Mexico - Initial Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 10821-ME STAFF APPRAISAL REPORT MEXICO INITIAL EDUCATION PROJECT August 10, 1992 .IrER0FUI X 'HE ("Of Y R:pc rs No (2, t -HFMIF (c -AF Z5i it l e :INIT7AL ED-iC(iATICAN I-'PRJ,JTECT Author: tEW.Y'RA, &. Ext. 5903'j 9 .-ooD!:I " 155'5 De-t. : LA2HR Country Department II Human Resources Operation Division Latin America and the Caribbean 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 EOUIVALENTS Currency Unit Peso (Mex$) US$1.C'= 3,108 Pesos (August 1992) FISCAL YEAR January 1 - December 31 ACADEMIC YEAR September 1 - June 30 UNITS OF WEIGHTS AND MEASURES Metric US/British Equivalent 1 kilogram (kg) 2.20 pounds (lb) 1 metric ton (m ton) = 2,250 pounds 1 liter (1) 0.26 gallons (gal) 1 kilometer (km) 0.625 miles GLOSSARY OF ACRONYMS CENDI Child Development Center (Centro de Desarrollo Infantil) CONALEP National Council for Vocational and Technical Education (Colegio Nacional de Educaci6n Profesional Tecnica) CONAPO National Population Council DIF National System for Family Development EMIS Educational Management Information System EMP Education Modernization Program (Programa de Modernizaci6n Educativa) GDPPB General Directorate of Planning, Programming and Budgeting in SEP's Undersecretariat for Education Coordination ICB International Competitive Bidding IE Initial Education IEU Initial Education Unit (at both central and state levels) IMSS Mexican Social Security Institute (Instituto Mexicano de Seguridad Social) ISSSTE Institute of Security and Social Services for State Workers (Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado) LAW LAW - Law on the Institute of Social Security and Services for State Workers LCB Local Competitive Bidding NA National Agreement for Basic Education Modernization NAFIN National Financing Company (Nacional Financiera, S.N.C.) PCC Pro-Childhood Committee (Comite Pro-Nitlez) PCU Project Coordination Unit SCEP State-level Coordinated Services of Public Education-recently replaced by SPES (see below) SEP Public Education Secretariat (Secretar(a de Educaci6n Pdiblica) SNTE National Union of Education Workers SOE Statement of Expenditure SPES State-level Public Education Secretariats or equivalent institutions UN United Nations UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific & Cultural Organization UNICEF United Nations Children's Fund  FOR OFFICIAL USE ONLY INITA EDUCAlION PIROIECT STAFF APPRAISAL REPORT TABLE OF CONTENTS LOAN AND PROJECT SUMMARY ...................................... v BASIC DATA SHEET ............................................... ix 1. INTRODUCTION ............................................... I II. SECTORAL CONTEXT .......................................... . 3 A. SECTORAL ORGANIZATION ................... 3 B. PRIMARY EDUCATION ..................... 4 C. PRESCHOOL EDUCATION ..................... 5 D. INMTAL EDUCATION ....... ..................... .5 (a) Formal Initial Education ................................. 5 (b) Non-formal Initial Education ............................... 6 (c) Issues in Non-Formal Initial Education ........................ 6 E. GOVERNMENT STRATEGY ............... .. .................. 8 F. BANK EXPERIENCE AND LESSONS LEARNED ........ .. ............ 10 (a) Education Sector Experience in Mexico ........................ 10 (b) Bank-wide Education Sector Experience ........................ 10 (c) Review of Research Literature ............................. 11 (d) International Context .................................... 13 G. RATIONALE FOR BANK INVOLVEMENT .......... .. .............. 14 Im. THE PROJECT ................................................ 14 A. OBJECTIVES AND CONCEPT .............. .. ................. 14 B. SCOPE AND TARGET POPULATION ............................. 15 C. COMPONENTS ............... .............. 16 D. DESCRIPTION ................ ................ 16 (a) Human Resources Development Component ...... ............... 16 Training of Parents .......... ...................... 17 Training of Community Educators ...... ................. 18 Training of Module Supervisors and Zone Coordinators .... ...... 19 Training of Training Leaders and Technical Staff .... .......... 