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close this bookThe Courier N 148 - Nov - Dec 1994 - Dossier: Education - Country Reports: Saint Lucia - St Vincent and The Grenadines (EC Courier, 1994, 104 p.)
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View the documentIncreasing school enrolment rates
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View the documentStructural adjustment and education support programmes
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View the documentEducation as an investment for the future

Structural adjustment and education support programmes


by Catherine Dom

The reason for Community support for structural adjustment in the ACP States was the increasingly pressing demands from a large number of countries which were almost all facing growing macroeconomic difficulties and obliged to adopt Structural Adjustment Programmes (SAPs). Soon, following examination of the potential and actual adverse effects of first generation SAP, (principally 'cuts' into vulnerable budgets, including those for education), a will emerged on the part of the Community to adopt a special position of its own, whilst supporting the macroeconomic reforms agreed on between the governments and the Bretton Woods institutions (World Bank and international Monetary Fund). What makes the position special is that the support will also be directed towards the social sectors: there is a determination to avoid the 'costs' of adjustment and to take the social aspects into consideration, to incorporate the needs of the social sectors from the moment the programmes are defined. Under the LomV Convention, a new instrument was to make its appearance: the Structural Adjustment Support Programme (SASP).

What are SASPs?

Structural Adjustment Support Programmes (SASPs) (negotiated between each government and the Commission, like all cooperation aid from the EU to the ACP) consist of two components: balance-ofpayments assistance (one of the major macroeconomic balances which almost always has to be corrected in the context of ACP structural adjustment programmes) by making foreign exchange available to finance General or Sectoral Import Programmes. The sale of this foreign exchange to national importers allows counterpart funds to be generated in local currency. The EU's stance in the field of structural adjustment is special in that the counter part funds in the State budgets allocated to the social sectors, which are seen as priority, are targeted. The second component is therefore budgetary support. These two components are linked, even if only chronologically, since the counterpart funds derive from the sale of the foreign exchange. In this way, a situation is reached where two types of objectives (macroeconomic and sectoral) are pursued by means of a single instrument.

Sectoral policy of Community aid to education

Past interventions, prior to the signing of the LomV Convention, focused essentially on infrastructures and grants. Since LomV, there has been a move towards programmes for the development of human resources and greater variety in their content.

In the present context of crisis in the education systems in many ACP countries (a diagnosis made long ago by other lenders), the EU wishes to increase its involvement in the social sectors, inter alia through a specific standpoint which it has adopted with regard to the issue of structural adjustment. This standpoint is a recognition of the priority nature of development of human resources, which must form the basis for long-term, endogenous development within the ACP.

The result was the recognition of this sector as one in which coordination between the EU and the Member States should be enhanced through the adoption of common guidelines in the sectoral aid policy. Since, moreover, the amounts of the counterpart funds allocated to education under Structural Adjustment Support are substantial compared to those given as programmable aid, there is an even greater need to strengthen consistency between the two types of Community aid (programmable and non-programmable).

Characteristics of aid for education

Among the 34 ACP countries benefiting (or to benefit) from Structural Adjustment Support Programmes, there are 17 where an 'education' component exists. At the end of April 1994, 41 decisions were taken to finance Structural Adjustment Support (for 31 beneficiary countries), corresponding to a total of ECU 860 million committed and ECU 690 million paid up. The amount of the counterpart funds allocated to education (about ECU 188 million) represents just under 30 % of the counterpart funds which will normally be set up following payments of foreign exchange already made for Structural Adjustment Support in the 31 countries. Comparing this same amount with the total payments made in the 17 countries where an 'education' component exists shows that 50 % goes to 'education'. Among the individual cases which we can cite, the proportions range from 100 % in Papua New Guinea to 10 % in Comoros and 50 % in Tanzania, the exact mean, where support is divided evenly between the education and health budgets.

Strengths and weaknesses of this type of support

We shall conclude by listing the various strengths and weaknesses of this kind of support. Although 'quantitatively' the fields in which improvements would be desirable are more numerous than the positive points, the reader must not interpret this conclusion as a negative judgment on Structural Adjustment Support Programmes: our sole objective is to draw attention to the various points where improvements would be desirable or essential.

Weaknesses

- The level of knowledge of the beneficiary sector, which should exist on a case by case basis, is often quite limited.

Progress is sorely needed in targeting the support, for example in terms of conditionality (What types of conditions? What targets should be set?), as well as in terms of areas supported in the sector. The following sectors currently receive little support, even though they are important: the link between education and employment, vocational and technical training, education for girls, and upgrading the teaching profession.

- There is also a need to consider the real, lasting impact of Structural Adjustment Support Programmes on national budgets.

- Where the cost of targeting is precise, given the real impact of targeting and supervision measures, the question of the fungibility of the funds will have to be studied.

- Institutional support and restructuring efforts are not firmly stated and are often 'timid', except in the case of Tanzania, with its programme for the reform of planning and budgeting in the education and health sectors.

- The support is short-term, whereas real sectoral support for education should be long-term.

- The potential adverse impacts of the macroeconomic component of structural adjustment support programmes (the 'stop-go' aspect of structural support programmes, the problem of selling the foreign exchange leading to a delay in setting up and availability of the counterpart funds in the planned budgets).

- The sustainability of the level of expenditure (what happens when adjustment takes longer than expected? What will happen when the support stops?)


Structural adjustment aid allocated to education

Strengths

- Financial support, especially when it goes to the functioning of the educational systems, secures expenditure which should normally raise the often very low standards.

- The determination to restructure budgets on a more permanent basis.

- The determination to support national institutional structures, both through the adoption of normal national budgetary procedures and through financial support to the education sector, which can give greater clout to the sector ministry during budget negotiations at national level.

- The consistent priorities in terms of level of supported and nature of expenditure and the trend towards 'sustainability', plus a curb on unconsidered investments.

C.D.