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Finance & Development, September 1980
Article

Bank activity: Education sector policy paper; McNamara to retire in 1981; Bank loans and IDA credits

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1980
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Education systems improving worldwide but many challenges remain

Despite severe limitations of resources, developing countries have made substantial progress during the past three decades in sending more children to school and in generally improving their education systems, notes the World Bank’s recently published Education Sector Policy Paper.

Enrollment of children in schools at all levels has expanded at unprecedented rates, says the paper. There has been a significant decline in the proportion of adults who are illiterate—from 44 per cent in 1950 to 32 per cent in 1975. Public expenditures for education have increased steadily in developing countries to reach roughly the same share of national product as in industrialized countries—about 15 per cent. There have also been improvements in extending educational institutions to areas previously unserved and in training managers, administrators, and teachers to run education systems effectively.

Despite the impressive gains during the past 30 years, the education sector faces many challenges in the 1980s:

• Over 250 million children of school age and another 600 million adults in developing countries lack basic education.

• Inefficiencies in the flow of students through different grades keep the number of students in school and the quality of education they receive low. Less than half the children enrolled in primary school, for example, reach the fourth grade.

• Because the education that is imparted does not, in many cases, meet the needs of the labor market, a large percentage of those who leave school do not find appropriate employment.

These factors have become obstacles in achieving the United Nations’ goal of free primary education for all; they have also made some people skeptical of the increasing public expenditures for education.

With the increasing concern about the relevance of education to the needs of the modern sector, efforts were made in the 1970s to relate education to employment needs and to integrate it into all development efforts. These efforts are expected to continue through the 1980s. In addition, the developing countries are expected to strive to make education more relevant to their national needs by using local languages or reactivating national languages. The new policy paper emphasizes that education must play a central role in overall development. It points out studies showing that “economic returns on investment in education seem, in most instances, to exceed returns on alternative kinds of investment, and that developing countries obtain higher returns than the developed ones.”

The Bank expects to increase its lending for education and training in developing countries from US$517 million in fiscal 1978 to about US$900 million annually for the five-year period, fiscal 1979-83. In allocating more funds for primary and nonformal education, for technical education at the secondary level, and for project-related training, five principles are used as guidelines for Bank lending:

• Basic education should be provided for all children and adults as soon as the available resources and conditions permit.

• Efforts should be made to provide educational opportunities without regard to sex, ethnic background, or social and economic status.

• Education systems should try to make the flow of students through the different grades as efficient as possible as well as improve the quality of education imparted.

• Education should be related to work and the students’ environment.

• To satisfy these objectives, developing countries will need to build and maintain institutional capacities for managing and improving education systems.

Emmanuel D’Silva

McNamara to retire as Bank President next year

Robert S. McNamara announced on June 9, 1980 that he will retire as President of the World Bank on June 30, 1981, when he will have reached the traditional retirement age of 65. Mr. McNamara became President of the World Bank in April 1968. He announced his retirement at a meeting of the Executive Directors of the Bank, who represent the 135 member countries.

The text of Mr. McNamara’s Memorandum to the Executive Directors follows:

“As you know, my current term as President of the World Bank runs to April 1, 1983. Today, however, is my 64th birthday, and I want to inform the Board now that one year hence—that is, effective June 30, 1981, when I shall have reached the traditional retirement age of 65—I propose to retire from my present position.

Timely change in leadership is salutary both for institutions and for individuals, and I had originally intended not to accept a third five-year term. In the end I acceded to the request of the Board that I do so because of the then unresolved problems of the Bank’s future financial structure. There was the added circumstance that eight senior officers of the Bank were scheduled to retire in the near future, and careful consideration needed to be given to their replacement.

Within the next twelve months these problems, and related issues, will have been largely resolved. The negotiations for the Sixth Replenishment of IDA’s resources, at a level of US$12 billion, have been concluded; agreement on the US$40 billion General Capital Increase for the IBRD has been reached; and the new senior appointments will soon be in place.

Further, two other matters of long-range significance have now been settled.

The Board has approved membership for the People’s Republic of China, and in the months immediately ahead we will be setting in motion the planning and organizational steps required as the world’s largest developing society—a nation of some one billion individuals—prepares to seek our assistance in its drive toward economic modernization.

Finally, the Bank’s basic policy decision, taken in the early 1970s, to gear itself not merely to the traditional role of assisting its developing member countries to increase their overall economic growth, but to help them as well in their efforts to deal directly with the fundamental problems of absolute poverty, has now been largely institutionalized within the organization. Our growing experience and capability—particularly in our new rural development projects—to design effective measures to help the poor to become more productive, and to assure a more equitable distribution of services to them, have demonstrated the essential feasibility and soundness of the approach, and its immense potentiality for the future.

In view of all these circumstances, I have come to the conclusion that we are approaching an appropriate time for a change in leadership in the Bank.

