China - Gansu Provincial Development Project : Education Component

Domnt of The World Bank FOR' OFmFCIAL USE ONLY CA. / ?3 C-V.4 Report No. 6507-CHA STAFF APPRAISAL REPORT CHINA GANSU PROVINCIAL DEVELOPMENT PROJECT: EDUCATION COMPONENT April 15, 1987 Projects Department East Asia and Pacific Regional Office 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.  CURRENCY EQUIVALENTS US$1.00 Yuan (Y) 3.7 Y 1.00 = US$0.27 (September 1986) FISCAL YEAR January 1-December 31 ACADEKIC YEAR September I-August 31 ABBREVIATIONS BOE - Bureau of Education -EI - Gansu Education Institute GPIO - Gansu Project Implementation Office ICB - International Competitive Bidding LCB - Local Competitive Bidding EPIO - Education Project Implementation Office SEdC - State Education Commission SOE - Statement of Expenditure UBE - Universal Basic Education GLOSSARY gongban : Teacher on state payroll minban Locally hired teacher prefecture A subdivision above the county level. Gansu province has 14 subdivisions: 7 prefectures, 5 municipalities, and 2 autonomous districts. All are referred to as prefectures in the report.  FOR O CIL USE ONLY CHINA GANSU PROVINCIAL DEVELOPMENT PROJECT: EDUCATION COMPONENT Table of Contents Page No. BASIC DATA ........... ........ * iv CREDIT AND PROJECT SUMMARY............................................ v I. BASIC EDUCATION IN GANSU PROVINCE .............................. 1 A.* Background .......................................................... 1 B. Issues in Basic Education in Gansu .......................... 3 Low Enrollment........................................... 3 Inadequate School Facilities and Instructional 4 Unqualified Teachers ..................................... 4 Inadequate Teacher Training Capacity o..................... 5 Shortcomings in Educational Management..................* 8 Fiancial Constraints.................................... 8 Co Government Strategy.......... ............................... 9 D. Bank Group Strategy ......................................... 10 E. Rationale for Bank Group Involvement........................ 10 F. Experience with Past Leading... ............................. 10 -II THE PROJECT*ooe***ooe*****o**0000*0#0 11 A. Project Objectives and Policy Framework ..................... 11 Action Program.................... ....................... 12 B. Project Components.......................... ................ 12 Expand the Normal Colleges.............. ................. 12 Upgrade Normal 8chools................................... 14 Expand Gansu TV Education Institute Programs............. 14 Improve Science Instruction in Lower Secondary Schools... 17 Establish a Center for School Administration............. 18 Strengthen Educational Supervision....................... 19 This report is based on the findings of an appraisal mission to China in September/October, 1986, comprising B.W. Searle (general educator and mission eader), V. Li (economist) and S. Sung (technical educator, consultant). The appraisal mission was preceded by a detailed review of education development issues and potential in Gansu, as part of the Bank Group's Gansu provincial study (Report No. 6064-CHA-Growth and Development in Gansu, China). This document has a resaticted disttibution and may be used by recipients only in the performance of their official duties. Its contents may not othewise be discoed without World Dank authouiution.  -ii - Page No. III. PROJECT COST8 FIMANCING AND IMPLEMENTATIOI ............. o44606* 20 A y Costs ...................................... 20 Basis of Cost Estimatea.................................. 20 Fordign EXchange Component ..... e. .......*.**. ........... .o 20 Contingeacy Allowaneeso.................................. 23 BS Financing...... .........0..................0........ ...... 23 C pital Costoos oo ............ s..e**o.oo.......... .* a* 24 Operating Cot ........ ** *24 C. ^letton ....... 24 Pro!ect Monitoring and Evaluation........................ 26 Status of Project Preparation............................ 26 De rcr"a ........... 27 Z.DsuslNos........... 29 F. Accounts and Audits........................ 30 IV. DENEFITS AND RISS....................... 30 Ao Benefits...... .....................................oo..o..o 30 Bo Risks .oo.o..o......o.o.o ..........ooo.oooeoo 31 V TO BE REACHED AND RECN6 00 .0.000.0... ... .... ........... 31 TABLES IIN iE TEXT Table 1.1 Natural Population Growth, Ganau Province 1984-2000 ................................ 2 Tabl* 1.2: Teacher Status and Qualifications, Gansu 1985....... 5 Table 1.3s Teacher Demand and Supply, Gansu, 1986-1990......... 6 Table 1.4: Long-Term Teacher Demand and Supply, Cansu 1986-2000 ................................... 7 Table 2.13 Enrollment of Normal Colleges....................... 13 Table 2.2: Development of TV Institute Teacher Upgrading Progras ....00..0.00..0000..00..00....................0....0. 17 Table 3.1: Sumary of Project Costs by Camponento............... 21 Table 3.2: Summary of Project Costs by Category of Expenditureo...... e ... ... .o.o. ..o........ 22 Table 3.3s Overall Financing Plan (July 1987-June 1993) by Category of Expenditure and Source of Funds.... 23 Table 3.4: Projected Budget for Basic Education in Gansu Basic Expenditures and Incremental Expenditures... 24 Table 3.5: Procurement Arrangements............................ 27 Table 3.6: Disbursement Forecast.............................. 29  - itii 1. Compulsory Education Law 2. Projections of Teacher Supply and Demand 3. Draft Action Program and Indicators 4. Civil Vorks and Equipment Information S. Technical Assistance 6. Draft Terms of Reference for Consultants 7. Costing S. Implementation Responsibilities 9. Ney Implementation Dates 10. Project Monitoring Indicators II. Issues for Further Dialogue 12. Comparative Bducation Indicators 13. Selected Documents and Data Available in the Project File cum 1. Education Pyramid 2. Orgaization Chart, Gansu Provincial Development Project Manageent System 3. Organization Chart, Provincial Bureau of Education and PIU 4. Schedule of Implementation MAP IBID 20173  - iv - CHINA GAJSU PROVINCIAL DEVELOPMENT PROJECTs EDUCATION COMPOUENT Basic Data (1985) General Gansu National Population 20 million 1 billion Adult literacy rate 46% 76X Average per capita income/a Y 316 Y 375 Gansu National Education Data (1984) Enroll- Gross enroll- Enroll- Gross enroll- ment 2 ment ratio ment ment ratio million female (2) lb (million) (2) Primary 2.70 40 125/b 143 95 Lower Secondary 0.81 33 41 39 48 Upper Secondary 0.21 36 11 7 10 Pro"incial Government Expenditure on Education Education expenditure as 2 of total expenditure 122 as Z of GDP 32 Share of Provincial Recurrent Education Expenditure by Level (2) /c Primary 482 Lower Secondary 292 Upper Secondary 72 Postsecondary 162 /a 1984 data, calculated as weighted average of urban and rural per capita income. Urban per capita income is derived using same methodology as in Annex 5 to World Bank Country Study, 1985. /b Some provincial ratios are higher than national ratios due to large numbers of overage children enrolled. Repetition rates are high, with about 202 of all children in the province repeating first grade. Drop out rate is also high. In 1984, the number of children completing primary school was 342 of the size of the entering class five years previously, compared with 652 for China nationwide.  