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Strategy sessions II.2 > Debt Relief
World Education Forum
Dakar, Senegal 26-28 April 2000
Utilizing debt relief for education
Issues Paper
Strategy Session II.2
Original : English
 This Strategy Session brings together presenters who are representative of the global partnerships that are being built around the issue of debt relief for education - Ministers of Education from countries working on debt relief strategies that can have an impact on education development, a representative of a bilateral agency that provides significant support for education in the developing world, and representatives of an international donor agency that provides considerable support for educational development. The session focuses on the centrality of education in countries' poverty reduction efforts and macroeconomic development.
1. Background
 The challenges countries face in universalizing access to quality education are many and complex. This is, however, a time of tremendous opportunity. New developments and technologies offer more and better prospects than ever before for improving the education, health and well-being of the world's people, and particularly the world's poorest people. And, with the development of the global market and faster communications technology, education, more than ever before, is central to countries' economic growth and development prospects.
Governments across the world hold the keys to open the doors so their people can seize the new development opportunities. Clearly, one of the most critical keys opens the door to education. But, this must now be a different education, one that encourages a different type of learning than in the past. And, one which is more inclusive. Only if countries move to meet these educational challenges will their people be able to grow and thrive in the new economic world in ways that include substantial poverty reduction.
New policy frameworks are being put in place to address poverty - frameworks within which education and social sector development are closely aligned with overall development objectives. But, critically, these imply partnerships that support country-owned and country-driven initiatives to address poverty and build human capital. In line with governments' need to respond to emerging priorities with greater agility, precision and capacity, different international organizations have responded to country efforts by offering new, more flexible, longer-term support for sector-wide reform programmes that are better-integrated with social macroeconomic objectives. Several national and global actors have also been working actively to reduce countries' debt burdens so they might increase and/or rationalize education financing and rethink the role of education in development as a whole to support needed changes and expansions in coverage.

This Strategy Session will provide information on these new initiatives that can be an opportunity if well used. It will illustrate how these partnerships work, or could work, to assist countries to develop and refine country-owned education sector policy frameworks, to set these policy frameworks within broader macroeconomic frameworks, and to utilize debt reduction processes to rethink the linkages of EFA goals within broader development goals.

 2. The Heavily Indebted Poor Countries Initiative
The Heavily Indebted Poor Countries (HIPC) Initiative was initially launched by the World Bank and the International Monetary Fund (IMF) in 1996, but has since gained the support of many international partners and was enhanced in 1999. The core aim of HIPC is to eliminate the unsustainable debt of the world's poorest, most heavily indebted countries. As such, it aims to help remove the bottlenecks to development and increase the poorest countries' capacities to provide for needed increases and/or rationalizations in social sector and education investments. HIPC has the potential to release very significant levels of resources for investment in the social sectors.

In Bolivia, for instance, it is estimated that HIPC will result in some US$90 million per year being made available for such investments. Total debt relief service for Uganda under the original and enhanced HIPC frameworks will yield approximately US$2 billion over the long term. The process to get the full benefits of this initiative can provide an enabling environment to review the coherence of development efforts; the actions needed to attain EFA goals, and the necessary enhanced linkages between educational outcomes and social and economic growth.

3. Poverty Reduction Strategies
At the September 1999 Annual Meetings of the World Bank Group and IMF, Ministers endorsed the proposal that country-owned poverty reduction strategies should provide the basis of all World Bank and IMF concessional lending and should guide the use of resources freed by debt relief under the enhanced HIPC Initiative. This strategy will be reflected in the Poverty Reduction Strategy Paper (PRSP) prepared by country authorities with the broad participation of civil society.
A poverty reduction strategy would be expected to: (a) be prepared by the country; (b) focus on faster and broad-based economic growth, which requires macroeconomic stability; (c) reflect a comprehensive understanding of poverty and its determinants in the specific country context; (d) assist in choosing public actions that have the highest poverty impact; and (e) establish outcome indicators that are set and monitored using participatory processes.
The PRSP aims are clear: to strengthen country ownership of poverty reduction strategies; to broaden the representation of civil society - particularly the poor themselves - in the design of such strategies; to improve coordination among development partners; and to focus the analytical, advisory, and financial resources of the international community on achieving results in reducing poverty.
It is important to point out that the principles underlying the PRSP approach are not new, but build fundamentally on research, experience, and most importantly, innovative and successful programmes pursued by many countries. Indeed, a number of low-income countries, including early recipients of HIPC assistance such as Uganda and Bolivia, have already made substantial progress in developing their own participatory poverty reduction strategies.
In these countries the process has been part of the Comprehensive Development Framework (CDF), a multi-sectoral approach designed to assist countries in assessing and integrating all the elements of development - social, structural, human, governance, environmental, economic and financial. By focusing more on development goals and the interrelationships between these various elements, the CDF is expected to improve the effectiveness of poverty reduction efforts and enhance countries' overall development. The CDF principles are based on a development process in which there is ownership by the country, partnership with all stakeholders (government, civil society, assistance agencies, and the private sector), a long-term vision of needs and solutions, and equal consideration of structural, social, macroeconomic and financial concerns. CDFs inform policy frameworks and serve as the basis for donor consultation and negotiation. As such, they demand strong political ownership and commitment, better informed policy decisions rooted in broader sectoral and macroeconomic frameworks, improved efficiency in the allocation and utilization of public resources, and the flexibility and capacity to cope with changing economic circumstances. This whole process opens a wide opportunity for linking education to the poverty reduction strategy, but more so to the core of development policy.
4. The linkages between the three new initiatives
The HIPC, PRSP and CDF initiatives each greatly facilitate establishment of closer linkages between education sector policy frameworks and macroeconomic frameworks. The very way in which the development agenda must be pursued under these various initiatives promotes and compels consideration of the linkages and interplay between different sector strategies and investment strategies. International partners and alliances can play important roles in fostering these linkages in countries. They can use their platforms, both in national and international arenas, to increase dialogue and coordination, not only between international players, but also between countries' Ministries of Finance and Ministries of Education. The latter is essential in fostering tighter linkages between countries' macroeconomic frameworks and education development strategies.
Ongoing initiatives in a number of HIPC countries show that considerable progress is being made when national governments draw on global partners for the support they feel they need to develop the CDF and prepare the PRSP.
5. Key questions for the session to address

The presentations and ensuing discussion during the session will be focused around four key issues:

1. How can a debt relief scheme be an opportunity to rethink educational policy in the context of poverty reduction and of a country's efforts to improve basic education opportunities?

2. What are the Heavily Indebted Poor Countries initiative (HIPC) and Poverty Reduction Strategy (PRSP) initiatives and their eventual impact on education?

3. What role can the international community play concerning these new initiatives?

4. How to seize this opportunity for building a sustainable education process to accomplish EFA goals?

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