Worlds of Education

"World Bank shifts position on funding for most private-for-profit schools", by David Edwards.

published 9 April 2020 updated 12 January 2022
written by:

In a sudden and far-reaching policy shift, World Bank President David Malpass has agreed to major reforms that include officially freezing any direct or indirect investments in private for-profit pre-primary, primary and secondary schools. This has been a critical issue for Education International for many years and has been the key focus of our interactions with the Bank.

It has also been a major thrust of our Global Response campaign, where member organisations, regions and the EI secretariat have worked together to research and expose the activities of private, for-profit firms. Examples of that work include Uganda and Kenya, where illegal operations took place or labour standards and regulations were violated by Bridge International Academies.

Given that the World Bank is the largest funder of education in the developing world, EI has been keeping a close eye on their work. We have repeatedly and publicly challenged them for promoting privatisation, attacking teachers and undermining quality education systems and have tried to engage in dialogue – in meetings, including with EI officers and through letters, reports, and other methods.  Not only did policy and financial support for private, for-profit, education operators like Bridge International Academies continue, but it increased. Some national foreign assistance agencies, including the UKs Dfid and USAID as well as private funders joined the parade. It was an ideological and profit-driven attack on public education.

Two things altered the situation. First, a pro-labour majority was elected in the US House of Representatives in the 2018 mid-term elections. That shifted leadership of key committees to members who were friendlier to trade union views. Second, the COVID-19 crisis required a broad consensus among the House, the Senate, and the White House to adopt a 2-trillion-dollar relief package.  The positions of the World Bank evolved in discussions between the House Financial Services Committee chaired by Maxine Waters (D-California), and US Treasury Secretary Steven Mnuchin.

These actions built on growing global recognition of the damage done by private, for-profit education. That increasing concern includes a decision by the European Parliament and an agreement by the Board of the Global Partnership for Education (GPE).

World Bank polices and advice to many countries have long supported private delivery of education and other public services. Although it has officially committed to support the Sustainable Development Goals, much of its policy and actions run counter to that global consensus.

Financial support for private, for-profit education firms came largely from the World Bank Group’s International Finance Corporation (IFC), which is charged with making loans to the private sector. Under the agreement with the US, the IFC will freeze all support to private, for profit schools, including through direct investment, indirect investment and advisory services

Although these reforms are critical, the World Bank also agreed to a process, both internal and external that may enable us to persuade the World Bank to reconsider its policy priorities in education. The Bank has an Independent Evaluation Group that will assess IFC support of for-profit schooling on the basis of “educational outcomes, access, poverty and inequality.” The future discussions with the Bank may be facilitated by the work of that independent group.

This is a major victory for Education International. Our concerted strategy included mobilisation with member organisations and EI Regions, especially in Africa and Latin America, intense lobbying with Congress and successive Administrations by the AFT and the NEA, firm, sustained support of EI officers and the Executive Board and the invaluable assistance of the ITUC/Global Unions Office in Washington, DC.

However, agreed reforms have gone beyond education.

The international trade union movement has opposed the notorious “Doing Business” report since its creation in 2003. The report assumes that nearly all regulations and social protections are a barrier to the investments and operations of business.

Our opposition centred on the “employing workers” indicator, which contended that a wide range of worker rights and protections undermined the business climate. The use of the indicator was suspended in 2010 after public opposition and internal review by the Bank. However, the figures were still gathered and were waiting to come back from the grave. The Bank has agreed to end the collection of data for that suspended indicator. The only concrete other action agreed on the report is that the business tax bill indicator will be examined.

That is not enough. EI, other Global Union Federations and the ITUC would like to see the report eliminated. On the one hand, it treats nearly all regulations that affect or limit business or cost them money as a disincentive to investment and economic activity. On the other, it dismisses rights and social and environmental progress as factors that sabotage growth and prosperity.

Although we must and will continue to be vigilant on the policies and activities of the World Bank centrally and at country level, this is a great and significant victory. It gives hope in these dark times, for our post-pandemic future.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.