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Education investment drives poverty alleviation push

Article - October 19, 2015

Peru’s explosive economic growth over the past 10 years has enabled the country to invest across its public services to alleviate poverty, with an improved education sector one of the biggest benefactors.

Improvements have been seen across the sector, with enrollment of three to five-year olds up to 72%, while 97% of those aged between six and 11 now attend school. Meanwhile more than nine out of ten youngsters aged between 12 and 16 are in education, a direct result of increased spending.

Investment has resulted from the Andean nation’s strong economic growth during the past decade, and while commodity price changes are affecting expectations, growth forecasts of 3.8% in 2015 and around 5% by 2020 are still predicted. Yet poverty remains a challenge and in 2013 the World Bank estimated that 23.9% of the Peruvian population lived below the threshold - meaning the role of education remains vital, according to Jaime Saavedra, the country’s Minister of Education.

“We are far from where we should be in terms of educational standards, achievements and learning,” he explains, adding that the country must invest to deliver a skilled workforce that can continue the country’s economic prosperity.
“If we do not make an unprecedented investment in education, the lack of human capital will be a binding constraint in the continuation of this development project. Sustained growth is achieved only if at the same time there is growth in investment in education. Since 2002, despite an existing agreement, the expenditure on this area has always been 3% of GDP and, while investment grew as a result of increased domestic product, the rate has not changed since then.”
“Last year we increased this figure half a point, so it currently amounts to $1,500 million, but it is still not enough, because the education budget is far below that of other countries in the region.”

Improving this figure has huge implications on reducing poverty for Peruvians, an area that the country has already focused on, receiving praise from the likes of the World Bank for its efforts.

Indeed, World Bank Group President Jim Yong Kim worked in Peru after launching an NGO in Carabayllo several decades back to deal with drug-resistant TB and he admits his experiences influence his current role.

“Our organization is here to fight poverty, and to fight poverty in places like Carabayllo. It’s a great opportunity to remind myself and send a message to my team that all the work we do has to be based on what we can do in poor communities,” Mr. Kim noted.

Mr. Kim’s Socios en Salud have developed their work in the region with Peru’s Ministry of Health while other government-backed schemes such as the National Strategy for Development and Social Inclusion (Incluir para Crecer) is another example of the country focusing its efforts on improving inequality.

Such practices are also found in the educational sphere, where teacher’s salaries and educational infrastructure are both being targeted. Wages are being ratcheted up by around 40% to entice a new wave of professionals and high school hours are being extended.

“We also began to implement a plan called ‘Works by Taxes’ in which any company can offer to build or improve a school, and in return the government gives it a certificate that it can accrue from their tax burdens,” adds Mr. Saavedra. The result is quicker development, and this along with public-private partnerships, are helping to deliver more schools and better facilities.

The higher education sector has also experienced an uptick in demand, and since 2003 the number of students at private universities has doubled while in public universities it has increased by 12%. More overseas students are also heading to Peru, but there remain regulatory concerns regarding the quality of education across all sectors and Mr. Saavedra says it is an area that his government is already focused on improving.

“We already have a legal framework to begin to change this, but it will take a long time. Last year we passed a new University Law, for which there was much debate and there was great opposition from several universities to the main change we proposed, which is creating a regulatory and supervisory body for the basic academic standards,” explains Mr. Saavedra.

US students are regular attendees at Peruvian universities while a scholarship program has also been created to improve social inclusion, particularly amongst low-income students. Similar systems for teachers, post-graduate studies, and professionals in the Armed Forces are also operational, allowing students to attend institutions such as Stanford, Columbia, or Harvard.

Peru is also seeking closer ties with the US to improve the educational sector’s ability to deliver English language classes, and a policy is being put in place that will see all high school graduates learning the language to a B1 level on the European system.

“This requires increasing the number of English teachers and from the Ministry we are giving them training programs abroad to improve,” says Mr. Saavedra, who adds that working with the USA to improve ICT services are being developed to strengthen technical education and employability.

The South American country is also in the midst of standardizing higher education across the country with the introduction of a new bill that is currently passing through Peru’s Congress, marking another step for the Andean nation as it seeks to protect its economic prospects with an educated workforce.