Madagascar - Education Sector Reinforcement Project

a~~~~~~ Document of The World Bank FOR OFCIAL USE ONLY X. L heit Report No. P-5128-MAG MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT IN AN AMOUNT OF SDR 30.4 MILLION TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN EDUCATION SECTOR REINFORCEMENT PROJECT JANUARY 22, 1990 This document has a restricted distribtion and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENT (August 1989) Currency Unit = Malagasy franc US$ 1.00 FM 1607 FM 1000 - US$ 0.622 SDR 1 - FM 2035 FM 1000 - SDR 0.491 SDR 1 - USS 1.27 MEASURES 9 Metric System DEMOCRATIC REPUBLIC OF MADAGASCAR FISCAL YEAR 1 January - 31 December ACADEMIC YEAR October - June GLOSSARY OF ABBREVIATIONS BPE Education Project Office CRESSED Education Sector Reinforcement Credit (Cr4dit pour le Renforcement du Secteur de l'Education) IST Higher Technological Institute MINESEB Ministry of Basic and Secondary Education MINESUP Ministry of Higher Education PEP, PIP Public Expenditure (Investment) Program SN National Service UERP Pedagogical Unit (Unit6 d'Etude et de Recherche Pedagogique)  FOR OMCIAL USE ONLY DEMOCRATIC REPUBLIC OF MADAGASCAR EDUCATION SECTOR REINPORCEMENT PROJECT CREDIT AND PROJECT SUMOARY Borrowers Government of Madagascar Beneficiariess Ministry of Basic and Secondary Education; Ministry of Higher Education Amounts SDR 30.4 million (USS 39.0 million) T>3nEss Standard, vith 40 years maturity Onlendins Ter.s. Not applicable Financimn Plans US$ milliLon Percent Goverzment 2.5 5 OPEC Fund 5.0 10 P.R. Germany (GTZ) 1.1 3 UNP 1.0 2 IDA 39.0 80 TOTAL excluding taxes 48.6 100 Taxes 6.4 TOTAL including tames 55.0 Economic Rate of Return: Not applicable Staff A,oraisal Revorts Report No. 8026-MAG No. IBRD 21706 This document has a rtitd dstrbufion and may be used by rciients only in the perfomt nce of their offcial dutia Its contents may not othdwis be dbclosed wihou Wodd Bank authorilrtion. .....  - 2 - MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN EDUCATION SECTOR REINFORCEMENT PROJECT 1. The following memorandum and recommendation on a proposed development credit to Madagascar for SDR 30.4 million (US$ 39.0 million equivalent) is submitted for approval. The proposed credit would be on standard IDA terms with 40 years maturity, and would help finance an education sector reinforcement project. The project would be cofinanced by UNDP (US$ 1.0 million), OPEC Fund for International Development (US$ 5.0 million) and the Federal Republic of Germany (US$ 1.1 million). France, the African Development Bank, and the World Food Programe are providing complementary support. 2. Back_round. Madagascar has a large public and private education system, with public sector primary enrollment of 1,260,000. Primary enrollment (public and private) is about 75 percent of the age group. There are 190,000 in lower secondary public school; 50,000 in upper secondary; and 36,000 in the universities. The private sector has 225,000 primary pupils, 80,000 lower secondary, and 35,000 upper secondary. 3. Primary and Secondary Education. In the mid-l7?Os Government introduced education reforms, with the themes of democratization, decentralization and Malagasization. Rapid expansion produced high enrollment in basic education and continuing academic and technical education for many; educational administration was partially decentralized; Malagasy replaced French in primary and lower secondary schools, and curricula were modified. However, the unplanned expansion and weak administration seriously eroded quality. Education now faces major issues of cost and quality. Although unit costs are extremely low, 252 of the Government operational budget is for education (cf. the 18t African average), mainly due to high enrollments. Spending is unevenly distributed, favoring higher education. Teachers are untrained, and books and teaching materials scarce; student achievement is poor and repetition rates high. 4. Higher Education. University facilities were expanded and regionalized in the late 19708. However, low baccalaureate standards and open admission led to a costly surge of ill-qualified students. Spending on student grants, housing and feeding programs leaves too little for education quality, and academic standards have fallen. Fewer than 201 of students complete their studies, so that although costs per student are low compared with other, similar countries, the cost per graduate is comparatively high. 5. Education Reform. In 1985, the Government adopted new education policies, with greater emphasis on French at secondary level, higher baccalaureate standards, and some measures to limit university access. Following extensive internal debate, it has now embarked on a long-term sector development strategy, including (i) giving priority to education quality rather than to further quantitative expansion of secondary or tertiary education, (ii) controlling education costs, including by restricting flows of students through the system, (iii) giving priority to primary education in resource allocation, (iv) improving administration, and (v) reorganizing vocational and technical education. It is addressing the politically sensitive problems of the universities.  6. ationale for IDA Znvolvement. During the educatlon refors of the latf.70s, Government dld not seek sector dialogue with IDA. In 1985 dialogua resumed, with a UNESCO/Bank sector study. Znter-ministerial working parties, with IDA PPF support, prepared sector rehabilitation proposals. Covernment seeks contlnued IDA involvement in developing sector strategies, and meeting sector financial needs, which exceed what can be expected from other donors. DA participation in this sector is a vital part of the country strategy to Improve public expenditure prograuming and civil service management, for which reform efforts are supported by the Public Sector Adjustment and the EconomLc Management and Social Action Projects (Credits 1941 and 1967-MAG). Satisfactory development of the education sector is crucial to the country's needs for further economic diversification and growth, it is also vitally important in facing longer term problems such as population and environment. 