Peru - Primary Education (Second Education) Project

Document of The World Bank FOR OmCIAL USE ONLY *.eporb No.12561 PROJECT COMPLETION REPORT PERU PRIMARY EDUCATION PROJECT (LOAN 2465-PE) NOVEMBER 30, 1993 M I CRO 3ARFi 1-4 iv S Repor-t Nou 1 Type. PCDR Human Resources Operations Division Country Department I Latin America and the Caribbean Region This document has a restricted distribution and may be used iv recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed without World Baok autborization.  Currency Unit US$ Intis (1984 - 1987) US$ - 4.40 Intis (1984) US$ - 9.38 Intis (1985, January to June) US$ 1 14.0 Intis (1985, July to December) US$ 14.0 Intis (1986) US$ = 20.0 Intis (1987) WEIGHTS AND MEAS-URES Metric System FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS CORDES Corporaci6n Departamental de Desarrollo Departmental Development Corporation DIEP Direcci6n de la Educaci6n Prunaria Directorate of Pnmary Education ESEP Escuela Superior de Educacidn Profesional vocationally oriented secondary schools GTZ Deutsche Gesellschaft far Technische Zusammenarbeit German Technical Cooperation Agency INIDE Instituto Nacional de Investigaci6n y Desarrollo de la Educaci6n National Institute for Educational Research and Development INIED Instituto de Ifraestructura Educativa Institute for Educational Infrastructure ME Ministenlo de Educaci6n Ministry of Education MEF Ministerio de Economia y flnanzas Ministry of Economy and Finance  FOR OFMCLAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.SA Office of Director-General Operations Evaluation November 30, 1993 MEMORANDUM TO THE EXECUTIVI, DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Peru Primary Education Project (Ln. 2465-PE' Attached is the Project Completion Report on Peru - Primary Education Project (Ln. 2465-PE) prepared by the Latin America and the Caribbean Regional Office. Part II was prepared by the Borrower. The Loan became effective in June 1985; less than two years later, in May 1987, the Bank suspended disbursements to Peru. By that date, fewer than 15 percent of classroom construction targets and under 4 percent of the planned textbook production had been realized. The project outcome is rated as unsatisfactory even though another 25 percent of classroom construction and slightly over 25 percent of textbook production targets were realized with alternative financing in the years 1987-91. Institution building under the project was negligible, and the PCR deems that 'project benefits were surely not sustained." No audit is planned. Attachment 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.  PERU FOR OMCIAL USE ONLY PRIMARY EDUCATION PROJECr (LOAN 2465-PE) PROJECT COMPLETION REPORT Table of Contents PREFACE .............................. .... i EVALUAMTONSUMMARY ............................ ii PART I: Project Review from Bank's Perspective 1. Project Identity ........................... 1 2. Background ............ .............. 1 3. Project Objectives and Description ......... .......... 2 4. Project Design and Organization ........... ......... 3 5. Project Implementation .......................... 5 6. ProjectResults .............7............... 7 7. Project Sustainability .......................... 8 8. Bank Performance .......................... 8 9. Borrower Performance .......................... 9 10. Project4elationship ............................ 9 11. Consulting Services .......................... 10 12. Project Documentation and Data ........... ......... 10 13. Lessons Leaned ........................... 10 PART II: Project Review from Borrower's Perspective 1. Introduction ........................ 12 2. Sectoal Development Objectives .......... ........ 12 3. Design and Organization oftheProject ..... ......... 13 4. Project Execution ........... ................ 14 5. Factors Which Affected Project Execution .... ........ 14 PART m: Statistical Information 1. Estimated and Actual Cumulative Disbursements .... .... 17 2. Planned and Actual Allocation of Bank Financing .... .... 18 3. StaffInputs . .............................. 19 4. UseofBankMissions ......................... 20 I This document has a restricted distribution 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.  Tables 1. Related Bank Loans .......... ........... 21 2. Project Tmetable .......... ........... 22 3. Loan Disbursements ..................... 23 4. ProjectImplementation ..................... 24 5. Project Costs and Financing ..................... 25 A. Project Costs ....... .............. 25 B. ProjectFinancing ........... .......... 25 6. Project Results A. Direct Benefits .......... ........... 26 B. Economic Impact ........... .......... n/a C. FinancialImpact ...................... n/a D. Studies ...................... 27 7. Status of Key Covenants . ..................... 28 8. Use of Bank Resources A. Staff Inputs . ..................... 29 B. Nissions ...................... 30 C. Costs ..................... n/a  - i - PERUI PROJECT COMPLETION REPOR PRIMARY EDUCATION PROJECT (LOAN 2465-PE) PREFACE This is the Project Completion Report (PCR) for the Primary Educafton Project in Peru, for which loan 2465-PE in the amount of US$27.0 million was approved on July 10, 1984. The loan became effective on June 10, 1985, and disbursements were suspended in May 1987. When the loan was closed on August 14, 1991 (retroactive to May 1, 1991), disbursements had not resumed. By loan closing, US$3.01 million was disbursed and the undisbursed balance of US$23.99 million was cancelled. The PCR was prepared by the Human Resources Division of the Latin America and the Caribbean Country Department I (Preface, Evaluation Summary and Parts I and IlI), and by the Ministry of Education of Peru (Part II). Preparation of this PCR is based, inter alia, on the Staff Appraisal Report; the Loan Agreement; supervision reports; annual audit reports; correspondence between the Bank and the Borrower; internal Bank memoranda and interviews with representatives of the Bank and the Ministry of Education of Peru who had central roles in the preparation and implementation of the project.  - lit - PROJECT OMPLETIN RQRt PRIMARY EDUCATION PEO3ECT ILOAN 2465-PE) EVALUATION SUMMARY 1. The thre main objectives of the project were to: (a) provide sufficient and appropriate schools in rural and urban areas of 10 departments; (b) improve the efficiency and quality of primary schooling; and (c) support the administrative and project management capacity of the Ministry of Education. These objectives were to be achieved by providing 1,250 classrooms in 150 schools, training 2,100 educators, producing 3 million textbooks, developing new curricula, supporting bilingual education and building the capacity of two units in the Ministry of Education. Since only a small proportion of activities were carried out, the project contributed minimally to the achievement of these objectives. Implementation Experience 2. The Loan Agreement for this project was signed on February 15, 1985, and the loan became effective on June 10, 1985. It was closed on August 14, 1991, retroactive to May 1, 1991, by which timne US$3.01 million had been disbursed. The undisbursed balance of US$23.99 million was cancelled. The Belaunde Government met conditions for effectiveness in June 1985, one month before the end of its term. The new government of Alan Garcia implemented the project for two years. In May 1987, the Bank suspended disbursements when Peru fell into arrears and disbursements had not resumed when the loan was closed in 1991. Of the US$3.01 million in Bank financing, 67% supported civil works, 19% furniture and equipment, 9% textbook production and the remaining 5% was allocated to consultants, studies and operating costs. The planned allocation called for less emphasis on civil works (47%) and greater emphasis on consultants and studies (17%). After Bank disbursements for the project were suspended, some project activities continued exclusively with Government support, albeit with serious limitations. RIeults 3. During the two year period of Bank financing for the project, 180 urban school classrooms were built and 14 of the proposed 15 textbooks were designed. The project also produced about 110,000 textbooks, or 4% of the target By financing bilingual education activities developed by the Government  - iv - with the assistance of GTZ, the project also p:-oduced 770,000 textbooks for non-Spanish speaking children, about 3 times the expected number. In the four years from 1987 to 1991 following suspension of Bank disbursements, the project continued to build new schools. It constructed an additional 313 urban school classrooms and supported the development of a special curriculum and a pilot training program for multigrade schools. Sustainability 4. The impact of the project was limited to expanding primary school infrastructure and developing architectural designs for school buildings. Since project implementation was so severely affected by the unfavorable political, economic and social context, project benefits were surely not sustained. Findings and Lessons Learned 5. The experience of this project provides several useful lessons for the Bank and the Borrower on steps which might be taken to avoid some of the problems which this project encountered. For the Bank: a develop special feasibility criteria for crisis situations. * ensure adequate financial and administrative measures for good management. * promote continuity of counterpart teams between preparation and implementation. e require plans for implementation, monitoring and evaluation. o only employ a project management model with several participating institutions when leadership is soiid and when the organizational environment fosters smooth horizontal coordination, dialogue and autonomy in decisionmaking. o hold a project launch workshop to review Bank guidelines and procedures for disbursements, bidding, special accounts and management of technical assistance. * include provisions for a mid-term review. For the Borrower: o prepare a detailed implementation plan with supervision and monitoring arrangements and built in procedures for making mid-term corrections. e undertake feasibility studies prior to decentralizing management to ensure that local capacity is adequate to support project implementation. 0 ensure that educational investment priorities have the necessary political and financial backing. a htiild on imneqe,.q and correct errors of earlier Droiects.  - v - * build on successes and correct errors of earlier projects. * place high priority on allocating adequate and appropriate human and financial resources to project prepartion to avoid costly delays and weak proposals which cannot be implemented * initiate discussions with the World Bank and other lending partners of modifications to project design that may be necessary following changes in the political/economic context.  PMR PROJECT COMPLETION REPORT PRIMARY EDUCATION PROJECt (LOAN 2465-PE) PART I: Project Review from Bank's Perspective I Project Identity Name: Primary Education Project Loan Number: 2465-PE RVP Unit: LA1HR Country: Peru Sector. Education Subsector: Primary Education 2 Background 2.1 Sector development objectives: Because the identification, preparation, appraisal and execution of this project spanned three national govemment five-year terms, sectoral development objectives shifted over the history of the project. When the Bank and the Government initiated discussions in 1978 about an education project to follow the FY74 First Education Project (Ln. 949-PE), the national government was in the midst of implementing a major educational reform program. This program, introduced in 1972, sought to strengthen education as a long term strategic means of promoting human resource deFvelopment and social and economic equity by: (a) ensuring nine years of basic education for all, including education for all children in their native language in the early grades; (b) providing comprehensive vocationally oriented secondary education through Escuelas Superior.es de Educaci6n Profesional (ESEP); and (c) offering post-secondary university education and further graduate studies. With the arrival of a civilian government in 1980, the emphasis in education was on returning to the educational system in place prior to 1972, which offered six years of primary education, followed by five years of secondary education and university studies. The "Five Years For Education" (1981 - 1985) plan established policies and action plans to: (a) develop and expand primary education (grades 1 through 6) in poor urban and rural areas; (b) improve the quality and efficiency of primary education through teacher training, curriculum development, establishment of an evaluation unit in the Ministry of Education to measure learning outcomes, and production and distribution of textbooks; (c) streamline the Ministry's administrative structure  and transfer greater responsibilities to regional offices; and (d) increase the coverage of pre-school through the expansion of facilities. The 1985-1990 national government which executed the project placed a new emphasis on redressing persistent neglect in the Trapecio Andino, the Andean region in which most inhabitants were poor and education levels low. The new administration's policy of "Education for Life" emphasized: (a) expanding pre-school education and universalizing primary education; (b) placing high priority on rural and marginal ur'^ni areas, border areas and those with non-Spanish speaking populations; (c) decentralizing and de-bureaucratizing education administration while promoting community participation; and (d) promoting educational infrastructure, through local management of construction investments. 