Morocco - Education Sector Reform Project

Document of The World Bank FOR OFFICIAL USE ONLY o G Y-4 Report No. 5923-MOR STAFF APPRAISAL REPORT KINGDOM OF MOROCCO EDUCATION SECTOR REFORM PROGRAM February 25, 1986 Education and Manpower Development Division Europe, Middle East and North Africa Region 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.  PRINCIPAL ABBREVIATIONS AND ACRONYMS USED MEA - Ministry of Economic Affairs MOE - Ministry of Education MOF - Ministry of Finance MOL - Ministry of Labor MOP - Ministry of Planning MPW - Ministry of Public Works and Vocational Training CURRENCY EQUIVALENTS US Dollar ($) 1.00 = Moroccan Dirhams (DH) 9.5 DH 1.000 = US$o.1053 GOVERNLENT FISCAL YEAR January 1 - December 31  KINGDOM OF MOROCCO FOR OFFICIUL USE ONLY EDUCATION SECTOR REFORM PROGRAM STAFF APPRAISAL REPORT Table of Contents Page No. PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ....)...... BASIC DATA . . ......................................... (ii) LOAN SUMMARY .. ..................................... (iii)-(vi) I. INTRODUCTION ..... 1 II. THE EDUCATION SECTOR . . ..................................... 4 The Education and Training System . . . 4 Context of the Reform . ................ . 4 Education and Training Issues . . ............... 7 III. THE EDUCATION SECTOR REFORM PROGRAM ................. 13 Objectives and Projected Impact . . ........... 13 Policy Actions . . ............... 18 (a) Expand Access to Basic Schooling . . ............... 19 Cb) Restrain Growth of Upper Secondary and Higher Education . . ............. 21 *c) Improve Education Efficiency ................. 21 (d) Control Education Costs .......... 23 Vocational Training .......... 25 IV. THE PROPOSED LOAN ................. 27 Rationale and Objectives . . . 27 Program Costs . . ............... 28 Disbursements . . ............... 35 Implementation ............................... 38 (a) Coordination within MOE ................. 39 (b) Liaison with the Bank ................. 40 (c) Monitoring and Reporting ................. 40 Monitoring and Tranche Release ................. 42 Accounts and Audits ................. 44 V. BENEFITS AND RISKS ................. 45 VI. AGREEMENTS REACHED AND RECOMMENDATION ................. 47 This report is based on the findings of an appraisal mission to Morocco in April/May 1985. Mission members were Michael Mertaugh (mission leader), Daniel Viens (World Bank), Ead Dib and Linda Dove (consultants). This document h a restuicted distribution and may be usd by reipients only in the performane of their official dudeL Its contents may not otherwise be disclosd without World Bank autbhouztion.  Table of Contents (Continued) ; ANNEXES AND TABLES Tables 1 - Evolution of Public-School EnroLlments by Level 2 - Evolution of the Ministry of Education Budget as a Share of GDP and Total Government Budget, 1975-85 3 - Public Schooling Enrollments by Level (Historical and Projected) 4 - Indicative Education Program: Estimates of Education Expenditures by Budget Category, Reform Program Phase I 5 - Comparative Education Indicators Annexes A - Statement of Education Sector Policy Attachment 1 - Summary of Reform Measures and Implementation Matrix Attachment 2 - Performace Targets B - Cost Projection Methodology C - Proposed Studies under the Reform Program D - Ministry of Education Organizational Chart E- School Planning and School Mapping F - Implementation of School Construction * - Revised Construction Norms for Primary and Secondary Schools I - Local Procurement Assessment Report I - Draft Legislation on Incentives for Private-Sector Education Investments J- Selected Documents and Data Available in the Reform Program File MAP  KWGDOM OF MOROCCO EDUCATION SECTOR REFORM PROGRAM STAFF APPRAISAL REPORT Basic Data Country Data Per Capita GNP (1984): US$670 Total population (est. mid year 1985): 21.8 million Population growth rate (1985): 2.5S per annum Education (1983/84) Female Gross Net Enroll. Total Net Enroll. Enroll. as S Level Enroll. 1/ Enroll. 2/ Ratio 3/ Ratio 4/ of Total Primary (grades 1-5) 2,467,611 1,815,668 77.91 57.3% 37.7% Lower secondary (grades 6-9) 710,384 392,240 33.31 18.41 39.91 Upper secondary (grades 10-12) 324,716 115,784 22.61 8.1% 38.51 University 99,637 N/A 5.01 N/A N/A Public Expenditure on Education (1984) Central government education budget as a Z of total government budget: 22.91 Central government education budget 6.0% as a X of GDP: Central government capital budget for education as a Z of government capital budget: 10.5X Central government recurrent budget for education as a Z of government recurrent budget: 28.51 1/ Public plus private schooling. 2/ Net enrollments equal total enrollments minus over-age students. 3/ Total enrollments as Z of population in relevant age group. 4/ Net enrollments as S of population in relevant age group.  