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Africa: Education on the Brink
AfricaFocus Bulletin
Apr 29, 2009 (090429)
(Reposted from sources cited below)
Editor's Note
"Investments in education and training were signaled in the G20 Communique as a priority to stimulate the economy - and as a key
strategy to get out of the global recession. However, these warm
words about education were focused on the G20 countries themselves
-- and most of the children out of school around the world are in
low income countries (LICs)." - Global Campaign for Education
With the International Monetary Fund gaining new prominence and new
resources following last month G20 summit in London, debate is
intensifying on to what extent promises for reform in the
institution are illusory. In a report released last week, the
Global Campaign for Education looked at the implications for
education, concluding that so far policy changes by the Fund in
response to the global recession are more cosmetic than
substantive.
This AfricaFocus Bulletin contains a press release and excerpts
from the full report, which provides a detailed analysis of the
impact of IMF policy mandates on the education sector in developing
countries.
For the full report and more about the Global Campaign for
Education (GCE). visit http://www.campaignforeducation.org The site
also includes additional reports, including recent reports on West
Africa and GCE evaluation of the latest multilateral "Education for
All" meeting.
For a more general analysis of the role of the IMF in the current
crisis, see the latest (April 24) bulletin of the South Centre,
available in PDF format at http://www.southcentre.org It includes
an article by Centre director Martin Khor, "The G20's Mistake:
Boosting the IMF without Reforming It."
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New AfricaFocus Website Feature
I often come across articles or other information sources worth
recommending to readers "fyi," but am able to cite only a few of
them in an AfricaFocus Bulletin. I'm starting a page on the
AfricaFocus website to put quick notes and links to some of the
others - sort of a "mini-blog." Check it out at
http://www.africafocus.org/fyi/recent.php It won't be updated
every day, but if enough readers find it useful, I'll probably
expand it.
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Make or Break: IMF's new lease on life must benefit Education for
All
Global Campaign for Education Press Release
25th April 2009
http://www.campaignforeducation.org
[Contact: Alex Kent +27-76-428-5390 or [email protected]
The Global Campaign for Education, founded in 1999, brings
together major non governmental organizations (NGOs) and
teachers' unions in more than 120 countries. GCE promotes access
to education as a basic human right and raises public awareness
to create the political will for governments and other leaders in
the international community to fulfil their promises to provide
at least a free, public basic education for all children.]
The Spring Meetings of the World Bank and International Monetary
Fund (IMF) are a 'make or break' moment for whether the G20 deal
will benefit the millions of children and adults struggling to
get an education, according to a new policy report from the
Global Campaign for Education (GCE). "Education on the Brink"
shows that without significant changes to the IMF architecture
and removal of conditionalities, the poorest nations will remain
unable to lift themselves out of recession. Education systems
will be left to languish without desperately needed funds and the
teacher workforce, already squeezed, is likely to face further
pressure. The future of millions of children and illiterate
adults now rests on whether the new cash injection given by the
G20 to the IMF is accompanied by a substantive overhaul of
macroeconomic policy frameworks, say GCE members.
"A good education is everyone's human right, essential for
individual growth as well as the economic growth of every nation.
Paying teachers is not a luxury expenditure, nor is it optional.
There's not a single IMF worker who got to their position without
a good education and a bunch of great teachers. Everyone should
have this chance, and that means making the resources available
to recruit, train and pay teachers", commented Kailash Satyarthi,
GCE President.
There are 75 million children out of school and 776 million
illiterate adults today. Yet, educated and healthy people have
the best opportunities to participate in and make lasting
contribution to their societies. Investment in education is thus
the strongest line of defence for any country's economic survival
and comeback. A person's earnings increase by 10% for of each
year of schooling they receive translating to a 1% annual
increase in GDP if good quality education is given to the entire
nation. With estimates of unemployment increasing by 30 50
million in the developing world, and 200 million more people
being pushed into extreme poverty, it's crucial that funding
education is not constrained.
Whilst rich countries have launched fiscal stimulus packages to
promote economic growth, this luxury is denied to poor nations.
As long as IMF conditions continue it is unlikely that the
poorest countries will be able to build on the fragile gains made
in education over recent years. Poor countries must be allowed
the flexibility in macro economic policy to continue the good
work they've started. Children waiting at the school gates should
not be left out because of the short sightedness of global
institutions. It is crucial that the IMF carries out the review
on loan conditionalities in poor countries that has been promised
by Dominique Strauss Kahn. Richer countries should insist that
the new mandate and lease of life they have given to the IMF is
accompanied by a real commitment to reform the institution.
"Education is a long term investment with long term gains. Yet
the Fund insists on rigid macro economic conditions to ensure
short term financial 'stability' defined only on their terms.
Funding for education, from both domestic budgets and aid, must
be substantial, long term and predictable, so that education
ministries can employ, train and pay the teachers that are needed
to teach their citizens", said David Archer, GCE Board Member.
