Nepal - Basic and Primary Education Project

DocuMAnt of The World Bank 7R OMFiCLAL USE ONLY MICROFICE COPY Report No. P- 5686-NEP Type: (pM)P-6-IE SCHMIDT,T./ X80370 / D-9015/ As1Pp MIM40RNDtUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTRATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 21.8 MILLION TO THE KINGDOM OF NEPAL FOR A BASIC AND PRIMARY EDUCATION PROJECT MARCH 27, 1992 This doent has a strlcted distsibutim ad may be used by recipiets oly In the perfonnauc of tL* official daties.Its contents may not otherise be dsosed without World Bank sutborization.  CURRENCY EQUIVALENTS Currency Unit Nepalese Rupees (NRs) US$ N NRs 42.7 (September 1991) FISCAL YEAR July 16 - July 15 PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ADB - Asian Development Bank BPEP - Basic and Primary Education Project HMG - His Majesty's Government IDA - International Development Association )4HPP - Ministry of Housing and Physical Planning MOEC - Ministry of Education and Culture UNDP - United Nations Development Programme UNICEF - United Nations Children's Fund  FOR OFFICAL USE ONLY NEPAL BASIC AND PRIMRY EDUCATION PROJECT Credit and Project Summary Borrowers The Kingdom of Nepal Amount: SDR 21.8 million (US$30.6 million equivalent) Terms: Standard with 40 years maturity Financing Plan: (Estimated) (US$ million) Financier Government 42.9 1/ Denmark 10 . 0 Japan 15.0 UNDP 7.0 UNICEF 10.8 ADB 20.2 IDA 30.6 Total Economic Rate of Return: Not applicable Staff Appraisal Report: Report No. 10130-NEP HAP: IBRD No. 23438 1/ Includes community financing of approximately US$18.0 million. This document has a restricted distribution and may be used by rocipierts only in the performance of their official duties. Its contents may not otherwise be disclose -; .,Jut World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE KINGDOM OF NEPAL FOR A BASIC AND PRIMARY EDUCATION PROJECT 1. I submit for your approval the following report and recommendation on a proposed development credit to Nepal for SDR 21.8 million, the equivalent of US$30.6 million, on standard IDA terms with a maturity of 40 years to help finance a project for Basic and Primary Education. The US$136.5 million project will be cofinanced by the Royal Government of Denmark with a grant equivalent to about US$10.0 million; the Government of Japan with a grant equivalent to about US$15.0 million; the United Nations Development Programme (UNDP) with a grant equivalent to about US$7.0 million; and the Un.ted Nations Children's Fund (UNICEF) with a grant equivalent to about US$10.8 million. The Asian Development Bank (ADB) has provided financing equivalent to US$20.2 million. Each will administer its portion of the project and follow its own guidelines for procurement and employment of consultants. 2. Background. The low level of literacy (352) hampers the economic and social development of the Kingdom of Nepal. The literacy rate for women is only 18S. Literacy rates are not likely to improve quickly unless steps are taken to reduce the high drop-out rates which erode primary school enrollment. In addition, non-formal basic education programs which currently enroll only 100,000 adults and children per year will need to be greatly expanded. A pervasive problem which has hampered both the growth and the quality of basic and primary education has been the chronic underfunding of the sector. Nepal spends only on average about 2.0-2.22 of GDP and 10.52 of total Government expenditures in education. Low income countries spend an average of 3.0? of GDP and about 12.32 of their Government's total budget in education. 3. The high drop-out rates in the primary schools are in large part due to the poor quality of the system. The curriculum is overly complex and inappropriate to the developmental needs of the children. Although textbooks are free for girls (and for boys through Grade III), they are outdated, poorly written and with inadequate durability. Teachers are for the most part untrained, they are inappropriately supervised, and morale is low. Management problems are pervasive, with the system suffering from lack of planning, poor data, and little monitoring. School buildings are poorly constructed and not maintained. 4. The Ministry of Education and Culture (MOEC) is welt aware of these problems and has developed a master plan for the subsector which emphasizes the need for investment in quality improvement and increased access. The master plan has provided a valuable analysis of the major issues and realistic costs of addressing them. The plan is serving not only MOEC but an ongoing review of the sector by an Education Commission for the new Government. With the support of IDA, UNDP and UNICEF, MOEC has conducted pilot projects designed to test methods to Improve the curriculum, teaching materials, teacher training and supervision. As a result, education quality has increased significantly in the pilot schools. Utilizing grant funds (US$1.6 million) from the Japan Policy and Human Resources Development Fund, MOEC has begun a two-year project of training and technical assistance to prepare ministry personnel to adapt these pilot projects to a country-wide program of  -2- quality improvement. The proposed project is part of this overall national program. 