Nepal - Critical issues in secondary education and options for reform

Report No. 12243-NEP Nepal Critical Issues in Secondary Education and Options for Reform August 26, 1994 Country Department I, South Asia Region Population and Human Resources Division Document of the World Bank MICROGRAPHICS Report No: 12243 NEP Type: SEC  CALENDAR Nepal Year 2051 = 1994 FISCAL YEAR July 16-July 15 CURRENCY EOUIVALENTS Currency Unit Nepalese Rupees US$1 NRs. 49.58 ABBREVIATIONS AND ACRONYMS USED ADB - Asian Development Bank BPE - Basic and Primary Education CBS - Central Bureau of Statistics CDC - Curriculum Development Center CL - Certificate Level CPI - Consumer Price Index Crore - 10,000,000, written as 1,00,00,000 (see Lakh) CSHE - Council for Higher Secondary Education DEO - District Education Officer (Office) DTVE - Directorate of Technical and Vocational Education EFYP - Eighth Five-Year Plan FOE - Faculty of Education FY - Fiscal Year GDP - Gross Domestic Product HMG - His Majesty's Government HSE - Higher Secondary Education HSS - Higher Secondary School IDA - International Development Association JEMC - Janak Education Materials Center Lakh (lack, lac) - 100,000, written as 1,00,000 (see Crore) MHPP - Ministry of Housing and Physical Planning MOEC - Ministry of Education, Culture, and Social Welfare MOF - Ministry of Finance NEC - National Education Commission NESP - New Education System Plan of 1971 NGO - Non-governmental Organization NPC - National Planning Commission NRs. - Nepalese Rupees OCE - Office of the Controller of Examinations PBSO - Private and Boarding Schools Organization PEP - Primary Education Project RDE - Regional Director(ate) of Education SETI - Education for Rural Development Project SLC - School Leaving Certificate SMC - School Management Committee SAARC - South Asian Association for Regional Cooperation, including Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka Tarai - Plains (also Terai) TU - Tribhuvan University  NEPAL CRITICAL ISSUES IN SECONDARY EDUCATION AND OTIONS FOR REFORM Table of Contents Executive Summary ............. .................................... i I: INTRODUCTION ...................1................... A. The Growth of Secondary Education .1 B. The Development of the School System. 4 C. The Curent Education Policy Context. 5 D. The Changing Economic Context. 7 E. Education for the Year 2000 and Beyond. 9 II: THE QUALITY OF SECONDARY SCHOOLS ..13 A. Qwlity of School Outcomes .13 B. Quality of School Inuts 15 C. Components of a Quality Improvement Reform Package .26 D. Recommendations .32 HII: ACCESS TO EDUCATIONAL OPPORTUNIIES ..34 A. Access and Equity .34 B. Private Secondary Education .41 C. Provision of Equitable Educational Opporunities .50 D. Recommendations .52 IV: EXPENDITURE OPTONS AND PRIORITIES. 53 A. Trends in Government Expenditures in Education .53 B. Financing of Secondary Education .55 C. Unit Costs .58 D. Financing Strategies .59 E. Recommendations ................................... .70  TABLES IN TEX 1.1 Historical Evolution of Secondary Education in Nepal, 1971-1991 1.2 Enrollment Growth Summary 1.3 Projections for Teachers and Schools in Lower Secondary and Secondary Education 1.4 Economically Active Population Aged 10 and Above by Economic Sector, 1981-1991 1.5 Growth Rate of Total and Sectoral Value Added 1.6 Educational Attainment of Economically Active Population Age 10+ 1.7 Social Rates of Return to Education in Nepal 2.1 Schcol-Leaving Certificate Examination Results, 1992 2.2 Lower Secondary and Secondary Curriculum 2.3 SLC Appearance and Pass Raies (1988/89-1991/92) 2.4 Lower Secondary Teachers by Qualification, Training and Region, 1991 2.5 Secondary Teachers, by Qualification, Training anA Region, 1991 3.1 Gross Enrollment Ratio by Region, 19909-91 3.2 Enrollment Distribution by Region, 1990-91 3.3 Female Participation Ratio by Region, 1990-91 3.4 Distribution of Secondary Schools (6-10) Teachers by Sex, Qualification and Region, 1990-91 3.5 Eollment Ratios by Economic Status 3.6 SLC Results by Region, 1990 3.7 Student Enrollment in Grades 6-10, 1989-91 3.8 Private Secondary Education Enrollment by Region and Zone, 1991 3.9 Sources of Revenue for Grades 6-10 in Private and Boarding Schools, 1991 3.10 Average School Fees in Private and Boarding Schools, 1991-92 3.11 Compaison of Fees, 1992 3.12 Average Recurrent Expendite Per Private and Boarding School, 1991 4.1 Nepal Education Sector Budgets Allocations by Subsector (Development and Regular) 4.2 INepal Education Sector Total Allocations and Expenditur to Education 4.3 National Expenditure on Secondary Education, 1990-91 4.4 Per-Student Public Expenditure by Levels, 1988/89-1990/91 4.5 Tribbuvan University and Private Campuses Total and Certificate Level Enrollment 4.6 CHSE Organization Strucure (Revised) 4.7 Estimates of Education Expenditures  ANNEXES Annex 1 NEPAL - Enrollment Projections Annex 2 Secondary Education Cohort Reconstruction (Grades 6-10) Annex 3 Regulations of Private Schools in Nepal Annex 4 Unit Costs of Secondary Education in Nepal Annex 5 Free Secondary Education Policy: Projected Financial Requirents, FY1993-FY2002 Annex 6 Physical and Financial Projections for the Phase-out/Phase-in Plan for Certificate Level Students at Tribhuvan University to the Higher Secondary Education System This report is based on the findings of a mission that visited Nepal in October 1992. The mission was led by Ana M. Jeria (Economist) and consisted of Messrs./Mmes. Linda Dove (Senior Evaluation Officer), Shiva Raj Lohani (Economist, Consultant), Richard D. Noonan (Educator, Consultant), Mun Tsang (Economist, Consultant), and Kin Bing Wu (Educator, Consultant). Mr. Ratna B. Bajracharya (Consultant) prepared a contribution on private and boarding lower secondary and secondary schools. Mr. David A. Ramse prepared a report on experiences with secondary vocational and technical education. Peer reviewers are Messrs. Albert Agbonyitor (Senior Country Economist), Donald Holsinger (Education Specialist), William Rees (Principal Economist) and Ms. Himelda Martinez (Education, Division Chief).  NEPAL CRMTICAL ISSUES IN SECONDARY EDUCATION AND OPTIONS FOR REFORM Executive Summary i. With low internal efficiency and poor quality, low coverage and severe imderflnacing on the part of the Government, secondary education in Nepal has some of the most acute problems in the country's education sector. While analyzing some of these problems in the secondary system, this report focusses on a few of the most salient questions of strategic importance for Nepal, namely: How to improve the quality of inputs and their utilization in the secondary education subsector so that a desired level of leaming is attained? How to improve internal efficiency? How to promote equity in the provision of educational opportunities? and How to finance the current and growing demands in secondary education? Bacgound ii. Nepal's formal pnmary and secondary education system provides for five years of primary education (Grades 1-5 for students 6 to 10 years old), three years of lower secondary education (Grades 6-8 for students 11 to 13 years old) and two years of secondary education (Grades 9 and 10 for students 14 and 15 years old). Just over three million students are enrolled in primary education, representing about 60% of the boys and 30% of the girls between the ages of 6 and 10. Despite a six-fold increase in secondary enrollments over the past 20 years, the current gross enrollment ratio is below 40%. Students who pass the School Leaving Certificate (SLC) examination after Grade 10 are eligible to enter the higher education system. Virualaly all higher education is provided by Tribhuvan University in numeous campuses dispersed throughout the country. In 1992, approximately 150,000 students were enrolled at the university. iii. Dropout and repetition rates are high in primary education, particularly in Grade 1. Sixty five percent of the children enrolled in Grade 1 drop out by the end of Grade 5, compared to a much lower 40% average dropout rate for Asia.' The lack of participation and attendance is mainly due to the high opportunity cost of the child labor, especially the girls engaged in minding their siblings. The quality of primary school facilities is poor, especially in rural areas; there is only a small minority of trained teachers. iv. At the other end of the education system, the university absorbs the few students that pass the SLC examination. During the past years cost recovery has been nominal in the higher education subsector. More recently however, University authorities started to increase charges and reduce subsidies (tuition fees were doubled in 1991 from NRs. 20 to NRs. 40 per month). Higher education also suffers from very low quality manifested in the obsolete curricula for most courses, a centalized examinations system which reinforces utilization of the old cumiula and lack of sufficient books and other instructional inputs. u Tan, J.P. and Alain Mingat (1989), Bducadonal Develomnent in Asia: A CoQMarive Study FPouai on Cost and Pmainag lssues (Appendix A: Idividual Country Profiles), World Bank: Washington D.C.  - ii - v. Against this background, secondary education has been called upon "to produce self- reliant citizens who cherish the dignity of labor, who have faith in the nation and democracy, who are wakeful to the need of maintaining the balance of iature, and who have high regard for the moral, cultural and social values; and to instill in them the knowledge and skills required for the higher secondary level".2 However, only about 40,000 students graduated from secondary schools in Nepal in 1992. For a country of almost 20 million people, 40,000 graduates represent only 2% of the 11 to 15 year age group and a grossly insufficient number of persons with higher level knowledge and skills. During the mid-eighties, gross enrollment ratios in secondary education were only 60% of the average figures for Asian countries.' These low numbers are of concem due to the fact that fertility behavior, health and nutritional practices, women's status, agricultural productivity, self-employment and ability to participate in the political life of the country, are strongly influenced by secondary education. In fact, secondary education is important in achieving a wide range of social, economic and political outcomes, central to developing and modernizing societies. Secondary Education by the Year 2000 vi. Extensive historical data across countries as well as empirical work show that education is a very important policy instrument which can stimulate economic growth, improve agricultunl and industrial productivity and reduce poverty. Evidence of the contributon of education to economic growth and agricultural output has been documented in Nepal during the past two decades. This evidence seems to be consistent with findings from other countries and with more recent Nepalese studies, which show high rates of return for primary and secondary education. vii. The economy of Nepal is gradually moving away from primary agricultural production and towards manufacturing and services. Favorable expectations have been created by the changing political and economic environment. The changing economic setting, highlighted by the Eighth Five- Year Plan will have a direct impact on the labor market, where a considerable imbalance between the supply of skilled labor and the new demands of the economy may broaden even further, due mainly to the low levels of educational attainment of the population. Sixty-five percent of the economically active population is illiterate and only 14% have attended school beyond the primary years. viii. As Nepal moves from the traditional society towards modernity and an expanded market economy, basic literacy, numeracy and at least basic generic skllls will be a necessity for survival. However, literacy and numeracy represent a necessary but not sufficient human resource base for national economic growth and development. Higher level skills will also be needed. Without at least a full primary education and increasing years of lower secondary and secondary schooling needed for many jobs, the Nepalese labor force is unlikely to be equipped with the m_iimm levels of knowledge, skills and adaptability required by a modernizing economy. Therefore, a key investment for growth and development will be widespread provision of basic literacy and numeracy and expanding numbers of lower secondary and secondary graduates. 21 HMG-National Planin Commission (1993), Education and Culture (excerpts from the Five Year Plan), Kmandu, Nepal. y Tan, J.P. and Alain Mingat (1989), Educational Development in Asia: A Comparative Study Pocussing on Cost and Financing Issues (Table 2.6), World Bank: Washigton D.C.  - iX1 - Crtial lssues in Secondary Education ix. The aualitv of the educationtl orocess is inferior and its efficiency is very low. The low quality of secondary education is evident from the results: two thirds of the Nepali students who enroll in primary education do not continue into lower secondary education and one quarter of those who do enter Grade 6, drop out after Grade 7. Low pass rates in the Secondary Leaving Certificate (SLC) examination (the gateway to post-secondary education) and overall poor achievement also afflict the secondary sector. It is very likely that the early dropouts do not have the knowledge and skills to enter paid employment. Efficiency is very low: only about 37% of the student cohort that enters Grade 6 will pass the SLC. On average, it takes 12.5 student-years to produce one SLC graduate. The overall low pass rates in the SLC examination in recent years (25-30%) should be the strongest signal yet for policymakers that government-aided and comnmunity schools' are currently unable to meet the very modest levels of achievement required by the exam. x. The majority of the school buildings reflect the poverty of the communities they serve, lacking even the most basic amenities, such as drinking water, sanitation and electricity The secondary curriculum has not been overhauled since the New Education System Plan (NESP) of 1971, more than 20 years ago, and today's teachers are communicating to the current generation of students more or less the substance they themselves were taught a generation or two ago. Because cmriculum development has been piecemeal and the structure of the school system has undergone frequent changes there is a lack of proper sequence, coherence of subject matter and integration. The validity, reliability and fairness of the examinations has been questioned often. Textbooks, which are the main teaching aids in lower secondary and secondary grades, suffer from poor design, coverage and educational usefulness. Xi. Teacher effectiveness, another critical element in providing quality education, is low in Nepal. The average number of teachers per school is only about three teachers at lower secondary and five at the secondary level. This means that teachers may be attempting to cover subjects in which they are not specialized, or the official curriculum is not fully covered, or both. Teachers are under-qualified and untrained. Their status is low, with low pay which does not keep up with the rising cost of living, fails to attract well-qualified candidates and leads to widespread moonlighting. Many teachers do not have permanent positions and have to rely on community contributions. The rural areas often fail to attract qualified teachers. Adequate supervision, technical support, professional development and training for teachers are all major needs which are largely umnet. xii. The distribution of educational opportunities for children from different backrounds is hiftygnguite. Regional inequalities in sudent participation rates are very apparent with large differences in gross enrollment ratios (GERs) between Kathmandu Valley and the rest of the country. Regional inequalities tend to increase with higher levels of education. On average, there are 39 secondary schools for every 100 primary schools in Kathmandu and this ratio falls to 15:100 in the Central Mountain and Mid-Western Hills districts. Private and Boarding Schools (PBS) and community schools are concentated in urban and semi-urban areas of relatively better-off regions: 56% of the approximntely 290 private lower secondary schools and 200 private secondary schools in Nepal are located in the Kathmandu Valley. 