External Funding for EFA

1. External Funding for EFA Is EFA-FTI living up to its potential?

2. Intent • EFA-FTI: to facilitate low income countries to achieve or make major progress towards achieving the education MDG’s and therefore EFA itself • To be understood, must be seen in context of the 1990-2000 EFA experience • Despite initial miscommunication (and a misleading name), there is growing recognition that EFA-FTI is not all about external financing • Increased financing is critical, but in particular, the issue is one of more efficient expenditures

3. Initial focus on financing almost derailed EFA-FTI, led to dissatisfaction on all sides • Some plans were endorsed that on reflection, were not necessarily credible or sustainable (i.e., plans that address data, policy and capacity constraints, in addition to financing) • In spirit of learning by doing - and perseverance - the EFA-FTI Partnership is now clearly advancing progress at the country level • Focus is on quality, efficiency and equity of basic education

4. Neither is EFA-FTI all about budget support, as desirable as this may be • What’s important is to end fragmentation; semi-independent or parallel project implementation driven by supply rather than demand • EFA-FTI is synonymous with a single national planning process and development of a national education sector plan • Room for project approach when they support activities that are clearly within the national plan • Project Approach used to complement a Program-Based Approach in line with the findings of “Joint Evaluation of External Support to Basic Education”

5. Consensus on External Financing • EFA-FTI links increased external financing to country performance • Country performance measured against EFA-FTI Indicative Framework benchmarks – based on evidence of EFA success in “on track’ countries • Framework provides a guide for policy reform and analysis of costing and domestic financing • If unit costs are too high (i.e. inefficient, therefore unsustainable) the national plan would not be considered ready for funding without a mutual examination of reducing those unit costs • Similarly, Donors Indicative Framework offers opportunity to analyze donor performance

6. Financing Progress • EFA-FTI lays claim to mobilizing $200m for first 7 countries – 50% increase • Approximately $250m has also been committed by 5 bilaterals to the Catalytic Fund for a three year period • However, estimated that $4-5B per year is needed to achieve UPC in LDC’s

7. Catalytic Fund • Crucial, but not what its all about – majority of external funds will come from a bilateral commitments • Transitional fund of last resort - meant to kick start implementation of national plans in advance of bilateral funding commitments • Yemen, Nicaragua originally lacked bilateral champions; now getting behind national plan • Mozambique with 26 donors, has no need • Countries such as Uganda, Tanzania or Bangladesh would also not be eligible for CF

8. Example of Honduras • Strong Government/Donor partnership made possible by hard work and EFA-FTI • Result:10 donors signed MOU with GoH defining how they will work together in support of a single program led by Secretariat of Education • Endorsed plan based on 5 components: • Efficiency of basic education (improving the flow of student cohorts through the primary cycle) • Strengthening pre-school • Raising quality of classroom instruction • Equity and access to bilingual education • Rural educational networks

9. Flexible modalities of donor support (Honduras cont’d) • Pooled Fund (direct support to national plan using gov’t administrative systems) • Projects (traditional bilateral projects articulated within EFA-FTI/national plan) • Non-Project Technical Assistance (e.g. UNICEF) • Co-ordination (e.g.. WFP school feeding) Working towards harmonization, but trying to ensure donor group did not break into inner and outer circles

10. Funding Results (Honduras cont’d):

11. Similar examples of increased external funds to national plans in Nicaragua, Yemen and Vietnam, but also Tanzania and Bangladesh • Commonality is not necessarily FTI, but strong donor collaboration working with strong MoE leadership (also key to additionality) • Tanzania feels increased external support due to • Political will and good governance • Country ownership • National policies which take into account local circumstances and local development plans (not by chance that these are all principles of EFA-FTI)

12. Where’s the Money? • Continue to press for achievement of O.7 goal • Nordics, NL led the way; France, UK , Spain have made recent announcements; USA’s Millennium Challenge Account • Canada is currently working on an 8% annual increase, but would need 10% to meet our share of the cost of achieving the MDG’s. This will be dependent on priorities of future governments • Strengthening Aid Effectiveness calls for concentrating resources in far fewer countries and reducing active sectors. This is a common approach – will it increase donor darlings/donor orphans? • What of unanticipated emergencies? -- Afghanistan, Iraq and Haiti are top receivers of Canadian ODA despite the fact they had previously not been in CIDA plans • Achievement of MDG’s mean developing countries need long term predictable financing commitments, but this is extremely difficult when global situation itself is unpredictable

13. Conclusions • Increasing external support dependent on increasing political support • G8 Education Task Force helped create momentum in Canada to increase support • We welcome the UK presidency which looks to put education back on the G8 agenda in 2005 • Explicit reflection on EFA-FTI by Development Committee Ministers also needed in order to generate renewed political commitment and momentum

14. Conclusions (cont’d) • The real work takes place at the country level i.e., EFA Framework MOU in Honduras • EFA-FTI principle of country-led process, based on reciprocal obligations, gives best chance of developing credible plans for meeting EFA targets • Donor Political Will needed for the Big increases in ODA, but increased funding to national sector plans will be country by country, and will go to the country and the sector with credible plans