KINGDOM OF MOROCCO EDUCATION SECTOR REFORM PROGRAM STAFF APPRAISAL REPORT Loa Borrower: Kingdom of Morocco Amount: US$150 million equivalent Terms: 20 years, including 5 years of grace, at the standard variable interest rate Loan Description: The proposed Loan would support the two-year first phase of implementation of the Government's education sector reform program and would assist the Borrower in carrying out reform activities during this phase. The objectives of the reform program are to make the provision of education more equitable, more cost-effective, and more consistent with the country's medium-term development needs. It would do this by: (a) improving equity of education by devoting a larger share of education resources to primary and lower secondary education, with a major increase in the number of students entering and completing basic schooling (grades 1 through 9); (b) improving educational efficiency in terms of improved student flows and improved employment orientation of schooling at all levels; and (c) containing the growth of public expenditures on education through reduction of unit costs, introduction of cost recovery measures, and encouragement of private-sector participation. At the same time, the Government would develop a number of new pedagogical actions under the reform program to preserve the quality of education programs while extending the coverage of basic education and controlling the growth of education costs. The Bank has received a letter from the Government which sunmarizes the objectives and content of the reform program. The content and timing of the agreed reform program are more fully described in a Statement of Education Sector Policy and its attachments. The Loan would finance a two-year time slice covering part of the foreign exchange cost of the agreed reform program during the first phase of reform program iraplementation. Disbursements would be made against an agreed program of investment expenditures in basic schooling, as well as expenditures for teacher training and foreign fellowships. Implementation risks relate to uncertainties of public acceptance of reform program measures, and to the risk of incomplete implementation which arises from the fact that pedagogical programs which are to be developed during the first phase of the reform are essential to the long-range objectives of the reform.  (it) Estiated Program Costs Z Total Millions of Millions of Phase I Current DH Current US$ Program Category of Expenditure Local Foreign Total Local Foreign Total Costs Investment Primary and Secondary School Construction 2,296 1,467 3,763 241 155 396 21.7S Equipment and Furniture: Primary and Secondary 66 200 266 7 21 28 1.5% IBRD 4th, 5th Ed Proj. 45 133 178 5 14 19 1.0O Other 32 98 130 3 10 13 0.7S Subtotal 2,439 1,898 4,337 2.56 200 456 24.9Z Recurrent Salaries and Benefits: Teacher Training 520 - 520 54 - 54 3.0S Other 10,149 - 10,149 1,069 - 1,069 58.4S Fellowships and Stipends: University Fellowships 395 303 698 41 32 73 4.0S Teacher Training Stipends 655 - 655 69 - 69 3.8S Secondary Fellowships a/ 211 - 211 23 - 23 1.2S Educational Materials: Primary and Secondary 125 54 179 13 6 19 1.1l Teacher Training 6 3 9 1 - 1 0.1S Other 268 114 382 28 12 40 2.1S School Maintenance 237 - 237 25 - 25 1.4S Subtotal 12,566 474 13.040 1.323 50 1.373 75.1S TOTAL PHASE I COSTS 15.005 2.372 17.377 1.579 250 1.829 100.0S a/ For boarding students, to offset boarding fees.  FEtmated Einmig Pla Phase I Reform Program Costs, Indicative Allocation of Loan Proceeds in Parentheses (Total Costs in Millions of US$) Category of Total Program Expenditure CY 1986 CY 1987 Phase I Primary and Secondary School Construction and Related Services 172 224 396 (7) (19) (26) Equipment, Furniture and Educational Materials: Primary and Secondary 21 26 47 (2) (4) (6) IBRD 4th. 5th Ed. Projects a/ 16 3 19 (0) (0) (0) Other 28 26 54 (0) (0) (0) University Fellowships: Studies in Morocco 22 19 41 (0) (0) (0) Foreign Studies 17 15 32 (17) (15) (32) Teacher Training 62 62 124 (Salaries, Benefits, Stipends, (49) (37) (86) Educational Materials) Other Program Costs 541 575 1,116 (0) (0) (0) Total Program Costs 879 950 1,829 (75) (75) (150) a/ The Fourth and Fifth Education Projects support the construction and equipping of education, technical education, and teacher training institutions which are compatible with the reform program objectives and content (see footnote 1, paragraph 4.09).  (iv) Estimated Disbursements: The Loan would be made available for disbursement in two tranches. The first tranche of US$75 million would be released at Loan Effectiveness; the second tranche of US$75 million would be released upon confirmation, through an interim review, of satisfactory performance to be conducted by December 31, 1986. Estimated D e ts Bank Fiscal Year 1986 1987 1988 1989 1990 1991 1992 1993 Annual 36.5 64.5 44.0 5.0 Cumulative 36.5 101.0 145.0 150.0 Doc 2872V  KINGDOM OF MOROCCO EDUCATION SECTOR REFORM PROGRAM STAFF APPRAISAL REPORT L NTODUCTON 1.01 Morocco's economic performance in the late 1970s and early 1980s was characterized by slow growth and serious fiscal and trade deficits. At the same time, there was massive growth in enrollments in a traditional type school system. Taken together, these have led to a serious situation in which the Government has bravely and imaginatively decided on a program of extensive education reforms. The reform program is the culmination of a long series of Government deliberations on the structure and objectives of the education system. In the context of its education operations, the Bank has been involved in a lengthly and