2.2 Policy context: The civilian government in power from 1980 on stressed the development of the social sectors and the improvement in production and incomes for low-income urban and rural groups. In education, the 1980 national government approved a law reversing the 1972 educational reforms. Initially this led to two parallel educational structures, each with its own curriculum and supervision system, with limited decision making at the central level. Throughout this project's life, major issues in education continued to be: (a) the small percentage of children who completed primary school, caused by high absenteeism from school, late age of entry, limited physical infrastructure, problems of language, inadequate adaptation of teaching systems and low income; (b) the poor quality of teaching, caused by a high number of unqualified teachers, extremely limited teaching, materials, and deficient school administration; and (c) financial and organizational problems of the sector. 2.3 Linkages between project, sector and macro policy objectives: The Bank and the Ministry of Education were informed about the macroeconomic development policy of the government. During project preparation, other projects were executed in the education sector or related areas, including the FY74 First Education Project (Loan 949-PE), the FY82 Higher Agricultural Education Project (Loan 2208-PE) and the FY82 Public .Fector Management Project (Loan 2204-PE) (see Table 1). 3 Project Objectives and Description 3.1 Project objectives: The project's three objectives were to: (a) provide sufficient and appropriate schools in 10 departments of the country, in both rural and urban areas; (b) improve the efficiency and quality of primary schooling; and (c) support the administrative and project management capacity of the Ministry of Education. 3.2 Components: The project had eight components designed to accomplish these three objectives. The first was a school construction component to provide 1,250 classrooms in a total of 150 schools, 90 urban and 60 rural. The second was a training component to provide training for 21,000 educational agents (1000 regional and local supervisors; 2500 school principals and 17,500 teachers) in both administrative management and the use of texts and  -3- curriculum for multigrade schools. The third was a textbook component to provide textbooks and educational materials for 300,000 children through the production of 3 million textbooks. The fourth was a multigrade school component to develop, pilot test and implement on a Pilot basis a cufriculum for multigrade schools. The fifth was a bilingual education component tu support an ongoing GTZ-led bilingual education project in Puno executed by INIDE, the lsWtuto Nacional de Investigacidn y Desarrollo de la Educacidn (National Institute for Educational Research and Development). The sixth was an institutional strengthening component to support the development of a training and textbook unit within INIDE. The seventh was institutional strengthening of INIED, the Instiuto Nacional de Infraesmructura Educadva (National Institute for Educational Infrastructure) by providing training and technical assistance in infrastructure planning, administration and project supervision capacity. The eighth was a studies component to support improvements in the budgeting process of the Ministry of Education. 4 Prject Design and Organization 4.1 Conceptual foundation: Shifts in educational policy influenced the project design. Early missions recommended that the Bank prepare a second education project for 1979 Board presentation which would include grades 7 through 9 (the last years of basic education under the 1972 educational reforms) and grades 10 through 13 (secondary vocational taining under the reform program). The project was to support fonnal and non-formal education and vocational training. Through support for INIDE, the National Institute for Educational Research and Development, it was to support improvement in the quality of curriculum development, staff and teacher training, educational materials production, and the Ministry of Education's management and planning capabilities. 4.2 By 1978, Bank discussions with the Ministry suggested that both institutions had begun to think that the project design should include the building and equipping of infrastructure likely to be unfinished under the First Education Project (Loan 949-PE); expansion and consolidation of basic education through the provision of new facilities; expansion of the grade 10-13 ESEP program through expanded infrastructure, and technical assistance to upgrade teacher skldls. 4.3 A 1981 project identification mission worldng with the new 1980 national government first set fo.h the basic design which was later prepared, appraised and executed. This called for: (a) providing new primary school facilities and upgrading existing ones in rural and low-income urban areas; (b) enhancing community participation; (c) introducing double shifts to expand enrollment; (d) strengthening evaluation and education planning capabilities of the Ministry of Education; and (e) improving teacher training, information flows and the provision and distribution of textbooks.  - 4 - 4.4 The identification of key barriers to the system's efficiency led to a design which emphasized infrastructure, textbook production, curriculum development and strengthening of the administrative capacity, the basic elements influencing teaching and learning. The project design included the innovative integration of management, human resource development, design and production of appropriate educational materials, and solutions to the problems of rural schools (largely multigrade and bilingual). 