Oman - Third Education Project

The World Bank FOR OFFICIAL USE ONLY Report No. P-4504-OM MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$ 13.8 MILLION TO THE SULTANATE OF OMAN FOR A THIRD EDUCATION PROJECT March 30, 1987 This document has a festricted distribution and may be used by recipients only in the performance of their olffcial duties. Its contents may not otherwise be disclosed without World Bankt authorization.  CURRENCY EQUIVALENTS 1 US Dollar ($) 3 0.384 Rial Omani (RO) 1 RO US$2.60 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ICB - International Competitive Bidding LCB - Local Competitive Bidding MOEY - Ministry of Education and Youth MOH - Ministry of Health MOSAL- Ministry of Social Affairs and Labor OIB - Omani Institute of Banking OJC - Oman-US Joint Commission OTIC - Oman Technical & Industrial College TTC - Teacher Training College VTI - Vocational Training Institute  FOR OMCIL USE ONLY SULTANATE OF OMAN OMAN THIRD EDUCATION PROJECT LOAN AND PROJECT SUMMARY V Borrower: Sultanate of Oman Beneficiary: Ministry of Education and Youth Amount: US$13.8 million Terms: Fifteen years including three years of grace at the standard variable interest rate. Onlending Terms: Not applicable Financing Plan: Government $13.9 million IBRD $13.8 million TOTAL $27.7 million Economic Rate of Return: Not applicable Staff A2praisal Report: (Report No. 6584-OM) This document has a restricted distribution and may be used by recipients only in the petformance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMIMENDATION OF THE PRESIENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE SULTANATE OF OMAN FOR A THIRD EDUCATION PROJECT 1. The following report on a proposed loan to the Sultanate of Oman for US$13.8 million is submitted for approval. The proposed loar would carry a standard variable interest rate with a maturity of 15 years including 3 years of grace and would help finance an educational development project. 2. Background. Oman's development as a modern state, based almost entirely on oil revenues, began from a very low base only 16 years ago. Despite progress in the capital city of Muscat, living conditions, and the educatiornal and health status of the population in rural areas, are still poor, close to those in low-income countries. Current policy is to diversify the oil-dependent economy, promote a wider distribution of social services and encourage human resource development, with the specific goal of replacing forei6a workers by trained Omanis. A major and critical constraint on Oman's development is the shortage of skilled labor. The country has a small and young indigenous population (1.1 million and 45% under 15 years of age in 1984) and a poor educational status (25S of rural children do not go to school and only a low 12% of the age group go to secondary school). Furthermore, the adult work force is largely unqualified because the school system dates only from the early seventies. Because of this, employers are reluctant to hire Omanis, specifically citing lack of education and poor work habits. Consequently, Omanis comprise only 40S of the labor force and are concentrated in the public sector and the traditional economy. Only 92 of the modern sector work force is female. With the sharp drop in oil prices in 1986, the Government was obliged to reduce its investment targets for the Third Five-Year Development Plan 1986-90. During appraisal, the Bank and the Government agreed- on ways to minimize the impact of this austerity program, establisting priorities for the education sector. The resulting i.ivestment program would expand access to education, upgrade the quality of curricula and improve their cost-effectiveness. The proposed project would support this endeavor. 3. Project Objectives. The proposed project is designed to assist in the development and modernization of the school system, enabling it to prepare Omanis for participation in the modern sector labor force. Specifically, it would: (a) develop key services (planning, management and curriculum) in the Ministry of Education and Youth; (b) train and upgrade teachers; and (c) increase access to education, particularly for girls and for children of the poor in rural areas.  