I suggest that later in the year the Board organize a Search Committee, and I will of course be available to assist it in any way that I can. In the meantime, there is a great deal of Bank business ahead of us all in the coming months, and I look forward to it, as I am confident you do, with undiminished enthusiasm and anticipation.”

IDA credits approved during fourth quarter of fiscal year 1980(Ended June 30, 1980)
Country 1PurposeAmount
(In millions of U.S. dollars)
Bangladesh (5)Jute industry, fertilizer industry, afforestation, fertilizer, education125.0
BurmaDam90.0
BurundiUrban development15.0
CameroonLivestock development16.0
ComorosCoconut rehabilitation and product control5.2
CongoRailway30.0
Egypt (2)Gas distribution, power 2170.0
Ghana (2)Agricultural development, highway54.5
HondurasAgricultural credit 35.0
India (10)Tube wells, nutrition, irrigation, cashew nut, thermal power, agricultural extension, sericulture, urban transport, water supply and sewerage, thermal power 4972.0
IndonesiaAgricultural research 530.0
Kenya (2)Export promotion technical assistance, fisheries14.5
Lao People’s Democratic Rep.Agricultural rehabilitation and development13.4
LesothoUrban development6.0
Madagascar (2)Water and sanitation, petroleum exploration promotion33.0
Nepal (2)Forestry, irrigation33.0
NigerRural development16.7
PakistanIndustrial development40.0
Papua New GuineaHighway 613.0
RwandaForestry and livestock21.0
SenegalPower engineering and technical assistance3.3
SomaliaPetroleum exploration promotion6.0
Sri Lanka (4)Rubber, telecommunications, water supply and sewerage, power95.5
Sudan (2)Power, irrigation105.0
Tanzania (4)Pyrethrum, grain storage and milling, smallholder tea consolidation, petroleum exploration97.0
TogoEducation11.0
Upper VoltaRice development6.5
Yemen Arab RepublicFisheries17.0
Yemen, People’s Dem. Rep. of (2)Water supply, petroleum exploration promotion22.2
ZaïreSmallholder maize11.0
Total2,077.8

Figures in parentheses are the number of credits approved for the respective country.

With a $7 million World Bank loan.

With a $20 million World Bank loan.

With a $25 million World Bank loan.

With a $35 million World Bank loan.

With a $17 million World Bank loan.

Figures in parentheses are the number of credits approved for the respective country.

With a $7 million World Bank loan.

With a $20 million World Bank loan.

With a $25 million World Bank loan.

With a $35 million World Bank loan.

With a $17 million World Bank loan.

World Bank loans approved during fourth quarter of fiscal year 1980(Ended June 30, 1980)
Country 1PurposeAmount
(In millions of U.S. dollars)
ArgentinaOil and gas engineering27.0
BoliviaStructural adjustment50.0
BotswanaEducation10.0
Brazil (4)Water supply and sewerage, urban transport, education, rural development393.0
ChileWater supply38.0
Colombia (3)Small-scale industry, development banking, hydropower307.0
Costa RicaHighway30.0
CyprusPower distribution and transmission16.0
Ecuador (2)Small-scale enterprise, highway75.0
Egypt (4)Textile, development banking, pulp and paper, power 2156.0
FijiPower15.5
GuatemalaHighway maintenance17.0
Honduras (2)Petroleum exploration promotion, agricultural credit 323.0
India (2)Development banking, power 4125.0
Indonesia (4)Nucleus estate and smallholders, agricultural research,5 population, power365.0
Korea (3)Development banking, railway, agricultural products processing174.0
Mexico (2)Irrigation, small-scale and medium-scale industry development260.0
Morocco (3)Highway, petroleum exploration, rural development146.0
Nigeria (3)Two agricultural development projects, highway168.5
OmanTelecommunications22.0
PanamaUrban development35.0
Papua New GuineaHighway 617.0
ParaguayIndustrial credit and regional development31.0
PeruPhosphate engineering and technical assistance7.5
Philippines (2)Ports, roads129.0
Portugal (2)Forestry, mechanical industries94.0
RomaniaOrchards50.0
Thailand (4)Lignite, water supply, rural electrification, sites and services216.0
Tunisia (3)Highway, natural gas pipeline, agricultural credit103.5
Turkey (3)Hydropower, cotton textile, livestock development254.0
UruguayAgricultural development24.0
Total3,379.0

Figures in parentheses are the number of loans approved for the respective country.

With a $120 million IDA credit.

With a $5 million IDA credit.

With a $225 million IDA credit.

With a $30 million IDA credit.

With a $13 million IDA credit.

Figures in parentheses are the number of loans approved for the respective country.

With a $120 million IDA credit.

With a $5 million IDA credit.

With a $225 million IDA credit.

With a $30 million IDA credit.

With a $13 million IDA credit.

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