Jordan - Second Education Project

FILE COPYI DOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. P-1570-JO REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE HASHEMITE KINGDOM OF JORDAN FOR A SECOND EDUCATION PROJECT February 20, 1975 This report was prepared for official use only by the Bank Group. It may not be pubiished, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  Ourrencr Unit: Jordanian Dinar (JD) Ourreneuy Equivalent: Before February 1973 US$ 1 - JD 0.357 JD 1 - US$2.80 Since February 1973 US$ 1 - JD 0.322 JD 1 - US$3.11 Fiscal Year: January 1 to December 31  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE HASHEMITE KINGDOM OF JORDAN FOR A SECOND EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the Hashemite Kingdom of Jordan for the equivalent of US$6.0 mil- lion on standard IDA terms to help finance the Second Education Project. UNDP and foreign governments are expected to finance expert services and fellowships costing about US$1.3 million. PART I - THE ECONOMY 2. An economic mission visited Jordan in January 1974, and its report entitled "Current Economic Position of Jordan", (#479a-JO dated November 5, 1974,) was distributed to the Executive Directors on November 15, 1974. A country data sheet is attached as Annex I. 3. During 1962-66, the Jordanian economy grew at over 8 percent per year in real terms. Price stability prevailed, and high levels of foreign assistance sustai.ned a high level of investment and a surplus in the balance of payments. However, Jordan's economy was adversely affected by the 1967 war with Israel and the confrontation with the Palestinian Fedayeen groups in 1970/71. The occupation of the West Bank, with 30 percent of Jordan's popula- tion, deprived the country of about 40 percent of its GNP, and over 200,000 refugees emigrated to the East Bank. Growth of agriculture, tourism and in- dustry, was curtailed, and the economy's dependence on external transfers increased. The latter, together with net factor income from abroad, account- ed for about a quarter of GNP since 1969. In 1970/71, the Government's ef- forts to check the activity of Palestinian guerillas provoked economic sanc-- tions against Jordan by some Arab countries. Jordan was particularly affected by the closure of the Jordanian-Syrian border from July 1971 to November 1972, which resulted in a decrease in exports from $41 million in 1969 to $32 mil- lion in 1971, by the suspension of budget support from Kuwait and Libya after 1970, and by the closure of the Syrian-Lebanese frontier during the first half of 1973. Following the October 1973 war and an Arab summit conference at Rabat a year later, more financial aid from OAPEC sources was granted to Jordan. 4. After a period of economic stagnation, signs of economic recovery began to appear in the second half of 1971, with agriculture output recovering to the level of 1967. Industry picked up in 1972, and reached almost full capacity utilization in 1973. Exports of goods rose sharply from $32 million in 1971, to $60 million in 1973. Economic growth is likely to have reached 8 percent in real terms in 1974, partly due to the recovery of agricultural production from a bad crop in 1973. With the reopening of the Syrian fron- tiers wi.th both Lebanon and Jordan in mid-1973, an improved domestic political situation, and a revival of private investment, the economy of Jordan has  good prospects for reniewee -rowti. A five-fold increase in phosphtate prices sinice 1972 and an expected expansionl in phosphates production from 1 mlillion tolIs in 1973 to J miillion tons itn 1975 inve improved balance of paynients prospects. liicreased costs of oil requirements may be expected to be off- sct by a correspondirg increase in royalties from oil pipelinie through-put. iowever, since imports represent jore than 5U percent of GNP the economy remains stronigly affected by increases of world prices. 5. The return of internal stabilitv in 1971 permitted the Government to devote more attention to medium- and long-term economic issues. The planning machinery was reactivated with the establishment of the National Planning Council (NPC), in late 1971, and of coordination committees with the private sector. As a first step, a three year Plan (1973-75) was prepared, which aims at achieving an 8 percent annual rate of growth in a situation of relative price stability; creating new jobs in an attempt to reduce the 8 percent unemployment rate and the serious underemployment in the East Bank; and improving manpower skills through vocational and technical education. The Plan also aims at fostering a more equitable distribution of economic gains between the various income groups and geographical regions, mainly through rural development and improvement of housing and public services; and at phasing out the economy's heavy dependence on foreign budget support by reducing the budget and trade deficits through increased domestic revenues and foreign exchange earnings. 