20 Training of High-level Professionals ...... ................ 20 (b) Educational Materials Development Component .. ................. 21 Parents"Guidebook ... 21 Handbooks .............. 21 Other Printed Materials ............ 22 This report is based on inputs from the findings of the appraisal mission that visited Mexico in May 1992. The mission was composed of Messrs/Mmes. Antonio Pereira (rask Manager), Louise Cord (LA2HR); Fduardo Velez (LATHR); Manuel Vera, Robert Myers, Gian Calvi, Silvia Elena Ar6valo, Martha Llanos, and Roberto Iunes (Consultants). Mme. Maria Anderson and Messrs. Viah Nguyen and Darren Dorkin contributed to the report at headquarters. Peer reviewers for the project were Mmes. Eleanor Schreiber (LA3HR) and CeeDIia Valdivieso (LAIHR). The managing SOD Chief is Mr. Kye Woo Lee (LA2HR). The managing CD Director is Mr. Rainer B. Stsckhan (LA2DR). 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.  ii Non-print Educational Materials ........................ 22 Radio Educational Programs ..... 22 (c) Institutional Strengthening Component ..... 23 Central Initial Education Unit ..... 23 State Initial Education Units ..... 24 Educational Management Information System (EMIS) ... .. 24 Improvement of Supervision Practices ..... 26 Pro-Childhood Committees (PCCs) ..... 26 Inter-Institutional Linkages ..... 27 IV. PROJECT COSTS AND FINANCING ..27 A. PROJECT COSTS .27 B. RECURRENT COSTS .28 C. FINANCING PLAN .30 D. PROJECT SUSTAINABILITY .31 E. PROCUREMENT .31 F. DISBURSEMENTS .33 G. ACCOUNTS AND AUDITS .33 V. PROJECT IMPLEMENTATION AND SUPERVISION ..34 A. PROJECT READINESS FOR IMPLEMENTATION .34 B. PROJECT MANAGEMENT STRUCTURE .34 C. PROJECT COORDINATION UNIT .35 D. IMPLEMENTATION SCHEDULE .36 E. PROJECT LAUNCH SEMINAR .37 F. PROJECT SUPERVISION .37. VI. PROJECT BENEFITS AND RISKS ..38 A. EXPECTED BENEFITS .38 B. RISKS ..40 VII. AGREEMENTS REACHED AND RECOUMMENDATIONS .40  ... ANNEXES 1. National Agreement for Basic Education Modernization 2. Government Policy on Initial Education 3. Enrollmenit Trends 4. Formal Initial Education kCENDI) Indicators 5. Non-formal Initial Education Indicators 6. Local Structure of Non-formal Initial Education 7. Evolution of SEP Spending 8. SEP 1991 Initial Education Budget 9. Rationale for Initial Education 10. Non-formal Initial Education in Latin America 11. Project Scope and Population Targeting 12. Terms of Reference: External Trainers 13. Terms of Reference: Educational Materials Analysis 14. Terms of Reference: Visual Program and Communication 15. Terms of Reference: Radio Programs 16. Terms of Reference: Educational Management Information System (EMIS) 17. Terms of Reference: Educational Impact Evaluation 18. Terms of Reference: Process Evaluation 19. Terms of Reference: Special Studies 20. Project Costs and Financing 21. Estimated Disbursements 22. Organizational Charts: SEP, Central Initial Education Unit at SEP, Project Coordination Unit, and State-Level Initial Education Units 23. Project Indicators and Targets 24. Project Monitoring Matrix 25. Documents in Project File MAP IBRD No. 23995  AR3co IMNlAL EDUCATION POERCT STAFF APPRNAISL )REIT LOAN AND PROJECT SUMMARY Borrower: Nacional Financiera, S.N.C. (NAFIN) urniH tor: United Mexican States Beneficiaries: Public Education Secretariat (SEP) and state-level Public Education Secretariats (SPES) in ten selected states Amount US$80 million equivalent Trsms: Repayment in 15 years including 3 years of grace at the standard variable interest rate Project Objectives: In support of Government policies for human capital accumulation and poverty alleviation, the project would aim to improve quality and efficiency of the non-formal initi; wducation (JE) program and expand access of poor parents to EE programs in the ten poorest Mexican states by: (i) preparing young children of low-income families for timely school entry and their improved primary school attendance and performance; (ii) educating parents, especially mothers, in home-based child-rearing practices; and (iii) strengthening the Government's institutional capacity to formulate sectoral policies and plan, expand, monitor, and evaluate EE programs. Project 'Msetiption The project would