4 Where 95% of all the students in secondary education are found.  - iv - xiii. Although female enrollment in lower secondary and secondary levels is increasing, there remain large gender difierences in educational participation. In 1991, the gross enrollment ratio for girls was 26.9% and 19.5% for lower secondary and secondary levels respectively, while the GER for boys was around double in both lower secondary (52.1%) and secondary (44.3%). Region-wise, again Katmandu Valley had the highest GER for girls. The proportion of female enrollments decreases with increasing levels of education. Female teachers account for only about 10% of the total stock (one female teacher for every 1.7 schools in average) and 59% of all female teachers are in schools in the Kathmandu Valley. There is evidence that the gap in educational participation between the poor and the non-poor is very wide and that ethnic minorities hardly participate in secondary education. xiv. The private secondary education system, which includes both the private and boarding schools and the community schools, serves a minority of students.5 The fees charged by PBS schools are about five times those for students in government-aided or community schools. PBS schools are affordale only to the top income/asset groups of Nepalese society. In terms of student achievement, PBS schools perform much better than government-aided schools which in turn perform better than commity schools. Ptivate enrollment has been increasing at a fast rate as the poor quality of government-aided schools pushes parents to look for alternative schooling opportunities. xv. The Government has not invested enoueh in secondarv education. Beyond the underfinancing of the education sector as a whole, there has been a long-term decline in the share of the total education expenditure devoted to secondary education, from about 22% between 1978 and 1980 to about 13-14% during the past few years. Salary support for teachers in government-aided schools consumed 88% of the government contribution. xvi. Total national expenditure on secondary education and prevailing unit cost estimates establish that it is ryvate financing which has the major role in the financing of secondary education. Parits and community accounted for 74% of total national resources devoted to secondary education in 1991. Even in Government-aided schools, the Government pays for less than half of the total recurrent cost of secondary education. While per-student Government expenditure on secondary education averaged 1.5 times that on primary education, per-student Govermment expenditure on university education averaged 8.4 times that in secondary education. The Major Chaflenges xvii. In the next few years, major challenges in the development of secondary education would be related to: (i) improving the internal efficiency and the quality of inputs and processes of the subsector, so that a desired level of learning is atained; (ii) promoting equity in secondary education; and (iii) properly addressing and financing the growing demand for secondary education to meet social and production needs. In view of these challenges, the Report's main recommendations discussed below include a set of strategies which would involve reallocating existing Government resources, using them more efficiently, targeting Govenment programs at specific population groups and mobilizing additional resotirces. D PBS schools have less tn one-third of the tot enrollmet in private schools; the other twothirds attend oemmunity schools.  INCREASED EFFICIENCY TO IMPROVE LEARNING ACHIEVBMEN-TS xviii. Increased efficiency in the secondary subsector involves interventions to improve learning achievements and the quality of school inputs. This rePot points to a nMer of specific proposals to start introducing quality reforms immediately. including strengthenint data collection and analYSis. finalizin major policy decisions. formulating a national secondary development plan which includes curriculum. examinations and textbooks reform. as well as teacher development and a supesvision program. xix. The quality and accuracy of the educational and financial data needed for planning the development of secondary education needs to be strengthened. This will facilitate the formulation of a national secondary development plan. The process of reforming the curriculum for the entire secondary education is also essential. Work can begin during the Eighth Plan period in Grades 6 and 7, following current reforms in the primary education curriculum, consolidating institutional cpacity in curriculum development at central level and building upwards in later phases. Development of the secondary curriculum needs to be conducted alongsiie development of examinations so that they are coherent and test the same competencies. There is a need to remedy deficiencies in the content, design, affordability and availability of textbooks and to develop reference and reading materials. xx. A comprehensive 10-year teacher development and teacher training plan is needed to provide upgrading and career oppormuities for teacher trainers, serving teachers and new teachers. School principals and supervisors should also be trained and supervisory guidelines need to be reviewed and developed. Finally, a high priority should be assigned to strengthening the quality of private schools, focussing on community schools. Outcome based methods for distribution of financial assistance to commuity schools should be established. TOWARDS MORE EOUITABLE EDUCATIQNAL OPPORTUNITES IN SECONDARY EDUCATION xxi. Sizeable differences in the quality of schooling between economically backward rural and remote areas and the more affluent urban areas are clearly reflected in the availability of qualified teachers, quantity and quality of schools and the overall achievement of the students. Low public investment in secondary education is implicitiy tolerating the accumulation of differences in educational opportunities and perpetuating social inequality. The Goverment can nromote increasing levels of regional and gender eWuivf t.rough actions to increase prioritv for schools and teachers in remote areas including icreased incentives, model schools and acilities for higher secondary students from backward regions: extension of the primarv teachers' policy of one female teacher per school to the lower secondarv and secondary levels: establisument of sinle sex schools where culturally desirable. provision of uniforms and stationerv for girls and assistance for admission into higher education levels: and provision of freeships by the PBS schools for students from voor and remote backlunds in agreement and coordination with MOEC.  - vi - FINANCING THE GROWING DEMAND FOR SECONDARY EDtJCAT10 Reaocation of Existing Goverment Resourmes to Improve Quality and Equity xxii. Although secondary education already suffers from major problems of quality, efficiency and equity which are not being adequately addressed, the Government is fiuther compounding these difficulties with the introduction of the free secondar education policy in the face of continuig resource constraints. Existing resources in the secondary sector are not efficiently udlized due to low internal efficiency and poor quality and a large number of school-Age children are not in secondary schools, especially those living in the rural areas and the less developed regions of the country. However, the Government is exempting secondary students in government-aided schools from paying tuition and compensating such schools with additional resources in the form of teacher salaries and other subsidies. xxiii. While this policy reduces the economic burden for poor families with children in secondary schools, it also reduces private financing of secondary education from families who would otherwise be able to afford the tuition fee. The Governime-.t's additional resources to schools to compensate for their tuition loss will have very high opportunity costs: such resources could be used to improve the quality of government-aided or community schools, to promote equity in secondary education, or to provide additional student places in government-aided schools. The policy can be a form of redistribution of Govermnent resources such that the gains of parents in Kathmandu and other urban areas are linked to the losses of parents in the rural areas of Nepal. xxiv. The policy creates a significant challenge to the Government to search for additional public resources. It is estimated that if the Government continues with the current practice of not charging tuition to Grades 6 and 7 students, the total recurrent cost of secondary education to the Government will be about NRs. 3,956 million in the Eighth Plan period and about NRs. 5,761 mfllion in the Ninth Plan period. In other words, it will cost the Government about 38% more in the ten-year period to fully compensate government-aided schools for the loss in tuition revenue from Grades 6 and 7 students, as compared to the case where no free secondary education policy existed. If the free-tuition policy were extended to Grades 6-10, this would add 50% to the Government financial comnuitment to the secondary sector. This case would require a very high and unsustainable average annual growth rate (in real terms) in Govermnent expenditure on secondary education: 12.0% during 1993-1997 and 11.5% during 1998-2002. xxV. The introduction of the free secondary education policy will -ompound the difficulties if the Government honors its commitments in the primary and higher education subsectors, where a large proportion of the expenditures represents investments in quality improvements which will have important pay-offs in the medium- and long-erm and without which the education system would continue to deteriorate and call for much larger investments in later years. Govermment resources in the secondary sector would be much better spent on quality improvements. xxvi. In sum, the free secondary education policy should be discontinued. If this is not nolitically feasible. the scope of the plicy should be limited and the pace of implementation should be slowed down as much as possible. Instead, the Government resources should be reallocated to  - vii - improve the qualty of government-aided schools and conmmunity schools. to promote equitv in secondary education. or to provide additional student places in eovernment-aided schools. Higher Secondary Education Reform xxvii. Cost savings could be achieved in the secondary cducation subsector with the Higher Secondary Education Reform. This reform is mainly ained at mitigating the impact of the large projected enrollment increases in Grades 11 and 12 on Tribhuvan University campuses. There are other important rationales for introducing the reform, such as international comparability for secondary qualifications, discipline of young students, the need for Tribhuvan University to upgrade its bachelor degrees and so on. However, in view of the high per-student public expenditure in the university, efficiency in the education sector would also be improved with measures that would achieve cost savings, such as the Higher Secondary Education reform. The reform consists in extending by two years the secondary education offered in schools beyond the SLC in Grade 10 to "higher" secondary level in Grades 11 and 12. SLC pass students would continue to study within the school systen rather than switch to university campuses which currently accommodate them. Concomitantly, the Certificate Level courses, which cater to the equivalent student cohorts, would be dropped from the campuses. The report shows that the net savings in Government regular costs could become substantial: by the year 2001/02, HMG's net regular costs savings are projected to exceed NRs. 50 million, which is euyivalent to about 22% of the regular costs in the "without 10+2" case. xxviii. The report recommends that the Higher Secondary Education Reform be introduced with the help of a Master Plan and in the context of a national plan for secondara education development. The Govermment would need to ensure adequate contributons in terms of teachers and facilities from Tribiuvan Universitv. increased cost recovery from the hifher secondary students and a plan based on the results of the present introductory phase. Increased Private Sector Role xxix. With high population growth, higher development and improvements in primary education, enrollments in secondary education are destined to increase at a rapid pace. The government's resources to the education sector are limited and therefore, increased enrollments will have to be accommodated by both the government and the private sector. In order to compensate for the low public investment, the Government can stimulate the provision of private education by providing further incentives to the establishment and operation of private schools, and reducing barriers to private education. The report discusses several options such as private ownership of private schools, assistance to private schools to secure loans for construction of school buildings, indirect subsidies and the streamlining of the regulatory framework for private education. xxx. The report calls for the Government to allow private ownership of private schools. distuishiga between proprietary schools and non-profit schools. Subsidized loans to private schools for school construction are not recommended, as the graing of private ownership should be a sufficient incentive for setting up private schools. The report also suggests that the Government should do more to encouraae establishment of communiy schools: by promoting the sense of cmmnity ownrship of such schools. oroviding indirect subsidies (such as free land and tax xemgtion on education items) and enabling an increased commnit control of the School Management Committees.  - viii - Education Expediture R xxxi. The level of education expenditures that would be needed during the Eighth Five-Year Plan will be substantial. A large proportion of these expenditures in the primary and higher education subsector represents investments in quality improvements which will have important pay-offs in the medium and long term, and without wlich the education system would continue to deteriorate and call for much-larger investments in later years. Estimates indicate that the sector allocation under the Eighth Plan may fall short of the needs. The free secondary education policy will exacerbate the resource shortage. Thus, the Govermnent runs the risk of having to cut back on needed quality reforms in the subsector or even in other education subsectors. xxxii. Given the resource situation (the sector allocation under the Eighth Plan represents about 8 percent real increase). the Government will need to select the combination of programs within secondary education which will best contribute to improving the qualitv of eovernment-aided schools (and community schools}. Dromotng equity and fmnancing the growing demand for secondary places. In this context, a review of the free secondary education policy should be the priority choice. Savns could then be allocated to the quality and equitv improvements recommended above. Initial reforms in the higher secondary gades should proceed concurrently.  Chaogt: INTRODUCTION A. The Growth of Sedary Education 1.1 Durbar High School, the first secondary school in Nepal, was founded 140 years ago. For the next centy education remained the right of the sons of the Nepali urban elite. Table 1.1 traces the development of secondary education since 1971. Enrollment growth has escalated from some 120 thousand to 774 thousand in the past 20 years, more than a six-fold increase. Gross enrollment ratios 6 more than doubled during the 1971-1981 decade and further increased by 76% during the 1981-1991 years. The current total gross enrollment ratio is 36%. Despite the fact that gross enrollment ratios grew faster in the case of female students,7 they stil lag behind those of boys by 25 percentage points. Enrollment rates also vary widely across regions. 1.2 New secondary schools have been established at a rate of some 250 schools per year. Schools tend to be small with a mean of 94 students per lower secondary school and 190 at the secondary level. From 1976 to 1991 the total number of teachers in lower secondary schools hicreased from 7,930 to 13,005 (64%). In the secondary schools, the mmber of teachers increased more rapidly during the same period, from 3,449 to 11,627 (237%). Unfortnately, the shortage of tramed teachers and the student-teacher ratio have also contnued to increase during this period. 1.3 The major objective of the system remains to provide access to higher education. The 1971 National Education System Plan (NESP) tried to impart a different character to the secondary level which would allow some students in vocational streams to leave at the end of Grade 10 prepared for employment in the local community. However, the planned vocationalizadon of secondary education failed because of lack of funding, weak linkages with the labor market, and lack of motivation and demand on the part of the students. 1.4 The current Eighth Five-Year Plan (EFYP) states that the objective of secondary education is "to produce self-reliant citizens who cherish the dignity of labor, who have faith in the naton and democracy, who are wakeful to the need of maintainin the balance of nature, and who have high regard for the moral, cultural and social values; and to instill in them the knowledge and skills required for the higher secondary level". The goal for the higher secondary level is" to produce the medium level manpower, capable of making solid contributions to the all-round development o- the country, and to impart to them the basic knowledge required for receiving graduate-level education".$ a Gross enrollment ratios represent tal enrolmnat as a percentg of school age popution. In the case of lower seconday and secondary education, school age populato includes ages I1-lS. There is no detaile ifonnation on the age structure of sudents enrolled in schools in Nepal and therefore net erollment atios are not available. 7T The proportion of girls as percentage of tal enrollment doubled in he aIst 20 years while the proportion of boys fel from 85% to about 60% of oal enrolment At primary level girs make up 36% of the eroflmen v HMG - Naonal Pang Commission (1993), ,id ad Culte (excepts from the Eighth Pie-Year Development Plan, unofficial tanslin), Kadrmandu, Nepal.  -2 - Table 1.1: HElorc Evolution Of Secondary Education In Nepa, 1971-1991 - si7~~~~~ ~ ~~~191 2976M 1931 1991 1. Number of Schools Lower Secondary 677 2.289 2.786 3.731 4,045 Secondary 494 520 918 1,411 2.079 2. Enrollment Boys: Lower Secondary 44.255 57.786 135.203 202.162 259.298 Secondary 56.612 6.524 117206980 81, Total I100367 T1I3M M268 541.066 Girls: Lower Secondary 8.521 12,274 34.361 69.082 119. 180 Secondary 10,Z 12L3 L7A2 -61. 825,M Total 18.750 W 8 61-.627 97 2 Total: Lower Secondary 52.776 70,060 169.564 271.244 378.478 Secondary 66.841 74.6 144. 331 2 805 395.33 Total 119.617 144,120 3W.8935 540.MW 773,-808 3. Gross Enrollment Ratio MX) Boys: Lower Secondary 15.3 36.4 52.1 Secondary 15.5 25.6 44.3 Total 15.4 30.4 47.7 Girls: Lower Secondary 3.6 10.9 26.9 Secondary 3.2 6.8 19.5 Total 3.4 8.6 22.7 Total: Lower Secondary 10.0 24.7 40.2 Secondary 9.8 16.8 32.4 Total 9.9 20.3 35.8 4. Numbers ot Teachers Lower Secondary: Total - 7.930 10.820 12.493 13,005 Trained (S) 38 40 41 34 Secondary: Total 3.449 4,909 9.290 11.627 Trained (X) 50 63 49 44 5. Indicator Ratios a. Enrollment per School Lower Secondary 78 31 61 73 94 Secondary 135 142 157 191 190 b. Enrollment per Teacher Lower Secondary 8.8 15.7 21.7 29.1 Secondary 21.5 29.4 28.9 34.0 c. Girls as X of Total Enrollment Lower Secondary 16 18 20 25 31 Secondary 15 17 19 23 29 Sources: HNG-NOEC-USAID (1988). Necal Education Resouces Sector Assessment, Tables 5.1 and 5.3). IEES. Florida: HMGOEC (1990) tinlS 1 ot NMAl aI SIA (=-M. Kathmandu; tWI-CBS (1992). cance es O1. : Kathandu. Nepal HIE*CBS (1991). Statistical Yearbook c 'e l. Kathmandu.  - 3 - 1.5 Despite the rapid expansion of secondary enrollments, a great mejority of the school-age children stiU do not attend secondary school. Projections of secondary enrollment for the period of the Eighth and Ninth Development Plans (1992-2002) indicate, however, that the system wll double in the next 10 years (see Annex 1: Enrollment Projections). This enrollment explosion is due in part to d hic factors, increased participation and increased quality in primay education.9 Assuming (a) that the population growth rate remains at 2.6% for 1992-1997 and declines to 2.5% for 1997-2002; (b) that primary education grows at modest rates of 3.12% (1992-97) and 3.18% (1997- 2002); and (c) that the system achieves small gains in internal efficiency, Table 1.2 projects average anual enrollment growth rates of 5.9% to 7.8% in lower secondary and secondary students and up to 8.7% for current cerdficate level students. Table 1.2: Enroiment Growth Summary Average knraI Growt Rate (X) 1991/92 2Q01/02 1992 97 1997-0 ts ('000) Primary (Grades 15) 2.972.7 4.053.1 3.1 3.2 Lower Secondary (Grades 6 and 7) 389.5 779.6 7.8 6.6 Secondary (Grades 8-10) 417.4 780.3 5.9 7.0 Higher Secondary (Grades 11 and 12)/a 78.6 166.7 8.7 6.9 Total Secondary 885.5 1,726.6 La These students currently attend Tribhwuan University Certificate Level Courses. Source: Mission estimates. 1.6 Using contant s /teacher and student/school ratios by region for 1991, the following are projections for the number of teachers and schools in the lower secondary and secondary levels that woud be needed during the next 10 years: Table 1.3: Noeotdons For Teachers And Schoob In Lower Seonday And Secondary Education Teachr Schoo1s 1991/92 200/0 -919 2010 Lower Second 13.282 26,259 4.171 8,473 Secondary 12.269 22,571 2.197 4.134 Source: Mission Estimates t In order o proje enrolumem in e five developmen tegions and three ecological zones, average annual lower secondary and secondary enolments growth rates were esdmated for the 16 regions between 1985/86 ad 1990191. This was then extrapolated for the projected years. The pattern of secondary enrollments is highly consisen with The PnI m- pans discussed in other studies, i.e. the higher rates of enrollmnt growtlh sa observed in the Teral while lower rates of enrollment growdt are m fthe Mountains and Hills. In addiion, rates of enrolln are not growing as fast in the Western Region as in the Far Western and Mid-West  - 4 - B. The Development of the School System 1.7 Mass education was non-existent for most of the time during the Rana regime (1846- 1950). Only the privileged few had education opportunities abroad or in the very few schools in Nepal. In 1939, the Government allowed the communities to establish and run schools to provide education to the conunon people. Since the end of the Rana regime in 1950, educadon became accessible to an increasing percentage of the population. In the 1950s, education was loosely organized, with several systems of schools existing side by side, including the English-type schools which were accredited on the basis of the Oxford and Cambridge examination, and the Nepali/Hindi/Sanskrit schools providing a "classical" and religious education. 1.8 The Ministry of Education was estab!ished in 1951 and planning for educational development began only with the Fourth Five-Year Development Plan (1970-1975). Between 1950 and 1970, education expanded rather rapidly. Very few of the existing schools were govement schools. Some of the independent or private schools started to offer boarding facilities; these school were reputed to have high quality and were attended by the children of the elites. The 1971 NESP introduced a new national system of 'public" education. All the different types of schools were brought under the national system and the Government paid for 100%, 75%, and 50% of the teachers salary respectively at the primary, lower-secondary, and secondary levels. Except at the pre-primaty levels, no new private schools were permitted. Financial and other reasons led the government to modify its education policy in 1980. Grants to private schools were withdrawn. The Seventh Amendment of the Education Act allowed private schools to open again and to be financed by private sources. 1.9 Toda,y, there are essentially three types of schools in Nepal. Government schools are government-aided schools. In 1992, the govermnent increased financial support for teachers in govermnent-aided schools so that it currently pays 100% and more than 60% of teacher salaries respectively at the lower-secondary and secondary levels. There were a little over 300 Pnvatean fQntng Schools (PBS) with Grades 6-10 in 1992. PBS schools are represented by the Private and Boarding Schools' Organization (PBSO). PBS schools are almost exclusively founded and operated by individuals; very few such schools are run by non-profit or religious organizations. Although some founders and/or operators of PBS schools are genuinely interested in providing education services to their community, a substantWial number of them are said to be driven primarily by a profit- making motive. 1.10 Communitv schools are schools founded by the community since 1980 that are potentdally eligible for government grants-in-aid; there were an estimated 1089 community schools in 1991. In Nepal, these community schools are also called "proposed" schools. The community first constructs and operates these schools and hopes that they will eventually be converted into government-aided schools when the Goverment has sufficient funds. During the Seventh Plan period (1986-91), community schools did not receive any financial aid. But they are startng to receive some aid for teacher salaries from the government during the Eighth Plan period. Community schools do not have a national organization that represent their interests.  -5 - 1.11 In the education statistics of Nepal, community schools and PBS schools are classified as private schools. However, community schools and PBS schools are two very different types of private schools. PBS schools are the most elitist and highest performing schools in Nepal and they serve a small minority of students. On the other hand, conmmnity schools are at the bottom of the school hierarchy, especially in terms of financial resources and academic performance. 1.12 The school system has been re-structured at least four times during the past twenty years. Iitially there were three years of lower secondary and two years of secondary education after the five-year primary cycle (5+3+2). The NESP changed to four years of lower secondary and three years of secondary, following three years of primary education (3+4+3). In 1981, the (5+2+3) structure was introduced. The National Education Commission recently recommeded that, beyond the five years of primary education, secondary education should consist of three levels: lower secondary (Grades 6, 7 and 8), secondary (Grades 9 and 10) and higher secondary (Grades 11 and 12) (5+3+2+2). Following the NEC recommendation, the Education Act (Fifth Amendment) has just introduced this new structure. C. The Current Education Policy Context 1.13 The entire educational system in Nepal is currenly facing structural changes which reflect Govermnent plans and which will have major consequences for quality, efficiency and access to education. The Govermnent has recently recognized the need to improve the quality of the Rtnnar scho system, increase access for the 6-10 year old children towards universal prhiay education and strengthen the management capacity of the subsector. 