Domestic revenues will need to be mobilised to realise the 2014 GPE pledges

The Global Partnership for Education brought together governments and donors at its Replenishment Conference in Brussels last week. While donors fell short of the $3.5 billion target, governments stepped up to the mark. These governments will now need to work on mobilizing more domestic resources in order to make sure they meet their commitments.

The Global Partnership for Education (GPE) was established in 2002 – originally as the Education for All Fast Track Initiative (FTI) – to live up to the promise that “no countries seriously committed to Education for All will be thwarted in their achievement of this goal by lack of resources”.

For the Partnership, the best sign of a country’s serious commitment to education is a credible education plan that can be endorsed by the international community and can kick-start a compact between country and donors. The idea was that the country then increases its financing to resource its plan. And donors scale up their financing to cover any gaps. At the same time, a special fund, now called the GPE Fund, helps catalyse additional financial support. Over time, the role and reach of the GPE Fund has grown making it one of the most substantial donors to the education sector in low income countries.

Last week, the second GPE Replenishment Conference took place in Brussels, where international and national policy makers announced their specific pledges to education over the coming four years.

gap

There is $26 billion finance gap for basic education

Pledges made by donors only covered 60% of the US$3.5 billion target, although additional commitments are expected. The long-term goal is to make aid redundant, but in the interim it is still extremely important for many of the poorest countries. Unfortunately, with pledges falling short, last week’s conference did not show any signs that the downward trend of aid to education might be reversed in coming years.

Perhaps as a result, the headline outcome of the Replenishment Conference was not related to their highly publicised target for donors, but instead the fact that “developing country governments from around the world committed to increase domestic funding for education by an unprecedented US$26 billion over the replenishment period”.

Is this a result to cheer about?

At the first GPE Replenishment Conference in Copenhagen in 2011, pledges made by governments of finance-constrained countries amounted to US$2.2 billion. In relative terms therefore the pledges made by governments in 2014 are a considerable success. It is also good that publicising these commitments brings governments under scrutiny.

But where will these resources come from?

Children in an inclusive education school in Ethiopia where 25% of the national budget is spent on education. Photo: UNESCO/P. Wiggers

Children in an inclusive school in Ethiopia where 25% of the national budget is spent on education. Photo: UNESCO/P. Wiggers

Many countries are already spending a large share of their budget on education. For example, Benin pledged to maintain the share of its budget dedicated to education at the extraordinarily high level of 27%. Ethiopia and Viet Nam will also maintain the share of their budgets dedicated to education at high levels over the period (25% and 20% respectively). These countries were already doing their best, in other words, and their pledges have simply confirmed that they will not deviate from that path.

What about other countries that have under-spent over the years?  Nigeria, which dedicates less than 10% of its budget on education, only pledged to “continue to annually increase the investment in the education sector”. Given this vague statement, we must assume this cannot have been taken into account in the calculations of the total government pledges.

The answer to the question of where much of the $26 billion will come from seems to be Pakistan, which has committed “to increase budgetary allocation from current 2% to 4% of the GDP by the year 2018”. With a GDP of US$230 billion, a doubling of spending – depending on its timing – could account for two thirds of the announced US$26 billion pledge by country governments.

This would be terrific progress for a country that had the second largest number of out-of-school-children in 2012 and which has historically spent too little on education. And yet it is unclear if this result can be ascribed to the GPE when it is a commitment expressed in the current government’s 2013 election manifesto. The mid-term evaluation of the FTI/GPE in 2010 posited that the Partnership was claiming some results that were not related to its activities. Time and further analysis will tell whether it has fallen into the same trap for the pledges made last week.

There is no doubt that in coming years developing countries have the potential to increase their financing of education by far more than donors can do. The EFA Global Monitoring Report recently published a policy paper that showed how 67 low and middle income countries could raise US$153 billion for education by 2015 by further prioritising education in their budgets but also by modestly increasing their capacity to raise taxes. For the latter to happen, strategies are needed.

Tax infographic

With this in mind, we joined partners at the GPE Replenishment Conference in a parallel event focused on domestic resource mobilisation. The messages that came out of this event were clear: countries should avoid handing out harmful tax incentives or selling natural resource concessions for less than their true value; donors should help countries strengthen their revenue raising authorities and stand behind transparency initiatives, such as those aiming to improve extractive industry governance and to close tax loopholes. Last but not least, as Villa Kulild, the Director of NORAD, said at this event, the private sector has no better way to show its commitment to education other than pay its taxes. This is the way that we are going to fill the education finance gap. With aid dwindling, we must turn our attention to domestic resources to pay for the education we want.

This entry was posted in Aid, Basic education, Developed countries, Developing countries, Donors, Finance. Bookmark the permalink.

One Response to Domestic revenues will need to be mobilised to realise the 2014 GPE pledges

  1. Pingback: There is $26 billion finance gap for basic educationthe 2014 GPE pledges | Millennium@EDU SUSTAINABLE EDUCATION

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