v CHINA GANSU PROVINCIAL DEVELOPMEIX PROJECT: EDUCATION COMPONENT ", Credit and Project Summary Borrowers People's Republic of China Amounts SDR 15.83 million (US$20.0 million equivalent) Beneficiarys Gansu Provincial Government Terms: Standard IDA Terms Project Description: The proposed project is part of a comprehensive plan to attain universal nine-year basic education and to improve the quality of instruction in primary and lower secondary schools in Gansu Province. The project has been desigpad within the framework of an agreed action program that would increase enrollment ratios and improve the status of teachers. "he project would finance civil works, equipmnt, furniture and technical assistance to: (a) increase the output of qualified lower secondary school teachers by expanding the capacity of five normal colleges from about 3,500 to 8,200 to accommodate both preservice and inservice trainees; (b) improve the quality of preservice primary teacher training by upgrading the facilities of 23 normal schools; (c) reduce the number of unqualified teachers by assisting the Gansu TV Education Institute to expand its inservice training program to cover the entire province through the establishment of prefectural and local learning centers; (d) improve science instruction in the 400 lower secondary schools in poor counties; (e) improve the quality of educational administration through the establishment of a Center for School Administration to train school and govern- ment education administrators; and (f) improve the manage- ment of education through assistance for continuing the development of a new school supervision system and for plan- ning improvement to the system for managing educational information. The main benefits would be: (a) improved quality of basic education; (b) increased access to basic education; (c) decreased disparity between rural and urban schools; (d) improved management and planning for primary and lower secondary schools; and (e) demonstration effects for other provinces. 1/ "Project" is used to describe this component in the text, in conformity with standard Bank practice.  - vi - The only significant risk arises because this is the first major Dank operation In Gansu Province. This risk has been addressed through training and the provision of technical assistaneo to the staff of the Project ImplneDtation Unit. Estimatee Costs: Local Foreign Total ( US million) Normal colleges (5) 14.68 1.68 16.36 Normal schools (23) 2.32 0.28 2.60 Gansu TV education institute (1) 1.06 1.03 2.09 Lower secondary schools (400) 7.26 0.88 8.14 Center for school administration (1) 2.35 0.36 2.71 Improve school supervision/ statistics 0.04 0.15 0.16 Base Cost 27.71 4.38 32.09 Physical contingencies 2.77 0.44 3.21 Price contingencies 1.21 0.21 1.41 Total Project Cost 31.68 5.03 36.71 Financing Plan: IDA 14.97 5.03 20.00 Government 16.62 - 16.62 Total 31.68 5.03 36.71 Estimated Disbursement: Bank PY 1988 1989 1990 1991 1992 1993 ==~ (US$ million) -- Annual 0.5 3.0 5.5 6.0 3.4 1.6 Cumulative 0.5 3.5 9.0 15.0 18.4 20.0 Economic Rate of Return: Not applicable. Note: Figures in brackets denote the number of institutions/schools.  CHINA GANSU PROVINCIAL DEVEWPMENT PROJECT: EDUCATION COMPONENT 1.01 The proposed project in Gansu province is the education component of an overall development program for the province which would be assisted through the Gansu Provincial Development Project. The other components in the overall project are agriculture and industry. The Education Component is referred to in the text of this report as "the project". I. BASIC EDUCATION IV GANSU PROVINCE A. Background 1.02 The challenge that China faces in combining improvements in the national economy with reductions in poverty are reflected in the development situation of Gansu province. Gansu, with a population of about 20 million, is situated in the semi-arid northwest region of China and in 1984 was the poorest province in China in terms of rural per capita income (Y 221 compared with a national average of Y 356).' The difficult environment, characterized by extensive mountainous areas, general aridity and a harsh winter, has impeded development which is largely dependent on agriculture. Although new economic policies have stimutated an annual growth of 3.72 in the gross .sutput value of agriculture in recent years, there are indications that the province is slip- ping behind the rest of the country. Rural per capita income was 622 of the national average in 1984 compared with 751 in 1978. The Central Government has established a special development program for parts of Gansu and will be allocating Y 200 million per year for the next ten years to the program. In 1985 it requested Bank Group assistance in carrying out a detailed study of develbpment prospects in the province. This study was issued in December 1986 entitled Growth and Development in Gansu, China (Report No. 6064-CHA). Annex C to that report, Basic and Vocational Education in Gansu Province: Conditions and Prospects, is the basis for the proposed education project. 1.03 A major national policy forms the backdrop for development of primary and secondary education in Gansus the drive to achieve universal basic education (UBE), through the step-by-step implementation of nine-year compulsory schooling. According to the Compulsory Education Law approved by the National People's Congress in 1986 (Annex 1), China will seek to achieve UBE in stages: in the cities and coastal areas by 1990* in towns and villages with a medium level of development by 1995, and in the more backward are&s, which account for about 25X of the population, at a rate commensurate with the local conditions. As one of the backward areas, Gansu's program to reach UBE will spread over a relatively long period of time. As a first stage, the 1/ In 1984, U8$1.00 = Y 2.00; Y 1.00 a US$0.50.  - 2 - province expects to reach universal primary education in 50 of the 86 counties by 1990 and in the entire province by the year 2000. The new Law devolves responsibility for financing and managint basic education to the provinces. Thus, provinces must play the major role in achieving USE. Demographic trends will also play a significant role in educational development during the next decade. xationwide, due to sucressful family planning efforts, the size of the school-ige population is decreasing. Gantu evidences the same trend, as shown in Table 1.1. Thus, the resources required to achieve UBE will be considerably less than in most other countries at a similar level of develop- ment. Table 1.15 NATURAL POPULATION GRO=WT, GANSU PROVINCE 1984-2000 /a Absolute size (million) Growth rate (2 p,a.) Age group 194 1990 2000 1984-90 1990-2000 0-4 years 1.9 1.8 1.8 -0.9 - 5-9 years 1.9 1.8 1.8 -0.9 - 10-14 years 2.5 1.8 1.8 -5.3 - 15-19 years 2.8 2.3 1.8 -3.2 -2.4 20-64 years 10.4 12.9 15.1 3.7 1.6 65 + 1.0 1.3 1.6 1.1 0.9 Total population 20.5 21.9 23.9 1.1 0.9 /a Projections assume no interprovincial migration. Source: Report No. 6064-CRA, Annex C, Table 1.14. 1.04 Two other national education policy reforms will shape educational developments in Gansus (a) restructuring of secondary education by expanding vocational and technical education; and (b) reforms in the enrollment, management and graduate assignment system in universities. In accordance with these guidelines, the province intends to increase the proportion of students in vocational program in upper secondary schools from the current 20X to 502. It is exploring various approashes that would expand vocational educa- tion in a cost effective way. The State Education Commisuion and the Bank are currently conducting a study on vocational and technical education in China. Findings and recomendations of the study would influence the strategy Gansu would adopt regarding vocational education. In higher education, the previous practice of enrolling all university students according to state plans and guaranteed job assignment for all graduates by the state has been modified nationwide. The new policy allows for enrollment of students outside state plans. It encourages employers to commission universities to train students who would be assigned to work for them upon graduation. It also allows for the enrollment of a small number of self-supporting students who will pay tuition and find jobs on their own upon graduation. These new rules will apply to the 14 higher-education institutions in Gansu.  -3- B. Issues in Basic Education in Ganou 1.05 Basic education in Gansu Province takes place in several kinds of schools. About 552 of primary schools have five grades, about 5X, mostly in urban areas, have six grades, and the remainder are incomplete village schools, usually with three grades. Lower secondary schools typically have three grades, as is the case nationwide. About two thirds of them are part of six-year combined (lower and upper) secondary schools; the remainder are "independent," or attached to primary schools. The present policy in the province is to retain five-year primary schools and eventually to achieve nine-year compulsory education through a 5-4 scheme in which a fourth year is e-dded to lower secondary school Teachers for basic educat:on are trained in two types of institutions: normal schools, which are upper secondary schools, train pricary teachersl normal colleges, which are two- or three-year junior colleges, train lower secondary teachers. The province has 23 normal schools and five normal colleges. Low Enrollment 1.06 According to provincitg data, in 1984 about 8SZ of the 7-11 age cohort were enrolled in school.-' This is a significant achievement, which reflects recent efforts to increase primary enrollments. However, there remain many primary school-age children in the province who are not in school, and females constitute the majority of this group; in 1986 only 402 of primary students and 332 of lower secondary school students were girls. Counties differ substantially in enrollment ratios. Of the 86 counties in Cansu, about 20X have 951 or more of the age cohort enrolled in primary school while for almost 301 of the counties, in particular the poorer counties and those with large minority populations, this figure is 751 or less, In lower secondary education, both the age cohort and the number of students enrolled dropped steadily during the period 1980-84. The gross enrollment ratio ranged between 411 and 471 during the period. 1.07 In Gansu, the primary school completion rate is lower, and dropout and repetition rates are higher than in China overall or in many other low- income developing countries (Report No. 6064-CHA, Annex C). In 1985, the number of children graduated from primary school represented about 351 of the entering class five years previously. This completion rate contrasts with the national average of 651. Repetition is also high, with about 201 of all chil- dren in the province repeating first grade. Several factors contribute to the low completion rates: a higher tendency for overage students and repeaters to leave school; a propensity for families to take girls out of school before completion of the primary cycle; the difficulty for students in incomplete schools (para. 1.04) to complete five grades; and the fees and related expen- ditures of schooling. 21 In 1984, the gross enrollment ratio was 1251, reflecting the large number of overage children in primary school.  - 4 - Ina&uquate School Facilities and Instructional Materials 1.08 Primary and lower secondary schools in the province, particularly those in rural areas, are generally inadequate for instructional ?urposes. Many buildings are poorly designed, many have dark interiors. Most classrooms in older buildings are small, or long and narrow and have limited provision for heating during the harsh winters. Data from 1983 on the conditio s of primary and lower secondary schools indicaie that about 1.0 million m of primary school buildings and 0.3 million m of secondary schools, representing 151 and 1OZ respectively of total space, must either be substantially improved or rebuilt. Equipment, teaching materials and furniture are generally in short supply with, again, the poorest conditions in rural schools. There are seldom any teaching aids in the schools aside from blackboards and demonstra- tion equipment in a few lower secondary schools. All children are required to purchase a full set of textbooks in order to attend class, but beyond the required texts, there are few other reading materials. The curriculum used in Gansu is embciied in the textbooks, produced by the State Education Comaission (SEdC). Teachers and parents in rural counties express dissatisfaction with the present curriculum, which they feel is oriented toward urban interests and experiences. While recent national decisions regarding education have given increased latitude to provinces in the matter of curriculum, it is probably premature for Gansu to take the initiative in p.oducing its own educational materials. During the next decade, as problems of teacher quality and access to schooling are resolved, increased emphasis should be given to local deve- lopment of materials. 