10th Regional Meeting of National EFA Coordinators Strategic Planning towards Reaching the Unreached in Education and Meeting the EFA Goals by 2015 Regional Perspective on Financing Education for Equity: Challenges and Options

GMR 2009 Key Messages Progress towards the EFA goals is being undermined by a failure of governments to tackle persistent inequalities Good governance could help, but current approaches to governance reform are failing to attach sufficient weight to equity In financing of education:  Government spending and aid flows to education are at risk, especially in the context of the on-going severe economic slowdown since the 1930s

Financing Challenges (1) Low and stagnant government spending on education: Low income countries, where some 80% of the out-of-school population lives, tend to invest the smallest shares of GNP in education (South Asia: Bangladesh 2.6%, India 3.3%, Pakistan 2.7%) In other countries, government spending was stagnant (South and West Asia)

Financing Challenges (2) Inequalities in education spending (rooted in income inequalities): Per student expenditure at primary level varied between less than US$300 in sub-Saharan Africa and over US$5,000 in developed countries South and West Asia accounts for over one quarter of the world’s 5 – 25 year olds, but only 7% of global public education spending

Financing Challenges (3) Efficiency in education spending: Difficult to measure but comparisons of financial inputs and specific outcomes such as enrolment, completion, and learning achievement can tell the differences across countries Misuse and leakage of funds at various levels linked to corruption Budgeting process for the education sector: Complicated, misaligned, inflexible, non transparent, diffused Corruption hits the disadvantaged hardest as they rely more on the public system, have less recourse to legal protection and are less able to make “informal” payment.

Financing Challenges (4) Stagnating international aid to education: Total aid required for basic education for low income countries will have to be triple to reach the required level The Fast Track Initiative is falling short of required commitments to its Catalytic Fund to meet financing requests in the pipeline (financing shortfall of US$2.2 billion by 2010)

Options (1) Mobilize additional funds by expanding public funds and contributions from the private sector: Public funds: Decentralisation of revenue generation (e.g. China, India), formula funding (e.g. China) Private funds: Cost recovery/sharing schemes (e.g. China, Vietnam, Singapore), school self-financing (e.g. China, Vietnam, Mongolia), public-private partnerships (PPP) in financing and service provision (e.g. Korea, Philippines, Malaysia)

Options (2) Emphasize greater equity in financing: Budget planning and allocation for education in accordance with levels of poverty and deprivation in education: additional resources for disadvantaged groups and areas Abolition of school fees Improved and increased transfer of funds from central authorities to local disadvantaged communities and schools, e.g. provision of school grants Demand side schemes: Scholarships, conditional cash transfer, vouchers, student loans

Options (3) Improve efficiency in allocation and use of funds: Decentralisation of financial responsibilities and management with safe-guarding measures to minimize disparity and inequity Improved budget process Strengthened governance

Conclusions Significant gaps across countries in terms of level of resources, spending and governance Countries are facing challenges of underinvestment in education, inequality and inefficiency in government spending on education and stagnating international aid to education Options for overcoming these obstacles for achieving EFA goals should address additional funding mobilization, greater equity in financing and improved efficiency in the use and allocation of resources

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