4.5 In broad terms, the preparation of this project spanned from 1977 through 1985, while disbursements were made between 1985 and 1987. This extended period for preparation led to considerable refinement and maturation of project concepts and strategies prior to effectiveness. The conceptual framework for the project was shared and understood by both the Ministry of 5ducation and the Bank. The Bank's support for the 1980 shift back to the pre- 1972 educational system is noteworthy since the First Education Project (949- PE) was designed specifically to support implementation of the 1972 reforms. In a sense, this project supported the reversal of these reforms. Project records suggest agreement between the Bank and the Government on this strategy. 4.6 A number of obstacles delayed project preparation. Initial discussion about a second education project began in 1977. When the Government formally contacted the Bank in 1978 to express interest in a second project, the Bank indicated that it would first need to assess the pace of implementation of the 1972 reforms and the execution of the FY74 First Education Project (949-PE). The Bank decided to send an identification mission in April 1980, yet shifted the timing to December 1980 because of national elections scheduled for April. The Bank expressed concern over poor implementation of the First Education Project, yet by mid-1981 both the Bank and the Govemment were operating on a rapid project processing schedule which called for January 1982 appraisal. Government failure to assign a competent team quickly meant that by the July 1982 appraisal mission, project preparation was not complete. In 1983, the Government decided to postpone the project in order to keep public sector expenditures down as part of its austerity program. This led to the postponement of Board presentation until 1984. The Belaunde Government met conditions for effectiveness in June 1985, one month before the end of its term. The new government of Alan Garcia implemented the project for two years before the Bank suspended disbursements on all projects in Peru because of the serious problem with arears. 4.7 Definition of agency roles and responsibilities: The project called for cooperation between two agencies within the Ministry of Education, INIED, the National Institute for Educational Infrastructure, and INIDE, the National Institute for Educational Research and Development. INIDE was responsible for introducing quality improvement programs and activities such as curriculum development, teacher and staff training, educational materials production, and management and planning capability building. Bank experience with the First Education Project indicated that agencies within the education sector were reluctant and highly bureaucratic in their interaction with one another. Staff from the First Education Project (Ln. 949-PE) did not participate  - 5 - in the preparation of this project. The primacy of INIED in project implementation, despite Bank encouragement of a Coordinating Committee, led to a central focus on infrastructure and limited achievement on complementary activities. 4.8 The project was not successful in achieving its objectives. One of the major reasons was the suspension of disbursements after two years of implementation. Two project design and organization factors which contributed to this lack of success were the extended period for preparation and the assignment of major responsibility to an agency that focused only on infrastructure at the expense of other components. The development of the project would have benefitted from more attention to the problems which plagued the First Education Project (Ln. 949-PE). In its first five years of execution, that project disbursed only US$6 million of a US$24 million loan. Only after 1979, when a Bank team worked with Government representatives to reduce the scope, establish a revolving fund and improve administrative procedures did this earlier project succeed in disbursing US$16.5 million more through 1982. The problems which plagued the earlier project included lack of coordination among govemment agencies, changes in the leadership of the project implementing unit, and the weak administrative capacity of the Ministry of Education. 5 Project Implementaion 5.1 Variancesbetweenplannedandactualproject implementation: The major variance between planned and actual implementation resulted irom the suspension of all Bank disbursements for Peru in May 1987, two years after project effectiveness. Some activities continued with Government support, albeit with serious limitations because the Government was unsure if expenditures would later be reimbursed by the Bank. From its inception, the project experienced delays and financial, administrative and technical problems. Despite ambitious targets, achievement was minimal. Delays in the establishment of the Special Account led INIED to restrict expenditure authorizations to other participating agencies, leading to delays in execution. Economic management was weak. Project managers did not budget with realistic inflation projections, which led to serious gaps between budgets and implementation requirements. 5.2 Decisions by executing agencies were not coordinated. INIED did not coordinate with other agencies well in either administrative or technical matters. Individual components were not well coordinated; links among teams managing different components were limited to presenting requirements for financing and attending sporadic meetings called by the Coordination Group or organized on the arrival of Bank missions. Participating institutions did not prepare joint annual implementation plans or coordinate their schedules. Thus, in sites where infrastructure was built, furniture, textbooks, trained teachers and principals were not necessarily available. Furthermore, most construction was concentrated in urban areas, with the idea of later expansion into rural areas.  - 6 - 5.3 Relations between INIED and the Ministry of Economy and Finance were strained because INIED did not meet MEF reporting schedules and requirements. The weakness in reporting was even more pronounced after 1987 when INIED lost its accounting staff. 