5. Project Objectives. The proposed project is designed to address the quality and access issues listed above in a systematic manner, utilizing increased external and HMG resources to fund the subsectoral program. The project's main objectives are: (a) to improve the quality of primary education, (b) to increase equitable access to primary schooling, and (c) to strengthen the management of the formal and non-formal primary education delivery system. 6. Project Description. The proposed project is organized into three components which wouldt (a) increase the quality of primary education (US$61.4 million) by simplifying and making more relevant the curriculum of the primary schools; providing improved teacher instructional materials, textbooks and supplementary materials; and institutionalizing a teacher supervision, support, and training system; (b) improve access to educational resources (US$61.1 mlllion) by strengthening the non-formal primary education and literacy programs. Girls, the very poor and those in remote areas would have increased opportunity to receive a basic education, renovate and construct additional classroom facilities for primary schools; and (c) improve the institutional development of the subsector (US$14.0 million) by strengthening MOEC's capacity to plan, manage and monitor its formal and non- formal primary education programs; assisting in the development of its capacity to coordinate and manage donor-aided projects; and improving the design of efficient classroom facilities. Various donors would provide the financing required to complete the program during the Eighth Five-Year Plan period (FY92-97). IDA's financing (US$30.6 million) would be predominantly for resources to imprwve quality and efficiency by strengthening in-service teacher training and the improvement of classroom facilities. Financing for studies leading to future projects will also be provided. 7. Pro3ect Implementation. The existing patchwork of donor-financed Project Implementation Units would, during the life of the project, be replaced by a Division of Program Management in MOEC. While the division would have no direct implementation responsibility, it would assist the Secretary of Education coordinate development activities. Planning, monitoring and evaluation would be provided by a strengthened Planning Division of the Ministry. The educational development activities of the project would be implemented by the operational units of MOEC such as the existing Curriculum, Textbook, Supervision, and Development Center (CTSDC). It would be expanded and reorganized into the National Center for Educational Development to coordinate and implement all primary school teacher training, curriculum and instructional materials development. Non-formal primary education and adult literacy programs would be implemented by the Department of Adult Education (upgraded from its existing status as a section in the Ministry). The school construction activities of the project would be implemented by the Ministry of Housing and Physical Planning through a School Rehabilitation and Construction Unit. Communities would be mobilized to carry out construction works through agreements between the Government and the school management committees. 8. Project Sustainability. The emphasis of this project will be upon building the foundation of an efficient delivery system for higher quality  primary education. This project will finance the foundation of a nationwide quality enhancement program. The completion of such a program is likely to take some 15 years of consistent investment in improved curricula and teaching materials, and in greatly strengthened training and supervision of teachers. Therefore the potential gains will not be fully realized without a series of follow-on projects. However, both HMG and the donors have expressed their commitment to a series of projects in the subsector. The costs will be substantial and they will require an increase in the allocation of resources to the primary subsector coupled with cost-saving measures. Beyond the life of the project, when project inputs are institutionalized throughout the Kingdom, efficiency gains would be considerable. Reduction in drop-out and repeater rates and more efficient teacher deployment could reduce the cost of producing a literate completer of the primary schools by 302. Cost savings in textbooks could be as much as 40? through wastage reduction and reuse of books. 9. Lessons from Previous I2A. Involvement. The lessons learned in the subsector have been substantial. Because of the recent pilot programs in primary education in Nepal and neighboring countries, it is now reasonable to expect that the quality of primary education can be improved by providing such inputs as increased teacher training and supervision, especially when combined with clusters of primary schools and resource centers. When more frequent teacher training and supervision are combined with a regular supply of high quality teachingilearning materials, noticeable improvements result in student achievement, reduced student repetition and drop-out, as well as increased professional satisfaction among teachers. However, as important as these inputs are to increased quality, they are but limited results unless the management system is capable of delivering these inputs effectively. To improve sectoral management in Nepal experience indicates that a number of changes should take place. First, the leadership of the educational, financial