Increase Investment in Responsible Education Loan

This op-ed is part of AASYP’s Digital Dialogues 2022, which is a programme that aims to provide a platform and forum for future leaders from across the region to contribute to the policymaking and diplomacy sphere by engaging in issues relating to innovation and investment, digital economy, and regional mobility.


In 2022, Australia’s flagship education loan to Myanmar funded about 84 million US dollars from 2014 to 2021 to support 47000 schools. However, the investment is nowhere near enough. In order to meet the investment target of US dollar 2,550 per school annually, the investment requires injecting a budget of up to  850 million US dollars, at least, during the era when the National League Democracy Government was in power. If Australia is able to provide support to bridge this gap,  more schools may be given the opportunity to purchase crucial learning equipment to supplement the students’ studies, such as a laptop, or other equally important services, such as providing accessibility support for differently-abled students.  

For instance, Japan JICA has invested a 1.5 billion US dollar grant to help improve education which is fully committed to supporting the national education strategic plan for 2016-2021. In contrast, the Myanmar government’s spending on education based on a percentage of gross domestic product (GDP) is 2.14 percent in 2019. Since Myanmar GDP is 68.7 billion US dollars, it can be estimated that a 1.47-billion- US dollar budget is spent as part of education expenditure at a yearly scale. 

Despite the international efforts, the current political situation in Myanmar may have caused monetary transactional difficulties between ASEAN members, Australia, and Japan alongside other economic development partners. Examples include the FTAF ban due to a lack of progress in the mutual evaluation report and the lack of credible understanding of risk, existing overseas contract that were converted into kyat (short-changes), as well as the cease of funding from Asia Development Bank. The tension has impeded international communications and diplomatic ties, which has the potential to stop the flow of aid and humanitarian development projects that would greatly benefit the people of Myanmar and is in line with the UN mandate of “Leaving no one behind.” 

Indeed, perhaps in this case, the best way to help those in need is to directly provide financing for them using possible methods such as a community-oriented funding system – a financial organisation driven mainly by private members from the associated community providing financial aid for education, healthcare and other social support. 

The budgeting has to be transparent, while every community member has the right to review the budgeting of the expenditure along with the third-party professional staff members nominated at the discretion of the lender to monitor and control appropriate covenants are in place during the loan disbursement stage. Administrative agents may also decide the efficacy of the loan by monitoring the covenants.

Keeping the education aid project in Myanmar has the potential to foster a positive community that seeks to break beyond geopolitical barriers, align with ASEAN objectives and form an informal alliance and partnerships which are fundamental for ASEAN regional stability. Investing in education also allows decentralised and sustainable economic growth in ASEAN since an educated society has a higher chance to keep the environment clean, foster innovation, and above all, peace. 

Therefore, it is recommended to:  

  • Increase the funding for education by a factor of ten, directly towards communities in remote areas. 
  • Use the decentralised community banking system where people can actually manage the finance transparently on a regional basis rather than through the need for a centralised local authority. 
  • Set nominated administrative agents from the lender to bridge the gap between formal (traditional banking system) and informal banking sectors to transfer the finance smoothly while honouring the existing financial regulations. 
  • Form a partnership for the achievement of common goals.

This article was written by Arkar Nyan Hein edited by the Diplomacy Team, and reviewed by the AASYP Publications Team.

Note: The views and opinions expressed in this op-ed are solely those of the writer and in no way represent nor reflect the position of AASYP and members of the AASYP Publications Team. The AASYP Horizons Blog provides a platform for the free expression of opinions and intellectual discourse.

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