4. Project Description. The proposed project would assist institutional development in the Ministry of Education and Youth through technical assistance and training to: (a) update planning methods and develop alternative policies for the physical and staffing requirements of general education; (b) develop a management information s;stem including new budgeting techniques, cost analysis and projections to enable the Min stry to exercise better control over costs; (c) introduce a school building maintenance program; (d) establish an in-service training program for Omani primary teachers and princ4pals; (e) introduce achievement testing and remedial instruction to improve student achievement levels and better prepare them for the next level of instruction; (f) establish a vocational guidance service for secondary schools to enhance the preparedness of Omani students for entry into modern sector employment; (g) develop secondary science teaching; and (h) develop secondary school library services to improve students' language skills. The proposed project would assist in expanding primary teacher training capacity in rural areas by constructing and equipping three teacher training colleges, with provision for boarding to ensure increased access of females. It would expand access to schooling in rural areas by constructing and equipping 30 primary schools for 9,000 students (50% girls) and 5 secondary schools, 3 of them with boarding facilities (307 girls). The project, to be implemented over seven and a half years, provides funds for technical assistance, civil works, furniture and equipment. The total cost of the project is estimated at US$27.7 million, with a foreign exchange component of US$21.6 million (78%). A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and disbursements, and the disbursement schedule are shown in Schedule B. A timetable of key processing events and the status of IBRD operations in Oman are given in Schedules C and D, respectively. A map is attached. The Staff Appraisal Report, No. 6584-OM dated March 30, 1987, is being distributed separately. 5. Rationale for Bank Involvement. The proposed project directly underpins Government priorities for the orderly development of the country's embryonic education system and supports the education investment program 1986-90 which the Ministry of Education and Youth developed in collaboration with the appraisal mission. Specifically, the project supports Government policy with programs to achieve universal primary education by the end of the century, to raise to 20% the proportion of the age group in secondary education. to train sufficient Omani teachers to staff rural primary schools and to improve the quality of primary and. secondary education. Technical assistance focuses on strengthening the planning and management capabilities of the Ministry of Education to deliver educational services cost-effectively. The Bank's involvement in the sector is especially appropriate at this juncture of Oman's development in order to ensure the sustainability of educational programs. In particular, the project would assist the Government in fostering and maintaining financial discipline in its investment program and in ensuring that the composition of the investment program is consonant with priorities for human resources development supportive of the country's prospective economic growth and its Omanization policy.  - 3 - 6. Agreed Actions. During negotiations the Government confirmed its agreement on the following actions: (i) to make every effort to appoint trained Omani principals to project primary schools no later than the end of their first year of operation; and (ii) to maintain current staffing levels, with appropriate technical support, in the Ministry of Education and Youth Departments of Curriculum Development, Educational Planning, Educational Research, Projects and Teacher Training. 7. Justification. The proposed project would enhance the capability of the Ministry to manage the school system more efficiently and operate new educational services. It would also increase the number of qualified Omani teachers and help upgrade the quality of serving teachers. The project would provide access to general education for over 9,000 primary and 3,000 secondary students. This would help alleviate the acute shortages of well-prepared graduates from the school system to enter further education, training or the labor market. In support of the Government's equity objectives, the project would provide 2,000 places for females at primary level, 850 at secondary and 250 in teacher training. It would also provide access to education for children of the rural poor, 83% of places at primary and secondary level being provided in rural areas. 8. Risks. All project components are included in the Ministry of Education and Youth investment budget under the Third Five Year Plan 1986-90. The principal risk is that, given the scarcity of qualified Omani staff in the Ministry, candidates for training through TA would not be made available in a timely fashion. However, there is a firm will to manage the TA cost-effectively. Staff to be trained have been indentified and the timetable for training should not prevent Ministry services from operating normally. Finally, such training would be short, intensive and in-country, facilitating continuity on the job. 9. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve the proposed loan. Barber B. Conable President Attachments Washington, D.C. March 30, 1987  -4 - _______ Schedule A Estimated Prtoject Costs: a/ Local Foreign Total - US$ Million A. Institutional Development Planning and Management 0.1 0.4 0.5 Teacher upgrading and Curriculum Development 0.0 0.9 0.9 Subtotal 0.1 1.3 1.4 B. Teacher Training Colleges TTC for Women 0.6 1.8 2.'4 TTCs for Men 1.0 3.7 4.7 Subtotal 1.6 5.5 7.1 C. Primary and Secondary Schools Regional Primary Schools for 1.7 5.7 7.4 Girls and Boys Lower Secondary School for Girls 0.2 0.7 0.9 Lower Secondary School for Boys 0.4 1.1 1.5 Upper Secondary School for Girls 0.6 1.8 2.4 Upper Secondary School for Boys 0.9 3.1 4.0 Sub-Total 3.8 12.4 16.2 Total Base Line Cost 5.5 19.2 24.7 Physical Contingencies 0.2 1.0 1.2 Price Contingencies 0.4 1.4 1.8 TOTAL PROJECT COST 6.1 21.6 27.7 a/ Does not include direct taxes and duties from which the project is exempt. Local Foreign Total - - US$ Million------ IBRD 0.0 13.8 13.8 Government 6.1 7.8 13.9 Total 6.1 21.6 27.7  -5- Schedule B PROCURENEIT METHOD (Total Costs of Proposed Project Components including Contingencies) ICB LCB Other Total Project Element (US$ Million) Civil Works 16.9 4.2 0.0 21.1 (7.1) (1.8) (0.0) (8.9) Professional Services 0.0 0.0 1.2 1.2 (0.0) (0.0) (0.0) (0.0) Equipment and Furniture 3.5 0.0 0.4 3.9 (3.2) (0.0) (0.3) (3.5) Technical Assistance 0.0 0.0 1.5 1.5 (0.0) (0.0) (1.4) (1.4) Total 20.4 4.2 3.1 27.7 Bank Financing (10.3) (1.8) (1.7) (13.8) NOTE: Figures in brackets are the respective amounts financed by the Bank Loan. DMSURSEMENT Disbursements Amount Z of Expenditure to be Category (US$ Million) Financed Civil Works 8.9 42% (expenditures) Furniture and Equipment 3.5 100% (foreign expenditures) 1002 (local, ex-factory) 90% (local expenditures) Technical Assistance 1.4 100% (expenditures) TOTAL 13.8 Estimated IBRD Disbursements (in US$ Million) IBRD Fiscal Year FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 Annual 0.6 1.4 3.0 3.9 3.0 1.3 0.4 0.2 Cumulative 0.6 2.0 5.0 8.9 11.9 13.2 13.6 13.8  -6- Schedule C SULTANATE OF OMAN THIRD EDUCATION PROJECT Timetable of Key Project Pr ig Events (a) Time taken to prepare: One Year (b) Prepared by: -Government with IBRD assistance. (c) First Bank Mission: September 1985 (d) Appraisal Mission Departure: September 1986 (e) Negotiations: March 9-13, 1987 (f) Planned Date of Effectiveness August 1, 1987 (g) List of Relevant PCRs and PPARs First Education Project (PCR and PPAR No. 3849 dated October 8, 1981)  -7 - Schedule D THE STATUS OF IBRD AND IFC OPERATIONS IN THE SULTANATE OF OMAN A. STATEMENT OF IBRD LOANS Was of Stember 30, 1986) ae Amount (less cancellations) V Loan Fiscal IBRD Undisbursed Nunber Year Borrower Purpose --US$ Million------ Five Loans fully Disbursed 46.40 2084 1982 Sultanate of Highway Oman Maintenance 11 15.00 4.40 2419 1984 Sultanate of Education II Oman 15.00 14.25 2513 1986 Gen. Telecom. Telecom. II Organization 23.00 18.99 2631 1986 Sultanate of Highway Oman Maintenance III 30.00 30.00 Total 129.40 67.64 Of which has been repaid 21.09 Total now outstanding 108.31 Amount sold 5.44 Of which has been repaid 1.32 4.12 Total now held by IBRD b/ 104.19 Total undisbursed 67.64 a/ The status of the projects is described in a separate report on all IBRD/IDA financed projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. b/ Prior to exchange adjustments. B. STATEMENT OF IFC INVESTMENTS (as of September 30, 1986) Type of Amount in US$ Million Year Obligor Business Loan Equity Total 1979 Oman Development Bank Development 2.0 2.0 Finance Total gross commitments 2.0 2.0 less cancellations, terminations, repay- ments and sales 1.0 1.0 Total cummitments now 1.0 1.0 held by IFC Total undisbursed  O M A THIRD EDUCATIC * TEAG4ER TRAD A LOWER SECOND O UPPER SECOND 3 PRAMY SCH EDUCATION RE( EDUCATION DIS 0 NATIONAL CAPI - MTERMATIOAL BOUDARIES United Arab Emirates Saudi Arabia .,  [RBD lst1Q O M A -N lUCAT ION PROJECT Islamic Republic of Iron tANER TRA4G COULEGES 7MUSA 0 SEM * MSANDUM PR SECOt0ARY SCOOLS; IRWRY SCHOOLS UATION REGW BOU\IES DUCATION DISTRICT OMNDARES AN ATOA CAFffrAL Gulf of VOWTORAINAL *= MARES Oman 3Lin ed Arab A .MUSCAT rirates / taq Auc 0 W DAHIRAH br 0. I~~~~~~~~~~~~~~~~~~~~~~~~~~~ DAKHLIYAH EAIR di Arabia AIWOStQfU / Sharqyah I \ .~~~~~~~~~~~~~~~~~~~~~~~~~~ ,,.., t 1 _ * " 0,. w . .W apw_ _~~~~~~~F ' -