At the same time, the $16 billion in external financing needed
annually to reach 'Education for All' must be made available, for
the long term and in a predictable way.
"The world's poorest were not the cause of the financial storm
battering the globe, yet they stand to lose the most in this
global crisis. The money needed for education is a drop in the
ocean of the hundreds of billions allocated for current bank
bailouts, it must be made effectively available to allow
everyone, no matter their age, to have the chance of a good
quality education", commented Maria Khan, GCE Board Member..
Education on the brink
Will the IMF's new lease on life ease or block progress towards
education goals?
Global Campaign for Education. April 2009
[Excerpts only. For full text, including references, visit
http://www.campaignforeducation.org]
Introduction
...
To date the most significant global response to the global
recession has been the meeting of the G20 in London in March
2009. Leaders at the G20 Summit emphasized their commitment to
implementing national fiscal stimulus packages to maintain high
spending levels and buoy global trade levels. National fiscal
stimulus packages could help to protect and expand spending on
education -- as they have in countries like the US and UK.
Indeed, investments in education and training were signaled in
the G20 Communique as a priority to stimulate the economy - and
as a key strategy to get out of the global recession. However,
these warm words about education were focused on the G20
countries themselves -- and most of the children out of school
around the world are in low income countries (LICs).
For LICs, the main response from the G20 was to make funds
available to them through the International Monetary Fund (IMF).
The following specific pledges were made:
- $250 billion to be created in Special Drawing Rights (SDRs), a
conditionality-free allocation of the IMF's reserve currency.
Sadly only 7.5 percent of this ($19 billion) seems to be
available for LICs. Despite the ability for richer countries to
reallocate these to LICs it is unclear which of them, if any,
will.
- $500 billion in funding pledges (for the IMF), $250 billion
available now and $250 billion to be approved later. It is
unclear what part of this will reach LICs and if it does, what
conditions may be attached.
- $6 billion in "concessional finance" for the poorest countries
to be generated by IMF gold sales. However the agreement on how
the gold would be sold is yet to be taken as are the conditions
under which the funds would be available to LICs. The sums likely
to be available for LICs are much smaller than the huge sums used
by rich countries for the bailouts of banks and to protect their
economies. Nevertheless, thanks to the efforts of some, there
certainly appears to be an opportunity to mobilise some funding
for LICs, who amidst the crisis, may not be able to have a credit
line elsewhere.
The question to raise however is which conditions will be
attached to this funding. The lessons from history show how
expanded lending by the IMF after previous recessions forced
harmful economic policies on LICs that actually inhibited growth
and damaged education and health sectors. Given that the richest
countries have now rejected much of this economic orthodoxy (for
example suspending public sector borrowing targets and
concentrating on economic stimulus packages) it is vital that all
countries are allowed to make similar choices. Education and
health advocates have raised serious concerns over the years
about how the IMF's traditional macroeconomic conditions have
undermined rather than facilitated investment in education. If
these conditions are continued it is unlikely that LIC
governments will be able to design their own fiscal stimulus
packages that will maintain education spending in the same way as
most of G20 countries are planning to do for themselves.
Unfortunately in the last summit, the G20 did not condition their
support to the IMF on reform to these conditions.
Indeed, it seems that the motivation of some of the new countries
sitting at the G20 table was to get a greater say in the
governance of the IMF (breaking the dominance of G8) - and not
enough attention was paid to the need for wider reforms of the
IMF.
This new investment in the IMF seems to have given it a new,
expanded role. Before the global financial crisis the
organisation was struggling to define its role in the world and
there were serious questions raised about its legitimacy. Now the
IMF not only has the resources to reassert its authority over
macroeconomic policies in LICs but it also has an effective
monopoly over the control and stewardship of the financial
resources intended to spare countries the worst pain of the
current global downturn.
There are some promising signs. The Managing Director of the IMF,
Dominique Strauss Kahn has emphasised the need for reform and has
promised a significant review of the conditionalities attached to
loans to LICs. This paper will explore whether these signals and
agreements between the IMF and LICs made since the September 2008
financial crisis are sufficient to make education advocates
optimistic for the future.
The first section of this report makes the case for investment in
education, specifically in teachers, as a key part of the
response to the recession in LICs. Section 2 outlines the
obstacles to expanding investment in education -- and scrutinises
how the traditional policy conditions and recent policy changes
made by the IMF affect education. Section 3 then looks at the
promises of change and the new instruments being developed. Has
there been any change in practice in the IMF's approach since the
global recession became clear in September 2008? Section 4 asks
whether aid can be part of the solution and explores how the IMF
policies impact on aid to education. Finally we draw conclusions
and lay out recommendations for the future.
