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Global Financial Crisis and the Financing of Education in
Asia: National & International Trends and
Strategies
Jandhyala TilakNational University of Educational Planning & Administration, New Delhi, IndiaE-mail: [email protected]
Asia is heterogeneous
Asia: 2, 3 or 4 Asias Central Asia East Asia & Pacific
East Asia South-East Asia
Pacific South & West Asia
South Asia West Asia
Inter-regional and inter-country variations are very high
Agreed Premises Education is
a public good – pure public good, a global public good
A basic need An economic investment Human development A Human right/fundamental right
Agreed Premises … Education is equitable and efficient Quantity, quality, and equity in
education are inseparable dimensions
Primary, secondary and higher education are inter-linked
Need to go ‘beyond the basics’
Macro Context in Asia
Post-Jomtien period Rapid growth in primary education
Enrolments, Gross/net enrolment ratios, gender parity
Dropout rates, out of school children, illiterates
Transition rates to secondary education Growth in Secondary Education
Net Enrolment Ratios in Primary Education in Asia
(%)
0
25
50
75
100
Cen
tral
Asi
a
Eas
t A
sia
& P
acif
ic
Eas
t A
sia
Pac
ific
So
uth
&
Wes
t A
sia
Wo
rld
Dev
elo
ped
Co
untr
ies
1990 1999/2000 2007
Growth in Secondary Education
Transition RateEnrolment Ratio in
Secondary Education
2000 2006 Gross Net
1999 2007 2007
Central Asia 98 99 85 95 88
East Asia & Pacific 88 65 78 71
East Asia .. 93 64 77 71
Pacific .. 111 105 70
South & West Asia 84 84 45 52 46
World 91 93 60 66 59
Advanced Countries 99 99 100 100 90
Macro Context in Asia
Despite improvements problems persistHigh dropout ratesLow levels of learningAsia accounts for
65% of World’s illiterates38% of out of school children
Macro Context in Asia
Growth in Primary education demand for secondary/higher education
Building knowledge societies Governments are ‘making’ plans for
Reaching EFA goals Expansion of secondary education Development of higher education Some shifts in emphasis are already noted
Macro Context in Asia
Global Financial crisis: Adverse effects on fiscal capacity of the governments Trade, FDI, remittances, aid to Employment levels, economic
capacity of households Projected growth rates are much
below the recently experienced growth rates; yet they are reasonably high above 5%
Global Financial Crisis: Predicted Fall in Growth
ratesAnnual Growth Rates of GDP in Asia (%)
0.0 2.0 4.0 6.0 8.0 10.0 12.0
South Asia
East Asia
Developing Asia
Pacific
Central Asia
East Asia
SouthEast Asia
South Asia
Asia Average
Average (2004-8) 2009 2010
Macro Context in Asia
The adverse impact of the crisis on education is widely feared; but no hard data are available so far….
Likely effects quite uneven Some countries are less affected by
the crisis than others
Global Financial Crisis
Public expenditure on education % of GNP, % of Budget Expenditure Intra-sectoral allocations Investments in quality and equity in
education Household expenditure External Aid
Questions on education as a public good Question on the importance of free
education
National Priority for Education
In a larger number of countries the priority accorded to education declined % of GNP % of Budget Expenditure
May be due to declining fiscal capacity Lack of political will
Public Expenditure on Education (% of GNP)
0
2
4
6
8
10
12
14
Mal
dive
s
Rep
of K
orea
Ban
glad
esh
Thai
land
Paki
stan
Sing
apor
e
Indi
a
Phili
pplin
es
Mal
aysi
a
Kyr
gyzs
tan
Aze
rbai
jan
Arm
enia
Tajik
ista
n
Mon
golia
1990 2007
Public Expenditure on Education (% of Total Budget
0
5
10
15
20
25
30
35
Ind
on
esia
Mal
aysi
a
Ph
ilip
pin
es
Mac
au,
Ch
ina
Sam
oa
Mal
div
es
Tu
val
u
Jap
an
Van
uat
u
Iran
Arm
enia
Taj
ikis
tan
Nep
al
1990 2000 2007
National Priority for Education
No relationship between education priority and economic conditions during normal period
But a +ve relationship during the periods of financial crisis
Relative Priorities Total spending on education as % of
GNP and spending on primary education as % of GNP are not related.
