ENSURING EDUCATION FOR ALL
BUDGET SUPPORT: BENEFITS & CHALLENGES

Presented by:Rasheda K. ChoudhuryDirectorCampaign For Popular Education (CAMPE)
Dhaka, Bangladesh
October 2007
1ENSURING EDUCATION FOR ALL
BUDGET SUPPORT: BENEFITS & CHALLENGES

Greetings from CAMPE, Bangladesh The Global Dream (to be achieved by 2015):
 Early Childhood Care and Development
 Universal Primary Completion
 Education, Skill and Livelihood for young adults
 Literacy Skills for adults
 Gender Equality
 Basic Education of good quality for All21

We have crossed halfway through 2015, but yet,
Millions of infants are deprived of early childhood carelet alone education
 More than 100 million children out of schools, mostly inSouth Asia and Sub Saharan Africa ( at the current rateof progress, at least 75 countries will miss the goal ofUPC)
 Millions of young adults/adolescents are not getting
space or scope for meaningful participation neither ineducation or skill training nor in productive sectors ofeconomy.
3

Despite massive economic growth, impressive
communication technologies and incredible scientificdevelopments, the existence of more than 800 millionadult illiterates remains as the “ Scandal of the Country”.
 Quality Education remains a far away dream andeducation, instead of being an “equalizer”, isincreasingly becoming an “instrument of inequality”
because of the “ Quality divide” and “ Commodificationof Education”.
42

An additional US$ 10-12 billion per year, needed tobring each and every child to school, is yet to beensured by the Global Community who has
continuously been failing to deliver on their promises!!

5



Against the backdrop of such a global scenario wehave gathered here to discuss whether “ recurrent
expenditure in education be supported?” Well, there
are three dimensions of this issue:
Developing countries not only need solid political will,
viable national plans and pragmatic strategies toachieve EFA but they also require adequate andtimely flow of resources to make it happen.

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Donor countries have to demonstrate that theirpromises are not “rhetoric but a reality” by making
conscious effort to reach the 0.7% of ODA.
Any financing plan should not only be long term,
predictable, responsive and flexible but should also
ensure two way accountability mechanisms andinbuilt processes for learning from lessons.
Now, the million dollar question is, “can the support
to recurrent expenditure address all the 3
dimensional challenges mentioned before?”7All of us know that support to recurrent expenditure
Allows more flexibility with overall budgetary
management in the hands of the recipient
governments providing them with room to maneuveras and when required Increases
allocative efficiency and lowers
transaction costs
 Improves democratic accountability.
 Increases predictability of resources.
84

Increases local ownership by creating space for local
and national institutions to work together.
 Creates scope for policy dialogue between recipient
government and donors
 Provides the basis and rationale for donor alignmentand harmonisation & The recipient country does not have to spend its
energy on managing the funds from here and there
which, in turn, allows it to focus on result basedinterventions.

9However, support to recurrent expenditure may facechallenges like
 Donor countries may dominate the development
agenda and public spending options
 Thenational education budget may reflect
government priorities , but may not necessarily bepro-poor
 The recipient government may not have theabsorption capacity and the pressure to utilize thefunds may tend to promote corruption.
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Governments may prefer to spend more on the“hardware”( e. g. infrastructure ) for making thespending easily visible rather than on “software”(e.g. teacher training, curriculum development etc.)
the result of which may be visible only aftersometime.
 Recipient countries may become too dependent on
aid and may loose interest to pursue a“ sustainability plan”.
11

Flow of External Resources
The Case of Bangladesh: An Overview
External assistance is considered a significant factor in
the economic development of Bangladesh in order tobridge the gap between savings and investments andbalance of payment.
 Up to June 30, 2006 a total of about US$53.93 billion ofexternal assistance was committed. Of the total amount,
11.82 percent was food aid, 20.53 percent wascommodity aid and 67.65 percent was project aid.
126



Over the years significant changes have taken place inthe total aid package to the country. The share of grants
is declining gradually. Bilateral aid, which was 75.4
percent in the total aid in 1973/78, has decreased to43.8 percent in 2004/5. Multilateral aid, on the otherhand, has grown from 24.6 percent to almost 56.2
percent over the same period.

13

The decreasing volume of grants has resulted in thelarger proportion of loans in the total aid package. The
share of grants which was 89.0 percent in 1971/73
declined to 53.2 percent in 1979/80, 55.4 percent in
1984/85 and 31.9 percent in 2005/2006. Furthermore,
the flow of food aid and commodity aid showed adeclining trend while project aid has increased
sharply.

