Financing Education

1
Financing Education

• The World Bank
• Latin America and the Caribbean Region
• 23 July 2003

2
Outline

• Lending
• Challenges/strategies
• Future approach

3

Volume of World Bank LAC Specific Education
Lending
FY97-FY03
Number of Projects approved per year Number of Projects approved per year
FY97 2
FY98 11
FY99 4
FY00 3
FY01 7
FY02 6
FY03 7
Specific Education Lending FY03 U 432 million
4
Volume of Total World Bank LAC Education Lending
1,200
1,000
800
millions of U
600
400
200
0
1997
1998
1999
2000
2001
2002
2003
Specific
Adjustment
Total Education Lending FY03 U 772 million
5
Specific and Adjustment Education Lending for
LACFY02-FY03
Number of projects Number of projects Number of projects
FY02 FY03
Specific 6 7
Adjustment 3 6
Total 9 13
Total Education Lending FY02 U 710
million Total Education Lending FY03 U 772
million
6
Education Lending for LAC as a of total WB
education lending
7
Evolution of LAC Education Lending by Sub-Sector,
FY91-FY03
8
Total World Bank Lending Volume and Composition
FY02
Total WB Lending for FY02 U 19.5 billion
9
LAC Lending Volume and Composition FY02
Total LAC Lending for FY02 U 4.4 billion
10
Challenges

• Basic education reaching last 10
• Secondary
• Quality
• Post-secondary/lifelong learning
• Research and innovation

11
Basic Education

• Education For All - Fast Track Initiative
• Four LAC countries selected
• Honduras, Nicaragua, Bolivia, Guyana
• Mainly IDA countries where completion will not be
  achieved without support

12
Secondary enrollment in LAC below world averages
13
But quality is poor...Outcomes uncorrelated with
income
14
Lifelong Learning/Post - Secondary

• Chile
• Reduce deficit of adults without complete basic
  or secondary education
• Provision of adult education
• Improve skill productivity of labor force
• Improve international competitiveness
• Develop new modalities articulating adult
  education and training for workers in small and
  medium size enterprises

15
Innovative Delivery

• Utilizing the private sector
• Demand-side finance
• Student finance (higher education student loans)
• Lifelong learning

16
Utilizing the Private Sector

• Trinidad Tobago Public-private partnerships in
  child care
• Colombia Private school vouchers for poor
• Links between universities and private sector
  (Chile, Mexico, Brazil)

17
Student Finance

• Colombia Higher Education Project
• Redesign and expand student loan scheme
• Enable needy but qualified students to attend
• 100,000 beneficiaries (9 of total students)
• Mexico Higher Education Financing Project
• Improve, expand student loans in Sonora
• Develop private sector student loan scheme
• Improve access to higher education

18
Future

• Service delivery
• Basic
• Quality
• Governance
• Knowledge economy
• Secondary education
• Sustainable higher education
• Lifelong learning

19
Moving Forward

• Market has strengths and weaknesses
• Government has strengths and weaknesses

• Draw on strengths of both market and government
• Minimize weaknesses of both
• Context-specific

20
Financing and Provision of Education
Provision Provision
Financing Private Public
Private Private Schooling Home Schooling User fees
Public Vouchers Charter Schools Contracting out Traditional Public Schools
21
Messages

• Investigate the market for education
• Demand and supply
• Separate finance and provision
• Role of private, NGO sector
• New roles for
• government, students, families, communities