intensive dialogue with the Government on the appropriate content of the reform. The Bank has thus helped define the directions of the reform, and fully supports the reform program. The Bank also appreciates the courageous and thoughtful decisions which the Government has taken to launch the reform. The current economic constraint has hastened the Government's decision to implement the reform program, but the origins of Government deliberations on the reform predate the current economic situation, and the reform measures are desirable on their own merits. Although the reform includes a number of sensitive measures. it is likely to be implemented successfully because of the Government's very deliberate efforts to prepare public expectations and to situate the reform in a national development context. Successful implementation of the reform is also likely to be facilitated by the major expansion and strengthening of vocational training undertaken by the Government since 1984, together with new efficiency and cost control measures which are already beginning to attract the interest of other countries in the region. 1.02 The objectives of the reform program are to make the provision of education more equitable, more cost-effective, and more consistent with the country's medium-term development needs. It would do this through three major policy changes: First, it would give more prominence to the importance of basic education by allocating a larger share of resourcJs to basic education and slowing the growth of education at other levels, with a major increase in the number of students entering and completing basic schooling (grades I through 9). Second, it would attempt to meet the needs of the economy and of school leavers through strengthened vocational training. Third, it would control the growth of education costs through improved educational efficiency in terms of improved student flows, through reduction of unit costs, through introduction of cost recovery measures, and through encouragement of greater private-sector participation. Full implementation of the reform would be a long-term activity, requiring about ten years to achieve its ultimate  - 2 - objectives. The proposed Loan would help launch the reform by financing a time-slice of education expenditures during the two-year first phase of reform program implementation. During this first phase, the new orientation of the education system would be established and the framework for controlled future expansion of the education system would be put into place. Improved pedagogical programs would also be developed during this phase for implementation during the subsequent phase f the reform. Key policy changes to prepare for the first phase have already been announced or are already in place. These include strengthened vocational training, repetition limits in primary and secondary schooling, tightened university fellowship eligibility, restrictions on civil servants' enrollment in university courses, and introduction of university registration fees. The second phase of the reform program would extend and reinforce implementation of the measures introduced under the first phase, and would introduce additional pedagogical and cost-control measures which would be prepared during the first phase. These measures include the introduction of remedial instruction and diagnostic testing in basic schooling, the strengthening of in-service teacher training and regional pedagogical support (conseil p6dagogigue) services, and cost-saving innovations in school construction-particularly at the primary-school level. 1.03 The proposed operation is a key element of the Government's current strategy for economic restructuring and containment of public-sector expenditures. The need for economic restructuring and containment of public expenditures arose largely from the then seemingly reasonable but ambitious, growth-oriented policies which the Government pursued in every sector during the 1970s. These expansive policies were financed initially by the abundant phosphate revenues which resulted from the 1973 tripling of phosphate prices. They were maintained by foreign borrowing later in the decade as phosphate revenues declined with softening prices and as expenditures for petroleum imports steadily increased. To control the rising fiscal and balance-of-payments disequilibria, the Government in 1978 adopted a three-year stabilization program focussing on reducing public sector outlays and imposing stricter import controls. This program proved insufficient to restore fiscal and trade equilibrium, and the early 1980's witnessed a further deterioration of the fiscal and balance-of-payments situation. In 1983, the Government acknowledged the seriousness of the situation: With foreign exchange reserves virtually exhausted and with a worsening fiscal deficit, the need for restructuring was evident. Under a 1983 Standby agreement with the IMF, the Government sharply curtailed public expenditures and at the same time began discussions with the Bank on a strategy for economic restructuring and containment of public sector expenditures. The proposed Education Sector Reform Program is one element of that strategy. The other elements are: (a) industrial