7. Prolect Obtectivos. The project would comence a major sector reform, through policy measures and quality improvements, to implement the first part of the Government's long-term strategy to improve efficiency and qualLty of education. Recurrent costs at all levels will be controlled, to free resources for quality improvement and increased primary enrollment. A rolling three-year sector public expenditure program (PEP) will be agreed anually, reflecting lncreased spending on primary education and on quality at all levels. Vocational education and training will progressively be re-oriented to employment needs. S. Policy Measures. Government strategy includes policies to increase Internal and external efficiency and to Improve quality. Among these ares (a), for ,rimarv and secondary education, (i) reorganization of the Ministry of Secondary and Basic Education (INESEB) to create a Pedagogical Unit responsible for educational quality, and planing and statistics services, (ii) regulation of student flows to concentrate resources on primary education, (iii) development of progrems to improve administrative efficiency and use of personnel, (iv) reduction of primary school repetition rates, (v) replacement of national service temporary teachers by qualified staff; (b), for the universities, preparation of action plans on cost and financing Issues, administrative reforms, and curricula modernization; and (c), for vocational and technical training, establisbment of an inter-ministerial coordination structure, with employers participating. 9. Proiect Description. The project would have three componentst (a) Strenath- ening administration and Dlannin in MINESEB, including computer and office equipment, studies, and training; (b) CLualitv imurovement of basic and lower secondary education, includings teacher support services (training and travel costs for inspectors, advisers, and head-teachers); pre-service and in-service training for teachers (setting up 6 primary and one lower-secondary teacher training colleges: and re-cycling existing teachers); producing and distributing school books; upgrading secondary school laboratories; and (c) Strenathenina hiQher level education: setting up two short-cycle higher technical training institutes; establishing an employment information service for students; developing action plans to modernize university curricula, and to improve university administration and the cost/financing balance at university level. 10. The project would be carried out over five years. 1te estimated cost is US$ 48.6 million equivalent, net of USS 6.4 million taxes; foreign exchange cost is USS 34.8 million (722). Detailed costs and the financing plan are in Schedule A. Procurement details and the disbursement schedule are in Schedule B. A timetable of processing events and the status of Bank Group operations in  -4- Madagascar are in Schedules C and D. A map is attached. Staff Appraisal Report No. 8026-M&G, dated January 11, 1990, is being distributed separately. 11. Agreed Actions. The conditions of effectiveness wvuld be that the Pe?agogical ana Project Units become operational, that a special account be established, and that co-financing be secured. The three-year rolling sector PEP, giving priority to basic education and to quality at all levels, will be reviewed annually with IDA; that for 1990-92 has been discussed and agreed. Government will ensure that when completed, the project-financed training colleges function at full capacity. Directives will be issued to teachers to set targets for reduced primary school repetition rates. MINESEB will coordinate nutrition, environmental and population education, and prepare programs to integrate such concerns into public education; it will also prepare programs to increase enrollment of girls. The universities will not be expanded at least until mid-1993. A vocational training coordination structure will be established. A condition of disbursement on sub-components for university quality improvement, rehabilitation of three primary teacher training colleges, and production of six out of nine text-books, would be agreement on action plans for university reform, improved education administration, and appropriate cost recovery for school books. 12. Justification. Both economic and educational benefits are expected. The institutional measures will improve long-term resource allocation, allowing strengthening of quality and increased enrollment to respond to demographic pressures, within the education budget likely to be available. The project will increase student achievements at all levels, and reduce costs by allowing students to complete education more quickly. Improved basic education should indirectly improve health, nutrition, fertility, and agricultural production, while improved vocational training and university quality will strengthen manpower resources. Sector PEP projections show that on the basis of CRESED strategies, taking into account the recurrent expenditure impact of the public investment program, real recurrent public expenditure on education would grow between 2 and 3 percent annually in the medium term, an increase consistent with Bank macro-economic projections. 13. Risks. The political implications of some of the measures, such as reducing staff or proposing university reform action plans, make their implementation risky. To reduce these risks, the project has been prepared by local technicians, but continuing dialogue to ensure Government's commitment to reform will be essential. Each sub-component will be implemented by the relevant line agency, assisted by a small unit chaired by the Minister of Secondary and Basic Education, who also coordinated project preparation. 14. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association, and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President by Ernest Stern Attachments Washington DC January 22, 1990  Shehoule A (Pap I of 1) DEDOCRATC LR3ZC 01 8 SfAEsD C0STS AND MNZ CS PIAN PrOiect goat SiMUaw sIAuted costi a P r (blllon) - - US (Millon) -- k al Igeaim Did kl For