1.09 Space requirements, as well as amounts and types of school furniture and equipment, are governed by national standards developed by SEdC. These are differentiated by school location, and take into account different levels of boarding and student body size. In general, the standards for space are generous, but not excessive, in comparison with other countries at similar income levels. For instructional equipment, SEdC has established three levels of standards. Level 1 is the most advanced and compares favorably with schools in more advanced countries. Level 3 is the most modest, and is the minimum necessary for carrying out required experiments or other instructional activi- ties. Few rural schools in Gansu Province are equipped even at the level 3 standard. Unqualified Teachers 1.10 Chinese schools are stiffed by two different kinds of teachers. Gongban teachers are permanent employees with a fixed salary level controlled by the state; they receive bonuses, subsidies and free medical care. In con- trast, minban teachers, usually found in rural areas, are hired locally with- out tenure and serve under terms agreed with the townshio or village that hired them. They receive payment in cash or grain, or a combination. The government also subsidizes their salaries but at less than subsistence level; the level of total compensation varies with the wealth of the local community. In 1985, 56% of primary and 81 of lower secondary teachers in Gansu were minban teachers (Table 1.2). The two types of teachers are an outgrowth of an effort to encourage local support for schooling, in the absence of sufficient resources to finance all schools centrally. During the Cultural Revolution,  townships and villages (the former brigades and communes) were given control over both financing and hiring of minban teachers. One outcome is that many people without qualifications were hired. But there are unqualified gonhban teachers as well, and low qualifications are a significant contributor to the perceived inadequacies of education in Gansu. Proportionately, lack of quali- fications is a greater problem at the lower secondary than at the primary level, but in both cases the numbers are large (Table 1.2). Teachers are considered unqualified if they do not meet educational requirements. (Under the new education law, Annex 1, certification procedures are introduced; these apply only to teachers who do not meet educational requirements.) Only two- thirds of the primary teachers in the province have a full upper secondary school education, the minimum education requirement (Annex 1, Article 13). For lower secondary school teachers, the minimum requirement of two years of postsecondary school is met by only one quarter of the teachers. Relatively few have had pedagogical training. Table 1.2: TEACHER STATUS AND QUALIFICATIONS, GANSU 1985 Level Total Minban Gongban Unqualified Qualified v # X # X Primary 119,420 66,990 56 52,430 44 39,700 33 79,720 67 Lower secondary 38,080 3,060 8 35,020 92 29,380 77 8,700 23 Inadequate Teacher Training Caacity 1.11 The province has inadequate capacity for both inservice teacher up- grading and for preservice training of lower secondary teachers. Upgrading for primary teachers takes place in continuing education schools located for the most part in county seats. These schools can accommodate abxut 1,000 trainees a year for two-year upgrading programs. Upgrading for lower secon- dary teachers takes place at prefectural training centers and normal colleges. These together can accommodate about 2,000 trainees for two-year programs. These institutions are inadequate to deal with the almost 40,000 primary and 30,000 lower secondary teachers who are not qualified (Table 1.2). Instead, a major part of the upgrading task will be given to the newly established Gansu TV Education Institute (para. 2.08) which opened in 1985 and has already enrolled about 2,500 lower secondary teachers in a three-year distance educa- tion program and expects, under the project, to extend the same opportunity to all unqualified primary and lower secondary teachers by 1993. 1.12 Table 1.3 presents estimates of the teacher demand and supply situation for 1986-1990, based on Bank and Gansu Bureau of Education (BOE)  - 6 - estimates. Details of the calculations are presented in Annex 2.31 The estimates take into account the teacher/student ratios in the province. The national targets for teacher/student ratios ares 1:25 for primary level; 1:18 for lower secondary level. Current levels in the province are 1:22 and 1t21 respectively, lo",r than the national target for primary level and higher for lower secondary.- These ratios are not ezpected to change significantly in the short- to medium-term. For primary schools, the ratio would remain lower than the national target because of the many small schools in sparsely popu- lated areas and because inadequately trained teachers are restricted in the number of subjects they can teach. In lover secondary schools, the shortage of teachers is so great that it would not be possible to decrease the ratio in the foreseeable future. Table 1.3: TEACHER DEMAND AND SUPPLY, CANSU, 1986-1990 Category Primary Lower Secondary Demand Expansion - 5,700 5,800 Attrition 17,900 5,700 Replace teachers in training 4,700 2,500 Replace unqualified and minban teachers 4,500 200 Total demand 21,400 14,200 Average annual demand 4,280 2,840 supply Expected supply from preservice schools /a 21,600 9,340 Average annual supply /a 4,320 1,900 Average annual supply without project 4,250 1,400 /a Including increased output generated by the proposed project. 3t The demand estimates are based on: (a) projections of changes in school- age population for the province; (b) assumptions about the rate of pro- gress towards achieving UBE; (c) teacher attrition rates estimated from previous experience; (d) the training capacity of inservice upgrading institutions (the number of teachers needed to replace those in train- ing); and (e) provincial data on numbers of unqualified teachers. 4/ Teacher student ratios are low in China because teachers have comparatively light teaching loads. In Gansu, for primary schools, average class size is about 35 and there are about 1.3 teachers per class. Comparable figures for lower secondary schools are 50 and 2.2. While light teaching loads appear inefficient, Gansu authorities feel that as long as teachers are poorly qualified, the quality of education would suffer by raising them.  1.13 Long-term teacher demand and supply are shown in Table 1.4. At the primary level, in the short term (to 1990) there will be a shortage of teachers because, according to a province-wide survey, about 13,500 unquali- fied teachers are ineligible for upgrading and have to be transferred to other positions. B0O plans to increase the output of normal schools, through a slight expansion in capacity and an increase in class sisz, in order to pro- duce sufficient new teachers to accomplish the replacement. The redeployment of the unqualified would be phased over the next decade, with the majority being