6. T'he Plan envisages a thorough restructuring of the economy by reducing its lheavy reliance on services (about two-tlhirds of GDP), especially on defense (about 22 percent of GDP in 1973), and by developing agriculture, manufacturilng anc miring, both tnrough institutional and infrastructure support to private initiative and througi public investment in production enterprises if needed. ILI agriculture, whiich accounts for about 18 percent of GDP, one-third of com- nodity exports and 30 percent of emlploymenit, emphasis is placed on developnent of irrigation and, to a lesser extenit, on imnprovement of rainfed faming to exploit the substantial potential for export --especially citrus and other fruits--and for irmport substitution of wheat and meat. Support of manufacturing andll umining, which account for about 12 percent of GDP, 7 percent of employment and two-thirds of commodity exports (aialf of whiclh alre phlosphates), aims at making production more competitive and export-oriented, particularly to neighbobring countries; developing fertilizers production based on the country's phosphate reserves; increasing thie production of Jordan's high quality phosphate rock; and exploiting the country's deposits of potash and copper. Four large projects, in phosphates, potasih, fertilizer and copper production, aim at reducing budget and trade deficits by generating substantial foreign exchange earnings. 7. The Plan anticipates aggregate investment of $557 million over 1973- 1975, in increase of 79 percent over tile level of the depressed 1970-1972 period. Cxternal financing is expected to cover 42 percent of the total. Two-tthirds of this ambitious investrnent program may be realized, in projects detailed in the Plan.  8. The pattern of external assistance to Jordan in the recent past has largely been influenced by the unsettled conditions of the region. Transfers to the Government, mostly in the form of budgetary support and military aid, averaged $140 million-i per year during 1967-73. Under the Khartoum Agreement, Jordan received subsidies amounting to about $105 million annually from Kuwait, Libya and Saudi Arabia in 19657-69. Saudi Arabia maintained financial assis- tance ill 1970 and inzreased its aid frorm $40 million to $64 million in 1972. Substantial US traDsfCrs ($100 million in 1972 and $89 million in 1973) com- pensated for the susz*en2ion after 1970 of tile payments from Kuwait and Libya; kuwait resumed its support in April 1973, raising total official transfers received by Jordan to $179 million in that year. 9. The new emphasis on development and an extensive project list pre- sented in the Plan have helped to increase development aid. New commitments over 1972-73 amourted to $137 million, mostly from Westerni sources, Kuwait and IDA. Average terms on $92 million committed in 1973 were about 1 percent interest, 7 yea-s of grace and 30 years maturity. The gross inflow of long and medium-term capital to the central and local governments, which had averaged $10 million per year durinig 1967-70, increased to an average of more than 430 million annually after 1970. Tiue external public debt, including undisbursed amounts, was about $221 million at the end of 1972, of which about 10 percent wis held by the Bank Group. The outstanding and disbursed debt at the end of 1973 was estimated at $180 million. Because of the concessional termis, the debt service ratio was low, at 6.6 percent in 1973. Nonetheless, because of the difficult development problems arising from the country's limnited natural resources, serious underemployment, and the progressive reorientation of the economy wihich is likely to follow a peace settlement and the development of new centers of economic activity, Jordan still needs a substantial part of external assistance on concessional terms. PART II - LANK. GROUP OPERATIONS 10. Jordan has to date received nine IDA cre(lits totalling $47.8 mil- lion (net of cancellations). Four credits were made before 1967 -- two for agricultural credit ($6.0 million) and two for water supply ($5.4 million) -- and are fully disbursed. W4ar and local disturbances adversely affected the pace of economic development and Bank Group lending resumed in mid-1971. Cre- dits were made for a highway project ($6 million) in 1971; an education proj- ect ($5.4 million) in 1972, a power project ($10.2 million) in 1973, a water supply project ($8.7 million) in 1973, and an irrigation project ($7.5 tmillion) in 1974. Performance under these projects is generally satisfactory. For FY75, a second power project, and an engineering credit to initiate the potash project, are being prepared. IFC has made its first investment in Jordan in February 1974 consisting of a $224,000 equity participation and a $1,600,000 loan to Jordan Ceramic Industries Limited (JCI). IFC ihas also assisted in the preparation of a phosphatic fertilizer project with reviews of initial proposals and help in the establishment of a seed company. Annex II contains a summary statement of IDA credits and IFC investment as of December 31, 1974, and notes on the execution of on-going projects.  - 4 - 11. The Government has recently requested Bank assistance in formulat- ing, implementing and mobilizing multilateral financing for a package of dev- elopment projects in the Rift Valley. This region includes a large portion of Jordan's resources which are critical to the future improvements in the bal- ance of payments and in incomes and living standards. The large mining proj- ects in phosphate, potash and copper, the phosphatic fertilizer project, and the related port and railway development are included in the package, as well as further development of the water resources of the Jordan Valley and the region south of the Dead Sea. These developments, together with the estab- lishment of industrial zones and supporting services for light manufacturing and tourism in other parts of the country, would contribute to reduce the present trend of excessive concentration of economic activities in the Amman- Zarqa area. Preparatory studies are also underway for projects in rainfed agriculture which would expand cereal and livestock production and reduce the countrv's dependence on agricultural imports. In view of the magnitude of the new investments contemplated and of Jordan's reliance on external financ- ing for the bulk of them, the Bank has requested the Government to review this program in the framework of the current three-year Plan so as to establish priorities in light of the financial resources likely to be available. 12. Since 1973, the Bank has been acting as Executing Agency to a three- year UNDP Planning Assistance Project based in the National Planning Council. The planning team has been working with the NPC on project preparation and appraisal, and will focus on strengthening NPC's long-term planning capabili- ties. PART III - THE EDUCATION SECTOR 13. Education is free and, subject to the availability of student places, compulsory in the first nine grades. Except for a few university courses in English, teaching at all levels is conducted in Arabic, by Jordanian staff. The Ministry of Education has overall responsibility for educational policies and planning for elementary, preparatory, and secondary education. The Ministry accounts for about 70 percent of total enrollments at these levels, the remaining pupils being enrolled either in UNRWA (United Nations Relief and Works Agency) schools for refugees (22 percent), or in private schools (8 percent). Repeater rates are relatively low at 8 percent and 15 percent, with drop out rates of 3 percent and 11 percent at the elementary and preparatory levels, respectively. The distribution of educa- tional opportunities by sexes and between urban and rural areas is fairly even. 14. As a result of a consistent policy of educational expansion over the past two decades, the formal education system in Jordan is comparatively well developed. About 92 percent of the 6-11 year age group are enrolled in elementary education, while enrollment ratios are 63 percent in preparatory schools, 31 percent in secondary education, and 27 percent in higher educa- tion - the latter being one of the highest percentages of enrollment in the world. The University of Jordan is an autonomous public institution financed  mainly by the pr1:.-.tte .-4ector, offering courses to some 3,600 students. In ad- dition, some 29,000 st;.ideccs are estimated to be studying in universities abroad. 15. As 'La mar.y othpr countries, however, the rapid growth of the edu- cation system has led t. or has aggravated, structural imbalances and bottle- necks, which adversely affnect the quality and relevance of education: (i) Partly due de;.ays in increasing the capacity of teacher training institutions as well as to high attrition and emigration, rates, the number of qualified teachers has not kept paca wiLh the increasing demand. At present, unqual- ified teachers still represent 52 percent of the total teaching force in elementary and preparatory education. At the secondary level, 23 percent of teachers do not have university degrees, and the largest majority of degree holders do not have any pedagogical training. It is ex- pected. however, that the ongoing rapid increase in enroll- ment in teacher training institutions will progressively reduce this imbalance, and will correct it by the mid 1980's. (ii) Insufficient attention has been paid to the training and retraining needs of adult workers, both in agricultural and non-agricultural sectors, as well as to the problem of functional literacy; the illiteracy rate is still 41 percent of the adult population. However, a literacy campaign has recently been approved by Government, which aims at complete literacy of the adult population by the mid-1980's. There are presently 205 literacy centers en- rolling about 4,200 participants. (iii) The pressure of social demand has led to an over-expansion of academically-oriented general secondary education not supported by adequate reforms of curricula and pedagogical methods, which has perpetuated traditional attitudes toward practical work and thus increased the disequilibrium between employment expectations and the availability of corresponding jobs. (iv) In spite of growing shortages of sub-professionals and techni- cians, vocational and technical education have been seriously neglected: enrollments are still too low and maladjusted to manpower needs, insufficient efforts have been made (with a few exceptions) to adapt curricula to the changing functional content of occupations in Jordan, and instruction methods are generally too theoretical. 