EI explores impact of IMF policies

published 24 September 2012 updated 15 October 2012
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Linking national investment in education to a broader economic agenda

The report argues public investment in education cannot be separated from the larger context of national economic policies and economic development.

The key to increasing education financing in the future is to enable countries themselves to adopt alternative development policies. This will lead to better mobilisation of domestic resources, while progressively reducing their dependence on foreign aid for education. It is crucial that education advocates contribute to these development policy issues. EI calls on them to take into account the broader socio-economic context in their own countries, and not limit themselves to fighting for education. They must get involved in advocacy campaigns against austerity measures which inhibit economic growth and development, and put pressure on decision-making authorities, both at national and international level.

Monitoring IMF and underlying neo-liberal policies

The report also explains how the neo-liberal ideology behind IMF policies is of much greater concern than IMF formal interventions in countries.

Even countries which are not applying IMF loan programmes subject to neo-liberal conditions are willingly adopting IMF-like policies, such as balanced budgets and a fight against inflation.

The global understanding about macroeconomic policy is narrowly focused on restrictive and short-term macroeconomic stability. It must be challenged by education advocates and their allies. The latter must stimulate broader public discussions about enhancing support for national economic development and increasing public investment in education.

A report, Impacts of IMF Policies on National Education Budgets and Teachers: Exploring Possible Alternatives and Strategies for Advocacy, provides a critical review of how current IMF macro-economic policy conditions and advice impact on the ability of borrowing countries to finance national education budgets, and wages for public sector teachers.

Possible alternatives to IMF policies

The study was jointly commissioned in 2011 by EI and one of its US affiliates, the National Education Association, from an independent researcher, Rick Rowden. It explores how such policies affect the ability of governments to achieve Education for All goals, as well as the progressive realisation of the Right to Education for their citizens.

The report also reviews other alternatives, such as more expansionary fiscal, monetary and financial policy options, allowing greater domestic financial resources to be available for future education budgets.

It examines in-depth three country case studies of current IMF loan programmes in Jamaica, Uganda and Latvia, exploring their shortcomings and the consequences of insufficient domestic resources being allocated to education budgets.

Finally, it proposes national and international advocacy strategies, as well as a framework to increase public scrutiny of current IMF loan programme conditions.