Filling the Glass: Moving the FTI Toward a True Global Compact on Education

December 01, 2005

Testimony by CFR fellows and experts before Congress.

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I. Education for All Fast Track Initiative: Recognizing a Glass that is Both Half Full and Half Empty: To answer the question of where the Fast Track Initiative should go from here, we need to take stock not only of where we are, but—just as importantly—of what the original aspirations were for the EFA-FTI in the first place.

After the Jomtien effort failed to provide adequate momentum for reaching universal basic education, those who participated in the Dakar World Education Forum and the setting of the Education For All goals—later incorporated into two of the Millennium Development Goals—were acutely aware that to generate real momentum for a renewed push for universal basic education, this push must be matched by a viable financing structure. The world needed a global compact on education, based on mutual accountability, which would provide the incentives and resources to empower poor nations to implement sound plans to reach free, universal basic education by 2015. The “compact” would be this: poor nations would be responsible for taking ownership of crafting national education plans, with budget accountability and a greater commitment of political and financial resources, while donor nations would provide the additional funding required to ensure that no nation that met its obligations would fail for lack of resources.

To establish the vehicle for financing this global compact, a decision was made in Amsterdam in 2002 to develop a structure that, while not technically a global fund, would operate as a “virtual fund.” Through this virtual fund—which would come to be known as the Education for All Fast Track Initiative—countries would coordinate at both national and international levels to ensure greater donor harmonization and resource mobilization. The global community would thereby provide the funding necessary to fully fill financing gaps and to help countries achieve education for all by 2015.

Thus, the Fast Track Initiative was designed to 1) create a process for coordination such that donors did not put forth conflicting criteria or separate application requirements; and 2) use this process to mobilize resources to help developing nations succeed in implementing sound plans to reach universal basic education.

As we consider the direction of the FTI going forward, it is important to recognize its enormous achievements to date as well as the equally enormous shortfalls in resource mobilization.

Achievements—Despite Funding Shortfall: In just a few short years, and despite significant shortfalls in resource mobilization, the FTI has made great strides in harmonizing donors, moving toward common education benchmarks, and establishing a process that is taken seriously by poor nations and donors alike. The FTI process has already led to the endorsement of 18 country plans and at least marginally increased funding for many of those countries. These are truly significant accomplishments, and it is important that we highlight cases where the FTI process has worked and has helped nations put forward and begin to implement quality EFA plans, accompanied by greater donor harmonization.

Although its structure and successes make FTI the most viable process available for realizing a global compact on education, the lack of certain and substantial increases in donor funding has caused the FTI to fall substantially short of its larger aspirations. It is vital to recognize that this failure is not primarily due to the FTI process or the World Bank, UNESCO or UNICEF officials who have been part of the process—but to a lack of high-level leadership among major donors with regard to making bold contingent financial commitments to make the FTI a true global compact While those of us who work on the EFA-FTI have every obligation to continually improve and reform this framework, we are equally obligated to make clear that the failure to raise donor funding for basic education to a higher level will mean that hundreds of millions of the world’s poorest children will be denied the free, quality education they deserve.

II. Nine Reforms to Fill the Glass for FTI: In that light, I want to make nine points for progress.

  1. The Need for a Bold, Contingent Commitment from Donors to Have a Powerful Incentive Effect for EFA: A true “compact” or “contract” requires that poor nations believe there is a clear and certain commitment by donors to fund universal basic education initiatives as long as poor countries meet their obligations. The importance of this being an upfront commitment should not be underestimated. Without the certainty that funds will be there if poor nations meet their obligations, the FTI will fail to have the strong and empowering incentive effect of a global compact on education. Because education yields long-term—as opposed to immediate—economic benefits, and because it imposes substantial long-term costs, it is critical that ministers of education be able to initiate a bold scaling-up of education with the knowledge that promised funds will be delivered. Without this clear contingent commitment from donors, an education minister may struggle to convince the minister of finance or head of state that broad education expansions are possible without a substantial increase in government spending or a dramatic reduction in educational quality, as more children enter a school system that lacks adequate resources.

    This type of commitment could mirror the debt-relief model , in which donors make a clear commitment to eliminate debt for nations that meet a set of obligations. Although donors do not guarantee that any nation will automatically receive funds, they do make clear that if poor nations meet the expected terms of the compact, they will receive assistance. As such, nations have the incentives to undertake serious reforms because they know with certainty that if they do so, they will receive promised debt relief

    Right now, education is the opposite. No minister of education knows for sure that if his or her country honors its side of the compact, donors will live up to their side. Without this certainty, the FTI or any other education vehicle will fail to empower the willing or provide incentives for the hesitant in poor nations to take bold steps on education.

