IMF and Education
IMF limit what countries can spend on education in many ways, either directly, through limits to teacher wage bills, or indirectly, by imposing tight limits on overall spending or setting inflation targets that make spending increases impossible.
The whole way in which the IMF frames economic planning around a 3-year cycle also makes it difficult for any country to justify investment in education (where the returns are only felt over the longer term).
ActionAid is working on the impact of IMF policies on education across 25 countries – getting education activists to interview Ministries of Finance and Central Banks about the constraints on education spending and how they are linked to IMF policies.
Studies from eight countries were compiled into a report published in September 2005 called, Contradicting Commitments: How the Achievement of Education For All is being Undermined by the International Monetary Fund
This is now being followed by Confronting the Contradictions: Time for Action on Education (2006)
The impact of the IMF’s constraints on education budgets is felt most acutely in the inability of countries to hire more teachers.
The IMF policies also impact women’s rights. As a result, many countries unfortunately will not be able to increase spending to levels necessary to meet the MDGs by 2015.
At Abuja in May 2006 twenty-two African Ministers of Finance pledged to develop long term education plans – but there are real question marks over how these ministers will address the contradictions between developing ambitious education plans and satisfying the IMF.
Many well-known economists argue that the IMF’s fiscal and monetary targets are unjustifiably low. See publication Changing Course: alternative policies to achieve the Millennium Development Goals and fight HIV/AIDS.
Yet the control that the IMF retains over the monetary and fiscal policies of other countries is astonishing. If countries do not abide by IMF policies aid can and has been cut off. This raises concerns around North-South power relations and adds up to a denial of sovereignty and democracy.
Change is possible. Some of the IMF’s biggest debtors, middle-income countries such as Argentina, Brazil, Indonesia, and Turkey and some smaller countries such as Bolivia, Uruguay and Serbia are paying off their IMF loans and openly stating their desire to no longer have the IMF control their economy.
Civil society organizations and citizens are increasingly demanding their government to openly debate the trade offs and sacrifices made between the IMF’s rigid policies and increasing investment on education and health.