ANALYSIS: With further progress on debt and development at Halifax, Canada, last weekend, finance ministers from the Group of Seven leading industrial nations are framing a deal for the world's poorest people.

A global compact for developing countries is emerging, based on more effective aid, debt relief, more help in crisis prevention and resolution, and a renewed commitment to trade liberalisation through a strong and effective multi-lateral trade system.

The decision to complete the financing of the highly indebted poor countries initiative will enable a further $1 billion (€1.046 billion) of debt to be written off their balance sheets.

In addition, the agreement on financing the World Bank's International Development Association programme for the world's poorest countries paves the way for an additional $1.8 billion contribution from donor countries.

But perhaps the most significant long-term breakthrough was the pledge at Halifax to support developing countries that have credible education plans and strong policy commitments in place. The first steps are at last being taken towards an international education budget to help fast-track performers provide primary school education for all.

Education is the best anti-poverty and social and economic development strategy. It is fundamental to strengthening political structures and to achieving sustained growth. Yet one in five of the world's children - 113 million, two-thirds of them girls - do not go to school.

Almost half of all African children and a quarter of those in south and west Asia are not in education. About 75 million of these children are in the Commonwealth. Because they have no school to go to, they will never get even the most basic primary education. They are destined to fail before their lives have begun.

The international community has signed up to the United Nations' Millennium Development Goal that, by 2015, every child will have the chance to go to school. But progress has been unacceptably slow. A recent World Bank report made clear that without a dramatic change, 88 countries, including 34 in sub-Saharan Africa, would not achieve this goal. That is why the international community needs to strengthen support for education in developing countries. With just 5 per cent of total overseas development aid going to basic education, it is unacceptable that education aid as a share of national income has been cut.

The international community must now raise its financial contribution for education in the poorest countries. In doing so, it should build on the opportunity presented by last week's World Bank report, which is the first financial framework for delivering basic education for all. More resources for education must be at the heart of a new deal between developed and developing countries where no country committed to universal primary education should fail through a lack of resources.

Since 1997, Clare Short, Britain's international development secretary, has committed more than £700 million sterling (€1.1 billion) to support progressive governments determined to achieve high-quality primary education, mainly in sub-Saharan Africa and south Asia. And in this summer's spending review, the government will substantially increase total UK development aid and raise its share of national income.

Alongside this commitment, and to mark the Queen's golden jubilee, the British government has also introduced a fund called the Commonwealth Education Fund. This will operate under the chairmanship of the governor of the Bank of England and will be administered jointly by Oxfam, ActionAid and Save the Children.

The British government will provide an initial £10 million sterling and shall match, £1 for £1, contributions from businesses and members of the public, in particular through this July's Comic Relief campaign - Sports Relief.

The innovative feature of the fund is that it will be channelled through the voluntary sector to help the Commonwealth's poorest countries. We must strive to ensure that children everywhere have a decent start in life. By opening the doors of learning to all and unlocking children's potential, we can secure a stronger, fairer, more prosperous future.

• Mr Brown is Chancellor of British exchequer and Sir Edward George is governor of the Bank of England