    Imagine if the G-8 nations made clear that there would be an extra $5 billion per year available by 2008 for nations with strong education plans. Is there any doubt that this certain and contingent fund would inspire more Heads of States and Finance Ministers to work with their Ministers of Education to take bold steps toward universal basic education? With this type of commitment, the FTI would create a “positive competition” in which more developing nations would work hard to “be next” and pressure would be put on donor nations to spread more success. This is the type of cycle of positive incentives and positive competition we need for FTI to meet its aspiration to be a true global compact on education.

  2. Commitments Need to Be Predictable and Long-Term to Encourage Nations to Take on the Recurrent Cost Challenge of Teacher Salaries: Funding must not only be up-front and contingent, but also long-term and predictable, in order to meet the needs of recurrent costs. Teacher salaries alone constitute more than 80% of education budgets in major developing nations, and recruiting, training, and hiring new teachers is one of the most crucial components of expanding access without sacrificing quality. Yet, when nations fear that they do not have long-term assistance to deal with the recurrent costs of teacher salaries, they hesitate to hire the large number of new teachers needed to expand access without a rise in class size and a fall in quality. As one African Minister of Education told me, he fears that if he hires thousands of additional teachers, he will face “aid shock” if the funding runs out and he is forced to lay them off.

    If we want the global compact to encourage poor nations to assume the recurrent costs needed to move toward universal education, we need to make financing more long-term. Donors with shorter funding cycles should at least make clear that funding will be renewed if performance standards are met. Financing mechanisms like the IFF are certainly more geared toward such long-term predictable funding, critical for new hires and new construction of classrooms. Yet, for education, even more traditional 3-5 year funding support should come with a clear expectation that the program will be rolled over if a nation has met its performance agreements, so that developing nations can have the confidence to take on the recurrent costs of teacher salaries. In the long-run the hope must be that economic reform will bring forth greater growth to make developing nations less dependent on outside support for recurrent costs.

  3. FTI Must Be Able to Act Quickly to Help Leaders Seize Political Moments—Such as Eliminating Fees—and Ensure that Bold Steps to Increase Access Succeed: When a nation takes a bold step—as Kenya, Tanzania, Uganda and Burundi have done by eliminating fees—it is crucial that the FTI be flexible and move quickly to mobilize resources and ensure that the elimination of fees and consequent increase in enrollment do not lead to a dramatic rise in class size and fall in quality. Although from a purely planning perspective we might wish that nations increase access in stages, we must understand the political realities: heads of states often have a single moment to take a bold step on universal education, and a smart global compact will be flexible enough to help leaders seize those moments. This means the FTI must not wait to see whether a nation’s elimination of fees or commitment to universal basic education will succeed, but rather must organize itself to work in partnership with those countries to help their bold efforts succeed even if they are only in the beginning processes of applying for the FTI.

    If the FTI fails to move quickly where nations have eliminated fees, the risk is that the larger number of students will lead to a rise in class size, a fall in quality and will therefore undermine such bold efforts to move toward universal basic education. If this happens, the high-level political acts toward free, quality education will be misguided, because the donor community will applaud from the sidelines but do little to actually ensure such efforts succeed. If this takes place, the positive incentives that FTI is supposed to create could be replaced by skepticism and cynicism.

  4. FTI Should Encourage Efforts to Create Success Stories: A core idea of the EFA “Fast Track” was to move quickly to achieve a number of clear successes, in order to show the global community that the compact was real and to create a sense of positive competition for FTI support, thereby encouraging more nations to institute bold reforms. Yet, although FTI has helped produce some additional resources for FTI-endorsed nations, very few believe that FTI is actually aiming to help poor nations achieve 100% or even 95% primary completion.

    Rather than being satisfied when a nation has a significant number of donors or when they have filled modest estimates of financing gaps, the FTI should push for stronger support aimed at actually achieving universal basic education. We should encourage major donors like the US and the UK to give substantial resources to a smaller number of nations, to show the world that universal education can be achieved, and to motivate greater support for the next countries in line. It is crucial that the EFA-FTI process be designed to demonstrate model success stories. This means seeking greater support for nations like Kenya or Tanzania—which still have gaps even if they have several donors—so the world can see that fee elimination can work. It also means encouraging major donors to make bold commitments in smaller nations that do not have much donor support, where for relatively little they could help spread the number of EFA success stories.

  5. FTI Should Not Low-Ball External Financing Gaps: The FTI should use a realistic estimate of the external financing gap for reaching universal primary education, without overly optimistic estimates of the increase in domestic spending, and with a full inclusion of the costs of dealing with AIDS; of needed incentive programs for girls, orphans and other vulnerable children; and of the added pressure on early secondary education. With DfID now putting forward a number of $10 billion annually—which takes into account inflation and the lack of progress since 2001—it is simply not credible for the FTI to offer an estimate of only $2.1 billion. FTI explains such low estimates by saying that it deals with only a subset of developing nations. Yet, the numbers put out by FTI are often interpreted as the full financing gap. The FTI should put out the full number as their headline number, and then explain their estimate as a subset number.

