An Education Stimulus for the Developing World

David Gartner
David Gartner Former Brookings Expert

June 23, 2009

Lost in the recent debate in Congress over expanded funding for the International Monetary Fund (IMF), was the key question of how that money should best be spent in order to promote a global economic recovery. Here in the United States, our own economic stimulus included unprecedented levels of funding, over $100 billion, in new education spending. The rest of the world now needs its own education stimulus package to promote economic recovery and quality education for all children. In a major development, the United States Congress just decided that the International Monetary Fund should “promote government spending” on education.

In the face of sharply declining growth rates, many low-income countries are being forced to cut back on vital investments in education at exactly the wrong time. In tough economic times, demand for schooling increases and the employment of teachers can be an economic stimulus in the context of high unemployment. However, declining donor funding for education is making it harder for low-income countries to pay their teachers and keep the school doors open. According to the most recent OECD data, donor funding for basic education actually went down by more than 20 percent in recent years.

Past economic crises have dramatically reversed progress toward achieving universal quality education in the developing world. In Indonesia, for example, the crisis of the 1990’s resulted in 35 percent more 10-year-old boys dropping out of school. Once these students leave school for a year or more, it is extremely hard to get them to go back. The current economic crisis is seriously jeopardizing recent progress toward achieving the world’s commitment to reach universal basic education by 2015.

Expanding the number of teachers represents both an important economic stimulus and an essential dimension of achieving education for all. UNESCO projects that 18 million new teachers must be trained and employed by 2015 if all the 75 million children who are not currently in primary school are to gain access to quality education. A number of countries in West Africa, such as Mali, will need to increase their ranks of teachers by more than 10 percent every year in order to achieve that goal.

The IMF has traditionally been somewhat reluctant to support significantly expanded investments in education and other areas because of concerns about avoiding public deficits. As a result, countries like Mali that face serious teacher shortages, are still agreeing to keep their own spending in check even as the United States and other countries are massively increasing public spending to promote economic recovery.

The new guidance by Congress to the IMF could make a real difference in giving low-income countries the ability to invest in their own children. The law now requires that the United States oppose any IMF program that does not allow national governments to increase spending on education. For the many low-income countries that receive IMF loans, this change could make it possible to increase investments in their children.

Just as education spending is a key part of America’s response to the economic crisis, so too should it be central to the response to the crisis in the developing world. Hopefully, the new guidance by the Congress to the IMF to support investments in education will give more countries the chance to scale up their own efforts. If so, it would be good news for the global economic recovery and great news for the millions of children now left out of school.