Financing EducationFinancing Education

The World Bank

Latin America and the Caribbean Region

23 July 2003

                       

OutlineOutline

• Lending

• Challenges/strategies

• Future approach

Number of Projects approved per year

FY97 2

FY98 11

FY99 4

FY00 3

FY01 7

FY02 6

FY03 70

200

400

600

800

1,000

1,200

mill

ion

s of

U$

1997 1998 1999 2000 2001 2002 2003

Volume of World Bank LACVolume of World Bank LAC Specific Specific Education LendingEducation Lending

FY97-FY03FY97-FY03

Specific Education Lending FY03: U$ 432 million

Volume of Total World Bank Volume of Total World Bank LACLAC Education LendingEducation Lending

0

200

400

600

800

1,000

1,200

mill

ions

of

U$

1997 1998 1999 2000 2001 2002 2003

Specific Adjustment

Total Education Lending FY03: U$ 772 million

Specific and Adjustment Specific and Adjustment Education Education LendingLending for LAC for LAC

FY02-FY03FY02-FY03

Total Education Lending FY02: U$ 710 million

Total Education Lending FY03: U$ 772 million

Number of projects

FY02 FY03

Specific 6 7

Adjustment 3 6

Total 9 13

$595

$115

$432

$340

0

100

200

300

400

500

600

700

800

millions

of

U$

2002 2003

Specific Adjustment

Education Lending for LAC as a Education Lending for LAC as a % of total WB education lending% of total WB education lending

6%

38%30%

11%

43% 49%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1997 1998 1999 2000 2001 2002

SAR

MNA

ECA

EAP

AFR

LAC

Evolution of Evolution of LAC Education Lending LAC Education Lending by Sub-Sector, by Sub-Sector, FFY9Y911-FY-FY0303

FY91-FY96

Primary Education

46%

Tertiary Education

12%

Vocational Training

19%

General Education

9%

Pre Primary 3%

Secondary Education

10%Adult Literacy/ Non

Formal Ed.1%

FY97-FY03

Adult Literacy -

Non Formal Ed.0%

Secondary Education

11%

Pre Primary 5%

General Education

32%

Vocational Training

1%

Tertiary Education

28%

Primary Education

23%

Total Total World Bank Lending World Bank Lending Volume and CompositionVolume and Composition FY02 FY02

I ndustry - Trade

7%

Energy - Mining10%

Law, J ustice - Public

Administration24%

I nformation - Communication

1%

Education7%

Transportation12%

Agriculture Fishing and

Forestry6%

Water, Sanitation -

Flood protection3%

Health16%

Finance14%

Total WB Lending for FY02: U$ 19.5 billion

LACLAC Lending Volume and Lending Volume and CompositionComposition FY02 FY02

Finance17%

I ndustry - Trade

1%

Energy - Mining10%

Law, J ustice - Public

Administration30%

I nformation & Communic.

0%

Education13%

Transportation11%

Agriculture Fishing and

Forestry2%

Water, Sanitation -

Flood protection

1%

Health15%

Total LAC Lending for FY02: U$ 4.4 billion

ChallengesChallenges

• Basic education –reaching last “10%”

• Secondary

• Quality

• Post-secondary/lifelong learning

• Research and innovation

BasicBasic Education 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

Secondary enrollment in LAC Secondary enrollment in LAC – below world averages– below world averages

.

Net

sec

onda

ry e

nrol

men

t rat

e, 1

998

Log of per capita GDP, 19985 6 7 8 9 10

20

40

60

80

100

KHM

VNM

LAO

MNG

NIC

CHN

GUY

PNG

IDN

PHL

ECU

SLV

PRY

JAM

DOM

PER

COL

THA

BLZ

VEN

MEX

CRI

MYS

BRA

TTOCHL

ARG

KOR

HKG

But quality is poorBut quality is poor......Outcomes uncorrelated with incomeOutcomes uncorrelated with income

Third Grade Mathematics Test Results and

GDP per capita for selected countries

02000400060008000

100001200014000

Arg

entin

a

Chi

le

Mex

ico

Bra

zil

Ven

ezue

la

Dom

. Rep

.

Par

agua

y

Bol

ivia

Hon

dura

s

Cub

a

050100150200250300350400

GDP per Capita Mean Scores

Lifelong Learning/Lifelong Learning/PostPost - - SecondarySecondary

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

Innovative DeliveryInnovative Delivery

• Utilizing the private sector• Demand-side finance• Student finance (higher education

student loans)• Lifelong learning

Utilizing the Private SectorUtilizing 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)

Student FinanceStudent 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

FutureFuture

• Service deliveryBasic

Quality

Governance

• Knowledge economySecondary education

Sustainable higher education

Lifelong learning

Moving ForwardMoving 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

Financing and Provision of Financing and Provision of EducationEducation

Provision

Financing Private Public

Private Private Schooling

Home Schooling

User fees

Public Vouchers

Charter Schools

Contracting out

Traditional Public Schools

MessagesMessages

• Investigate the market for education

Demand and supply

• Separate finance and provision

Role of private, NGO sector

• New roles for:

government, students, families,

communities