    Furthermore, few actually believe that the financing gaps identified by FTI for specific countries—if completely filled—would lead to universal education. The numbers often seem to be modest estimates of what the donors and the country agreed as needed for a specific year of the plan—not what is actually needed to help that nation truly achieve UPE by 2015.

    Furthermore, these estimates do not seem to truly take into account the types of incentive programs needed to get hard-to-reach children into school, the costs due to AIDS, and the added pressure on secondary education by having so many more children complete primary education. Therefore, FTI should seek to produce a realistic estimate of the external financing gap for reaching UPE and UBE, and to explain any different numbers as subsets of that total. In doing so, they should consult with UNESCO and the NGO community to try to establish greater consensus around the true level of resources needed to reach UPE and UBE.

  6. FTI Should Have a Process—Perhaps with UNESCO—of Publicly Identifying the True Size of the Gaps at the National and Global Level: The FTI now seems to take the approach that if a nation has significant donors and a gap remains, that gap is simply the duty of the donors in that nation to mobilize the necessary resources. Yet, we cannot expect the donors to mobilize pressure on themselves or to have the recipients have to loudly lobby against the donors who are around the table helping them. This is why it is critical that the FTI and UNESCO strongly publicize the true financing gap and pressure the entire global community to fill that gap.

    There should be a far more high-level effort to publicize true financing gaps, and—as the Global Campaign for Education has suggested—benchmark the efforts of donors so we can identify where truly additional resources are being committed.

  7. Expand the Catalytic Fund or Establish a Second Window: The FTI should seek to meet countries’ external financing gap either through increased bilateral assistance or through a pooled fund that can be disbursed to nations which lack a sufficient donor presence or which have many donors but still face financing gaps. If some donor nations would prefer to give through a pooled fund as opposed to through bilateral support, we should facilitate that opportunity, and vice versa. Ultimately, we should be less focused on how many donors a nation has and more focused on the size of their financing gap and how it should be filled.

    In that light, it seems the simplest reform would be to simply expand the Catalytic Fund so that it can help any poor nation fill its financing gap—whether that gap is due to a lack of donors or to a shortfall in financing from existing donors—and so it can offer support not only in the immediate term, to jump-start reforms, but also on a longer-term basis. Our goal should be to provide such expanded coverage with minimum complications and duplications. If we cannot simply expand (and possibly rename) the Catalytic Fund, then I would support the Netherlands proposal for an FTI Expansion Fund. This seems like a workable option to provide more predictable, longer-term financing to countries that still face financing gaps after a few years of Catalytic Fund support. Ultimately, we should remember that the key constraint is not the number of windows, but the political will of donors to vastly increase their support for education.

  8. FTI Should Address the Needs of Displaced Children and those in Fragile States: The FTI is based on working with, inspiring, and rewarding functioning governments. While this model should be the primary model for a global compact on education, we must recognize that it does nothing for children in refugee camps or living in fragile states. If we truly wish to meet the MDGs—and if we believe children in dysfunctional states or emergency situations deserve an education as much as children in functioning states—we have no choice but to have a strategy for meeting the education needs of these children.

    The background paper prepared for this meeting on expanding the FTI to fragile states offers several options for supporting education in fragile states. It recommends increasing the EPDF’s focus on fragile states, and using it to support capacity building and needed analytic work. The paper also recommends building a base of knowledge and lessons learned—including on the possibility of using alternative financing, oversight, and service delivery channels, such as UN agencies and non-state providers—to inform possible future expansion of the Catalytic Fund into select fragile states.

    Care should be taken to ensure that expansion into fragile states does not jeopardize engagement with functioning governments, but we must also recognize that engaging with fragile states will likely require greater flexibility and innovation on the part of the FTI and of donors. Such efforts, however, are absolutely necessary if we are to reach the goal of education for all by 2015.

  9. The Need for a More Inclusive Process—So that FTI Helps Facilitate an EFA Global Compact—with One Entry Point for All Developing Nations: The FTI should remain the central process for a global compact on education. However, the notion that nations are only part of the global compact when they have successfully gone through the FTI endorsement process undermines the notion of a global compact. There should be more of an effort to reach out to nations that have taken bold efforts to eliminate fees—to provide assistance and partnership at these crucial times—even if they are only at the first stages of getting into the FTI process. On the other hand, larger nations—such as South Africa, Pakistan and India—might have a greater desire to come into the FTI process if they thought it would help give them a global seal of approval and help identify their remaining financing needs to reach the EFA goals. These reforms, together with the fragile states initiative, would be progress in making FTI more of a true global compact. Expanding the reach of the FTI would also call for greater partnership and ownership from UNESCO and UNICEF, which have a critical role to play in forging a more comprehensive Global Compact on Education.

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