1. The Case for Education
"[The] last thing a government should do in the middle of a
recession is to cut back on spending", US President Barack Obama
The human right to education has been affirmed since the writing
of the Universal Declaration of Human Rights, and has been
re-asserted in countless international conventions and treaties
as well as in most national constitutions. The Education For All
(EFA) and Millennium Development goals (MDGs) set in 2000 are the
latest targets keeping the world's states on track to fulfilling
this responsibility. In the context of the present global
financial crisis there is a better case than ever for making
accelerated progress on delivering on this fundamental right.
Increased public investment in education is an obvious and key
strategy for helping countries to endure and emerge from the
global financial crisis. ... The benefits of education itself -
as a first-line of defense in and a solution to economic downturn
- and as a high-return, long-term investment - are touted by
wealthier governments as a key domestic policy and budget item.
Unfortunately nowhere in the global bailout actions and stated
plans is there a call for - nor a commitment to - the reforms to
education financing that are needed to approach, let alone meet,
EFA goals by 2015.
Education provides one of the smartest, most cost-effective and
most equitable strategies for long-term sustainable development.
...
...
Studies have consistently shown that more schooling is associated
with improved economic performance at both an individual and
societal level. A person's earnings increase by 10 percent for each
year of schooling they receive, translating to a 1 percent annual
increase in GDP if good quality education is offered to the entire
population. ... Sadly current IMF growth forecasts focus on a 3 to
5 year period and fail to include any longer term growth returns -
leading to a systemic under-representation of the economic benefits
of education investment (which come over an 8 to 15 year period,
when children who leave school enter the workforce).
This restricts many countries in Sub-Saharan Africa from
following the education expansion that worked so well for the
South East Asian economies in recent decades.
Aside from the long-term benefits of investing in education, it
also makes sense in the short-term given the need to stimulate
economic growth. ...
Hiring more teachers is in fact an effective economic strategy to
help countries reverse the negative impacts of the financial
crisis. Expanding numbers of public servants such as teachers and
health workers puts money in people's pockets and provides jobs
for the unemployed across both rural and urban areas....
The Squeeze on Teachers
Education is one of the soundest investments any country can
make. Yet policies and practice over the past decades have
ventured away from financing and building a trained teacher
workforce, which in turn has opened the door for on-going attacks
on the teaching profession. Teachers are expected to teach
subjects outside their core competency, to be held accountable
for students' performance and improving learning outcomes despite
having little or no training and working in classrooms with PTRs
as high as 78:1 -- and often over 100:1 in rural areas. They are
also increasingly required to fulfill these duties as informal
employees with lower pay and less employment stability than
public sector employee teachers traditionally have. UNESCO
projects that 18 million new teachers need to be trained and
employed between now and 2015 if all the 75 million children out
of school are to gain access and all children are to be taught in
manageable class sizes (of 40:1) which enable quality and
positive learning outcome. ...
Financing a national education system includes financing the
recurring costs of training, hiring and retaining skilled people
to teach future generations. Full funding to close the global
education financing gap (currently estimated at $16 billion) is
one of the best forms of crisis-response aid wealthy donor
governments can make to LICs, and should therefore be at the
forefront of policy makers' agenda. It is significantly less than
the sums invested in recent months by a number of G8 countries in
single banks ... Yet the world's teachers, and their role laying
a foundation for human welfare, let alone economic recovery, are
conspicuously absent from global leaders' recent crisis-response
rhetoric and the policies aimed at the world's poorest countries.
...
Education vs macroeconomic stability goals: the case of Malawi
Malawi has an unacceptably high PTR, currently 78:1, and in many
rural areas well above 100:1. Not only is there a teacher
shortage, but many teachers have received limited 'fast-track'
training when thousands were hastily introduced into the system
to cope with exponential enrollment following the introduction of
free primary education in 1994. Currently 12 percent of primary
school teachers are untrained, and 14 percent are either contract
or volunteer teachers. This dire teacher situation means that
learning outcomes are far from satisfactory and drop-out rates
very worrying, as only 32 percent of boys and 27 percent of girls
complete their primary education cycle. While a sudden rise in
enrolment will present a government with difficult challenges in
terms of providing a sufficient amount of teachers (especially
trained professionals), Malawi had to face particularly stringent
macroeconomic and budgetary constraints, undergoing several IMF
austerity programmes. Despite facing a sometimes difficult
financial situation with very high inflation at the end of the
1990s, a worsening HIV/AIDS prevalence rate and a food crisis in
2002, the Government had to assure overly restrictive targets
such as bringing down inflation to 5 percent and fiscal deficit
to less than 1 percent. A limit of 7 percent of GDP was imposed
on the wage bill as part of the PRGF arrangement, but following
pressure from civil society education advocates, the IMF agreed
to remove it as a condition for loans in early 2008. However this
has not translated into an increase of the projected wage bill.
...
3.1 Are There New Trends in IMF Arrangements with LICs since
September 2008?