147

Among the bilateral donors, Japan tops the list in termsof cumulative disbursement followed by USA andCanada. International Development Association (IDA,
the soft lending window of the World Bank) is thelargest amongst the multilateral development
institutions followed by the Asian Development Bank

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

Coordination with the development partners has animportant bearing on the mobilization of economicassistance. It is secured through a variety of means
such as holding frequent dialogues with thedevelopment partners and inter-ministerial consultations
on a regular basis.

168Project having co-financiers are usually more complex,
and demand greater attention than those which arefinanced from a single source. Sometimes, rigid
conditionalities create difficulties in the speedy
implementation of projects or utilization of economicassistance.

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Second Primary Education Development
Program (PEDP-II), 2004-2009
The first ever (sub) sector-wide Program approach(SWAP) in the education sector of Bangladesh
A Case Study
189PROGRAM FEATURES AND STRATEGIESFocus is quality of primary education for all children inBangladesh The Government is in the driver’s seat 8 development partners pooled their fund and 3development partners are `parallel’ financiers Being implemented by the line divisions of theDepartment of Primary Education
 Implementation period of 6 (six) years from 2004 to2009
19

KEY OBJECTIVES
Increase primary school access, participation andcompletion in accordance with the Government’s“Education For All” (EFA), Poverty Reduction Strategy,Millennium Development Goals (MDGs) and otherpolicy commitments.
 Improve the quality of student learning and achievement
outcomes to Primary School Quality Levels (PSQL)
standard.
2010

PEDP-II Financing Plan
Total Cost (US $ 1815 Million)
GOB:
63.9 %ADB:
5.5%
IDA, WB
:
8.3%
DFID
:
8.3%
EC
:
5.5%
NORAD
:
2.2%
SIDA
:
1.6%
CIDA
:
1.1%
JICA
:
0.2%
UNICEF:
0.7%
21

Initial Challenges of PEDP II
Transition from Project Approach to Program
Approach:
Lack of appropriate regulatory frameworks
 Orientation of all stakeholders with the new concept ofprogram approach Preparing the institutions for program implementation.
2211

Initial Challenges of PEDP II
Complexity of financial system of PEDP II
Multiple sources of fund: Government of Bangladesh Bi-lateral grant IDA credit
 ADB loan
 UNICEF parallel fund JICA parallel fund23

Initial Challenges of PEDP II
Complexity of financial system of PEDP II
Complex fund flow mechanism
 TAX and VAT-100% GOB
 Direct funding by DPs for ICB procurement Special arrangements for parallel financiers


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Initial Challenges of PEDP II
Coping with new and varied procurement Guidelines
Three different procurement guidelines: Public Procurement Regulation 2003 of GOB
 World Bank procurement guidelines ADB procurement guidelines

25

However, lessons from countries like Uganda,
Afghanistan and Bangladesh, as documented bysome donors like DFID and the Dutch government,
have demonstrated that
 A careful, unbiased, objective analysis of the country
situation particularly focusing on socio-politicalscenario and institutional strengths and weaknesses
is necessary before initiating budget support

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13

An environment of mutual understanding and trust
should be created for getting maximum benefit out ofthe collaboration
 Operational tools( e. g. MOU) must reflect aframework of mutual obligations and must allow for
two way accountability mechanisms
 Processes and mechanisms must be in place toallow enough scope for learning from lessons,particularly from mistakes made/challenges faced27



The benefit of budget support/support to recurrent
expenditure may be visible only after a long time.
Inbuilt monitoring mechanisms are necessary to
maximize the benefits.

Are we, the Global community, thedonors and the recipient governments,
ready to do that?
Otherwise, the EFA goals may remain onelusive dream.
2814THANK YOU

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References:

Flow of External Resources in to Bangladesh (as of 30 June2006), Economic Relations Division, Ministry of Finance,
Government of the People’s Republic of Bangladesh, Dhaka 23April 2007
The Millennium Development Goals Report 2007, United Nations,New York, 2007.
Bangladesh Economic Outlook, Vol.-1 No-1 September 2007
published by SHAMUNNAY, edited by Atiur Rahman
Second Primary Education Development Program (PEDP-II),
Directorate of Primary Education, September 2007
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