have three main components: (i) Human-Resources Develogment (79.2% of total project costs including contingencies) would upgrade the knowledge and skills of all personnel involved in the IE program, SEP's and SPES' technical staff, coordinators, supervisors, and community educators), and specifically the child development skills of parents; (ii) Educational Materials Development (12.9%) would upgrade instructional materials to cover new areas (health, nutrition, environment, etc.), present materials more effectively, and develop new supporting audiovisual components; and (iii) Institutional Strengthening (7.8%) would strengthen management capacity at both SEP and SPES levels-including their planning, management, supervision, and evaluation capacity-while fostering and supporting community participation. The project would center on the training of parents through periodic group meetings and home visits, with the help of comprehensive illustrated guidebooks and other educational materials, to teach them skills for caring and stimulating chi:dren for cognitive, psychological, and social development. Basic health and nutrition education and guidance would also be provided including cooperation with the health system. Parents would be trained by community educators, each of whom would work with 20 families to form a project nucleus. Ten nuclei would make up a module, technically assisted by a module supervisor; and up to ten modules would be monitored by a zone coordinator. Zone coordinators and module  V supervisors would be public education sector personnel, while community educators would be locally selected volunteers who receive a modest stipend. Over 90% of community educators are women. Local Pro- Childhood Committees (PCCs) would be reorganized under the project and would operate as community umbrella organizations for project support, inter-agency coordination, and general child-related advocacy. project Benefita: Project benefits would be reflected primarily in an enhanced quality of life for participating children and parents, who would acquire better child development skills. About 1.2 million children would be better prepared to benefit from primary and further education and for a more productive labor force participation. Consequently, their earnings potential would be increased and economic growth would be promoted. In addition, since most parents and children are from poor families, economic and social benefits (health, education, family planning, and earnings potential) would be more equally distributed, and a more conesive society would be developed. The project would provide training opportunities to about 760 zone coordinators, 4,500 module supervisors, 45,000 community educators (mostly women) and 900,000 parents (especially mothers) in poor rural and urban marginal areas. Since the project model would eventually be adopted by other states, the project iw-p_t wouid be nationwide. Furthermore, the project would contribute to the improvement of the quality and efficiency of public inv 3tments in education, especially in basic education, by reducing repetition and dropout rates and increasing primary education completion rates. Pr.1ectRilk>: The main risks associated with the project are: (f) the institutional weaknesses of SEP and SPES, and in particular their weak planning and managerial capacity to operate an expanded and upgraded program; (ii) the auaterity program of the Government, which may make it difficult to provide suffic;ent funds for program operation; and (iii) difficulties in reaching and motivating parents in remote rural communities. The project would attempt to reduce these risks by: (i) strengthening the institutional capacity of the IE units of SEP and SPES, particularly in their planning, monitoring, and evaluation functions; (ii) improving incentives and working conditions for community educators, and implementing improved in-service training and closer supervision progranis; (iii) providing loan resources to cover incremental operating costs on a declining basis and monitoring program budgets through annual and mid-term review meetings; and (iv) mobilizing local community support through PCCs, improved working conditions of community educators, supervisors, and coordinators, and multi-media promotional support.  