16. These shortcomings are recognized by the educational authorities and steps are being taken within the framework of the Educational Plan 1970- 1980 to correct them. In addition to the continuous expansion of elementary and secondary education, adult education and literacy programs, and teacher training, the Education Plan aims at a better adaptation of the educational  - 6 - system to the quantitative and qualitative manpower needs of the country and would provide nine years of basic education to all children by the end of this decade. This objective would be accomplished by a variety of means including: development of curricula emphasizing scientific and technological contents; increasing the proportion of secondary students enrolled in vocational educa- tion (from about 8 percent to 30 percent); reorienting vocational and technical training to strengthen industrial programs; and introducing practical subjects into general secondary education. 17. The supply of technicians and skilled workers in Jordan is heavily conditioned by increasing labor shortages in the neighboring countries, parti- cularly the Gulf States, which can offer salaries between four and five times higher than those in Jordan. Since there are no linguistic or other barriers against emigration, the outflow of manpower has greatly increased in recent years, aggravating domestic shortages of skilled workers, and resulting in rapid increases in wage rates. At present, the number of Jordanians working abroad is estimated at 250-300,000; in 1973, their remittances amounted to about US$46 million. Although structural changes in production processes, emigration, the small size of the economy, and the uneven quality of avail- able information all add to the uncertainties involved in estimating manpower requirements, it is nevertheless clear that within the broad orders of mag- nitude obtaining, the overall supply of university graduates and office workers is likely to exceed the absorptive capacity of the labor market, while severe shortages are likely to occur for technicians and skilled manual workers. 18. Of the 3,560 students enrolled in vocational education in 1972/73, about 1,600 were in commercial schools, 1,500 in industrial schools, and the remainder in agricultural schools or in the secondary school for assistant nurses. With the exception of the Trade Center operated by UNRWA, the exist- ing vocational schools have been unsuccessful in meeting the needs of the labor market, partly because of the academic orientation of curricula. Very limited opportunities are offered for up-grading or re-training of adults already in employment. Technical education at the post secondary level has been limited to two engineering centers for about 200 technicians: one ope- rated by UNRWA and the other by the Ministry of Education within the voca- tional industrial school in Amman. UNRWA also conducts an advanced commer- cial course for 160 refugee students. Two agricultural secondary schools con- ducted by the Ministry of Education, with an enrollment of nearly 370 stud- ents, provide a practically-oriented syllabus. However, fewer than 10 per- cent of the graduates from these schools directly join the labor force as farmers; the remainder seek government employment or further education. The Ministry of Agriculture has little input into agricultural education, and the Committee established between the two ministries to coordinate agricul- tural education and review curricula has not been effective. No institution exists for the training of personnel for the hotel and catering industry. 19. A peculiar feature of education finance in Jordan has been the low percentage of capital expenditure with respect to total education expenditure. In the last five years, the Ministry of Education spent, on the average, only  - 7 - about 7 percent of its budget for capital investments, which was too low to provide the required nmnber of additional classrooms. In practice, the gap has been filled by increasing the number of rented classrooms. At present, over 68 percent of all elementary classrooms, 50 percent of preparatory and 23 percent of secondary are rented. In urban areas these proportions are even higher --- 95 percent, 73 percent and 89 percent respectively. Virtually all the rented premises were formerly dwelling houses, most of the rooms are small and very often lack adequate ventilation and natural lighting. The Educational Plan alsc aims at a gradual improvement in the stock of these physical facilities by replacing uneconomically small rented school buildings and providing them with adequate workshops, science laboratories and other teaching aids. 20. Over the past five years, public expenditures on education have been growing at 8.5 percent p.a., at current prices, and total domestic ex- penditure at about 9 percent p.a. In real terms, the growth has been much slower, probably in the neighborhood of 1.0 percent p.a. and 1.5 percent p.a., respectively, which compares favorably with the average growth of total enrollments of about 7 percent p.a. Central government expenditures on education, in 1973, amounted to about JD 8.2 million (including continued payments for teachers' salaries and rents for the West Bank), or 5.0 percent of East Bank estimated GDP, which represents about 7.1 percent