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FEATURE STORY

Education Financing Hits High Mark as New Strategy Evolves

March 29, 2010


STORY HIGHLIGHTS
  • $1.05 billion is largest single-country education investment in FY2010
  • Bank financing for education will top $4.4 billion this year
  • New education strategy will guide Bank’s work for next decade

March 29, 2010--This month the World Bank Board approved two new education projects for India that will mobilize $1.05 billion in zero-interest lending to boost children’s elementary school enrollments and learning levels, and strengthen engineering education institutions across the country.

The two operations together comprise the Bank's largest investment in education in one country in FY2010. The Bank first started investing in the sector in 1962, with a $5 million loan to Tunisia to build a few schools.

The Bank has supported India’s Sarva Shiksha Abhiyan (SSA) program, which aims to provide quality elementary education to all children, with two IDA credits totaling $1.1 billion since 2003. SSA, now the largest ongoing Education for All program in the world, has been remarkably successful, particularly in achieving greater access to elementary education: between 2003 and 2009 the number of out of school children declined from 25 million to 8.1 million.

Although India has made significant progress in meeting its education goals, especially at the primary level, its enrollment rates in higher education stand at 11 percent. This has led to a severe skills shortage, especially in the information technology, infrastructure, power, and water sectors.

Financing Surge

At current projections, Bank financing for education in the latest financial year is on track to reach approximately $4.4 billion, which would represent another high-water mark for the institution. Of this amount, $2 billion will be in zero-interest concessional lending to the world’s poorest countries in Africa, South Asia, and other regions. The remaining $2.4 billion will be to middle-income client countries worldwide.

While managing its expanding portfolio, the Bank has also asked its client countries and partners to develop 10-year strategies and targets for their education programs. The Bank’s education sector has embarked on regional and country consultations to canvas the views of clients and stakeholders to shape the Bank’s new Education Sector Strategy 2020.

New Strategy for a New Decade

"A country’s winning development prospects depend on the skills and creativity of its citizens and workers, the wisdom and humanity of its leaders, and the ability of its parents to raise healthy, educated, and happy children," says Elizabeth (Beth) King, the Bank’s Director of Education. "Investing in education is the best way to achieve these prospects."

With the 2015 Millennium Development Goals (MDGs) just five years away, and their promise of transforming people’s human and economic well-being still hanging in the balance, the Bank’s new education strategy aims to reduce poverty and help countries master the acquisition of cutting-edge knowledge and innovation, which will underwrite the potential for broad-based, long-term growth.

The strategy builds on lessons learned and will chart progress toward the education MDGs, including the sharp increase in primary education completion rates and the growing demand for relevant secondary and tertiary education. It will describe the challenge of helping secure learning opportunities for the most disadvantaged children and workforce competencies for youth, including those living in post-conflict and fragile-country settings.

New development evidence suggests that regional education plans, a hallmark of earlier Bank strategies, may need to make way for strategies tailored for countries at different stages of development, facilitating a smoother path to country-specific plans.

Work in Progress

King and her team are meeting with hundreds of education advocates—including governments, academics, civil society organizations, and donors—to take stock of current trends, discuss and debate future challenges, build consensus on strategic directions, develop a framework with indicators of success, and identify gaps in analytical work and investments.

The team will meet with stakeholders in two dozen cities before finalizing the strategy in November 2010.

"A new World Bank education strategy will capture the current and emerging state of education," King said, "and position us for the next decade."

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