restructuring (supported by the FY85 and FY86 Industrial and Trade Policy Adjustment Loans), designed to invigorate private-sector industries, particularly for export production; (b) agricultural reform (supported by the FY85 Agricultural Sector Adjustment Loan), designed to overcome prevailing constraints to rational land use, to improve farming techniques, and to provide the modern inputs and support services necessary to bring about these changes; and  -3- (c) public enterprise reform (to be supported by a public enterprise rehabilitation loan currently in preparation), designed to improve the efficiency of public enterprises in a number of sectors. The education reform is an important complement to these major restructuring initiatives by the Government, both because it would reorient the education and training system to better respond to the country's medium-term development needs, and because it would improve the efficiency of resource use in the sector which consumes the largest share of public resources. 1.04 Discussions with the Government on the content of the education sector reform were initiated following the October 1981 Education ana Training Sector Survey. The specific findings and recommendations of that survey were discussed with the Government first in the context of the 1981-85 Economic Plan Review, then in the context of the conditions for the 1983 IMF Standby Agreement. Sector survey recommendations, pertaining to limitation of teacher recruitment and reduced levels of fellowships and teacher training stipends, were included among the conditions agreed with the IMF for the 1983 Standby. The Government subsequently curtailed teacher recruitment and imposed fellowship and stipend restrictions as proposed by the Bank and agreed with the IMF. An October 1983 education sector mission discussed additional reform measures with the Ministry of Education (MOE) and, at the request of the Ministry of Finance (MOF), examined the impact of the proposed reform program upon short-term investment requirements in terms of budgetary commitments and expenditures. The latter activity was conducted in the context of the Bank/ Government Joint Public Investment Review, which is leading to improved budgetary planning by the MOF and the operational ministries, and an expected improvement in the efficiency of contract approval and payment authorization by the MOF. A March 1984 mission reached agreement with the MOE on the objectives and key measures of the education reform. Subsequent discussions focussed on the budgetary and political feasibility and phasing of the proposed reform program. Following the March 1984 mission, the education reform proposals were incorporated into a highly disaggregated projection model of enrollments, teaching inputs, and associated investment and recurrent expenditure requirements. Discussions on the content and costs of the reform program were held in October and December 1984 with the Ministry of Education, the Ministry of Finance, the Ministry of Economic Affairs (MEA), the Ministry of Planning (MOP), and the Ministry of Public Works and Vocational Training (MPW), as well as the Prime Minister's Office. Following these discussions, the projected cost implications of the reform program were refined and confirmed with the Government during the April/May 1985 appraisal mission. During this mission, the support of all Ministries involved in the proposed reform program was confirmed, and the reform program was presented to and endorsed by the Parliament. 1.05 A Bank Loan of US$150 million is proposed to support first-phase implementation of the education reform program. The proposed Bank Loan is timely and important for two reasons: first, it would permit the Government to launch the reform at a time when government commitment to the reform is at a high level but financial resources are severely constrained; and second, by demonstrating Bank support for the reform, it would facilitate public acceptance of the sensitive elements of the reform such as increased teaching hours and slower growth of university intakes (paragraph 5.02).  IL THE EDUCA33E SCTOR uiernEmeati ad 1fainn Sistema 2_01 mm ME is responsible for formal education and training which includes primary, general and technical s and post-secondary technical education (technical training institutes, teacher trainin institutes. and the College of Applied Engineering) as vell as the universities. PrimAry school is five years in duration; lover- ad upper-cyce secondary are four and three years. respectively- Schooling is n01inally caplsory for all boys and girs between the ages of 7 amd 16, altough school attede by children in this age group is far froa cqplete-Largely die to limited classro faciliUas. particularly im rural areas (pagraph 2.06). Private schooling is not well developed. accounting for less than 4Z of enrollmts in priwy and secondary education. 