of central gov- ernment total expenditure and about 17.9 percent of domestic public reve- nues. Foreign aid to education was about JD 1.9 million, or 14.5 percent of domestic expenditures on education. PART IV - THE PROJECT Project History 21. In February 1972 IDA extended its first credit for an education project in Jordan (Credit 285-JO). The project was designed to help increase the supply of qualified primary and preparatory school teachers (including practical subject teachers), support the policy of introducing practical subjects into general secondary schools to transform them into comprehensive schools, and increase the output of middle-level technicians and skilled workers. The credit (US$5.4 million) is assisting in the financing of: (i) a Polytechnic and Trade Training Center at Marka; (ii) two comprehensive secondary schools in Amman; (iii) a Teacher Training Institute at Salt, and an Agricultural Teacher Training Center in the Agricultural School at Shaubak; and (iv) related technical assistance. After some initial delays in the pre- paration of architectural designs, project implementation is now progressing well, but is approximately 8 months behind the original implementation sche- dule. The proposed second education project would reinforce the pattern of comprehensive and technical education being financed under the first credit, and would extend the reform to types of education not included in the first project. The project was identified by a UNESCO mission, which visited Jordan in mid-1973, and it was prepared and appraised by an IDA mission in May - June, 1974.  -8- 22. Negotiations were held in Washington on January 16, 1975. The Gov- ernment was represented by Dr. Hanna Odeh, President, National Planning Coun- cil. A report entitled "Appraisal of a Second Education Project in the Hashemite Kingdom of Jordan" (No. 635-JO, dated February 12, 1975) is being distributed separately. A Credit and Project Summary is being attached as Annex III. Project Description 23. The objectives of the proposed project are: (i) to expand and re- inforce vocational and technical education including adult training and re- training to produce the specialized skills required for the development of priority sectors of the economy (mining, industry, agriculture, food pro- cessing, and tourism); (ii) to support integrated rural development projects in the Jordan Valley through a pilot scheme of non-formal basic education; and (iii) to promote quality improvements, rationalization and economy of operation in both the compulsory cycle and secondary education by replacing uneconomically small rented school buildings and providing the schools with adequate workshops and other teaching facilities. 24. The Project would include the construction, equippihg and furnish- ing of the following facilities: (a) The Irbid Polytechnic would provide two year postsecondary courses for about 240 students in food and textile tech- nologies and in industrial chemistry. Training would be defined in terms of specific fields of industrial application. (b) The Aqaba Training Complex would provide full-time and part-time courses of various duration in five basic specializations (plant maintenance and repair; industrial electricity; instrumentation and control; climatization and refrigeration; materials handl- ing and transport) as well as pre-apprentice basic training, and up-grading, conversion and re-training courses for adults. Entrance requirements would vary according to the courses, but would include completion of preparatory education for full-time training; aptitude tests would be administered for all courses. Flexible training patterns in modular form would be used to in- crease educational efficiency. Modular training would also help improve up- ward social mobility of workers by providing training arrangements which could be utilized at any time over the entire span of a working life. When fully operational and with the introduction of a continuous work day, the Center could enroll up to 400 full-time and 230 part-time trainees, with an estimated annual output of about 400 trained workers at different levels of skills. (c) The Hotel Training School would consist of a hotel school with about 280 student places and a practice hotel with a capacity of about 80 beds, and would provide two-year courses at either secondary or post-secondary levels to train middle-level personnel for the hotel and catering industry in four basic specializations (hotel administration, accounting and control; reception and front office; restaurant and bar; kitchen). In addition, a one year course in hotel management would be offered to applicants who suc- cessfully complete any of the first three basic specializations above. (d) The Rural Development Center would enroll up to 1,000 adult trainees per year and organize some 50 courses per year in rural skills, general agriculture (in cooperation with the UNDP financed training center for extension agents), cooperative development, women's crafts, public health, nutrition and family care as well as functionally-oriented basic literacy courses. (e) The three  comnprehensive sc.;o'.os wou.d offer a broad curriculum incorporating pre-voca- tional training with