1.14 Primary education in Nepal is characterized by low levels of internal efficiency, low access of educational opportunities and poor educational quality. Dropout and repetition rates are high: these rates are particularly heavy in Grade 1 with 24% of students leaving school and 40% repeating the first year of school. Sixty-five percent of the children enrolled in Grade 1 drop out by the end of Grade 5. Overage and underage children fill many of the primary places in schools. Only 60% of the boys and 30% of the girls between the ages of 6 and 10 are actually enrolled in primary school. Internal and external factors contribute to this situation. Within the primary school system, the quality of the physical facilities is poor, especially in rural areas. There is widespread lack of teaching materials and teaching aids and only a small minority of the teachers is trained. The lack of participation and attendance in primary schools is also due to the high opporunity cost of the child labor, especially the girls engaged in minding their siblings. 1.15 Current projects in the primary subsector emphasize increasing the quality and efficiency of primary schooling by simplifying and making more relevant the curriculum, improving the qualit of school buildings, training the primary teachers and improving the instructional materials. In addMion, girls, the very poor and those in remote areas will have increased opportmities to receive a basic education. Progress is also being made in the management of primary education. Nepal is at the early stages of the improvement process and to achieve a system of reasonable quality will requiremay years of steady investment before quality improvements are fully institutionalized and universal primary education is achieved.  - 6 - 1.16 Resolving the problem of a low performing university has been another priority of the Government in recent years. Tribhuvan University, virtually the only provider of higher education in the country, suffers from a runaway enrollment growth mainly at the certificate level, chronic underfinancing, a highly centralized and ineffective management structure, poor physical facilities and outdated curricula. Enrollments at the university have risen from about 23,000 in 1975 to about 150,000 in 1992. The proportion of the Government's education budget devoted to higher education has declined and, since the declining resources have been spread over an increasingly large student body, the allocations per student have also decreased. There is very little cost recovery. Recently, University authorities started to increase charges and reduce subsidies. Tuition fees which had not been changed for the past 17 years, were doubled in 1991 from NRs. 20 to NRs. 40 per month. The extremely low quality of higher education is mainly evident in the obsolete curricula for most courses, a centralized examinations system which reinforces utilization of the old curricula and lack of sufficient books and other instructional inputs. Only 10% of the students are enrolled in engineering, agriculture, forestry or medicine; the rest attend humanities and social sciences. 1.17 Appropriately, recent Government strategy on higher education focuses on cost continment, improvements in educational quality and efficiency and greater resource mobilization. An IDA Higher Education Project will provide support to the ongoing reform process at Tribbuvan University by supporting the implementation of a package of administrative, financial and management changes in higher education. The project will initiate and facilitate reforms designed to regulate the growth of enrollments, improve resource utilization and cost recovery, implement a higher secondary education program in collaboration with the Ministry of Education and improve the quality and management of higher education. 1.18 Two recent strategic policy decisions affecting secondary education, namely the introduction of free secondary education and the implementation of the higher secondary education, are also among the Government reform plans. As a result of a campaign promise during the 1990 elections, the government has introduced a free secondary education policy by which students in government-aided schools do not have to pay tuition (which ranges between NRs. 40-60 per month). Because of fhiancial constraints, the Government plans to implement this policy in a phased manner. The cost of this policy will be substantial. It is not clear yet whether the policy will cover only lower secondary grades, secondary grades up to Grade 10 or even include the higher secondary Grades 11 and 12. In 1993, all Grades 6 and 7 students in government-aided schools do not have to pay tuition. 1.19 The " 10+2" initiative is envisaged as extending secondary education by two years to higher secondary level in Grades 11 and 12. Students who pass the SLC examination would continue to study within the school system rather than switch to university campuses which currently accommodate them. Concomitantly, the Certificate Level courses, which cater to the equivalent student cohorts, would be transferred to higher secondary education. The reform is perceived as a means of mitigating the burden of the large projected enrollment increases in Grades 11 and 12 on Tribhuvan University, meeting the need to upgrade Tribhuvan University degree courses to international standards, dealing with concerns about closer supervision for younger students and achieving better quality education.  -7 - D. The ChnW Economic Cof 1.20 While Nepal is still a predominantly agricultural country, the economy is very grdually shifting away from primary production, to secondary and tertiary production. Agnculure has declined from 57% of the GDP in 1981/82 to 33% in 1990/91. Meanwhile, manufactring has grown from 4% to 6.7%, electricity gas and water from 0.3% to 0.8%, trade, restaurants and hotels from 3.4% to 5.3%, transport and communications from 6.4% to 8.7%, and community and socal services from 7% to 7.4%. 0 This gradual transformation is also evident in the changes in distribution of the economically active population by sector. As Table 1.4 shows, agricultural employment as a share of the economically active population declined from 1981 to 1991, while manufacturig, construction, commerce, transport and commumication grew considerably. Table 1.4: Economicaly Active Popultou Aged 10 And Above By Economic Sector, 1981-1991 Annual 1981 1991 Growth Sector Persons % -Persons Z_ Rate(%) Agriculture 6,244.289 91.15 5.773.330 80.50 -0.78 Mining and Quarrying 971 0.01 2.140 0.03 8.22 Manufacturing 33.029 0.48 124.220 1.73 14.16 Electricity. Gas and Water 3,013 0.04 5.300 0.07 5.81 Construction 2.022 0.03 53.900 0.75 38.86 comerce 109.446 1.60 239.830 3.34 8.16 Transport and Comunication 7,424 0.11 43.400 0.61 19.31 Finance and Business 9.850 0.14 18.780 0.26 6.67 Person and Community Service 313.570 4.58 768.730 10.72 9.38 Others and not stated 127.272 1.86 119.508 1.67 -0.63 Total 6.850,886 100.00 7.172.060 100.00 Note: The 1991 figures which are based on a 10 sample have been multiplied by 10 in order to obtain figures comparable to the size of the work- force in 1981 to calculate the percentage change. Sources: Statistic Yearbook of Neoal. 1991. p. 23: 1991 Census - Advance Tables. 1.21 Agricultural production is still at the subsistence level. Since agriculture is direcly linked with the employment and income of the majority of people, improvement in the setor is critical to alleviatng poverty, as well as to meeting the needs for raw materias for agro-based industries. The m rin sector is still small, but is rapidly growing. Manufacturing has boee significantly diversified and the eWort of carpets and garments grew rapidly in the 1980s. Labor mas will need to change and knowledge, skills and attitudes will need to stay abreast of these developments. u Economic Survev. FIscal Year 1991-9, Minisy of Fiance, 1992 (p. 17).  - 8 - 1.22 The Eighth Five-Year Development Plan. The lian seeks to achieve sustnable economic growth, the alleviation of poverty and a reduction of regional imbalances." The Plan estimates that a 5.1 % average annual growth rate could be achieved during the period. Table 1.5 shows the growth rate of total and sectoral value added. Although agriculture is by far the largest sector in Nepal, its expected value added growth is about 60% that of the non-agricultural sectors combined. The major growth sectors are expected to be industry and mining and electricity, gas and water. Ln the industry and mining, construction, trade, hotel and restaurant and finance and real estate sectors, growth will be led primarily by private sector investment. In electricity, gas and water, transport and communications and social services the government will take the lead role. Table 1.5: Growth Rate Of Total And Sectoral Value Added /a (In millons of NRs. at 1991/92 prices) Growth 1_91/92 1M&7 BaLe Amount Share AmDunt Share 199Z-97 (MIs.) (S) (NRs.) (O) (O) Total Value Added 113,024 100.0 142,992 100.0 4.8 Agriculture. Irrigation and Forestry 62.712 55.5 75.364 62.7 3.7 Non-agriculture 50.312 44.5 67.628 47.3 6.1 Industry and Mining 7.283 6.4 12,169 8.5 10.8 Electricity Gas and Water 1. 054 0.9 1.617 1.1 8.9 Construction 9,408 8.3 11.604 8.1 4.3 Trade. Hotel and Restaurant 5.995 5.3 8.685 6.1 7.7 Transport and Conmunication 6,878 6.1 8.548 6.0 4.4 Finance and Real Estate 9.321 8.3 11.735 8.2 4.7 Social Services 10.372 9.2 13.270 9.3 5.0 Indirect Tax 8,038 12.168 8.6 GDP (at Market Price) 121.062 155.160 5.1 La 1996/97 projections and growth rates are based on estimates of sectoral production for 1991/92 and earlier years. These estimates are subject to revision on the basis of on-going efforts to improve both agricultural and non-agricultural production data. Revisions may lead to changes in estimated savings, investment and other macro-economic variables as well as changes in base year sectoral production. Sources: Eighth Plan (1992-1997). National Planning Coumission. 1.23 As a result of the new political environment and the favorable expectations created by the new democratic government, the changing economic policies and the Eighth Plan will have a direct impact on the lmarke. The expected pattern of growth in employment, by sector, may corespond to the above paterns of growth in value added. Altliough in absolute terms, employment growth would be much larger in agriculure than in all other sectors combined, the share of agriultural employment in total employment is expected to decline by the end of the Eighth Plan, whUe the share of non-agriculatal employment is expected to increase. Labor demand in the industry " HMG, Nation Planing Commission. BEidth Plan (1992-1997) - Summary, Kadmiandu: National Panning ffomms July 199.  - 9- and mining sector is expected to almost double duing the five-year period. With labor demand growing at a rate of 3.1 % per anmun, a total of over 1.4 million jobs will need to be created (or close to 300,000 jobs per year). 1.24 A considerable imbalance exists between the supply of skilled labor, however, and the demand of the Nepali economy. A labor force with low levels of educational attainment is not likely to be able to take advantage of the more favorable policy environment being promoted. According to the 1991 Population Census figures, the educational attainment of the economically active population is extremely low. About 65% are illiterate and 12.4% of the total have no schooling. The illiteracy rate among females is as high as 83%. Only 11.4% of males and 4.2% of females has had primary education, and 10.7% of males and 2.6% of females had secondary education (Table 1.6). While the new entrants to the labor market will in general have higher educational attainment, given Nepa;'s low enrollment ratios, few possess the skills needed to propel economic growth. Table 1.6: Educational Attainment Of Economically Active Populton Age 10+ Total x Male Female X illiterate 4.665.620 65.05 2,264.480 52.78 2.401,140 83.32 No School 887.360 12.37 697,470 16.26 189.890 6.59 Primary 612.460 8.54 490.610 11.44 121.850 4.23 Secondary 533.120 7.43 457.840 10.67 76.280 2.65 S.L.C. 167.990 2.34 150.070 3.50 17.920 0.62 Certificate 72,940 1.02 65,320 1.52 7.720 0.26 Bachelor's 54.160 0.76 48.900 1.14 5,260 0.18 Post-graduate 12.360 0.17 10.790 0.25 1.570 0.05 Others 80 0.00 80 0.00 0 0.00 Not Stated 165.960 2.31 104.610 2.44 61.350 2.13 Total 7,172.060 100.00 4,290.170 100.00 2,881,890 100.00 Source: Po laion Census -- 1991. p. 42 (ffgures based on 1OX Census samplee). 1.25 The trend of growing urban sector employment indicates changing skills requirements in the labor market and has special implications for employment opportnities of secondary school graduates. For example, services jobs (which hare experienced considerable growth) include the broad category of positions in tourism, catering, and hotel business, as well as personal and community services. This is the field in which language skills, particularly proficiency in a foreign language, entrepreneurship, and management and marketing skills can provide handsome economic retuns. In industry, the skldls requiements are predominately in two levels - the supervisory, skilled and semi-skldled personnel at the factory level; and high level manpower would be required in scientific, technological and managerial disciplines. E. Education for the Year 2000 and Beyond 1.26 Extensive historical data across countries as well as empirical work show that education is a very important policy insument which can stimulate economic growth, improve agricultural and industial producdvity and reduce poverty. In Asia, Japan's rise as a major economic power has been attributed, in part, to its highly educated and education-conscious population. In the early 1960's,  - 10- Korea's relatively strong base of human capital was key to its technological capability and the fast dse in its industrial output. Kenya's attainment of almost universal primary education and increased enrollment in secondary schools, contributed to a much better than average economic performance among sub-Saharan African countries. Research for the World Bank's 1991 World Development Report suggests that increasing the average amount of education of the labor force by one year, when this average is three years or less, raises aggregate real output by 9%.12 1.27 Evidence of the contribution of education to economic growth and agricultural output has been documented in Nepal since the 1970s. The evidence seems to be consistent with findings from other countries. Several studies dealing with the effects of education on productivity in agriculture and conducted in a few regions and districts'3, showed that education made a positive contribution to agricultural output, showing higher efficiency results in modernizing farms than in traditional farms. During the early 80s Pudasaini 14 re-examined the effects of education in agricultural output in a modernizing conumic environment as opposed to a more traditional one. The study showed that an increase in the average education of a farm operator by one year expanded output by 5.2 % in the Terai and 5.9% in the Hill region. 