Nepal is aiming to prepare its children for an AI-driven future, but its education budget tells a different story. As part of its vision for education by 2030, the country has committed to allocating 20 percent of the national budget, or 5 percent of GDP, to education, yet spending has remained between 10 percent and 11 percent of the national budget and below 3 percent of GDP. This is not just a financial gap. The budget reflects what our country chooses to prioritise. We cannot keep saying we want children to think critically, solve problems, communicate well and prepare for an AI-driven future while the classrooms meant to build those skills remain underfunded.

The current education budget may look significant financially, but it remains far from the direction Nepal wants to take its education system. A country cannot promise AI readiness, employment, innovation and social mobility while treating education as a routine budget line. Underfunding the education system weakens schools, puts the most vulnerable children's futures at risk, and limits what an entire generation is prepared to become. However, simply increasing the budget is not the answer. The case for a higher budget must also be linked with a clearer direction, better implementation and stronger learning outcomes. This means that we should prioritise teacher development, foundational literacy and numeracy, classroom quality, student retention, assessment reform, digital readiness, and the creative and critical thinking skills that the children need for the future. More funding, hence, must come with stronger accountability, better implementation and a clear commitment to what (and how) children actually learn inside classrooms.

Lessons from countries that invested with clear direction

Peru sets a great example for Nepal because it shows what can happen when a developing country treats education financing as part of a broader reform agenda. Over the past two decades, Peru has increased public investment in education while also focusing on teacher salaries, school infrastructure, curriculum reform, student assessment and stronger school standards. Its Programme for International Student Assessment (PISA) scores improved between 2009 and 2018, before the pandemic. Peru’s average score rose from 370 to 401 in reading, 365 to 400 in mathematics, and 369 to 404 in science. These gains, about 31 to 35 score points across subjects, show that higher budgets matter most when they are tied to teachers, classrooms, standards and measurable learning outcomes.

Vietnam adds another important lesson. Education success also depends on how seriously a country treats learning. Despite being less wealthy than many countries participating in international assessments, Vietnam performed remarkably well in PISA, especially in earlier rounds. Its performance was shaped by strong social expectations, quality teachers, a focus on equity, disciplined classrooms and a deep public belief in education, alongside investment in the system. For us, this challenges the assumption that a country should first become rich before it can improve learning.

The lesson from Vietnam is not that Nepal should copy another country’s education model. Nepali classrooms have their own realities—multilingual learners, public and private school inequality, migration, rural and urban divides, climate vulnerability, unequal access to technology, and children whose lived experiences are often disconnected from what they study. But Vietnam’s example shows that learning improves when education is treated as a serious national priority, not just as an annual budget line. This means, for us, the education budget must support both system reform and classroom culture. Increasing spending will not be enough if classrooms continue to reward memorisation over thinking, examination scores over understanding, and enrollment numbers over meaningful learning. This is where Nepal’s budget priorities should become more strategic. If the country wants ‘future-ready’ children, it has to fund the everyday classroom practices that help children reason, express, collaborate and create. A stronger education budget has to support teachers to teach better, students to ask better questions, schools to assess deeper learning, and communities to see education as more than passing exams. Without these classroom-level and mentality shifts, even a larger budget risks becoming another administrative burden rather than a learning reform.

From schooling to learning

Another important thing to consider is that Nepal’s future-ready education system has to be locally rooted. Students should be able to connect mathematics to local markets, science to water and agriculture, language to storytelling, and civic education to the problems they see in their everyday lives. If Nepal wants children to participate in an AI-driven economy, it must first help them build the human skills that technology cannot replace: curiosity, critical thinking, communication, creativity, empathy and problem-solving. Technology can support learning, but it cannot substitute for the deeper human capacities that make learning meaningful.

The real shift, therefore, has to happen from schooling to learning. Nepal cannot measure success only by the number of schools built, students enrolled, textbooks distributed or exams conducted. The harder and more important question is whether children are learning to think, question, create and use knowledge meaningfully in their lives. A larger education budget is necessary, but it should also be a smarter budget. It must be a budget that invests in teachers, classrooms, accountability, local relevance and the actual learning of every child.