academic subjects for all students. Each comprehensive school would enroll approximately a total of about 2,100 students in two shifts, 30 percent of whom would be in practical subject streams. The pro- posed schools w3uid l help reduce the dependence on unsuitable rented facilities, thus permxctitng the replacement of about 20 of the worst premises. (f) Extensions to 16 preparatory and secondary schools (science laboratories; pre-vocational workshops for boys; craft workshops for girls). The project also includes a totx.l r-' 20 man/years of expert services and about 50 man/years of fellowships. The; nhysical components of the project are to be completed by end 197?, 25. Durinvi negotiaLions, the government provided assurances that: (i) Detailed curricula and syllabi for the proposed Irbid Polytechnic and the Aqaba Trade Trair.-ing Complex, designed in terms of the functional content of jobs in the Jordanian industry, would be prepared and presented to the Asso- ciation for comm2nts within two years of signing of the Credit Agreement (Section 4.04 of the draft Development Credit Agreement). (ii) The ongoing preparation of a new trade testing and certification system, applicable to all forms of vocaticnal training, would be completed by the time the proposed Aqaba Trade Training Complex starts operating and, in any case, not later than three ye-rs after signtng of the Credit Agreement (Section 4.05 of the Draft Development Credit Agreement). (iii) The proposed Hotel Training School would be legally established as a corporation within three years of signing of the Credit Agreement (Section 4.09 of the Credit Agreement). (iv) Within three years of signing of the Credit Agreement, the Preparatory School Certificate Examination would be revised to: (a) allow for testing of prac- tical skills as well as theoretical knowledge; (b) provide for testing of educational achievement in the compulsory cycle, with criteria for satisfactory completion to be established independently of the number of student places available in secondary education; and (c) introduce adequate criteria to select among the students awarded the Preparatory School Certificate those entitled to continue to either general secondary or vocational education (Section 4.07 of the draft Development Credit Agreement); and (v) The "tracer" system which is to be established under the First Education Project to follow- up on the employment pattern of graduates (Section 4.03 of the Credit Agree- ment) would be extended to all schools included in the proposed project (Section 4.03 of the draft Development Credit Agreement). Project Cost 26. The total project cost, net of duties and taxes, is estimated at US$17.5 million, with a foreign exchange component of US$11.2 million. The proposed $6.0 mijlion credit would finance about 54 percent of the total estimated foreign exchange component of physical facilities and services. Expert services and fellowships, costing about $1.3 million including contin- gencies, are expected to be financed by UNDP and a number of foreign Govern- ments. The Government will bear the remainder of the costs. 27. Cost per student place range from about $4,400 for the Irbid Poly- technic to about $1,200 for the comprehensive and hotel training schools.  - 10 - The proposed project would have only a small impact on future educational expenditures. At full capacity the project institutions would require about JD 350,000 per year in operating costs, corresponding to less than 2 percent of projected public recurrent expenditures on education by 1985. 28. The project cost includes a contingency allowance for unforeseen physical additions equal to 10 percent of the estimated cost of civil works, furniture, equipment and professional services. During the project imple- mentation period, prices are expected to increase on average by about 42 per- cent for civil works, 37 percent for professional services, 31 percent for furniture and equipment and 28 percent for technical assistance. Accordingly, total price contingencies are estimated at about 38 percent of base line costs plus physical contingencies. Project Execution 29. The Project Implementation Unit, established under the first project and further reinforced, would also be responsible for the implementation of the second project (Section 3.02 of the draft Development Credit Agreement). A special allowance to reduce the wide disparity of present salary scales in the civil service and in the private sector would be paid to the personnel of the Unit. This allowance would average around 45 percent of present salaries. Its cost, estimated at about $150,000 over the period 1975-81, would be fi- nanced out of the proceeds of the credit. The Ministry of Public Works would prepare the designs and tender documents for the proposed extensions to the existing preparatory/secondary schools and would supervise the construction works. For the other project items, consultant architects/engineers accept- able to the Association would be appointed under terms and conditions agree- able to the Association. Project Benefits 30. The project would reinforce the pattern of educational reform pro- moted by the first project and assist in extending the reform to new