Education Funding

G-8’s Loan Forgiveness in Selected Poor Nations Could Benefit Education

By Mary Ann Zehr — July 12, 2005 4 min read
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The announcement that the world’s richest countries will erase the foreign debt of 18 of the poorest could have a significant effect on education in the developing world, international development experts say.

The Group of Eight, or G-8, nations are cancelling loans to poor countries from the World Bank, International Monetary Fund, and African Development Bank.

A girl from Mozambique writes the alphabet on a blackboard at her school. The African nation is one of 18 whose loans will be forgiven by the G-8 nations, which could free up money for education.

Leaders of those countries—France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States, as well as the European Union—announced the debt relief in advance of last week’s meeting in Scotland.

Poverty in Africa was one of the top agenda items for British Prime Minister Tony Blair, the meeting’s host. The meetings continued despite the July 7 bombings in the London transit system.

“This is the critical time to make a leap forward to achieve the development goals agreed upon by the world as Education for All,” said Carol Bellamy, now the president and chief executive officer of the Brattleboro, Vt.-based World Learning, a nonprofit international development organization, after heading up UNICEF for 10 years.

Education for All is a compact that 180 countries signed in 2000 to ensure that all children have access to a primary education by 2015, among other goals.

Ms. Bellamy said the degree of the impact on education rests chiefly with the leadership in the countries getting the relief. “Too often the resources put into education cover only, at best, very modest teacher salaries and don’t go beyond that to the supportive kinds of things for a high-quality education,” she said.

The debt relief needs to be accompanied by increased external funding for long-term, targeted education projects in those countries, such as training administrators and helping teachers acquire new instructional methods, added Stephen F. Moseley, the president and CEO of the Academy for Educational Development, a Washington-based nonprofit organization.

“It’s very good to have very large amounts of debt relief, so the countries have more room in their budgets for education,” he said. “That needs to go hand in hand with funding and encouragement for innovations that will improve the quality of education.”

On the Fast Track

A big player in education development is the World Bank, and the recent change in its leadership could lead to more emphasis on international education, Mr. Moseley noted. Paul Wolfowitz, a former U.S. deputy defense secretary, took the helm this spring, replacing James D. Wolfensohn.

Under Mr. Wolfensohn’s 10-year tenure, the bank helped establish the Education for All Fast Track Initiative. Formed in 2002, the partnership between wealthy countries, development banks, and international agencies coordinates donations for education to poor countries.

Ten of the 15 countries whose education plans had been endorsed by the Fast Track are among the 18 selected by the G-8 countries for debt relief—Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mauritania, Mozambique, Nicaragua, and Niger. The other eight whose loans will be forgiven are Benin, Bolivia, Mali, Rwanda, Senegal, Tanzania, Uganda, and Zambia.

The G-8 countries said in a press release that they chose the 18 countries from the World Bank’s Highly Indebted Poor Countries Initiative, which was started in 1996 to address the problem of poor countries’ not being able to repay loans.

Debayani Kar, the communications and advocacy coordinator of the Jubilee USA Network, a Washington-based alliance of religious and nonprofit organizations that champions such debt relief, called the action “a victory and step forward.”

Short Shrift?

But education continues to get short shrift because of World Bank and International Monetary Fund policies, she maintained.

Under such policies, which were intended to help countries improve their economies, Ms. Kar said, the 18 countries had to cut back spending in the social sector. What’s more, she noted that the IMF continues to hold other poor countries to such policies. “On the one hand, the World Bank is saying, ‘We’re concerned about education.’ At the same time, they work closely with the International Monetary Fund, which is saying, ‘Don’t spend so much money on education,’ ” Ms. Kar said.

But Ruth Kagia, the director of education for the World Bank, said the so-called structural-adjustment policies were abandoned at least a decade ago. “It became clear that structural adjustment may help to balance the budget, but it destroys the social sector, especially education,” she said.

World Learning’s Ms. Bellamy said the World Bank has become more flexible in recognizing the need for investment in the social sector, and is less restrictive in that regard than the IMF. “The fund can sometimes be constricting. It’s not across the board, but it still exists,” she said.

And, she added: “The bank is still a bank. The bank hasn’t turned into an NGO,” a nongovernmental organization.

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