthe period will amount to no more thanUS$6 billion to US$8 billion.Education for All financing gaps should be closedunder a human development recovery plan.Governments, aid donors and financialinstitutions urgently need to assess the financinggaps for achieving the Millennium DevelopmentGoals. Making available the resources requiredto close these gaps should be part of thecoordinated international response to the globalfinancial crisis. A major new financial costingexercise carried out for this Report (discussed indetail in Chapter 2) puts the Education for Allfinancing gap at around US$16 billion. Thatheadline figure appears large in absolute terms,but has to be placed in context. It represents lessthan 2% of the financial rescue package puttogether by governments in just two countries –the United Kingdom and the United States – forfour commercial banks and is equal to a smallfraction of the wider financial systems bail-out.International action must be taken before the2010 Millennium Development Goal summit.The impact of the financial crisis and newevidence on the scale of financing gaps demandan effective international response. With aMillennium Development Goal summit plannedfor 2010, the United Nations Secretary-Generalshould convene a high-level meeting of donorsand governments of low-income countries toreassess the external financing required toachieve the Education for All goals.This chapter is divided into three parts. Part 1looks at the mechanisms through which thefinancial crisis and the food crisis are hurtingeducation systems. Part 2 examines ‘fiscal space’,the room for manoeuvre that governments haveto protect public spending in education and otherareas from the effects of the global economicdownturn. Part 3 critically reviews the internationalresponse to the crisis, highlighting in particularthe failure of the current G20 framework.20