removed during the 1991-95 period. During this period, enrollments are projected to decrease, in response to the sharp reduction in population and to a decrease in the number of overage students enrolling in first grade. Thus, the net requirement for new teachers is expected to decrase. In addition, increases in the quality and efficiency of teachers expected to result from upgrading programs would make it possible to increase teacher student ratios from the existing 1:22, although the province has no firm plans to do so (See Annex 11). In response to the decreased requirement for new primary teachers, BO plans to decrease the annual output of normal schools to about 3,500 dur- ing the 1991-95 period. Table 1.4: LONG-TERM TEACHER DEKAND AND SUPPLY, GAN8U, 1986-2000 1986-90 1991-95 1996-2000 Estimated number of seven year olds (millions) 0.37 0.37 0.37 Primary Enrollment (millions) 2.50 2.23 2.08 Teacher student ratio 1t22 1:22 1:22 Net annual requirement for new teachers 4,280 3,S20 1,940 Annual supply Ia 4,320 3,500 n.a. /b Lower Seconda!X Enrollment (millions) 0.92 0.95 0.93 Teacher student ratio 1:21 1:21 1:21 Net annual requirement for new teachers 2,840 3,200 1,800 Annual supply /a 1,900 2,500 n.a. /b /a Includes additional capacity generated by proposed project. Estimates also assume all graduates will enter teaching, as they are now required to do. /b The teacher training system is expected to undergo major reforms during this period due to changing requirements for teacher qualification. 1.14 For lower secondary teachers, the projected annual demand for new teachers is about 2,800-3,200 during the next decade. The present annual supply is about 1,400. The shortage reflects: (a) increasing enrollment as the enrollment ratio is slowly raised from the present 482; (b) teachers on  -8- leave for upgrading; and (c) the need to replace unqualified teachers. Between 1986 and 1990 the B0B plans to restrict enrollment increases, limiting total enrollment to only 920,000 in 1990. Thereafter, enrollments would be allowed to increase, reaching about 950,000 in 1995. However, decreasing population would bring down the rate of enrollment increases thereafter. The province would continue to face shortages of teachers if it attempted to attatn the national target teacher student ratio of 1:18. A target of 1:21 appears more realistic. Shortcomings in Educational Management 1.15 One serious weakness in the management of basic education is the inadequacy of school supervision. Methods, procedures and responsibility for assisting and monitoring the performance of schools, teachers and administra tors are zot clearly established. In addition, education managers in Gansu often lact the necessary information to enable them to carry out budget plan- ning, resource allocation, cost-saving measures and implementation of new policies and objectives. Information on enrollment by age and sex, by urban and rural areas, and corresponding promotion, dropout and repetition rates, as well as information on student achievement, student movement after completion of basic education, teachers' qualifications, revenues and expenditure are generally not available. A major cause of inadequate management is that educational administrators at the county, township or school level have seldom received specialized training for their positions. Provincial authorities estimate that there are more than 35,000 administrators who have received no training, including 600 prefectural and 7,000 county administrators and 28,000 primary and secondary school principals. The Gansu Education Institute, whose major role is to provide inservice upgrading for upper secondary teachers, also trains administrators. The present enrollment in the Education Depart- ment of the Institute, which provides courses. in administration ranging in duration from six months to two years, is 50. The Institute occupies a small campus outside of Lanzhou, the provincial capital. The province plans to expand its capacity and move the campus to Yinmentanp a section of Lanzhou, on land which has been set aside as a site for tertiary education institutions. To address the problem of training administrators, the province would esta- blish a Center for School Administration, which would offer training courses and facilities for conducting research into problems of school administra- tion. It would also run correspondence courses for school principals. Financial Constraints 1.16 In Gansu, the share of education expenditure in total public expenditure was 12X in 1985, or Y 241.5 million. Secondary education (upper and lower) accounted for 361, primary education about 48Z, and higher educa- tion about 161. A World Bank survey in 1985 (Report No. 6064-CHA, Annex C) found that per student expenditure in urban primary schools is about three times that in locally run village primary schools. At the secondary level similar disparities exist, though strict comparisons are not as applicable because of the different types of schools (general, technical and vocational) in the sample. The study also showed that in the case of urban primary schools public expenditure represents about 89% of the total; family contribu- tions, about 8.51; and other inputs, about 2.51. In the village primary  school, the local government provides only 212 of total expenditures student households, about 321; and others (largely village contributions of grain or cash payments to teachers), about 441. The fees and related expenditure on schooling by families are a barrier to school attendance in poor counties and rural areas. The new Compulsory Education Law recognises this problem and states (Annex 1, Article 10) that there shall be no tuition for students in compulsory education and that the state shall offer stipends to students from impoverished households. However, the province is not yet able to implement this portion of the law. C. Government Strategy 1.17 The Gansu provincial government is developing plans to universalize basic education, as decreed by the central government. (Gansu is classified as a backward erea (para. 1.03) and thus is setting its own timetable for achieving UBE). In the initial stages, the province would strive to achieve eight-year basic education, based on five years of primary school and three years of lower secondary school. In his discussions of the new Compulsory Education Law, Li Peng, Vice Premier and Chairman of the SEdC, noted the difficulty poor provinces would have in financing nine years of compulsory schooling and stpted, "we should allow the el;stence of the five-and-three academic system in the transitional period."