Stimulating Investment in Global Education

1. Stimulating Investment in Global Education February 2003

2. Overview The Story To Date Why EdInvest? Pressures for Change - Global Education Market - Education Reform - New Roles Some Lessons Learnt from West Africa The Story going Forward Products and Services Outcomes and findings Accomplishments in 2002 Plans for 2003 Room for Partnership?

3. The Story To Date Why EdInvest? Pressures for Change - Global Education Market - Education Reform - New Roles Some Lessons Learnt from West Africa

4. Why EdInvest? • Global education industry • IFC receiving education proposals • Education reform

5. Global Education Market • 113 million children worldwide have no access to primary education. (World Education Forum, Dakar) • Global demand for higher education will reach 160 million by 2025, up from 84 million today. (Merrill Lynch) • Education expenditure in developing countries is inadequate to cover rising enrollments: (UNESCO World Education Report) • Over the past 50 years, K-12 enrollment in developing countries has increased by a factor of 8, and higher education enrollment has increased by a factor of 14. • Public expenditure per student has remained generally flat in relation to GNP, particularly for the least developed countries.

6. Household Spending (% of total ed. spending) all levels Uganda Chile Korea Indonesia United States Mali Japan Germany France Denmark Netherlands Sweden 57 45 41 37 26 25 23 22 9 7 3 2 0 10 20 30 40 50 60

7. Private Enrolment in Tertiary Education

8. Education Reform Growing private provision: • Vietnam’s “semi-public” schools • Deregulation: eg, Senegal, Tanzania

10. Competition Scholarships and vouchers: • Chile, Colombia, Côte d’Ivoire

11. Contracts Private management and subsidies: • Kenya, West Africa

12. Public Role in Education • Income distribution • Capital market imperfections • Information asymmetries • Externalities

13. Private Role in Education • Reduce fiscal burden • Improve efficiency • Enhance choice and diversity • Increase accountability

14. Financing and Provision

15. Regulatory Framework: West Africa The Gambia Senegal Côte d’Ivoire Entry/Exit Limited Relatively liberal “Authorized” or Regulations No waiting period “chartered” schools “Authorized” or Take account of “recognized” schools impact on existing schools Fees No limits for No limits Ministry of fully private; Commerce Grant-aided ratifies fees limited Direct No for private “Recognized” Subsidies to primary Subsidies fee-paying private schools schools Yes for Grant- subsidized Public sponsorship aided of students in private schools

16. Regulatory Framework: West Africa The Gambia Senegal Côte d’Ivoire Subsidized Yes No No land/ buildings Tax/Customs Exempt from No education No education Exemptions duties, income specific specific tax & sales taxes, exemptions. Exemptions training/ex-pat Non-profit -only for non-profit levies exemptions Curriculum Free Centrally Centralized, but prescribed but variations allowed variations allowed for French schools School Hours Free Free Free School Year Free Free Set centrally after discussion

17. Market Share (Percent) 25 21 19 20 15 15 10 5 0 The Gambia Senegal Côte d'Ivoire Private Education in West Africa, late 1990s

18. Growth in Enrollments (private institutions, %) 66 Tertiary 8 Secondary/Senior Secondary 72 20 Middle/Junior Secondary 32 123 6 Primary 123 40 0 20 40 60 80 100 120 140 Côte d’Ivoire(Average annual growth from 1991/92 - 1995/96) Senegal (1987/88 - 1997/98) The Gambia (1993 - 1996)

21. The Story Going Forward Products and Services EdInvest Outcomes Accomplishments in 2002 Plans for 2003 Room for Partnership?

22. Products and Services • Engages in four major activities: • conducts research into market-based solutions in education markets, with a particular emphasis on developing countries; • undertakes consultancies that enable the discovery of underlying patterns and processes that are at work in the burgeoning global education industry; • offers training modules with a particular focus on the institutional requirements for public-private partnership; and • markets and promotes conferences.

23. EdInvest Outcomes • Internal: IFC-World Bank dialogue, strategy, new department, investments • External: demand for consulting • News/reviews of global industry • Assistance to education entrepreneurs

24. EdInvest Outcomes • Internal: IFC-World Bank dialogue, strategy, new department, investments • External: on-line resources • News/reviews of global industry • Market studies (Africa, Eastern Europe) • Conferences

25. EdInvest Outcomes • Market surveys (W. Africa) • Regulatory framework is key • Education entrepreneurs worldwide • Research program

26. Accomplishments in 2002 • EdInvest has achieved a lot during its first year of operation: • EdInvest website of global investment opportunities; • monthly newsletter about global education market activity – distribution has doubled within the past year to more than 7,000 individuals worldwide; • global education conferences– in Athens, Lisbon, Phoenix and London; • market analyses on Saudi Arabia and Ethiopia and, in the Balkans, Albania, Bulgaria, Croatia, FYR of Macedonia, Romania; • training – through the United Nations Training Institute, the World Bank Institute and the Institute of Economic Affairs, and • leveraged additional resources – from multi and bilateral contracts and commissions from the private sector.

27. Activities for 2003 (through June) - Actual • Consultancies Global Study: Private Education for the Poor (Templeton Foundation) India: Study of Demand and Supply for SME in Education (IFC) Saudi Arabia: Partners in Progress (GKSA) Rwanda: Private Education Sector Study (DfID) Africa (pending): Secondary Education in Africa Study Financing and Costs (WB) • Conferences India: Education India (April) Portugal: World Education Market (May)

28. Activities for 2003 - Planned • Development and rollout of an Education Development Finance Facility for Private Education. • Establishment of a virtual “Community of Practice” in which public and private education stakeholders share their reflections and findings; and • Hosting of global e-discussions.

29. The Education Development Finance Facility • Objective: To create a vehicle that can enable disbursement of small amounts (eg. $200,000 to $1.5 million) to education enterprises in a secure manner. • Required: Information: -access for enterprises to existing sources of commercial finance; - demand from enterprises for commercial finance products; - potential partners among commercial providers of finance; - parameters and possible structures for an IFC sponsored facility. Infrastructure: - to disburse the funds; - to ensure quality.