5.4 Risk identification and avoidance: Risks were correctly identified as: possible delays in the preparation of bidding documents, difficulties in coordination between two independent agencies (INIED and INIDE) and difficulty securing adequate counterpart funding. The solution proposed to minimize these risks was the formation of a Coordination Group, with specific responsibilities and representation from all participating agencies. In practice, this proved to be inadequate to overcome risks. 5.5 Factors affecting project implementation: The lengthy period between initial conceptualization and actual implementation led to unforeseen factors affecting implementation. First, the severe fiscal situation which led the Government to postpone consideration of the project in 1983 could not have been foreseen when initial discussions began in 1977. Second, the new focus of educational investments which emerged with the afival of the 1985 national government toward the Trapecio Andino could not have been foreseen at the design stage. 5.6 By using project funds to support ongoing GTZ activities in bilingual education, the production of textbooks and the expansion of this component were ensured. The project emphasis on addressing management at all levels and components was also well founded. Nonetheless, the preparation and supervision missions did not include specialists in educational management, nor was technical assistance provided. The role of DIEP, the DirecciOn de la Educacidn Primaria (the Directorate for Primary Education) in the project was insignificant in contrast to the roles of INIED and INIDE. This is particularly apparent in training and curriculum development, in which both INIDE and DEEP should have worked in coordination. 5.7 Peru's decision to continue to support the project financially after the suspension of Bank disbursements permitted further construction to be undertaken and reflected a commitment to achieving some project targets. The emphasis of the project on school construction after suspension of Bank disbursements suggests that the Government did not consider the other project components as important to the success of primary education as the Bank did. The project spent US$11.7 million, 26% of the planned amount, of which the Bank provided US$3.01 million, 11I% of the planned level and the Government provided US$8.6 million, or 48% of its total financial commitment. Frequent changes in project management jeopardized project continuity. The project had three Executive Coordinators: the first worked for one month, the second for two years and the third began six months after the Bank's suspension of disbursements.  -7 - 6 Project Results 6.1 Project achievements: With Bank financing through May 1987, the project built 180 classrooms in urban schools. Rural school construction was not undertaken, although plans were prepared for rural multigrade schools. Improvements in school efficiency and quality were below target levels from the beginning. Fourteen of 15 proposed school textbooks were designed, yet only 110,759 were produced, which was 4% of the target. This low achievement is particularly surprising since the project procured machinery for book production and expanded the physical space of the Textbook Production Unit. A small number of Spanish-spealdng students received additional textbooks through the project, but not the full range which the project proposed to deliver. One of the project's achievements which surpassed planned levels was the production of textbooks for non-Spanish speaking children. Here achievement was three times the target level (707,000 distributed compared to 220,000 planned). In this component, the efforts of the bilingual education project supported by GTZ were of vital importance. The project trained 600 teachers in bilingual education and thereby contributed to the expansion of bilingual education. 6.2 From June 1987 through May 1991, the project constructed an additional 313 classrooms for a total of 493 classrooms in 55 urban schools with local financing. This represents 39% of the target with an investment of US$8.5 million (US$1.8 million Bank financing). The project's emphasis on urban areas meant that 61% of school construction and 54% of planned classroom construction in urban areas were accomplished. Procurement of furniture was low relative to the number of schools constructed, so that only some of the schools built were fully equipped under the project. The project provided 19,720 primary school places, or 39,440 school places assuming 100% utilization in two shifts. After the suspension of Bank disbursements, the project supported the development of a special curriculum and a pilot training program for multigrade schools. 6.3 Human resource development was limited by the lack of materials, which were to form the basis for training. Of the six proposed studies, four were partially completed. The planned feasibility study on bilingual education was partially completed and led to a comprehensive diagnosis for curriculum development and teacher training. For the planned study on school mapping, only the initial proposal and a few instruments for data collection were developed. A study on the characteristics of the school administrator and a situational analysis of multigrade schools were caried out in Arequipa; the situational analysis led to the use of a multigrade curriculum design. (See Table 1.) No achievement was made toward the objective of improving and modernizing the administration of education. 6.4 This project was implemented under difficult circumstances, both because of the crisis in Peru and because of the lack of Bank financing. The project's impact was limited to expanding school construction, developing  - 8 - architectural designs for school construction and expanding primary education infrastructure. The project's support for the bilingual education project indirectly led to the creation in 1987 of a Directorate for Bilingual Education within the Ministry of Education. 7 Project Sustainabilitv 7.1 The project was not sustainable. First, it was plagued from the outset by instability such as: (a) the change of governments shortly after loan signing, which led to a series of new counterpart authorities; (b) the economic deterioration and great dissatisfaction of the education sector employees, which led to frequent strikes; (c) the resignation of INIED technicians and administrators who had played important roles within the project; (d) the security situation in the country; and (e) frequent shifts in authorities, including S changes of ministers over the project life. Second, the fact that the Government, when it began to finance the project from its own resources, substantially changed its orientation, suggests that the design was unsustainable from the outset. 