Mobilizing Financial Resources

In view of the importance of this topic, a special double-session thematic roundtable on the financial challenge of schooling for all for the 1990s was presented. The first session called for four categories of reforms to reduce costs, namely: (a) policies to reduce unit costs, e.g., increasing pupil-teacher ratios and double shifting; (b) restructuring school systems, e.g., reducing the length of the school cycle, modifying teacher use, using self-instruction, and distance education techniques; (c) redistributing expenditures among sectors, e.g., military to education, and within the education sector, e.g., allocating budget increments to support basic education; higher to lower levels; and (d) raising additional resources, e.g., user fees balanced by equity-oriented loan schemes, taxation and other fiscal instruments. The second session presented several country case studies, e.g., Senegal, the Philippines, Ghana, Sri Lanka, and Colombia illustrating the application of similar reform packages under conditions of economic constraints. The roundtable culminated in an effort to project the costs of reaching primary schooling for all by the year 2000, coming up with an estimate of $58 billion without the reform package suggested and about $42 billion with an attainable package of cost-saving, revenue enhancement and quality improvement measures. It was further estimated that about one-third of these costs would need to be incurred in Sub-Saharan Africa. The tenor of the debate was summarized by one participant in that a "tragic consequence of recession, debt and adjustment has been that many countries are now further away from the goal of providing a primary school place for each eligible child than they were a decade or more ago."

Let us also accept as a hypothethesis that increased needs for Education for All are of the order of $5 billion a year. Developing countries themselves would provide $3.5 to $4 billion of this through restructuring measures, and multilateral donors will provide a part of the $1 to $1.5 billion of the balance. But bilateral assistance programmes would have to give education a higher priority as well. Yet the amounts are clearly manageable if the priority is there.

J. Wheeler
Chairman, Development Assistance Committee
OECD

The finance sessions stimulated a broad-ranging discussion. It was pointed out that the analysis did not really treat the financing of literacy or other non-formal modalities of basic education but was limited to 'schooling for all.' Others argued that many of the proposed reforms had been tried, yet because of the intensification of adverse socioeconomic conditions outside schools, literacy rates among school leavers and others had in fact declined in recent years. Some questioned the relevance of specific reforms which were recommended, such as double-shifting, in countries where overcrowding schools is not a problem. Others queried how cost-cutting reforms such as increasing class size could be consistent with improving educational quality. The importance of teacher time was stressed by several participants, noting that improving instructional quality typically meant increasing teacher incentives and enhancing training which had additional, not less, costs. It was added that one could not realistically discuss cost and financial reforms in isolation from a discussion of management and administrative capability to implement such measures, as well as the overriding political feasibility.

When the discussion turned to the mobilization of resources, many participants felt that parents and communities were already over-burdened by hard times and there was little use contemplating further user fees or family and community contributions. Debt reduction was again raised, setting forth the applicability of the idea of a 'maximum tolerable burden' of debt internationally, as a kind of parallel to what is applied in domestic bankruptcy courts in Northern countries. Debt swaps were mentioned as particularly attractive mechanisms worth pursuing.

Concern was expressed over whether Education for All funding requirements would starve other social sectors such as health. Equally strong concern was expressed that aid shifts to Eastern Europe would reduce levels of aid required in more needy corners of the world, such as Africa. The 'peace dividend' hoped for from decreasing military expenditures was supported by most as a warranted inter-sectoral shift. However, caution was quickly injected, given the continued hostilities in many areas of the world, such as Southern Africa, causing surrounding countries to maintain their present military expenditure levels.

It was generally agreed that many donors should now raise the portion of their aid for basic education, particularly where it is a relatively small percentage of their current overall aid portfolio. While overall aid to basic education might increase, the areas in most need could very well remain neglected. This brought a call for a comprehensive study of the modalities of assistance to basic education. The correspondence between the kinds of aid given, e.g., technical experts, and the kinds of aid actually needed, e.g., salary support to teachers, was also cited. Finally, the point was made that primary education, indeed, benefitted from indirect assistance to other sectors, e.g., a paper factory contributed to local text-book production capacity, and that this should not be overlooked in the final calculus of support to basic education.

The case material presented in the session, as well as the separate country Education for All action plans from Nigeria, Morocco, China, and Kenya, provided several interesting examples of the reforms and the financial points made in the finance roundtable presentation.