IMF Harps on Increased Spending on Education, Health Sectors

A latest research by the International Monetary Fund (IMF) has shown that health and education spending have typically been protected in lowincome country programmes.

In fact, an analysis of more than 25 years of data (1988–2014), according to the fund, suggested that public health spending, as a share of GDP, has on average remained unchanged, while public education spending has increased by 0.32 percentage points.

The findings, the IMF stated, underscored its strong commitment to protect health and education spending and the most vulnerable during challenging economic reforms.

“Indeed, in many countries with IMF-supported programs— from Tanzania, to Honduras, to the Kyrgyz Republic—per capita public spending on health and education has significantly outpaced the growth of per capita income.

“Safeguarding social spending is critical because women, young people, seniors, and the poor often lack the political leverage to promote their economic well-being.

“By protecting the health and skills of vulnerable groups, growth will be stronger, more durable, and more inclusive,” the Fund added.

It pointed out that last year, it extended zero interest rates on all IMF concessional lending to help low-income countries deal with future shocks and achieve the Sustainable Development Goals.

But cheaper financing alone is not enough to ensure more durable and inclusive growth, the IMF stated.

The success of low-income country programs increasingly depends on two key factors—minimum levels of government spending on health, education, and social safety nets; and specific reform measures to protect vulnerable groups.

“Our data indicate that minimum financing levels were included in virtually all low-income country programs, and that more than two-thirds of these program targets were met.

“In other IMF-supported programs, measures were taken to strengthen social safety nets.

“More broadly, IMFsupported programs have helped boost social spending by unlocking additional donor financing and by encouraging tax reforms that create stronger and more reliable sources of government revenue.

“We also provide hands-on technical assistance in this area, helping more than 130 countries per year to generate higher public revenue that can be used for fresh investment in hospitals, schools, and poverty reduction.

“I am glad to say that the Fund’s work has made a difference in low-income countries in recent years, which has been acknowledged across our membership,” it added.