MCO INrTAL EDCTINPROJECT TA-FF APPRAISAL REPORT Estimated Project Costs1' Local Foreign Total ---US$ million----- PROJECT COMPONENT Human Resources Development 81.5 0.5 82.0 Educational Materials 7.0 5.8 12.8 Institutional Strengthening 7.3 0.7 8.0 BASE COST 95.8 20 102.8 Physical Cont!ngencies 0.6 0.2 0.8 Price Contingencies 10.8 G.6 11.4 TOTAL PROJECT COST 107.2 78 115.0 Financing Plan Local Foreign Total ---US$ million United Mexican States 34.0 - 34.0 IBRD 72.2 7.8 80.0 UNDP/UNICEF 1.0 0.0 1.0 TOTAL FINANCING 107.2 7.8 115.0 Estimated Disbursements F I IBRD Fiscal Year _ 1993 1994 1995 1996 1 1997 1998 Annual 1I.0O- 9.0 16.0 16.0 18.0 10.0 [ Cumulative 11.0 20.0 36.0 52.0 70.0 80.0 ' Includes Special Account deposit of US$8.0 million. Retroactive financing of US$5.0 million equivalent would be available for eligible expenditures incurred starting from May 1, 1992. Economic Rate of Return: Not Applicable 1' Excluding taxes, esfimaWt at US$5.0 million.  BASIC DANA SHEET Unit Year General Country Data GNP per capita 2,490 US$ 1990 GDP 235.5 US$ Millions 1990 Area 1,958 Thousand Km2 1989 Population 85 Millions 1989 Urban Population (% of Total) 72.0 Percent 1989 Projected Population Year 2000 103.0 Millions Social Indicators Crude Death Rate 5.0 Deaths 1990 Population Growth Rate 2.1 Percent 1989 Total Fertility Rate 3.3 Births 1990 Infant Mortality Rate (per 1,000 live births) 39 Deaths 1990 Life Expectancy at Birth 70.0 Years 1990 Children under-5 malnourished 14.0 Percent 1988 Adult Illiteracy Rate 11.0 Percent 1990 Basic Education Indicators Enroilment Numbers Initial 347 Thousands 1991 Preschool 2,734 Thousands 1991 Primary 14,402 Thousands 1991 Enrollment Rates Initial (ages: 0-3) Formal < 5.0 Percent 1991 Non-formal 2.3 Percent 1991 Preschool (ages: 4-5) 65.8 Percent 1991 Primary, Gross (including overage students) 114.0 Percent 1989 Primary, Net (excluding overage students) 98.0 Percent 1991 Basic Education Efficiency Primary Education Repetition Rate 10.3 Percent 1991 Dropout Rate 5.3 Percent 1991 Completion Rate 57.1 Percent 1991 Lower Secondary Education (Grades 7-9) Repetition Rate 27.7 Percent 1991 Dropout Rate 9.5 Percent 1991 Completion Rate 73.0 Percent 1991 Education Expenditures Data Total Education Expenditures as % of GDP 4.2 Percent 1990 Federal Educ. Expenditures as % of Total Public Expend. 10.0 Percent 1990 Initial Education as % of Federal Educ. Expend. 0.4 Percent 1991 Preschool Education as % of Federal Educ. Expend. 4.9 Percent 1990 Primary Education as % of Federal Educ. Expend. 23.0 Percent 1990 Unit Costa (Public Education) Initial Education SEP Formal 1,406 US$ 1991 Non-Formal 31 US$ 1991 Preschool Education 164 US$ 1988 Primary Education 127 US$ 1991  viii DEFINLTIONS Total Fertility Rate Average number of children who would be born alive to a woman during her lifetime if she were to pass through her child-bearing years conforming to the prevailing age-specific rates. Life Expectancy at Birth Average number of years an infant would live if prevailing age/sex-specific mortality trends at the time of birth were to continue. Infant Mortality Rate Number of deaths of infants under one year of age in a given year per 1,000 live births. Crude Death Rate Number of deaths per 1,000 population in a given year Enrollment Rate Percentage of children of a given age group enrolled in schools at a particular level of education. Coverage : The enrollment rate multiplied by the ratio of the number of years of the age cohort over the number of years of the educational cycle (Annex 11). Completion Rate Ratio between the number of students exiting last grade of an education cycle in a given year T and the number of students entering the firs. grade of the same education cycle in year T- [standard duration of education cycle] (close approximation of the percentage of students of a given cohort who completed the education cycle). Adult illiteracy Rate Percentage of population aged 15 and over who cannot read or write.  