1.28 Jamison and Moock 15 in a study of 683 households in Bara and Rautahat districts of Cntral Terai, near the Indian border, examined the mechanisms of education's effects on efficiency, as wel as the impact of a newly introduced training and visit extension service in the area. Their study found a positive effect of education on efficiency for the then newly introduced wheat crop, confirming previous studies which stated that education is important for adapting to changing ircumstances. Education helped the farmers adapt and innovate in an environment of changing prices and technology and produce a larger output from given quantities of input. The latest estimates on the contribution of education to economic growti are found in the Education and Human Resources Sector Assessment.'6 Table 1.7 summarizes results from this study and shows that the highest reurns are found in primary, lower secondary and secondary educaion. Private rates of i King, Elizabeth, P. Glewwe and W. Albenrs Iuman Resource Develoment and Economic Growth: Ghana in the Next TWO Decades, The World Bank, PHREE Background Paper Series, 1992. 3 Sharma, S.F. (1974) Techoical efficiency in traditional agriculure: An econometric analvsis of die Ruuandei distdc in Nenal. Unpublished master's thesis, Australian National University. - Pdasaini, S. (1916) Resource oroducuvitv. income and emoloyment in traditional and mecanied firmino of Barf Dilicp Neoal. Unpublished master's thesis, University of the Philippines at Los Banos. - Cakins, P. (1976) Shiva's Trident: The effect of imnroving hor_dulure on income. employment and mnro Unpublished doctoral dissertation, Cornell University. w4' Pudasaini, S. (1982) Education and Agricultural Efficienc in NeDal, Population and Human Resources Division Discussion paper No. 82-3, The World Bank; and (1983) The Effects of Education in Agricultre: Evidence from Nepal, in Americao Journal of Agriaulture Economics (August). w~' Jamison, Dean T. and Peter R. Moock (1984) Farmer Education and Farm Efficiency in Netal: The role of Schoolin. Extension Services, and Comitive SkiUs. The World Bank, Washington, D.C. w4' HMG/USAID/1EES (1988) Neval: Education and Human Resouwes Sector A n, Florida State Unersity, Florida.  - 11 - return are not available. There is a 1976 cost-benefit study which shows private rates of return for higher education higher than social rates of return, reflecting the highly subsidized subsector. Table 1.7: Sodal Rates Of Return To Education In Nepal ECucaaton yevel Percentaa rern Primary education(1-5) over 100 Lower Secondary(6-7) 29.1 Secondary(8-9 only) 15.0 Secondary (10 SLC) 7.5 Certificate (11-12) 8.0 Bachelors 21.7 Sources: IEES study. Table 2.85 (page 2-162) 1.29 Education for Basic Needs. As emphasized in the Eighth Plan, basic literacy and numeracy are preconditions for democratic decision malkng and for making effective participation in the design, planning, and implementation of development projects. Literacy and numeracy represent basic needs for survival in all modern societies. Education a powerful enabling condition for the improvement of health and fertility regulation. As Nepal moves from a traditional society toward moderity, these are the essential conditions of human resource development, without which the country cannot attain economic development. Today the gap between the reality and these essential conditions is large, especialy in the rural areas, where 90% of the population lives. The best contribution that education can make to continued agricultural growth would be ex educadon (especially in rural areas) in order to assure the widespread gresence of at least basic Jjterac and numerav. In this regard, the desimbility of combining primary education with the lower secondary cycle in a so called "basic education cycle"-for-all would not be appropriate for a country like Nepal, where 50% of the children are not in school and, of those enrolled, only half attend regularly. Retaiing children in school and having them complete five years is already an immense challenge and should remain the focus of the Eighth and Ninth Plan periods. Attempts at spreading already scarce resources over a basic eight-year cycle may result in further loss of enrollments. 1.30 Education for Development. Economic growth and development is accompanied by diversification of markets, in accordance with rising levels of income and expectations. This market development generates a variegated range of employment opportunities, including processing of priury sector products, production of producer and consumer goods, marketing, transportation, sales, services, etc. The challenge of the education system in Nepal is to provide, in a cost-effective way, the kinds of knowledge and skills needed to meet the labor market demand. Widespread literacy and numeracy represent a necessary but not sufficient human resource base for national economic gth and development. Higher level knowledge and skills are also necessary. 1.31 The crucial importanc' of primary education in national development has long been undetood. There is a growing body of evidence that also general secondary education is important for achieving a wide range of social, economic, and political outcomes cental to development planning and public policy. Women's status, fertility behavior, health, nutritional practices, agricultural productivity under tmchnology inensive conditions, self-employment, political beliefs and values may be more strongly ifluenced by secondary education than by primary education. General  - 12 - secondary education not only provides information and understanding, but also increases the capacity to absorb new information and to learn new skills. 1.32 Social and economic returns to secondary education are high in Nepal. Apart from the contribution of education to health, population control and life expectancy, educational gains would make a significant contribution to . More rapid and larger increases in investment in the sector could contribute to the provision of educational opportunities to a larger share of the population, thus also improving equity. Poverty reduction would result as a consequence of both, increased output and greater access and equality. The need for technical manpower, efficient managers and potential entrepreneurs as well as increased participation of women at all levels of education would further contribute to increased efficiency, equity and growth. Without at least a full primarv education and ncreasinR provision of lower secondarv and secondary schooling, needed for many iobs. Nepalese workers are unlikely to have the knowledge and adantability required in the evolving economy. 1.33 Human capital investments must also ensure that every group realizes its economic potential. For example, young people living in the Kathmandu Valley have approximately three times the probability of attending lower secondary and secondary school as young people from the rest of the country. The geographic distribution of education and training services is partly an equity issue, but it is also partly an efficiency issue. From an equity point of view, the issue concerns the equitable allocation of public resources, the distribution of political power and the fruits of development. From an efficiency point of view, the issue concerns allocation of scarce education and training resources where they are needed most and can yield the highest benefits. In this regard, also the role of women is crucial to the development process. Achieving a more balanced educational develonment. involving a close cepondence between population distribution and distribution of educational services, as well as imprvements in female participation. should be treated as a national develoment prory.  - 13 - Chapter 11: THE QUALITY OF SECONDARY SCHOOLS A. Ouality of School Outcomes 2.1 Two thirds of the Nepali students who enroll in primary education do not continue into lower secondary and one quarter of those who do enter Grade 6, drop out after Grade 7. In 1992, about 210,000 students entered the secondary school system but fewer than 160,000 are expected to complete lower secondary school. As the school age population bulge gets bigger, the absolute numbers of young children who have less than eight years of formal education will also rise unless dropout rates fall drastically. By the year 2002, there are projected to be over 400,000 students in Grade 6 of whom 100,000 would not reach Grade 8. Given the deficiencies of educational quality inputs both in primary and lower secondary schools, it is unlikely that these school dropouts, around thirteen years of age, will h.ve achieved the competencies and life skills required to enter productive employment. 2.2 There is no yardstick as yet by which the learning gains of early dropouts can be accurately measured. Schools regularly run teacher-constructed tests but these are not at all valid and reliable. Annual district-based examinations are also of uneven quality. Nepal does not yet have the capacity to run natdonal assessments of educational performance which would enable comparisons of educational achievements to be made at various levels of the school system. Tracer studies of early dropouts could be mounted to assess their school-derived competencies. It is likely that such studies would reveal that early dropouts rarely have the knowledge and skills to enter paid employment and that the majority, stay at home, enter subsistence farming or the informal sector. 2.3 hternal Efficienc. Efficiency in the secondary education system in Nepal is low. The reported 17 repetition and dropout rates for 1988, 1989, 1990, and 1991 show that the heaviest dropout occurs in Grade 7, at the end of the lower secondary cycle and the heaviest repetition occurs in Grade 10 (actually double the repetition rate in Grades 8 and 9). Using the reconstructed cohort method to map the flow of students from Grade 6 to Grade 10 (as shown in Annex 2), it is found that only two-thirds of the students will eventually complete Grade 10. Assuming the appearance rate of regular students at the SLC examination of 80% and the pass rate of 40%, only 26.7% of the cohort pass the SLC for the first time they take it. Similarly, assuming a compartmental and exempted students' appearance rate at the SLC of 80% and pass rate '8 of 47%, an additional 10% of the cohort will eventually pass the SLC exam by re-takirg it. In total, only 37% of the student cohort that enters Grade 6 will pass the SLC. 9 t The MOEC has estimates of promotion, repetidon and dropout rates for 1987188, 1988/89, 1989/90 and 1990191. The 1989/90 estimates were available only for Grades 1 to 5. The 1990/91 estimates did not have information on four disis (Kathmandu, Morang, Kailali and Banke). Because these rates flucate from year to year and the information is incomplete for the most recent years, a best estimate judgement was made with the above estmates. w Comparmenal candidates are those students re-taking one or two subjects only; exeapted candiates re-take the entre examiation. tw f we considered a student cohort of 1,000 entering Grade 1, only 15% will eventually pass the SLC.  - 14- 2.4 If the Grade 10 students are regarded as output of the secondary education system, the input-output ratio is 1.37. In a perfectly efficient education system where there is no repetition and dropout, this ratio would equal one. Thus the system is operating at the efficiency rate of 72.9%. However, if only SLC passers are considered as output of the education system, the input-output ratio is 2.50, meaning that the school system uses two and a half times more input than that of the optimal system. The efficiency rate is only 40% .1 Another way of illustrating the internal efficiency of the Nepal secondary school system would be to say that it requires, on average, 6.9 pupil-years to complete the five-year cycle for students leaving Grade 10 and 12.5 pupil-years for students holding a Secondary Leaving Certificate. 2.5 Without repetitions and dropouts, the cost to produce a graduate is simply the product of the unit costs and the number of years in the cycle. When many of the students either repeat or dropout, the cost per graduate is always higher. The reason is that repeaters raise the nuniber of years it takes to graduate and dropouts lower the denominator over which total costs are spread. In other words, even with the existing resources, many more students in Nepal could be educated within the existing system if it were operated more efficienly. 2.6 Grade 10 Outcomes. The SLC Examination is conducted annually by the Office of the Controller of Examinations (OCE). The SLC results are not a very credible measure of the performance of Grade 10 students. However, it is the only measure currently available, apart from a few small-scale studies on students' learning achievement for various subjects.2' While not much reliance can be placed on the raw marks, some glaring differences do indicate worrisome areas of concern about relative performance levels. 2.7 In 1992, the pass rate for regular (first time) candidates in the SLC examination was only 31.7%. Out of 76,982 regular candidates in 1992, 52,612 failed the examination (rable 2.1). Every year the SLC examination in effect disappoints the aspirations and diminishes the life chances of the majority of the Grade 10 cohort. The low pass rate in the SLC examination in recent years has dismayed and shocked the public and led to demands for remedial action because low pass rates mean fewer pupils can gain entry to Grades 11 and 12. a This is comparable to the estimated efficiency rate of 41.2% for the primary grades when Grade 5 complelers are regarded as output. w For exampe, Tribhuvan University, Development of Standardied Tests m Selected Subect Areas, Research Center fbr Educational hnovadon and Development, Kathmandu, 1988.  - 15 - Table 2.1: School-Leaving Certflicate Examination Results, 1992 (Regular Candidates) No. ol' Students Districts o-tal Total Covered Ayvwared Pass PBS Schools 20 /a 5,328 4,319 81.1 Community Schools 64 14.764 3.570 24.2 Government-Aided 75 56,890 16.481 29.0 Total 75 76.982 24,370 31.7 4 lncludes Ilam. Thapa. Morang, Sunsari. Dhanusa, Sarlahi, Kavhre. Bhaktapur. Lalitpur. Makwanpur, Chitwan, Parsa, Kaski, Tanahun. Syangja. Rupandehi and Bank districts (these districts have either municipalities or towns). Source: OCE 2.8 One area of concern is the low level of achievement in the government-aided and community schools, compared to the prestigious private schools. Private schools outperform all other schools by a huge margin. In 1991, for example, 96% of the listed "Top Schools" in the SLC examination were in the of Private and Boarding Schools Organization (PBSO). The PBS schools acieved a pass rate of 79%, of which 46% were in the first division (60 or above marks) and only 3% in the third (lowest pass, 32- 44 marks). In 1992, 81.1% of the private school (regular) students appearing at the SLC passed the test. In contrast, the community schools which put forward some 15,000 candidates attained only a 24.2% pass, lower even than the government-aided schools at 29.0%. These disparities should signal to policymakers that the community schools in particular, and many govermment-aided schools, are currently unable to meet the modest levels of achievement at secondary level required by the SLC. 2.9 Regional comparisons between the three types of school are also dramatic. In 1990, the lowest pass rate for PBS schools was 88% in the Eastern region and 89% in Central. But the highest pass rate for all schools was only 54% in the Central region and 53% in the West. Differentials in the mnmbers of first division passes were equally dramatic. Poor preparation for the SLC examination in govermment-aided and community schools also appears to affect girls more severely than boys. Every year, reguler female candidates have lower pass rates than the average by three to six percentage points. In PBS schools girls pass rates were only slightly lower than boys. B. Ouality of School Inputs 2.10 Worldwide experience shows that there are a number of factors which contribute to the quality of the educational process (teaching and learning) and final outcomes (students' knowledge, skdlls and values). Critical out-of-school factors include the financial inputs of society to the school system, the monetary and non-monetary contribution of parents and communities to school operations and, not least, the attributes of learners themselves - their health and nutritional status and the prior knowledge, skldls and motivation which they bring with them to school. At the school level, the  - 16 - resourcefulness and skill of school principals and administrators is crucial to school efficiency and effectiveness. In the classroom, it is the quality of the teacher which is critical to whether students achieve their potential to learn. Without an appropriate teaching-learning envirownent, teachers' capacities to make learning a productive experience for students are severely constrained. Key elements of a stimulating educational environment are the physical envirornent (well-designed and maintained buildings, furniture and equipment), the curriculum, the textbooks and instructional materials. Physical Facilities 2.11 The evidence that exists about the contribution of the physical environment to the quality of teaching and learning indicates that much can be achieved even with minimal facilities. Nevertheless, well-designed schools with good space utilization, lighting and air-circulation help ensure safety and effective operation. For a number of subjects at secondary level, space and storage for reading and writing materials and simple science equipment and materials is essential. In addition, well-maintained and equipped school have unquantifiable but positive effects on the morale of teachers and pupils and become the symbol of community pride and aspirations. 2.12 In Nepal, school buildings are usually contributed by patrons or the community. They are constructed by community members or by contractors. Although models for school design and umit cost norms have been developed under donor-financed projects by Government agencies, they are not always enforced as the Government is practically not involved in fimancing school buildings. Furniture and equipment are also not provided by the Government except as part of externally- financed projects. A few schools in more affluent communities have substanial facilities provided from fees levied on parents over the years. But most schools reflect the poverty of the communities which they serve. They lack basic amenities, including electricity, drinking water and sanitation. Maintenance and security are poor and desks and chairs are insufficient. The lack of lighting hampers efforts to run late classes. Systematic data is also lacking on the status of school facilites. Curriculum 2.13 Curricular goals have been modified over time to reflect the country's changing socio- economic imperatives. In 1971, the NESP's goals for all post-primary education emphasized vocational utility and disciplined citizenship, loyal to the country, Crown and God. In the mid-1980s, the National Education Commission (NEC) added the concepts of education for national development and integraton and secondary education as a preparaton for more advanced levels of education. Under the Eighth Five-Year Plan, the objectives of lower secondary education maintain the emphasis on character-building and preparation for work or more advanced education, whilst secondary education is to prepare pupils to contribute to the country's development and lay the knowledge base for higher education. Despite the evolution of broad goals, curriculum content has not been systematically and thoroughly overhauled since the NESP twenty years ago. 2.14 In 1991 a NEC report recommended broad curricular goals for the entire education system, to strengthen social unity and national identity, relevance to the community's environment and development, and the needs of the disadvantaged, minorities and girls. In particular, it recommended development of mother tongue teaching in primary education, use of Nepali in secondary education, with English taught as a subject, and Englsh as the medium of instruction in higher education. Compulsory science education was recommended for all levels, with a technology  - 17- emphasis in higher education. It also recommended that history and geography should not be optional alternatives but should be an integral part of the -urriculum. 2.15 The proposed new curriculum, centrally prescribed for all levels of primary and secondary education, has nine subjects at lower secondary level. Five core subjects are defined by the greater amount of lesson time allotted to them and the greater weighing of marks given them in the school examination. At secondary level, seven subjects are covered; five core subjects, one option and one vocational option. All subjects are weighted equally, with about four hours of instuction each a week and 100 marks each in the school examinations (Table 2.2). Table 2.2: Lower Secondary And Secondary Curriculum Lower secondarY Grades seconaary teraes Nepali 100 Nepali 100 English 100 English 100 Mathematics 100 Mathematics 100 Science 100 Science and Env.Ed. 100 Social Studies 100 Social Studies 100 Sanskrit 50 Health and Phys.Ed Health and Physical or Computer Sc. Education 50 or Population Ed. 100 Prevocational/Art 50 Optinal subJect 100 Population and Environ.Education 50 Total Marks 700 Total Marks 700 Source: MOEC 2.16 Weaks. Nepali educators recognze many weaklesses in curriculum content and the process of curriculum development, dissemnation and implementation. The main we are: (a) Obsolescence. Because there has been little change of curriculum content, today's teachers are commuicating to the current generation of pupils more or less the objectives and content they themselves were taught a generation or two ago. Secondary curricula need updating to take account of changmg technologies, communications and ecology which will impact students' lives and work in the next century. (b) Lack of Sequence. Coherence and Integration. Because curriculum devdopment has been piecemeal and the sture of the school system has undergone frequent change (for example, from 3+4+3 in 1971 to 5+2+3 in 1981 and the recen change to 5 +3+2+2), the sequencing and coherence of subject matter and Skills acquisition is unsystematic. Teachers complain at both lower secondary and secondary level that students promoted from the level below have not acquired the prerequiste knowledge and skills to enable them to benefit from the next level of education. (c) Too Much Coverage and Too Little Practice. Curriculum content is unrealistically crowded and teachers lack time and materials to give students opportunities to practice and reinforce what they have learned. In practice, teacers teach facts to be memorized at the expense of skills acquisition, sudent participation and problem-solving. Curriculum materials need to be revised to guide teachers in how to  - 18 - teach thinking and problem-solving skills and how to access the competecies and weaknesses of students so that they can take remedial action. (d) ITrelevant Subject Matter. Curriculum planners are aware that curriculum content needs revision to render it meanigfil to Nepali cultures. For example, literary appreciation is taught from the English classics. However, in an English language course which emphasizes communication, 14 and 15 year-olds in Grade 9 who have been studying the laMguage for five years cannot hold a simple conversation about their own community. (e) Jneffectve Lanue Policy. At what stage English should be introduced as a second language subject is everywhere controversial on social and pedagogical grounds. But there is no question that English taught as early as Grade 4 gives a headstart to children from urban and middle class families. This is a legacy of a former period when primary education ended at Grade 3. The fee-paying PBS schools attract students by emphasizing English and use a variety of English texts other than the standard ones. Even in these schools English is often poorly taught.? Government-aided and comnity schools suffer more from the severe shortage of specialist English teachers and basic reading materials, as well as trying to cater to minority students for whom Engish is often a third language. Deficiencies in English plague other subject specialist teachers also. Science education is particularly problematic because most advanced texts are in English. The real problem to address is how to deploy scarce resources for teaching English well to schools which do not enjoy the means to attract expert English teachers and do not use English as a medium. (0) Overload and Instructional Time. The curriculum is certainy overloaded. Nine separate subjects in lower secondary and seven in secondary is a very full load for 11-15 year- olds by any standards, and in Nepal additional time for study through homework is rare, except in the best private schools where teachers report assigning about four hours a week. But the reasons why teachers and pupils do not cover the full ground and the curriculum is not fillly implemented are much more complex. The time for teaching and learning allotted in schools is often much less than the ideal time required by the official curriculum. Actual instuctional time is very short. The time allotted per class period (mximm 40-45 minutes) adds up to only 26 hours of instructional time a week (about four and a half hours a day in a six-day week), even though the official time for a full school day is six hours (10 am - 4 pm). Time-on-task sminimal in a system where the official days of school opening are 180 a year and include examination time and teachers' official leave. Time-on-task is further reduced because of irregular attendance by pupils and frequent absences of teachers and even school principals. 2.17 The School LeavMUg Certificate Exanon. Examination results are used as the nure of student achievement in lower secondary and secondary schools in Nepal. The academic w Awashi, Lava D., ELT in Nepal, Anual Efd Joumal MENA CTSDC, MOEC 1991/92.  19- year runs fron January to December; and schools have three internal examinations. However, the examination which everyone cares about is the SLC held at the end of Grade 10. The SLC examination serves two functions. One is to provide a graduation certificate, giving evidence that students have covered school programs to the end of Grade 10. However, the certification function is minor and the certificate itself has little credibility with employers that school leavers are well prepared for entry to the work force. Its primary function is selection, as its results are used to determine which students will be admitted into the much coveted public campuses of Tribhuvan University. A good pass in the examination is the only means by which students can continue on the formal education ladder. 2.18 Eighteen subjects are on the SLC examination among which Nepali, English, 'compulsory" Mathematics (the subject "optional" Mathematics is an elective), and vocational study are core subjects. Most of the subjects have a full mark of 100 and a passing mark of 32. Passing scores are categorized into three divisions: first division for scores 60 and above, second division for scores between 45 and 59, and third division for scores between 32 and 44. A student has to take the four core subjects plus three optional subjects. The student has to pass all seven subjects in order to be awarded a pass in the SLC examination. A student who fails the examination may take all seven subjects or the failed subjects again the following year. In 1992/93, science became a core subject. 2.19 The SLC examination results are not standardized. A study of the examination by the University of Cambridge Local Examination Syndicate stated that examination "papers are seriously restricted in the range of skills tested, concentrating mainly on the factual recall of textbook information and sometimes encouraging the repetition of learned model answers based on textbook exercises". Since the SLC examination is taken to be the single measure of success for the school system, teaching in school is geared heavily towards the examination. Thus teachers emphasize rote learnmig and discourage independent thinking and creativity. In Grades 9 and 10, the official urriculum is mostly swept aside by the syllabus for the SLC examination when teachers use examination questions to coach and students prefer to cram. The backwash effect of the examinations is high and dominates the instructional process. 2.20 Prior to registering as candidates for the SLC, pupils need to pass the "send-up" examination which is a non-standardized test set at district level and administeied by schools. This procedure is meant to screen pupils and bar poorly performing candidates from entry to the SLC examination. Teachers coach for the "send up" examination and students memorize answers to questions from past SLC papers. In recent years about 50% of the candidates who appear in the SLC examination are first time (regular) candidates, and the rest are those re-taking one or two subjects only (compartmental) and candidates re-taking the entire examination (exempted). Many, but not all the re-take candidates, repeat a school year in Grade 10. 2.21 Table 2.3 indicates that over the four-year period 1988/89- 1991/92 the number of candidates appearing for the SLC examination rose from over 125,000 to more than 160,000. The number of regular candidates fluctuated from over 64,000 in 1988/89, to 100,382 in 1989/90 and to 2' lEES (1988) Nenal: Education and Human Rsources Sector Assssn, Florida State University, Tasahasee. Florida.  - 20 - over 76,000 in 1991/92. During the same period the overall pass rate fluctuated from 41% to 52% and down to 26%. Table 2.3: SLC Appearance And Pass Rates (1988/89-1991/92) 1988/89 1989/90 199U/91 1991/92 Regular Appeared 64.166 100,382 94,534 76,982 X Appeared 62X 90% 84X Exempted Appeared 61.436 58.484 65.100 84,535 (One year lag) 79X 862 Total Appeared 125,602 158,866 159,634 161,517 Total Pass 51,232 83.403 53.200 41,155 Regular 28.319 48.656 23.200 24,370 Exempted 22.913 34.747 30.000 16.785 Pass Percentage 41X 52X 33X 26% Regular 44X 48% 24X 32% Exempted 37X 59X 46X 20% Total Failed 74,370 75,463 106.434 120.362 Source: Office of Controller of Examinations 2.22 Deficiencies of the SLC Examination. The administration of the SLC and the validity, reliability and faimess of the examinations have been the subject of a number of recent reports.24 The main conclusions of these studies reveal that the technical quality of the SLC examination is not high. The test items are not standardized and raw scores are used. Test reliability is low and the tests do not provide a basis for judgments comparing the performance of candidates from one school to another or from one year to another. The construction of test items is often deficient. Wording is often ambiguous, confusing candidates, teachers and markers. The validity of the test items is also weak; items do not cover all aspects of the subject matter and questions asked do not always tap the full range of knowledge and skills as prescribed in the curriculum. 2.23 The capabilities tested overemphasize recall, to the neglect of items requiring candidates to exhibit comprehension and problem-solving skills. Theoretical items predominate over items requiring practical application. There is only a small pool of good items available. Marking standards are low. Markers are usually teachers but their training is minimal and cross-checking of marks for consistency is uneven. This reduces the fairness of the examinations. Ideally, subject matter experts, specialists in curriculum and pedagogy, as well as testing experts, need to work together to develop and mark high quality examinations. w Universiy of Cambridge Local Examinations Syndicate (UCLES), A Strategv for Develonmem: A Report to the Office of Controfler of Examations, Cambridge, nd.; UCLES, Educational Assessment in Nenal: A Report on the Education and Elxaminaton Systems in Nepal, Vols. I (report) and U (appendices), Cambridge, 1989; Tribhuvan University, Causes of Paiblre in English in SLC Examination, Research Center for Education, Innovation and Developmen, Kathmandu 1989; Bridsh Cotucil, Neval: Secondary Education Develonmenr Widt Special Reference to Science, Mathematics and English, Vol. 2, for EMG and Asian Development Bank, pp. 50-55 and pp. 193-195, May 1991.  - 21 - 2.24 Finally, the central administration and marking of the SLC examination is a massive and costly task.' It is done through the Office of the Controller of Examinations in Kathnandu. The institutional capacity of the OCE is not sufficient to ensure that the administration is fair and efficient. In accordance with Educational Rule 31 of the 1992 Educattion Regulations, a Board of Examination has been formed under the chairmanship of the Secretary of the Ministry of Education, Culture and Social Welfare. This Board will be responsible for policy formulation and control of the SLC examination. 2.25 Unfortunately, the general public is largely unaware of the technical limitations of the SLC examination as a measure of learners' competencies. Rather, its overriding significance to teachers, students and parents is as a gateway to post-seconda_r education. This has a detrimental effect on teaching and learning in secondary education, it produces more "failures" than "successes" amongst students and it has serious implications for the preparedness of intakes into Grades 11 and 12 to undertake advanced level studies. Educational Materials 2.26 Surprisingly, in a country with such difficult communications, textbook availability in primary schools does not appear to be a major problem. Unlike for primary, secondary books are not supplied free through the schools but are, instead, sold to students and teachers. Book availability at this level is reported to be fair. It has been suggested that books probably are available near urban centers where there are book stores and where agents are active in carrying secondary texts for sale to stores and to teachers and students in schools. But where the market is small (i.e. in areas where populations are sparse and scattered and where few secondary schools exist), it is said that textbooks are harder to come by. 2.27 Recently, the main emphasis on textbook development has been at the primary level because this is where curricula reform is underway. A new Curriculum Development Center (CDC) has replaced MOEC's Curriculum, Textbook, Supervision Development Center. A Textbook Committee oversees the commissioning of authors and textbook content. There are subject sub- commitees comprising university teachers, school teachers and subject specialists. These meet firegularly and personnel who combine publishing expertise with skiUs in subject matter and pedagogy are scarce. Sub-committees meet when a curriculum revision requires textbook changes. 2.28 Textbook Publishing. Printing and Distribution. The Janak Educational Materials Center (JEMC), a parastatal institution, publishes and prints textbooks. It currently produces about eight million primary and four million secondary books a year with no subsidy from government. It thrives on its monopoly of large print runs for textbooks for government schools, but its print costs are high. The physical quality of books is poor, due mainly to the uneven quality of paper (now nearly 70% of the total book production cost) and poor ink, covers and binding. JEMC's sole distribution agent is Sajha Prakashan, also a parastatal, which operates bus fleets throughout Nepal. Books for sale (which include some primary, all secondary and a few higher education titles) go to Sajha's own district offices and thence to its own depots, to agents and to retailers. JEMC pays Sajha a commission for the distribution of books. CDC, JEMC and Sajha are all based in Kathmandu and 25 OCE estimates show that the admmisttion cost per candidate is Nrs 97 and revemne from registrion and examination fees is NRs 120. Rechecking marks brings (NRs 50 per candidate), wance of provisional certificates (NRs 25) and mark sheet duplicates (NRs 20), answer book sales NRs 5 and migration certificates (Nrs 25). (Figures are from 1992.)  - 22 - 80 the cycle of textbook development, from selection of authors to printing and distribution, are cetralized and virtalaly monopolize textbook development and printing for government schools. Becase the private publishing, book printing and book-selling industry is small, there is little competitive pressure to improve book quality and little piloting and field trialling of new titles occu, which might help improve quality and relevance. 2.29 Other Educational Materials. The parastatal organizations produce virtually no other printed materials such as curriculum and teachers' guides, reference and library books. The JEMC has a mandate to provide visual aids and equipment but this has not recently been a major priority. It is important to note that printed materials supplementary to textbooks are essential to enhance leaning. The more advanced the subject mnatter, the more important becomes the ready availability of a variety of sources of reference material for independent enquiry and for practice in comprehension of different reading styles (e.g. documents, narrative, exposition). For sxdents whose home language is not the medium of instruction, who lack reading materials at home and who begin school late, a resource-rich school environment is even more vital to reading literacy. A recent international study indicated that 14-year olds who, amongst other things, had larger school libraries, were given more homework and had more resources for reading apart from the textbook, achieved better in reading literacy than those who did not.26 Imhm 2.30 Teacher effectiveness is a critical element in providing quality education. Teachers are responsible for translating the official (intended) curriculum into classroom teaching practices which enable stuents to learn (the actual) curriculum. To do this, teachers must themselves have a higher level of u sing of the curriculum content than the content they are teaching, an undstling of how to simplify, organize and communicate that content to immature learners, an uin of how learning takes place and how to stimulate students to learn. In addition, they must manage and use effectively the material inputs available (e.g. books and science equipment), and mainain a task- oriented, disciplined environment. 2.31 In 1991, there were 24,632 teachers in post-primary schools. Of these, 13,005 (53%) wer at lower secondary and 11,627 (47%) were at secondary level.2 This indicates a natonal average student-teacher ratio of 29.3 at lower secondary and 34.0 at secondary. These are higher raios than in the mid-1980s when ratios were at an over-generous 24:1, but they are acceptable by interional norms. However, more significant ratios to take into account are the student-school and teacher-school and the average class size. Average student-school ratios for Grades 6-10 was found to be is 190:1. The average number of teachers per school is only three at lower secondary and five w61 BEey, Wanvick B., Hw in the World do Studen Read? nteraonal Association for the Evaluaon of Educational Achievement (lEA), 1992. 2' For planning purposes official teacher positons are utilized (according to formulae long established for teacher-upS rtios and cls sizes). Aniual data coliection frm schools and District Education Offices is reporely oft based on teacher positonso, rather than on acual teachers in post. The 'ghost tacher phenomeo exists but its exte Is not known.  - 23 - at secondary. Average number of students per class is as much as 39 at lower secondary and a high 75 at secondary. These data mean that, either teachers are attempting to cover subjects in which they are not specialized. or the official curriculum is not fully covered, or both. The large average class size also suggests that a great deal (,f multi-class and nmlti-grade teaching occurs, for which teachers are ill-equipped. 2.32 The existence of so many very small schools also means that these schools lack a critical mass of teachers through which professionalism can be nurtured. Of course, these aggregated nationwide data conceal wide variations in the conditions under which teachers work, with very small schools being more typical of rural areas and the western regions of the country and large schools typical of urban areas. The authorities have been attempting to deal with the problem of small schools by clustering contiguous primary schools. However, detailed mapping of the secondary level is needed in order that there can be rational planning for school consolidation and teacher deployment. 2.33 Educational Levels of Teachers. To teach subject mater in Grades 6-7, lower secondary teachers are only inini--ly equipped to get by with Grades 11-12 education. However, 70% of teachers have this level of educational qualificadon and only 20% have a bachelor or master degree (Table 2.4). Nearly 1,300 (10%) of the lower secondary teachers are very much under-qalified, having only SLC examination pass, or lower, educational qualifications. r'rades 11 and 12 are definitely not an adequate educational level for lower secondary teachers and a Bachelor's degree needs to become the minimum qualification in actuality as well as in principle. Moreover, the degree needs to be in the subject specializations that teachers teach. Data are not collected on this, though it is known that there are severe shortages of teachers specialized in science and English, with the result that science is rarely taught and English is taught by nonspecialists. If, today, a first degree or above were to become the minimm acceptable qualification level, the national average ratio of qualified teachers to pupils would be 1:144, with the three western regions being by far the worst off, having only 16% of teachers with degrees. Table 2.4: Lower Secondoy Teaders By Qualification, Taining and Region, 1991 under SLC SLC CL &A__ Master Tot Total Total Total Total Total Total Trained Eastern 10 238 2.193 418 5 2,864 34 central 24 425 2.760 1.256 104 4.569 39 Western 26 317 2.148 560 18 3.069 34 Kid-West 2 125 1.160 133 8 1.428 26 Far West 12 130 793 129 11 1.075 28 Nepal- 74 1,235 9.054 2.496 146 13.005 34 Source: HOEC, Planning Division. Manpower and Statistics Section. 2.34 To teach subject matter in Grades 8-10 secndy teachers need to have at least a first degree-level education themselves. Depending on the difficulty of the subject matter and the quality  -24 - of the degree courses, some authoriies argue that a master degree would be more appropriate.28 About 89% of secondary teachers have a bachelor or master degree and just over 10% have Grade 11 and 12 education or below Crable 2.5). In this tespect, seondary teachers are better qualified on educational grounds than lower secondary teachers. Also, former B.Ed. students were not required to study English, Science and Mathematics, as these subjects were included in the list of optional subjects. Considering the shortage of teachers in these critical subjects in secondary schools, B. Ed. students are now required to take at least one of these subjects. TabJe 2.: Seconday Teahes, By Qualification, Training And Region, 1991 under sLF U AFC CL _ BA WasterToa Total Total Total Total Total Total Trained Eastern 4 25 196 2,160 126 2,511 42 Central 6 37 234 3.410 594 4.281 49 Western 20 85 411 2.155 178 2.849 44 Mid-West 9 55 95 877 53 1;089 35 Far West 5 59 76 650 107 897 35 MM - 44 261 1.012 9.252 1.058 11.627 44 Source: MOEC. Planning Division. Nanpower and Statistics Section. 