8 Bank Performance S.1 The Bank maintained a dialogue with the Borrower through firequent missions and fluid communications, especially in the preparation phase. The Bank fielded a total of 25 missions at intervals averaging about 5 months, of which 12 were during the design phase. The Bank's other experience in the country, including three other projects in the education sector, contributed to the Bank's understanding of the educational, political and financial situation of the country at that time. During project implementation, 11 missions were fielded and the aide memoires note difficulties and delays from the beginning of the project. The total staff time devoted to the project over its life was 227 staff weeks, which demonstrates the continued interest the Bank had even after suspension of disbursements. The professionals who participated in missions were principaIly architects (15) and economists (19), with lesser participation of general educators (11) and textbook specialists (4). This composition contributed to the infrastructure bias of the project in implementation. 8.2 The Bank frequently acknowledged concern over the administrative and coordination capacity of INIED. Nonetheless, the proposed solution of forming a Coordination Group as a means to counteract this problem had only limited impact. The Bank appraised the project carefully and indicated at that time that project preparation was incomplete. Bank awareness of further preparation needs led the Bank to assist the Government to identify financing for further preparation work. 8.3 The Borrower indicated that despite the Bank's high level of interest, supervision missions concentrated on administrative matters and did not provide substantial technical support. The continuity of Bank personnel on  - 9 - successive missions was considerable, but was not matched by continuity of counterpart personnel. Even after the May 1987 suspension of disbursements, the Bank maintained strong and positive contact with the project through frequent mnissions of staff, who proposed alternatives to the Government for reprogramming the project to achieve some project objectives. 9 Borrower Performance 9.1 Strengths and weaknesses: National institutions tried to collaborate closely with the Bank in project identification and preparation. Despite great enthusiasm for the project, the Ministry failed to provide the high level analytical skills necessary to ensure rapid preparation. The Ministry of Education's commitment to improving primary education was not shared by the Ministry of Finance, which did not allocate sufficient resources in a timely manner for project preparation or implementation. The elements which would ensure smooth project implementation (assignment of funds, selection of a coordinator and constitution of a Coordinating Unit) required lengthy and difficult processes. The project often faced delays in obtaining counterpart funding, had three coordinators, and the Coordinating Unit did not meet frequently enough to facilitate decisions. The Ministry of Education's experience with the First Education Project (949-PE) should have given this project a stronger basis for identifying the risks which it would face in implementation, since that project also suffered the same difflculties. 9.2 The Government continued its support to the project after the suspension of Bank funds, although it funded infrastructure almost exclusively. INIED gave the highest prionty to its own activities, and DIEP participated minimally in the project. 9.3 This experience provides important lessons for the Govemment. Educational priorities which form the basis for investments must be supported by political and financial commitments. Preparation of new projects should build on the successes of earlier projects in the same sector or correct the errors which contributed to their weaknesses. Project preparation should be afforded a high priority in the allocation of resources; failure to do so results in delays and poor quality project proposals. These problems are costly in the long-run for the Government in terms of slow disbursement and investments which have little impact on development. 10 Project Relationship 10.1 Strengths and weaknesses of Bank-Borrower performance: The relationship between the Bank and the Ministry of Education for this project was consistently positive and based on mutual professional respect, despite the difflculties each party experienced with the suspension of disbursements and subsequent canceLlation of the project. In retrospect, the major frustration with this relationship was that it did not lead to project achievement.  - 10- 10.2 Strengths and weaknesses of relationships with other parties: Bank and Ministry of Education relationships with other parties were good--with UNESCO which supported the sector analysis; with the OAS which was to assume responsibility for managing technical assistance; with AID for financial cooperation and with GTZ for support of bilingual education. One vital relationship which was weak was between the Ministry of Education and the Ministry of Finance. 11 Consulting Services 11.1 Technical assistance was not used in this project, although the 200 months of planned assistance were vital to strengthening the management capability of the Ministry of Education. Project discussions with the OAS over arrangements for technical assistance management were halted when Bank disbursements were suspended. 12 Proiect Documentation and Data 12.1 The legal agreement signed on February 15, 1985, was drafted appropriately and both parties agreed with its terms. No difficulties arose in either its legal or operational interpretation. The SAR provided a useful framework for understanding the context and the design of the project. The Bank project files were well organized through 1987, when disbursements against this loan were suspended. Project files in Peru were not accessible because the relocation of the agency responsible for project implementation coincided with PCR preparation. 