Education Financing Crisis in ASEAN: A Call for Action


Jakarta, The PRAKARSA - The PRAKARSA held a public discussion with the theme "Renewing the Fiscal Policy Landscape in ASEAN: From Macroeconomics to Public Expenditures". This event marked the launch of their latest research entitled "Studying trends in public spending and privatization for education in ASEAN countries post COVID-19", on Thursday (6/6/2024) in Jakarta. 

Le Ha Phuong, a researcher from Vietnam, highlighted the downward trend in public spending on education in ASEAN countries, which has significant implications for long-term productivity and equal opportunities. 

“ASEAN countries' public expenditure on education as a percentage of GDP has decreased from 3,5% in 2013 to 2,8% in 2022,” said Le Ha Phuong. 

Although most ASEAN countries meet UNESCO's recommended benchmark for the proportion of public spending on education in total government expenditure, it is still much lower than the recommended levels for individual countries. 

Phuong explained that despite budget reallocations for the COVID-19 response, public spending on education has not recovered to pre-2013 levels in most ASEAN countries. This trend poses a threat to the future of educational development in the region. 

“While countries such as Malaysia and Vietnam have, for several years, attempted to meet or exceed UNESCO's recommendation of 4% of GDP for education spending, most ASEAN countries have consistently fallen short, a shortfall reflecting broader problems in prioritizing education in national agenda," said Phuong. 

Phuong also discussed the trend towards privatization in education, which shows shortcomings in the public education system. Demand for private education is increasing in many ASEAN countries, highlighting problems such as overcrowded public schools and the need for more personalized and modern learning environments. 

“Reliance on private education creates challenges regarding financing, affordability and quality assurance. "These changes place a burden on households and students, especially those from disadvantaged backgrounds," added Phuong. 

Apart from that, Dr. Vu Sy Cuong from the Academy of Finance in Vietnam, emphasized the need for ASEAN countries to collaborate on strategies to increase domestic resource mobilization for education. 

“The government needs to increase public spending on education. "ASEAN countries must reallocate funds rationally and effectively from other areas, especially as the economy recovers from the pandemic," said Dr. Cuong.

Dr. Cuong highlighted the importance of developing clear capital allocation criteria for education projects and ensuring balanced investment between infrastructure and operational needs to avoid non-transparency and inefficiency in budget use. 

The study includes several key recommendations for ASEAN policymakers: 

  1. Increasing Public Spending on Education: Allocate more funds to education to improve school infrastructure, teacher training, and student resources, producing better educational outcomes and increasing tax revenues. This can be supported by our recommendation regarding the Minimum Global Tax Rate being increased to 25% for ASEAN so as to encourage higher budget allocations for this sector.
  2. Ensuring Fair Allocation of Resources: Establish a transparent and fair funding formula that takes into account regional disparities and student needs.
  3. Standardization of Education Data Reporting: Adopt uniform data reporting standards to facilitate monitoring and assessment of the education sector in each country, thereby increasing the ability to implement consistent improvements. 

RESEARCH PRAKARSA underlines the importance of increasing investment in education to ensure long-term economic growth and equality. By prioritizing education funding and adopting these recommendations, ASEAN countries can create a more just and prosperous future for all their citizens.

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