-' Thus, provincial plans for achieving compulsory schooling are consonant with national policy. Within this framework, the province would devote a major effort to first achieving universal (five-year) primary education and then expanding access to lower secondary school. Full student participation in a primary education program should be realized in all but a few remote areas between 1990 and 1995; the net enrollment rate in 1995 is projected to be 951. Full lower secondary participation should be attained in about half the counties by 2000 with the remainder reaching this standard subsequently; province-wide, the 1995 enroll- ment rate is projected to be about 652. The actions taken by the province in reaching UBE and improving the quality of education would serve as a model for other poor provinces in China faced with similar problems. 1.18 Since 1985, the province has initiated a series of actions designed to support the achievement of UBE and to improve the quality of basic educa- tion. These initiatives form a coordinated action program with three objec- tives: (a) to increase enrollments in basic education; (b) to assure a supply of well-qualified teachers; and (c) to provide adequate school facilities (see Annex 3). To achieve these objectives, the province would Mi) assist poor families to pay school fees; (ii) encourage girls to enroll in school; (iii) expand the capacity to train lower secondary teachers; (iv) expand teacher upgrading programs to cover all unqualified primary and lower secon- dary teachers; (v) reduce the number of minban teachers; (vi) subsidize the salaries of existing minban teachers; (vii) repair dilapidated buildings; (viii) supply school furniture; and (ix) build appropriately located lower secondary schools. 5/ Li Peng, "Explanation of the Compulsory Education Law (draft) of the PRC," made at the fourth session of the Sixth National People's Congress on 2nd April, 1986.  - 10 - D. Bank Group Strategy 1.19 To date, almost all Bank Group investment for education in China has been in higher education. This pattern reflected the urgency of filling the large Sap in the supply of high-level manpower. However, balanced and equit- able development requires upgrading and expansion of education at other levels and paying attention to the educational needs of particular sectors or prov- inces. Accordingly the Bank Group lending strategy has three themest (a) support for basic education and teacher training. Assistance in this area would involves Mi) support for improvement in textbooks and other educational materials; and (ii) the development of institutional and financial mechanisms for basic education and related teacher education especially in rural areas, which are now faced with many of the same problems faced by low income coun- tries, including low enrollment ratios (especially for girls) and inadequate finance mechanisms; (b) increased emphasis on the education and training needs of economic sectors which the Government and the Bank Group consider priori- ties for development; (c) support for technical and vocational education; and (d) continued support for higher education. E. Rationale for Bank Group Involvement 1.20 The Bank Group has a significant role to play in assisting Gansu Province to improve the quality and efficiency of basic education. In its economic and sector work in the province, the Bank Group has already helped to sharpen the focus on education management and financial issues and, during project preparation, to trim and rationalize a much larger project request than is now being proposed for financing. Bank Group participation in the proposed investment in Gansu would assist the provincial government in achiev- ing its goals of UBE and quality improzement more quickly, thereby narrowing the gap between Gansu and other, more developed provinces. Looking beyond the present project, the work in Gansu has implications for future Bank Group involvement in education in China. As the first direct and substantive involvement with a provincial bureau of education, the project is providing the opportunity to work with and come to understand the functioning of the provincial education system which, under new education laws, has been given increased responsibility for managing and financing basic education. Also, as the first lending for basic education in China, the project is providing a policy basis and approach for subsequent Bank operations in support of universalising basic education in other provinces or regions of the country. F. Experience with Past Lending 1.21 Seven projects in China have supported education, under three ministries. Four are under SEdC. The first project, the University Development Project (Loan 2021/Credit 1167-CIA, US$200 million), assisted 28 major national universities in the fields of science and technology. It was approved in 1981 and has been satisfactorily completed. Another was approved in 1983 for the development of polytechnics and television education (Credit 1411-CHA, US$85 million). The Second University Development Project (Credit 1551-CIA, US$145 million) is contributing to strengthening education in engineering, economics and finance in about 35 universities. In 1986, the  - 11 - Provincial Universities Project was appruve4 (Credit 1671-CU&, US$120 mil- lion). It will assist provincial universities and the .SdC to expand enroll- mnt and improve the quality and management of provincial higher education programs. Special emphasis is being given to teacher education programs in Normal Universities. Under the Ministry of Agriculture, Animal Husbandry and Fisheries, two loans/credits were extended for the development of professional agricultural manpower in 1982 and 1984 (Credit 1297-CM, Loan 2444/Credit 1500-CMA, total U8$144 million). A Rural Health and Medical Education Project approved in 1984 (Credit 1472-CM, US$85 million) included about US$43 million for support of medical universities under the Ministry of Public Health. Disburseents for the China projects are well ahead of averages for all East Asia and Pacific education projects. While it is early to assess impact, since the first project has just been completed, policy initiatives are being implemented and earllment and other targets measuring quantitative, qualita- tive and efficiency improvements, are being met in on-going projects. II. THE PROJECT A. ?roject Objectives and Policy Framework 2.01 The proposed project is part of a comprehensive plan to attain USE and improve the quality of education in Gansu Province. The project has been designed within the framework of an action program agreed with the provincial government to increase enrollment ratios and improve the status of teachers. 