Edn Primary Lao 3.6 0.5 Philippines 2.3 1.2 Bhutan 5.8 1.0
Shifts in Priority within education
Decline in share of expenditure on primary education
Marginal increase in the share of secondary education
Changing Priorities: Allocation to Primary Education
Base
Year %Latest
Year %
Lao 2000 55.5 2007 45.9
Malaysia 1990 34.3 2007 29.0
Korea 1990 44.3 2007 35.1
Philippines 2000 60.4 2007 53.6
Thailand 1990 56.0 2001 33.6
Bhutan 2000 56.9 2007 26.9
Bangladesh 1990 45.6 2007 43.4
India 1990 38.9 2007 35.8
Nepal 1990 48.2 2007 62.9
Priority Shift towards Secondary Education (% of
total Edn Expr)42
37.638.3
43.5 43.9
41.1
30
35
40
45
Bangladesh India Rep of Korea
1999 2007
Growth in private schools
Private not for profit /state supported
Private for profit Enrolments in private schools No disaggregated data
Private Enrolments as % of Total Enrolments in Primary and Secondary Education, 2007
0
25
50
75
100
China Nepal Thailand Philippines Pakistan Korea, Repof
Indonesia Bangladesh
Primary Secondary
Other Developments
Increase in efforts to mobilise more resources Education cess in India surcharges in China Decentralisation
Rising household expenditure on education Not willingness to spend But compulsion to spend
Questions on ‘Free’ Education Legal Status of Free Education vs Practice Legislations on Free Primary Education (e.g.,
India, China, Thailand..)
External Aid Asia accounted for 32% of total aid
for education Unsteady flow of external aid
(1999/2000-2006/7) Flow of aid has not been steady
(government funding is relatively steady)
Share of Education in total ODA has declined in Asia except in South & West Asia
Change in the Share of Education in ODA (1999/2000-2006/7)
6
10
13
8
10
12
9
59
50
20
9
16
9
27
22
22
29
8
26
7
0 20 40 60
Central Asia
East Asia & Pacific
South & West Asia
China
Uzbekistan
Nepal
Malaysia
Tonga
Maldives
India
1999/2000 20007
Trends in Aid for Education Declined
India Philippines PNG Malaysia Lao
Increased China Pakistan Afghanistan Indonesia Bangladesh Vietnam Nepal Mongolia Sri Lanka Cambodia
Education Aid (absolute amounts)declined in 12 countries; Increased in 19 countries
Uneven Distribution of Education Aid in Asia,
2007
East Asia & Pacific54%Central Asia
5%
South & West Asia
41%
Largest Aid Recipient Countries
(Received above US$100 million in 2007)
188
293
522
31
211
8
149
18
170
697
519
423
316 295 277 250
175125
0
200
400
600
800C
hin
a
Ind
on
esia
Ind
ia
Pak
ista
n
Vie
t N
am
Afg
han
ista
n
Ban
gla
des
h
Mal
div
es
Ph
ilip
pin
es
US
$ m
illi
on 1999/2000 2007
9 countries received more than US$ 100 million in 200725 countries received below US$ 50 million each.
External Aid Aid forms a small proportion of
total expenditure on education in developing countries: domestic funding accounts for the most.
India: aid 2-3% of total expenditure on education
Exception: Nepal 53% FTI is not attractive to many in Asia
(except Vietnam)
Basic education still forms a large part of the total education aid in many countries, though some are marginally shifting towards secondary education
Aid organisations may have to adhere to their commitments, and
Go beyond and offer more aid to take care of the effects of the crisis
% Share of Basic Education in Total Education Aid
0 20 40 60 80 100
AzerbaijanIran, Islamic
ThailandKazakhstan
ChinaViet NamArmenia
UzbekistanIndia
GeorgiaMaldives
SrilankaBhutanSamoa
Lao PDRBangladesh
FijiKiribati
TurkmenistanMongolia
Cook IslandsVanuatu
KyrgyzstanMicronesia,
TokelauTajikistan
PhilippinesMarshall
NepalIndonesia
PNGTimor-Leste
TongaPakistan
CambodiaSolomon
AfghanistanNauruPalau
Myanmar
1999/2000 Av 2006/7 Av
Funding Issues in Post-Primary
Education Low Levels of Government Funding Increasing reliance on cost recovery
measures Student fees Student Loans
Private Education – growing PPP
Aid – unclear trends and priorities Questions: Equity, Quality ??? Search for innovative methods of financing….
Thank you