Will IMF policy advice align with new UNESCO Declaration on education finance?

9 December 2021

A new UNESCO declaration agreed in November called on countries to, “Raise more revenues to increase education budgets, in particular via measures that strengthen the design and the equity of the tax system.” It also pushed governments to implement previous commitments to “allocate at least 4-6% of GDP and/or at least 15-20% of total public expenditure to education.”

Such efforts are likely to be frustrated by IMF’s conditions that would require Ministers of Finance to re-impose austerity (see Dispatch Springs 2021). As Isabel Ortiz and Mathew Cummins argued in April’s Global Austerity Alert, a rapid return to austerity, including public sector wage bill constraints, is now predicted for 85 per cent of the world’s population, affecting 159 countries (see Observer Autumn 2020).

Analysing IMF loans from the past five years across 15 countries, ActionAid International’s October report demonstrated that the Fund’s medium-term advice resulted in these countries dropping below the global average for public sector wage bill spending (see Observer Autumn 2021). Despite the IMF’s claims that cuts should be accompanied by actions to expand tax revenues, even the few countries that did so were advised to cut spending on public sector wage bills.

David Archer of ActionAid International said, “To make a real difference, education advocates will need to draw attention to the gross contradictions between their aspiration to spend more and IMF’s austerity policies…They need to enter a systematic dialogue with the IMF about how their wider policies have unintended consequences on education spending – and that dialogue needs to be replicated with Ministries of Finance in every country.”