2.02 Within this framework, the project woulds (a) increase the output of qualified lower secondary school teachers by expanding the capacity of five normal colleges from 3,530 to 8,200 to accommodate both preservice and inservice trainees; (b) improve the quality of preservice primary teacher training by providing instructional equipment for all 23 normal schools and accelerating completion of the campuses of four schools presently under construction; (c) reduce the number of unqualified primary and lower secondary teachers in the province by assisting the Gansu TV Education Institute to expand its inservice training program to cover the entire province through the establishment of prefectural and local learning centers and the provision of equipment and technical assistance; (d) improve science instruction in the 400 lower secondary schools in poor counties by constructing laboratories, training teachers and laboratory assistants and providing equipment; (e) improve the quality of educational administration through the establishment of a Center for School Administration to train school and government education administrators, providing civil works, equipment and technical assistance; and  - 12 - (f) support the management of education through technical assistance for continuing the development of a new school supervision system and for planning improvement to the system for managing educational information. Action Program 2.03 To achieve nine-year compulsory education, the provincial government has adopted an action program submitted to the Associatioa under the letter of the Director of the Bureau of Education, dated March 7, 1987, with three objectives: (a) increase enrollment ratios of primary and lower secondary education, in part by assisting special groups such as poor students and girls; (b) assure an adequate supply of well-qualified teachers; and (c) improve school facilities. (The program is described in Annex 3, which also includes a set of indicators that would be used to monitor progress under the action program.) At negotiations, the provincial government affirmed that it will carry out the action program (para 3.13). Te program would implement several newly adopted policies concerning basic education. These would: (a) provide special financial assistance to the 16 poorest counties to enable children to attend school; (b) work towards uniform status for all teachers by eliminating minban teachers through upgrading and cessation of new hiring; and (c) reduce the disparity between urban and rural schools by subsidizing the salaries of minban teachers, improving instructional facilities in rural schools, and assisting rural schools to repair dilapidated buildings. The proposed project is part of this action program. It supports initiatives to: (a) improve the quality of primary and lower secondary teachers; (b) expand the supply of lower secondary teachers; (c) improve science instruction in rural lower secondary schools; and (d) strengthen education management. Project components are described below. Other aspects of the action program, such as subsidies to poor counties and school construction and repair, have been underway since 1985 and would continue to be financed and implemented by the provincial government. B. Project Components Expand the Normal Colleges (proposed outlay US$16.4 million excluding contingencies) 2.04 Gansu has five normal colleges that provile preservice training to lower secondary school teachers and, beginning in 1985, inservice upgrading as well. (Inservice training is also provided in prefectural training centers (para. 1.11). These institutions, which are located in areas not served by normal colleges, will continue to operate as long as the need for upgrading of unqualified lower secondary teachers remains acute.) To meet the requirements of increased secondary enrollment, the project would expand the capacity of the normal coheges from 39530 to 8,200 to accommodate increased enrollments of iath preservice and inservice students. The enrollment targets of the colleges are as follows:  - 13 - Table 2.1: Enrollment of Normal Colleges Preservice Enrollment Inservice Enrollment Total College 1985 1992 Increase 1985 1992 Increase 1985 1992 Qingyang 940 1,200 260 40 700 660 980 1,900 Zhangye 770 1,100 330 40 600 560 810 1t700 Lmnxhou 820 1,200 380 80 400 320 900 1,600 Tianshui 650 1,500 850 80 500 440 730 2,000 Hezuo 110 800 690 0 200 200 110 1,000 Total 3,290 5,800 2,510 240 2,400 2,160 3,S530 8,200 All inservice and most preservice programs are two years in length. The inservice and preservice programs overlap substantially in content and under the expansion to be financed by the project would share the same facilities and faculty. This consolidation is a major improvement on the existing system where the two programs are conducted in separate institutions. It would result in greater economies and in increased flexibility to shift between pre- service and inservice training, which will be needed to deal with changing requirements for teachers. 2.05 The project would finance civil works to complete the campuses of the five normal colleges and to expand capacity as noted above. In the 1ggre- gate, about 155,000 m' would be added to existing facilities of 85,000 m . (Details are presented in Annex 4.) New construction would include facilities for instruction, including classrooms, laboratories and libraries (36X); administration (6X); and boarding, for both students and staff (582). The project would finance equipment in three categoriess (a) science laborato- ries; (b) audiovisual equipment; and (c) language laboratories. Each college would receive the equipment needed to bring its supply up to the standard set by SEdC for schools of this type. 2.06 Expansion of the normal colleges would require substantial addi- tional faculty. The five schools at present have about 625 teaching staff. If the province were to adhere to the SEdC standard teacher student ratio of 1:6, close to 800 new staff would be required. Instead, the province plans to increase the ratio to 1:8 so that, overall, about 400 new staff would be required. For the most part, these would be recent graduates from normal uni- versities and other tertiary-level institutions. Provincial authorities recognize the need to provide these new staff with teaching experience in lower secondary schools, the level for which they would be training teachers. At least one college, Tianshui, already has a program to provide one year of teaching experience in lower secondary school before a new staff member takes his o: her position at the college. During negotiations agreement was reached that the provincial government would take steps to assign newly recruited normal college staff who have no prior teaching experience to one year of teaching at a lower secondary school prior to taking up their normal college  - 14 - positions. The project would finance 1,640 man-months of local training, which would be used to provide additional education and teaching experience for new and existing teaching staff of the colleges and training for admini- strative staff (Annex 5). Upgrade Normal Schools (proposed outlay US$2.6 million excluding contingencies) 2.07 The province has 23 normal (upper secondary) schools for preservice training of primary teachers. All of them fall short of SEdC