The World Bank unveiled plans on Monday to double its investment in public education over the next five years with the main focus on improving the quality of education rather than concentrating on boosting enrolment numbers.
The bank said it would spend USD 5 billion by 2020 - double its spending of the previous five years - in an bid to reach more than 120 million children who are out of school and some 250 million more who cannot read or write despite attending school.
World Bank President Jim Yong Kim said the bank was adopting a results-based financing system where countries only get money if they meet agreed performance targets.
The announcement comes as more than 160 countries gather in South Korea on Tuesday for the start of the World Education Forum to set new education goals for the next 15 years, particularly in developing countries.
Those will become part of the Sustainable Development Goals to be adopted by the United Nations in September that will replace the Millennium Development Goals and mark a new era in the global fight against poverty.
"The truth is that most education systems are not serving the poorest children well," Kim said in a statement.
"With nearly a billion people remaining trapped in extreme poverty today, sustained efforts to improve learning for children will unlock huge amounts of human potential for years to come."
The World Bank, which aims to end extreme poverty by 2030, has spent USD 40 billion on education since 2000 and describes itself as the world's largest international education funder.
It has been experimenting with results-based financing in education with this shift coming after the educational targets in the Millennium Development Goals were criticized for too much focus on enrolments without improving the quality of learning.
Kim pointed to a programme in Pakistan where the World Bank offered USD 350 million of loans or credits, seeking increased enrolments for children from poor families, good quality teachers, textbooks actually getting to students on time.
"The difference in outcomes once we switched to results-based financing have been striking," Kim said.
World Bank experts see investment in education as a key factor in eradicating global poverty.
They say the quality of education is a strong predictor of economic growth rates and education can help people escape poverty by increasing earnings by 10 percent for each year of education. Also when a country improves education for girls, its overall per capita income increases.
"The goal for 2030 is not just to get all the remaining children in school, but to also to make sure that they are learning," said Kim.
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