educa- tional activities and target groups. An important benefit would be to reduce the dependence on uneconomically small and educationally unsuited rented facilities. In addition, the project would contribute to institution build- ing by providing better institutional links between the schools and the labor market, stimulating the reform of the system of examinations and trade testing, and establishing a systematic source of information on educational buildings, as required for educational planning and programming. Procurement 31. Civil works contracts would be awarded on the basis of international competitive bidding, in accordance with Bank guidelines. It is expected that the contracts would be awarded to Jordanian firms as the country has a compe- titive construction industry capable of implementing the proposed project. For the extensions to preparatory and/or secondary schools, civil works con- tracts estimated to cost the equivalent of less than $100,000 each would be awarded on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association, provided, however, that the  aggregate cost of all such contracts shall not exceed the equivalent of $1,100,000. The average estimated civil works costs for science laboratories, women's craft centers and prevocational workshops are US$60,000, 63,000 and 78,000, respectively. Apart from the small sums involved, the extensions are dispersed over the country, in some cases in remote areas. Qualified Jordanian contractors are available in all the localities concerned. t2. Detailed lists of furniture and equipment would be presented for the Association's review prior to procurement. These list would identify all items or categories of itens costing more than US$2,000, the residual items being included in one miscellaneous category not exceeding US$50,000 for each institution. Items would be grouped to the extent possible to form sizeable packages to permit bulk procurement. Furniture and equipment contracts would be awirded on the basis of international competitive bidding in accordance with the Association's guidelines. Nearly all equipment and about 80 percent of the furniture are expected to be obtained from foreign manufacturers. Local manufacturers of furniture and equipment would be allowed a margin of preference equal to the existing rate of custom duty applicable to competing Imports or 15 percent of the c.i.f. price, whichever is lower. Furniture for the preparatory/secondary school extensions would be required approximately 15 months before the completion of the comprehensive schools and would cost not more thar, US$110,000. For this reason, contracts would be awarded on the basis of competitive bidding advertised locally and in accordance with proce- dures satisfactory to the Association. (Schedule 3 of the draft Development Credit Agreement). The same procedure would be applied for the procurement of the residual items included in the miscellaneous categories referred to above. It is expected that the total value of contracts awarded on the basis of local competitive bidding would not exceed 20 percent of the total cost of furniture and equipment. Disbursements 33. Disbursements for items to be financed by the proposed Credit would be on the basis of: (i) 27 percent of total expenditure for civil works; (if) 31 percent of total expenditure for professional services; (iii) 63 per- cent of the c.i.f. cost or ex-factory price for furniture and equipment, and (iv) 100 percent of total expenditure for project administration. The per- "entage for civil works would be adjusted as necessary to distribute disburse- ments over the implementation period. PART V - LEGAL INSTRUMENTS AND AUTHORITY 34. The draft Credit Agreement between the Hashemitee Kingdom of Jordan and the Association, the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement and the text of a draft resolution approving the proposed credit are being distributed to the Execu- tive Directors separately.  - 12 - 35. Features of the draft Development Credit Agreement of special in- terest, are referred to in paragraph 25 of this Report. Otherwise, the draft agreement conforms to the normal pattern of Credits for education projects. 36. I am satisfied that the proposed development credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 37. I recommend that the Executive Directors approve the proposed development credit. Robert S. McNamara President Attachments Washington D.C., February 20, 1975  ANNEX I Page 1 of 3 pages 0gUmmI! DATA- JORDANl ARKA ~~~~~~~~~POPUJLATlIO EUSIT 1Tho k S zlla (mid-1972) Per beSo arablc land SOCIAL MINICATORS Reference. Countries P. Rep. of 1960 1517 ~ ~ 272 1970 199 GNEPPER CAPITA ALSBSSa..20a300/a 380 /a 700/u lgiP.l0ApArSnBSI)cI 70 Crudre birth rate (per thousad) 47 /b 49 /c 44 /n 38 41 Crude death rate (per thonead) in 7W 16 7. 23 7W 14 13 Infnt martality rate (per thousand live births) ..36 7fl.e ..25 If .~ Life e-peota...y at birth (pesre) 52/b 54 41A/o 52 5 Oroon -oprod-otion reta 3.4 /A 3.5AI 2.8 Ic 3.4 1.9 fpon.ition grostr rate . 3.3 7W 2.2 7W 2.1 /h 2.6A/ Pnps,Iati.nn sowtr rate . r .,b.. 377 373k Age structure (perosnt) 0-aL !45I 47 /i 42Ie 46/n. 43 15-61, 51 ~~~~~~~~~~~5o717 537;- 51 52 65and -ne 49 37! 57; 37; 5