standards for instructional equipment. The project would finance the purchase of equipment to assist all 23 schools to meet SEdC standards for science, language labora- tories, computers, audiovisual equipment and the arts. Equipment lists for each school have been prepared based on an inventory of existing equipment (Annex 4). Two hundred man-months of local tra.ning would be included to give instruction to teaching staff in the use of the new equipment (Annex 5). Civil works would be financed for four normal schools, Lanzhou, Tianshuip Qingyang and Zhangye. In each case, the existing campus was appropriated for a normal college in 1983 so these institutions could begin operations quickly, and the normal schools were transferred to temporary quarters. New campuses are under construction and the project would finance completion of these works, thereby accelerating the provincial government's xisting program to replace the campuses. Under the project, about 24,000 m' would be added to the existing space of about 69,000 mWe New construction would include facili- ties for instruction (482), administration (162) and boarding (361). The capacity of the four colleges would be expanded slightly from about 3,600 to 4,000 preservice trainees. This expansion would assure that the province could meet requirements for qualified primary teachers (Table 1.3). However, by the mid-19909 when teacher qualifications would be raised to a level where teachers would be able to carry a greater workload and when the primary school-age population would plateau, the annual demand for new teachers would decrease. At that time BOE plans to reduce the output of normal schools to about 3,500 a year by reducing class size from the current 50 to 40, and by converting student places to train kindergarten teachers. Furthermore, it anticipates the introduction of major reforms in teacher training, with the level of training for primary teachers rising from secondary to postsecondary towards the end of the decade. As a measure to prevent an oversupply of primary teachers, the provincial government has included as one of the progress indicators under the action program the monitoring of the supply and demand situation of primary teachers (Annex 3). Expand Gansu TV Education Institute Programs (proposed outlay US$2.1 million excluding contingencies) 2.08 About 40,000 primary and 30,000 lower secondary teachers in Gansu Province are unqualified (Table 1.2), a number far beyond the capacity of existing institutions to upgrade. The Gansu TV Education Institute, which delivers courses taught by TVt is the primary vehicle through which the pro- vince expects to meet its goal of eliminating unqualified primary and  - 1S - lower secondary teachers by the year 2000.1' Teachers study part-time and do not have to leave their teaching posts to attend courses. The Institute began operations in 1985 and by the following year about 2,500 trainees were studying in 38 local centers. TV upgrading courses consist of about 1,200 instructional hours, spread over three years, with a minimu of seven hours per week. Trainees view TV progrms as a group in a center under the direc tion of a tutor, who is also responsible for checking homework and providing assistance. Tutors are hired on a part-time basis from normal colleges and other institutions. Videotapes are used so that viewing is not restricted by transmission schedules. TV programs originate from two sources, a national TV Education Institute and provincial production. (Some national program are provincial productions that have been judged suitable for national distribu- tion.) Periodic national examinations are given to monitor student progress; certification is through national examination at the end of a course. Under the project, the province would expand the number of local centers to 430 (on average, five per county) and establish 14 prefectural centers that would function as intermediaries between the Institute and the county bureaus of education which, in turn, would link with local centers. Responsibilities of each level of the provincial system would be as followst 6/ A comparison of costs, including recurrent costs and annualized capital costs, for upgrading lower secondary teachers through TV Institute programs and normal colleges shows that training at a college costs about ten times as much per student per year and about 3.5 times as much to produce a qualified teacher. (Details of the calculations are presented in a project working paper; see Annex 13). Despite the lower cost of TV institute programs the province is also expanding the capacity to upgrade teachers at normal colleges because it believes that the quality of the training will be higher, as a result of better laboratory facilities and more concentrated instruction and because the effectiveness of TV courses for upgrading is unproven. As experience with the TV Institute programs accumulates, the BOE will examine these assumptions and assess the effectiveness of TV-based training (Annex 11).  - 16 - Institute (Laonhou): Tape programs transmitted from Beijing, send tapes to prefectural centers; produce programs (about 400 per year)$ plan expansion, periodic rearrangement of centers to meet needs; keep up- to-date enrollment data. Prefectural center Duplicate tapes, distribute to counties for local centers; take over taping function when satellite receiving equipment is acquired; monitor performance of local centers; transmit data to Lanzhou. County Bureau of Distribute tapes to local centers; provide Education financial and other assistance to local centers. Local center Run classes; transmit data to prefectural centers. 2.09 The project would also broaden the scope of training to be provided by the Institute. At present it offers two courses for lower secondary teachers. By 1988, the Institute would offer 10 courses. One would be for primary teachers; the remainder would be separate subject courses for lower secondary teachers. In 1989, the program would be reaching about 24,000 tea- chers (Table 2.2). By 1992, about two thirds of the teachers presently unqua- lified would have had the opportunity to enroll. Assuming a completion rate of 50%, about 21,000 unqualified teachers would be upgraded by the end of 1993. Another 15,000 would be upgraded in normal colleges, prefectural train- ing centers, and continuing education schools (para. 1.11). The present plan of the BOB is that those not qualifying by 1995 would be transferred to other jobs.  - 17 - Table 2.2: DEVELOPMENT OF TV INSTITUTE TEACHER UPGRADING PROGRAM 1986 1989 1993 Primary Teachers Cumulative number enrolling 0 12,500 24,000 Cumulative expected number certified 0 1,000 12,000 Lower Secondary Teachers Cumulative number enrolling 2,500 11,200 18,000 Cumulative expected number certified 0 1,800 9,000 Totals Number of teachers reached 2,500 23,100 42,000 Expected number certified