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: jtilak@nuepa.org

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