I. INTRODVCTION 1.1. This report presents an Initial Education (IE) Project, for which a Bank loan of US$80 million equivalent to Nacional Financiera, S.N.C. (NAFIN), with the guarantee of the United Mexican States, is proposed. This project represents an integral part czf the Mexican Government's human capital formation and poverty reduction program, and aims to strengthen a non-formal Initial Education (1E) program for young children (ages 0-3), to be managed by the Public Education Secretariat (SEP) and the state-level Public Education Secretariats (SPES) (para. 2.4). 1.2. After nearly a decade of deep recession in the 1980s, Mexico's successful economic reform and adjustment programs have set the stage for renewed growth. The country's potential for growth is, however, still constrained by relatively low levels of human capital formation. In spite of significant resources spent on education, even today as many as 47% of newcomers to she labor force did not complete primary school. The net primary school enrollment rate is very high at 98%, but some 300,000 children in poor areas do not attend or still have no access to school. 1.3. Low human capital formation is closely intertwined with poverty, and many features of poverty have roots in tie insufficiency or inadequacy of investments in human capital. Resolution of these issues can only be achieved through sustaine"! human capital investmert carried out to a much larger extent and with more efficiencv thar, in the past. Dropout and repetition rates remain high: the nationwide first grade repetition rate is 32% and may reach as high as 50% in the poorer states. Likewise, while the primary school completion rate nationwide is 57%, it averages only 40% in the four poorest (mostly rural) states. Undernourished people are more vulnerable to disease and early death, at risk of developing anthropomorphic deficiencies and of becoming less able to acquire knowledge and skills; the risks are especially higher when deficiency occurs at an early stage in life. The incidence of undernutrition is particularly high among the poor living in rural southern Mexico, where undernutrition is nearly four times higher than in the north. In the states of Chiapas and Oaxaca, about 70% of preschool-age children suifr from some degree of malnutrition, compared to a national average of 14%. Life expectancy is 55 years in rural areas as against 71 years in urban areas; and it is 53 years among the poor compared to 73 years among the wealthy. The infant mortality rate varies widely between states, ranging from less than 20 per 1,000 in Zacatecas and Veracruz to over 50 per 1,000 in Chiapas, Oaxaca, as well as in Mexico City. 1.4. Despite the comparatively high per capita income (US$2,490 in 1990), poverty has remained widespread and large regional and income disparities have persisted. A 1980 study of changes in standard of living showed that, across states, the differences were considerable, with leading states enjoying a living standard more than twice that of poorer states. With the economic crisis, social problems have become more acute as the poor have particularly suffered from the deterioration in real income and the fiscal retrenchment, which affected social services more acutely. Mexican poverty in 1991 is marked by the following characteristics: (i) approximately 20% of the population is below the line of extreme poverty!'; (ii) 77% of the extremely poor are located in rural areas; (iii) the extremely poor have the largest share of children, the highest dependency ratio, and the lowest educational levels; and (iv) the urban extremely poor are better off than the rural, but have similar demographic and educational characteristics. 1.5. To properly address the need for human resources development and poverty alleviation, the Mexican Government has torrmulated a strategy mainly embodied in the Education Modernization Program (EMP), 1989-1994, whh.. expands on the National Development Plan (1989-1994) and is complemented by the recent (May 1992) National Agreement for Basic Education Modernization (NA; See Annex 2). Unanimously, these documents aim at: (i) improving the quality of the educational system, especially of 1/ The extremely-poor are defined as 'those people who are unable to purchase enough nutrients which, given age zd