and planning establisbment and the donor community must agree on priorities, goals and programs. Second, a more efficient use of scarce resources needs to be obtained through the coordination of donor-supported activities in the subsector to integrate the foreign-aided activities. Third, in addition to the need for a well staffed, experienced and organized management system, the success of a project has been directly associated with the qualities of the senior manager of the program, indicating that more time and attention needs to be paid to the recruitment and training of top staff. Finally, in programs to improve the physical quality of schools in Nepal, it has been learned that primary school constr.uction and classroom rehabilitation can be effectively delivered by utilizing the Ministry of Housing and Physical Planning's nationwide technical and supervisory experience and encouraging community support and participation in the program. 10. Rationale for IDA Involvement. IDA has played a significant role in assisting HMG develop the sector. Six education projects and related sector work have given IDA a strong voice in the dialogue of donors and HMG in the establishment of sectoral objectives. As the proposed project demonstrates, IDA financing has not only been used to assist HMG reach its objectives, but also to complement and maximize grant financing from other donors.  11. Aareed Actions. JMIN has agreed that it would: (a) increase the number of female primary school teachers in accordance with a plan satisfactory to the Association; (b) by December 31, 1993 complete administrative arrangements with staff, resources and powers satisfactory to the Association, for the efficient management of foreign-aided education programs; (c) carry out the Project, in accordance with a management plan satisfactory to the Association; (d) cause construction and renovation of buildings under the Project, to be carried in accordance with design and engineering standards satisfactory to the Association; (e) carry out the Project, in accordance with successive annual financing plans satisfactory to the Association. Such plans shall include estimates of the funds, from the Borrower's own as well as other sources, required to carry out the Project for the following fiscal year; (f) by December 31, 1992 furnish to the Association for approval, model contract agreements with School Management Committees for the construction and renovation of classrooms and for the construction of resource centers; and (g) by December 31, 1994 conduct a comprehensive mid- term review with the Association with regard to actions taken pursuant to the carrying out of the Project. The following are conditions of credit effectiveness of the Credit: (a) that the Borrower has furnished to the Association a program for the appointment of female teachers in fiscal year 1993; (b) that the Borrower has established with staff, resources and powers satisfactory to the Associations (i) a unit responsible for implementation of the Project; (ii) a unit responsible for planning of physical facilities for ,primary schools and resource centers; and (iii) a unit responsible for construction and rehabilitation under the Project; and (c) that the Association has received assurances from the Borrower that adequate funds are available to carry out the Project in fiscal year 1993. 12. Project Benefits and Risks. The major benefit of the project will be the creation of a more efficient delivery system to provide higher quality instruction in basic education at the primary level. However, because of the time it takes to institutionalize significant change in the education sector, most of the direct and visible benefits will occur after completion of the project. The cost of educating a primary school graduate will begin to be reduced because of lower drop-out and higher retention rates. The curriculum will be simplified, and textbooks revised. Teaching skills and teacher morale will be improved. Girls, the very poor and those in remote areas will have increased opportunity to receive a basic education. The proportion of female primary schcol teachers will rise from 12.52 of the work force to approximately 19Z by the year 2000. A second, and more immediate, benefit of the project will be increased effectiveness in the utilization of domestic and foreign resources. The process of planning the project for the subsector has already resulted in the integration of inputs financed by six foreign donors. The project will integrate the grade-by-grade improvements in curriculum and textbooks with the teacher training program. The major risks to the project would be inadequate management and delays in counterpart funding. MOEC is mitigating the first risk by strengthening its management (the Division of Program Management) and administrative (the National Center for Educational Development) units. While the delays in the release of funds are, for the most part, the result of HMG financial control mechanisms outside MOEC's management, the risk will be somewhat mitigated by the strengthened program management enabling MOEC to anticipate funding delays and possibly head them off.  -5- 13. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C. March 27, 1992  -6- Schedule A NEPAL BASIC AND PRIMARY EDUCATION PROJECT Estimated Costs and Financing Plan Estimated Costs: Local Foreign Total