Innovative financing solutions to achieve one year of free and compulsory preschool

Abundance of evidence highlights that providing quality early childhood care and education (ECCE) is fundamental to children’s life-long success. This evidence was one impetus to create Target 4.2 within SDG 4: “By 2030, ensure all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education”.

Investing in ECCE is important to achieve SDG 4

The Third Asia-Pacific Regional Policy Forum on Early Childhood Care and Education in June 2018 adopted the Kathmandu Statement of Action to accelerate the progress toward SDG 4.2.

The statement identified increasing investment in ECCE as a priority action and suggested to come up with innovative modality for financing ECCE.

As reiterated by the global and regional commitments to achieve Target 4.2, adequate finance for quality ECCE programs is one of the most effective investments a country can make to address inequity, break the cycle of poverty and improve socio-economic outcomes later in life. ECCE therefore can act as a powerful equalizer.

ECCE is chronically underfunded

Despite these arguments, ECCE remains a chronically underfunded sub-sector in the Asia-Pacific region. The figure below shows that spending on pre-primary education as a percentage of total government expenditure was below 10% in the region and has not increased much in most countries.
 

Pre-primary education expenditure as a percentage of total government expenditure, 2012-2014
Source: UNESCO Bangkok and SEAMEO CECCEP. 2019. Regional Guidelines on Innovative Financing Mechanisms and Partnerships for Early Childhood Care and Education (ECCE). page10.

According to the OECD-CRS database (2018), 1.7% of total ODA to education goes to pre-primary education, indicating that external funding for ECCE is also not sufficient and not sustainable to provide quality ECCE services.

The burden of paying for early childhood education often falls on households, making it difficult to secure sufficient and sustainable funding (UNESCO Bangkok, 2016).

5 innovative financing mechanisms and partnerships for ECCE in the Asia-Pacific Region

Given this situation, many nations face difficulty to achieve Target 4.2, especially as it calls for “free” pre-primary education.

Although it is clear that the first and foremost policy action required is to increase public resources for ECCE, it is often difficult when governments face limited fiscal capacity. There is a need to explore and adopt alternative and innovative financing mechanisms to support it.

UNESCO Bangkok, in collaboration with SEAMEO Regional Centre for Early Childhood Care Education and Parenting (SEAMEO CECCEP), developed the Regional Guidelines on Innovative Financing Mechanisms and Partnerships for ECCE.

The guidelines define innovative financing as nontraditional financing mechanisms that:

• mobilize domestic as well as international financing
• include innovations in service delivery as well as in resource mobilization
• involve multilateral management and partnerships with private entities
• generate substantial and stable flows of funds for development
• help to enhance the efficiency of financial flows.

Based on this definition, the guidelines documented 26 innovative cases for countries to learn from.

• Operational costs for early childhood education programs in Indonesia

The Ministry of Education and Culture of Indonesia has developed an operational costs subsidy for early childhood education centers. Criteria have been set for the use of these funds for infrastructure, teaching materials, teacher costs, and others. In addition to the subsidy, ECCE centers can charge a wide range of fees depending on the local context and future development plans.

• Sin taxes in Thailand, the Philippines and Vietnam

Many countries such as Thailand, the Philippines and Vietnam have adopted a “sin tax” policy as a strategy to control and discourage harmful behaviors of the people, which include tax on cigarettes, alcohol, and gambling winning. This mechanism creates additional revenue that can be used to encourage to fund the expenditures in positive areas such as health and education infrastructure and services. Although there are not many cases that have used sin tax revenue for ECCE provisions, the sin tax policy model has potential to generate additional funding.

• Corporate social responsibility in Sri Lanka

One of the largest companies in Sri Lanka, Hemas Holdings, has been implementing a project called Piyawara since 2002. Hemas Holdings provides full-scale financial support for setting up preschools for children aged 3 to 5, and covering maintenance and operational costs, teacher salaries, and teaching and learning materials.

Meanwhile, the Ministry of Women and Child Affairs takes care of teacher training and also provides teaching and learning materials. The provincial council and local government conduct general maintenance of the schools and monitor quality assurance, teacher training and parenting.

• The Quality Education India development impact bonds

Under the development impact bond (DIB) mechanism, the risk investor provides working capital to enable the implementing partners to deliver education interventions. Investors receive dividends only if the outcomes are achieved. In India, a number of stakeholders play a role in the Quality Education India DIB, which is the largest education DIB in the world. The mechanism enables implementation of the program over the four-year lifetime and allows for close collaboration between a broad coalition of private, not-for-profit and public sector partners.

• Partnerships for children with special needs in Malaysia

A strong cooperation between the Ministry of Education, the Ministry of Health, and the Department of Social Welfare allows systematic attention to a range of challenges ton integrate children with special needs in early childhood development. Activities both child development and the teaching-learning process in order to increase academic achievement and social integration.

Innovative financing mechanisms and partnerships should not divert attention away from the absolute need for dedicated and stable public financing of ECCE. However, in order to increase access to and the quality of sustainable ECCE programs, a range of innovative financing solutions need to be established in collaboration and synchronization among the government, non-government entities, and the community.

By  Masaya Noguchi, UNESCO Bangkok 

*This article was first published in Global Partnership for Education