2.02 In addition to general education, the M is also involved in technical and vocationl education. In 1968, the ME's secondary colIege of 'ocatIDEal trainig, until the the major source for skilled worker training, ver disbanded and each mIn;itry va charged with the task of traing sPecialized peroel for its own needs. In 1975, the National Office of ocatioal Training (the Office) mm created under the auspices of the MinistrY of Labor (MOL) to meet private sector needs, mainly in the industrial, construction, and camrcial fields. at present. alisot all inistries bhae their own training units, and the Office has evolved into a mior training agency, nw under the authority of the WV. Jpart from a vestigial program i lower secondary vocational education, the MOE's current volvement in voational and technical education consists of a technical baccalaureat program at tbe upper secondary level, and technical teacheb training and e r studies at the post-secondary level. gsbt operating ministries also provie tehican training for their onm needs. A nutber of these also provide vocational training for their own skilled-worker neefds- -otably the parm edical training provided by the Ministry of Realth, and -ae training in construction specializations provided by the mm. Sic t program of pre-service skill training within the prixvate sector are eztvely limited, and are confined largely to CCNmercial specializations. Cam*et of the Redwin 2.03 Go t Strate. Go t efforts in the education sector since Id (1956) bae focussed an expansion of school capacity at all levels, on loroccanization of teaching staff, and on developmnt of new course offerings consistent with tke needs of a groving economy. As shown in Anne Table 1, schooling capacity has expanded progressively, beginning with the lowest levels of schooling. and advancing to successively higher levels. At Indpend ece Ibrocco's education system vas little developed beyond the primary level. The GCovexunts initial efforts focussed on epandig secondary educatin, where enrollments increased very rapidly during the first decade of I n rising from 4.000 in 1957 to over 200,000 in 1966. Epansio of bgher education followed, particularly after the mjor  investment program undertaken with increased phosphate revenues in 1974 and 1975: enrollments in higher education grew at over 15X per year between 1974 and 1984. Under the reform program, government efforts would concentrate on expanding basic schooling and on providing vocational training to as many school leavers as possible. In 1984, the Government embarked on an important program of vocational training expansion-an effort which is being supported by the Vocational Training Project (parag:aph 3.09). The current expansion of vocational training capacity appropriately focuses on specializations in which shortages of skilled manpower are constraining private-sector output growth, particularly in the electro-mechanical industries.-' A study of medium-term manpower needs being carried out by the MOP is to identify other priority areas for future expansion of vocational training capacity. 2.04 Bank Strategy. Although otiher external sources have supported particular elements of the education program, - the Bank has had the most sustained and the most comprehensive involvement in the education sector. The Bank has been active in the education/training sector since 1963, as reflected in the six education/training projects (three of which are ongoing) and in the sector work and government policy discussions which led to the proposed reform program. Consistent with government needs and priorities, Bank lending in the sector has evolved from an initial focus on reinforcement of general education at the primary and secondary levels to its current emphasis on reinforcing employment-oriented skill training and on introducing structural reforms to improve the efficiency, financial viability, and employment orientation of education at all levels. This evolution of Bank lending also reflected key lessons learned from ongoing lending-particularly, the importance of adequate staff capabilities in the implementing agency and of adequate coordination of interministerial aspects of implementation. With the exception of direct support through small project compornents for manpower training in the sectors of forestry (second education project), and health, tourism, and rural development (third education project), the thrust of Bank lending has been in support of the formal ed.cation system, particularly of basic education and technical and engineering specializations, and has attempted to improve both internal and external efficiency of education through curriculum reform, upgrading teacher skills, and improving teaching equipment. The recent (FY85) vocational training project extends Bank involvement to the complementary area of middle-level skill training to meet private-sector manpower needs- -L. Skill shortages in the electro-mechanical industries have been identified as a major constrai. t to industrial 'iutput expansion (Morocco, Review of the Engineering Industries; IBRD Industry Special Study; Report No. 3233-MOR; November 16, 1981). z- Most notable of these are the UNICEF support for teacher training in a new primary school program in practical activities, the ongoing programs of technical assistance for teacher training provided by French, Canadian, and Belgian aid, and the extensive cooperation program through which France provided teachers at subsidized rates to all parts of the education system. The latter program has dwv