13 Lessons Learned 13.1 The experience of this project confirms the need to rely on clear feasibility criteria in crisis situations such as the one Peru faced. For example, the project design should be very simple and based to the greatest extent possible on ongoing activities rather than new activities which require extensive or complex design work. The project should have a clear implementation manual and a detailed implementation plan and schedule. The project should be prepared in a participatory way so that activities are based on broad consensus rather than the views of a small number of possibly transitory officials. Project design should incorporate frequent implementation reviews. In hyperinf9ationary settings, project management should include sophisticated budget management capabilities. 13.2 It also confirms the priority of instituting adequate financial and administrative measures for good management. It suggests the value of ensuring continuity between officials responsible for project preparation and those responsible for implementation. This experience suggests the need for careful  - 11 - operational plans and for regularly scheduled monitoring and evaluation to permit adjustments in implementation. This project experience highlights the challenges inherent in having several participating institutions, even in the same sector. It suggests that such a model will only work when leadership is very solid and where the institutional framework is conducive to smooth horizontal coordination and autonomy in decision-making. 13.3 The project also suggests the need to ensure Ministry of Finance commitment to providing adequate counterpart funding. It demonstrates that good Bank-Borrower relations must extend beyond the implementing agency and ensure broad govemmental support. 13.4 This project suggests the value of holding a project launch workshop, where Bank personnel can review with project implementing agencies, Bank guidelines and procedures for disbursements, bidding, special accounts and management of technical assistance. It also suggests the merits of including a mid-term review to re-assess the appropriateness of project strategies to achieve the objectives after several years of implementation experience. 13.5 Project preparation should include preparation of a detailed implementation plan with supervision and monitoring arrangements and built in procedures for making mid-term corrections. 13.6 While administrative decentralization can facilitate action, it should be based on prior feasibility studies which assess capacity and recommend any steps necessary to support project implementation.  PER-U PROJECT COMPLETION REPORT PRIMARY EDUCATION PROJECT (LOAN 2465-PE) PART I}: Project Review from Borrower's Perspective 1 Intoducion 1.1 The Ministry of Education of Peru is in agreement with the review which the World Bank presents in Part I, given that the bulk of the information on which it is based is shared by both parties. For this reason, and in order not to repeat the Bank's findings, this chapter provides some information which Part I omits and focuses on the lessons which can be drawn from this project experience, so that in the future the weaknesses which this project faced can be corrected. 2 Sectoral Development Objectives 2.1 In Part I of this Project Completion Report, the World Bank did not present a summary of the policies of the Government of Peru which took power beginning in July 1990, even though the period of review for this project extends through 1991, the year the loan was canceled. 2.2 On August 8, 1991, the Government of Peru launched a stabilizadon program aimed at eliminating the root causes or financial imbalance, by ending preferential exchange rate subsidies and establishing strict management of public finances. The stabilization program sought to bring about a drastic reduction in hyperintlation by correcting distortions in relative prices generated during the prior administration. This program was combined with the initiation of structural reforms to reorganize the economy by eliminating barriers to the free functioning of market forces and the promotion of productive activities. 2.3 The new orientation of the economic program gave high priority to intensified efforts aimed at ending the financial isolation which led, among other things, to the drying up of sources of official and international financing for development activities. 2.4 In the area of education, the new government has initiated a series of reforms based on the following principal underpinnings:  - 13 - a. qualitative improvement of education, giving priority to rural areas and border zones because of their condition as areas plagued by the greatest educational iniquities; b. institutional change based on the transfer of education management to democratically organized communities; c. modification of the financing system oriented at providing direct subsidies to educational centers and programs in order to ensure better use of public resources without overturning the policy of free education; d. rafionalization and de-bureaucratization of all levels of educational administration. e. execution of an aggressive program. of construction and rehabilitation of school buildings and school rooms with priority attention to marginal urban, rural and border areas. 3 Design and ganization of the Prec 3.1 The lengthy period used for the preparation of this project (1977- 1985) is a source of continuing puzzlement-eight years which included two changes in national government. It was to be expected, therefore, that significant changes in educational policy and priorities would have occurred, particularly since from 1977 on, the signs in favor of abandoning the educational policy initiated in 1972 were quite visible. 3.2 The World Bank states that "such a long period of maturation permitted the concepts and strategies of the project to mature before being implemented': nonetheless, this was not demonstrated in the stage which really counts-the execution of the project. Factors which influenced the lengthy maturation include the following: * discontinuity of educational policy; * slow government response in the preparation of the project; * weakness of interinstitutional work; * insufficient motivational leadership; * failure of the Ministry of Education and the World Bank to leam from the experiences of the prior project (Loan 949-PE); and * limited technical assistance from the World Bank.  - 14 - 4 Project Execution 4.1 As the World Bank states, the project had an unusual history. Essentially, from when the project was first identified (1977) until the last disbursement was made by the World Bank (1987) an entire decade went by. In this period, at least six cohorts of students completed primary education and seven cohorts completed secondary education. Nonetheless, World Bank disbursements (1985-1987) totalled only 3 million dotlars, merely 180 classrooms were built through the project, and just barely 111,000 books were printed. This anecdotal experience merits an exhaustive review of the operating systems and procedures of both the Ministry of Education and the World Bank. What then were the roles played by the 15 architects, 19 economists, 1I education generalists and 4 textbook specialists, who participated in the 25 missions the Bank sent and who dedicated 227 staff weeks, with an average of 24.3 staff weeks per year in the period mentioned previously. (See Table 8.a.) 4.2 The project activities carried out from May 1987, when disbursements were suspended, to May 1991, when the loan was canceled, while they maintained the momentum of the project, were made without World Bank financing, exclusively with national financial support. This enabled the government of the time to reorient project priorities in accordance with the economic and social policies subject to the availability of financing. This affected (a) the sustainability of the project (as was to be expected because of the difficult economic situation of the country); and (b) the orientation of investment, which favored infrastructure to the detriment of other project components. 5 Factors Which Affected Project Execution 5.1 The convergence of a variety of factors meant that the project execution would not develop as was foreseen and thus the proposed objectives would not be reached. It is important to highlight these factors and take precautions in future projects. Minimizing risks which can be controlled can ensure greater project success. 5.2 The most important lessons which can be drawn from this project experience are the following: it is vital to identify mechanisms which tend to reduce risks and uncertainty in the context of financial crisis and political changeability; educational policy priorities should have the solid financial backing of the Ministry of Economy and Finance to ensure a timely flow of national counterpart resources; when a project calls for interinstitutional participation, effective integration should be established through a clear definition of  - 15 - responsibilities authorizing a horizontal coordinating capacity and delegating autonomy in decision making; operating plans should be developed jointly, noting precisely the task of each project component; the project administration, a key part of execution, should be developed from the beginning, very carefully, taldng into account the following: - qualified, strong and balanced leadership; - dynamic and committed participation of all organizations involved; - assurances so that personnel changes do not compromise the continuity or the orientation of the project; - capacity to ensure adequate interinstitutional interaction; and - smooth implementation of the project with a vision of the whole. project monitoring should be adequate and timely to enable cofrection of factors which might affect the execution and results of the project; the World Bank's technical support should be brought to bear.  - 16- PERU PROJECT COMPLETION REPORT PRIMARRY EDUCATION PROJECT (LOAN 2465-PE) PART II: Statistical Information  PERU - PRIMARY EDUCATION PROJECT (Loan 2465-PE) PROJECT COMPLETION REPORT Graph 1, Estimated and Actual Cumulative Disbursements 30 25 . ... ..... ...... ... ......... . .... .... ... . .~~~~~~~~~~~~a 20 .............. . . . . . . . . . . t; .. .. . . . .. I .. . . . . .. . . . . tAppraisal Estimate 10 ... . .... .. . . .. . . . .. . . . 5 ............................... b '/-~~~~~~~~U 1984 1985 1986 1987 1988 1989 1990 1991 Years Based on Table 3. .-17-  PERU-PRIMARY EDUCATION PROJECT (Loan 2465-PE) Project Completion Report Graph 2. Planned and Actual Allocation of Bank Financing Textbook Production 13% Civil Works Consultants, Studies Furniture, Equipment, 17% 19% Initial Deposit S/A Operating Costs 3% ~~~~~~~~~~1% Frniture & Equipment 19% Civil Works Textbook Production Consultants, Studies 47% 9% 3% Planned Disbursements: US$46.8 Million* Actual Disbursements: US$3.1 Million * These are percents of US$24.4 allocated. Loan total also includes US$3.2 million unallocated. Based on Table 5b.  PERU-PRIMARY EDUCATION PROJECT (Loan 2465-PE) PROJECT COMPLE-TION REPORT Graph 3. Staff Inputs Staff Inputs (sws) 100 80 1 0 0 .. ... - . - . - . - - - - -- - - - - --.-.--.. .............. . .... .... . .: :- .: : . - . .: . ... . .. -... - .: .. - .:: . . . . - - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. . . .. .. .. ... 60 ... . . .. . .. . .. .. . ''. ,,.'' ',,,',' ,'.,' :- .' ,'.' . .... .. ... . . '. - ~~~~~~~~~~~~~~~~~~~~~.. .. ... . .......... ..... .-.--.....-.. - . .- . ->;.4.b.. ........ .......... ................... ....... ... .. .............. ;......; - ... -:- i ~~~~. --:.. .....-.--..:-:.........--.-.--.-. ......................... . -...- j. j-'':ij':-, . ...:........................ -.. . .:,::, ' : ... .. - 60~~~~~~~~.. ..-....... . ; ; --- -- ; - -- ;- * 40.. ,, j.,.... . . . .j ~~~~~~~~ ...:.-.: -: :-..::.: . : .. ..... .. . : . . .. :-.... .:- . :.:--: .,, , ,., , ,., ,, ,,.,.,;,,. . , . .......... : .-::j: --''-:.' .'. ' : .' ' i . :'::.-:'' ''' -.'M. '' ' 20 ........... ............................. .... .......... .-.... '- : :::. ::. IL. ......, . ..- .. ...... ..... . ........ .. .. . ........... ............ ........j.;;.j.;:;:-'-:':':'j ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~....... ,, . ._. _ ':... .' . .' -". ... '.'. : : '-:.''' ..; ' ''''.'". '',-j"''..:.................. -- - - '':.: - ' AM ......"' '' ''':" ": ,., , ., . j , , ,, .,,, , ,. . . X , . j, ........ ... . . .. .. . ............~~~~~~~~~~~~~~....... .. ..... 20 .---... . 0 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 Years Based on Table 8a. - 19-  PERU-PRIMARY EDUCATION PROJECT (Loan 2465-PE) PROJECT COMPLETION REPORT Graph 4. Use of Bank Missions Person Days in Field 160 140 ...*............. I..... AppraisalI 1 20 . .. .. .. .. .. . .. . .. .. .. .. . .. .. . .. .. .. . .. .. .. . .. . . . . . . .. ..... ..... ... ... ...... ...... .. 1()0 . ... . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... ............ . p t o6 .. ................. ....... . . . . . .. ... ............................. .......... 40 .. ................. ... . . ............ ............ .......... ....... 80