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	Table of Contents
p. 3 of 22 BACK | NEXT Preface Executive Summary I. Introduction II. Development of the Policy Paper III. Education and Poverty Reduction IV. The Changing Context V. Experience of the Asian Development Bank VI. Assistance Policies and Support for Education VII. Role of the Asian Development Bank VIII. Dimensions of the Education Policy IX. Education Policy Principles X. After the Policy Paper XI. Recommendation Appendixes

Policy on Education

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I. Introduction

1. In 1988, when the Asian Development Bank (ADB) approved the education policy paper,1 it officially recognized, for the first time, basic education as a human right. It also acknowledged that investment in the sector should extend far beyond ADB’s traditional focus on technical-vocational and higher education. In the following decade, the region and ADB experienced enormous change. Education is now recognized as a prerequisite for development, both economic and human development. Basic education —especially for girls and women—is acknowledged as being closely linked to the achievement of other human development indicators such as lower infant mortality rates and reduced fertility rates. The incidence of child labor also declines with education enrollment. Investment in education is synergistic, leading to greater utilization and greater impact of investments in other areas of social infrastructure such as health, nutrition, sanitation, and the environment. An educated population is more productive and more likely to use modern methods and technologies. An educated workforce is easier to train and better able to acquire new skills and technologies required as economies develop. The question is not whether to invest in education, but how such investment can be targeted most effectively in the different context of each country to ensure maximum human, social, and economic benefits.

2. ADB recognizes it can attain its overarching objective of poverty reduction only if the poor have equitable access to quality basic education.² ADB’s poverty reduction strategy³ identifies three pillars: pro-poor sustainable economic growth, social development, and good governance. Investment in education is clearly needed to support these three basic aspects of poverty reduction. Economic growth requires skilled and educated workers. Social development requires investment in basic education, especially for women. Demand for good governance is closely linked to the level of education of the population. ADB’s long-term strategic framework (2001–2015)⁴ stresses that “large investments will be required in the social sectors and in social infrastructure, particularly in education, health, water supply and sanitation, and shelter, especially in poorer countries. These investments, in areas such as education and health, besides promoting human development and improving the quality of life, are essential for sustained growth and productivity.” The strategic framework also commits ADB to help the region achieve the eight Millennium Development Goals (MDGs)⁵ agreed to by the international community (Box 1). Two are directly related to education: achieving universal primary education and promoting gender equality at all levels. But education also promotes achievement of other MDGs: reducing poverty, reducing child mortality, improving maternal health, lowering the prevalence of HIV/AIDS,⁶ and ensuring environmental sustainability. Support for the achievement of the MDGs is a fundamental element of ADB’s education and poverty reduction policies.

3. ADB faces many challenging questions about the role it can most effectively play in the education sector. Approximately 72% of education financed globally is provided by governments, 25% by the private sector (including parents and communities), and about 3% by development agencies.⁷ This rather humbling figure carries a very important message: development finance, because it is small and often in the form of a loan, must be used effectively to be justifiable at all. What then is the comparative advantage of this 3%? How can ADB ensure that its own support is most highly leveraged to achieve maximum benefit? The broad aim of the education sector policy paper is to articulate the nature of ADB’s priorities for education sector development, and the sector’s role in poverty reduction. The paper will (i) analyze how changing conditions affect education investment requirements; (ii) examine the situation of education in the region, particularly continuing challenges; (iii) distill the experience of ADB’s prior investment in education; and (iv) articulate policy directions to guide ADB’s investment in education over the medium term.

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