A detailed look at all currently active IMF arrangements with
LICs which have had a review since September 2008, when the
financial crisis hit, show that contractionary targets are still
a key element of IMF arrangements. ...
[for example] 43 percent of countries are expected to bring their
deficit down to below 3 percent, which is the European Union
common rule on fiscal deficit. In the current economic context,
most European countries will be breaking that rule themselves.
The UK is currently projecting to run a deficit over 10 percent
of GDP in 200945, with the US projecting 13 percent of GDP for
the same period. In a context where most rich countries are
pursing these expansionary policies, 48 percent of LICs with IMF
arrangements are expected to decrease their deficit in the face
of what many say is the worst economic crisis the world has seen
since 1929.
Looking into more details at four countries facing a crisis in
education, it is clear that IMF advice is still highly stringent
in terms of macroeconomic targets. [see full text for cases of
Sierra Leone, Mozambique, Senegal, and Burundi.]
...
In the run up to the G20 Summit, on March 24, the IMF employed
both a press release and a conference call with civil society
advocates to announce that changes to its concessionary lending
are on track and that conditionality for LICs has changed.
However, a careful look at the proposed changes clearly shows
that only structural conditions are meant to change, not
macroeconomic ones. ,,,
What the examination above suggests is that this overhaul
appears to be more cosmetic than substantive. The same
macroeconomic conditions that have constrained education spending
for years remain in place for LICs. ...
If the hundreds of billions of dollars going into the IMF are to
be used effectively, there is an urgent need for a radical
overhaul of the macroeconomic policies promoted by the IMF. ,,,This
discredited package needs to be questioned as a whole. The mood and
tone of the G20 summit was that of an end to the Washington
consensus, but currently its decisions may fuel its expansion with
devastating effects across the developing world. By the time of the
next G20 summit the IMF and the G20 must detail how they will avoid
this.
LICs need to be able to prioritise investment in education and
health -- and shape their macroeconomic policies in ways which
will facilitate achievement of those development goals. At
present, policies are back to front: macroeconomic policies are
defined first without regard to these goals -- and education and
health ministries have to make do with the limited funds that are
available. Fundamentally it should be for national governments to
set their economic policy -- but with IMF conditions most are
left with little room to manoeuvre.
...
5. Conclusions
The big winner from the G20 meeting in London in March 2009 seems
to have been the IMF. It positioned itself as the agency best
able to help countries weather the impact of the global financial
crisis. It presented itself as flexible and open, willing to
change some of the controversial conditions it imposed in the
past.
The LICs and the fight against global poverty could also be big
winners -- but only if the G20 and the IMF make key changes to
the planned implementation.
This review by GCE of what the IMF has done since the global
financial crisis took hold shows that little has yet changed in
practice. LICs will benefit little from the hundreds of billions
of dollars announced at the G20. They may have access to some new
money, but if present trends continue, that money will come with
conditions attached that actively undermine investment in
education. There is an urgent need to hold Dominique Strauss Kahn
to his word and ensure that a fully comprehensive review of IMF
macroeconomic conditions imposed on LICs leads to real change.
Poor countries should be given the fiscal space necessary to
sustain and expand their investment in education. Indeed, such
investment should be seen as an integral part of the response to
the present crisis, yielding both immediate benefits and long
term economic growth. As many rich countries move towards
spending their way out of the recession through investing in
education, poor countries, where the need is greater, should be
encouraged in the same direction.
...
The present crisis, whilst creating potential threats for
investment in education, also presents a window of opportunity.
Macroeconomic policies that have been entrenched for decades will
need to be reviewed as part of the overhaul of the global
financial system. Securing progress on education should itself be
seen as an indicator of stability and as a sign of a sound
economy which is investing in the future, as well as a way to
make progress in other goals and protect the most vulnerable. At
present, education spending is all too often seen by the IMF and
Ministries of Finance as consumption, in part because by its
nature, it is made up mostly of recurrent spending, such as on
teacher salaries. This mind-set needs to change and the IMF needs
to promote education as an investment and factor in the growth it
creates and be proactive in advocating for strategic increases in
education spending in response to the financial crisis, most
notably in the trained teachers that underpin any effective
education system.
...
Civil society actors in every LIC have a key role to play in
opening up a dialogue with their Ministries of Finance about
possible alternative macroeconomic policies. Discussions about
the shape of the national economy should not take place behind
closed doors, between the IMF and Ministries of Finance -- but
should be transparent and open to public scrutiny and debate.
National education coalitions need to link with other civil
society actors to promote such debate, building collective
understanding and economic literacy. As well as arguing for a
greater share of the national budget to be dedicated to
education, we need to ask fundamental questions about the size of
that national budget as whole.
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues,
with a particular focus on U.S. and international policies.
AfricaFocus Bulletin is edited by William Minter.
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