2.35 The Teahe Trainin . Available data show that 34% of lower becondary teachers in 1991 had training. The level of traiing of secondary teachers is better than at lower seconary, with 44% trained. Pre-service taining is undertaken by the Faculty of Education (POB) for primary and secondary levels. As a constuent institution of Tribhuvan University, FOE has twelve campuses throughout the country, the central campus being at Kirpur, Kathimdu. The FOE enrolled over 6,000 new suden nationwide in 1990/91. With a staff of about 500 dispersed over its twelve campuses, it has limited capacity and the staff tbemselves need upgrading and updatng. Regretably, the coopeion between subject specasts in other TU faculties such as science and languages and the countrpart education specaists in the FOE is minimal. This deprives students of educaion and access to the most upodate subject specialist knowledge available in the country. In- service programs are provided to meet special needs or under projects by MOEC agencies. Secondary in-serwice training is still mainly done through short crash courses from two weeks to three months. The agencies involved recuit practicing teachers and university staff to run them. The formal, short course fonnat is recogied worldwide to have minima positive impact on teachers' classroom performance. There is a serious risk, thereore, that scarce training resources are being wasted. 2.36 Temale Techr. Although in many countries teaching is often a preferred employment for females, in Nepal, an opporunity is being lost. The presence of female teachers can atact girls into clssrooms and good female teachers can provide role models for girls aspiring to Ware, Sylvia A., Mm Educdy n of Seo, Pui tn Te source in Doealot me , Wodnblishoed ms., Mwdoct nd 13 mpbymeo D ,b P _pai and Human Reswce D _ame World Bak Octobor 1992.  - 25 - modem sector employment. At primaty level the authorities are making efforts to attract more women into teaching and to provide special training for them. However, figures for 1992 (preliminary) for post-primary level, show that only 13% of teachers were female at lower secondary level and at secondary level 10% were females. The Status of Teachers 2.37 Teachers' Pay and Conditions of Service. The four official pay scales for teachers in government service range from a starting rate of only NRs. 1,350 a month for under-qualied non- SLC teahers to a maximum of NRs. 5,500 for teachers with a bachelor degree on the top rate of their scales (1992). The four scales provide between 15 and 20 annual increments, with an efficiency bar after seven to ten years. Teachers qualify for retirement after 20 years of service but may continue longer. It is acknowledged that the official salaries for qualified teachers are low, do not cover rising costs of living and fail to attract well-qualified candidates into teaching. The MOEC data on teachers given above includes "permanent" teachers with tenure in MOEC-approved positions, teachers in recognized private schools and community schools. "Permanence" is a sought-after ss because pay, tenure and pension is assured, whereas non-permanent teachers have to rely on community contributions. In practice, because many post-primary classes have been added onto primary schools to provide continuing lower secondary and secondary education, teachers often hold primary posts but they may teach at higher grades either full-time or part-time. This upward creep is unfortunate in that many teachers manage classes at much higher levels than those for which they are qualified or trained. Thus, the lower grades are deprived of teachers and the credibility of teaching as a profession is damaged in the eyes of the public. 2.38 Other factors also contribute to the low status of teachers. Teachers seem to be sometimes appointed on political grounds without proper qualifications. Teaching today in the country can hardly be called an attractive profession. Salaries are the main problem but a poor physical work enviromnent also acts as a deterrent to recnitment. Also, the secondary teaching force is fairly young and inexperienced, with rapid turnover and high wastage, particularly for males with marketable skills. Job-seekers with qualifications in education often use teaching as a biLde to more attractive employment elsewhere. Teachers, without other opportmities for employment and who value the security that tenure permanent teaching posts offer, tend to stay in the profession. In urban areas, where the jobs are available, they often work two or three other jobs, in order to supplement meager salaries. This widespread moonlighting and frequent absenteeism is officially tolerated but it has detrimental effects on the time teachers devote to the classroom. 2.39 Teacher Management and Supervision. Better rewards for performance, better education and training and better physical working conditions would all contribute to improving the status of teaching and hence, it is logical to anticipate, the quality of those available for recruitment. But, arguably, one other factor affecting the low status, poor morale, isolation and uneven performance of teachers is the weakness of the system of teacher management and supervision. One important symptom of this is the debate in the profession about who actually is the teacher's employer, the District Education Officer (DEO), who approves public school grants and registers private schools, the school principal who co-signs the salary authorization with the DEO, the School Managing Committee (SMC), or the community which pays a variety of formal and informal school fees, supplements salaries or provides non-monetary benefits such as lodging and food. Whoever is the paymaster, the teacher is caught in a web of local influences which lowers morale and detracts from  - 26 - job performance. The professionalism of the District Education Officers needs to be enhanced through training and increased accountability. 2.40 SMCs they are largely under the direction of the Regional Directorate of Education for the post-primary level or local community pressure groups. They seem to be in disarray and continue to be politicized. There are plans to strengthen the SMCs under the current decentralization strategy and, properly constituted with strong professional and parental representation, they should play a critical role locally in ensuring that school principals operate schools efficiently and professionally. 2.41 Concomitantly with this reform, the strengthening of the cadre of school principals is needed, to provide administrative and educational leadership. Experience elsewhere, as well as in Nepal, indicates that the principal is the key figure in how well a school performs. Currently, adequate training, selection procedures, performance incentives and support structures are lacking for principals who must undertake heavy and complex responsibilities, often in harsh and isolated conditions, sometimes under the scrutiny of parents and community. Training support and accountability for principals need to be enhanced. Localized supervision, technical support, professional development and training for teachers and principals are all major needs which are largely unmet. C. Conmonents of a Qualitv Improvement Reform Package 2.42 Worldwide experience shows that there are no sure prescriptions for curing the ills of low educational quality. But research on effective schools and school restructuring does indicate that quick fixes and single-focus efforts rarely succeed. Educational quality enbancemem involves changes in human beings and institutions. It must be planned for the long haul and implemented holistically, takdng account of the repercussions of change in one set of people or institutions on others. For example, any plan to effect improvement throughout a school by providing one teacher with in-service training is doomed to failure because the new ideas, skills and inspiration of one teacher alone cannot overcome institutional resistances to new ways of doing things. Similarly, efforts to develop practical science curiula will not lead to better science education unless a system is in place to supply schools with equipment and materials with which to experiment and unless teachers are trained to teach practical science. 2.43 In order for reforms in quality to be planned and phased appropriately, it is essential for accurate data to be available. This is a major deficiency in the country today. Data needed include, at a mnimum, the accurate age and enrollment status of the secondary school cohort, the location and status of school facilities, equipment, books and materials, and the correspondence of teachers' qualifications and training with the level at which they teach. In addition, data are needed about the affordability of secondary education to various population groups so that efficient and equitable pricing policies for tuition, for books and for subsistence can be worked out. Similarly, data are needed on the salary and incentives required to establish effective and equitable teacher recritment and deployment policies. A first priority would be for central govermment to develop a strategy requiring the relevant data to be collected and analyzed at district level and to mount training exercises for participants. The next step would be to develop district proposals, based on needs assessments, identifying what major deficiencies need to be addressed as a priority. A national plan for secondary education development could then be developed which would be grounded in reality.  - 27 - 2.44 Major policy decisions are needed on certain fundamentals in order for rational planning for curriculum, facilities and teacher training to go ahead. These are, for example, the official introduction of English as a second language, the date by which practical science, needing laboratories, will be introduced and when teacher training will again be made compulsory after a two decade deterioration in the status of the teaching profession. Though the guidelines on these decisions need to come from central government, in the decentralized system, different decisions may be required for the various regions of the country depending on needs and context. 2.45 Central authorities have some complex and difficult major commitments to make. One is to consolidate and streamline central institutional capacities and to strengtherP local capacities in planning, management, supervision and in technical fields such as teacher training and curriculum development. A second is to clarify the regulatory environment for schools, teachers and School Management Committees. Examples would be that. quality standards for school facilities, school size, specialist teacher requirements, classroom environment and the number of reference books per pupil would be issued for community schools to obtain permission to register as examination centers. The required classroom contact hours for teachers should be revised and enforced and teachers should be allowed to opt for contract payment by the hour for less than full-time service. Secific Proosals 2.46 Based on the above discussion on secondary education inputs, priority areas and measures to improve quality in the physical environment for learning (curriculum and examinations, books and materials, teachers and supervisors) are highlighted. The order in which they are listed does not indicate an order of priority. Indeed, many of these measures would need to be undertaken simultaneously because they are complementary. The recent Secondary Education Development Project financed by ADB is aimed at addressing some of the curriculum and textbook development issues, enhancing teachers' effectiveness and improving the examination system. This assistance is a continuation of ADB's earlier involvement which aimed at strengthening science in secondary education. 2.47 Curriculum Reform. A detailed curriculum plan for the entire secondary education subsector (Grades 6-12) is essential and should include plans for curriculum design, trials, implementation, dissemination and evaluation. Weak and fragmented institutional capacitv is at the heart of the problem of curriculum developmnent and dissemination. Technical capacity to develop curricula systematically is weak and the processes, such as teacher training, which are essential to translate curriculum on paper into teaching and learning in the classroom, are not planned in detail. There are a nmnber of institutions involved. The CDC is responsible for developing and monitoring curricula, preparing dissemination materials, textbooks, audio-visual aids and extra-curricula programs, as well as training teachers and supervisors in these fields. Until recently it has concentrated mainly on primary level because this has been and continues to be the Government's priority. CDC has recently developed curricular specifications and learning objectives for the primary curricllum and this work will continue till 1997. In the mid-1980s the Science Education Development Center (SEDEC) was set up to pioneer science curriculum development at secondary  - 28 - level, to coordinate training for science master teachers and to develop a Science Education Development Unit in one school in 25 districts.?9 2.48 The Council for Higher Secondary Education is another recently set up institution which is already involved in curriculumn development for Grades 11 and 12. The CHSE is not institutionalized within the MOEC's structrie, but is responsible directly to the Minister of Education. This practice of curriculum development by two-to-three institutions creates fragmentation of and does not ensure sequencing of contents, coherence and integration of the curriculum development process for the secondary subsector. 2.49 With the target of enrolling 45% of the age group in secondary education, the Eighth Plan period is ideal for the development of a curriculum plan for the entire secondary subsector, takdng into account the deficiencies of current curricula and paying particular attention to the science and language needs of secondary students. Lower secondary education needs to be based on the planned learning outcomes of the new primary curriculum, and secondary, on standards of achievement expected of secondary graduates in countries which have modernized specific curricular areas (for example, Malaysia, the Philippines, Singapore and Sri Lanka). The five-year plan period is too short for the entire curriculum to be revised and introduced into schools. A more realistic target would be to implement a first phase in Grades 6 and 7 and build upwards in later phases. Another emphasis should be to consolidate institutional capacity in curriculum development at central level and tining of curriculum experts. 2.50 Examination Reform. Development of the secondary curriculum needs to be conducted alongside development of the Grade 10 examinations so that curriculum and examinations are coherent and test the same competencies. One suggestion is to convert the present "send up' examination into a district or regional Secondary School Graduation Diploma (SSGD) which would test mastery of knowledge and skills prescribed in the curriculum. Candidates would be provided with a diploma describing what they knew and could do, rather than a pass or fail level. The graduation report could also include a list of their non-examined activities and accomplishments in co- urricular programs, such as voluntary work. If secondary graduates proved well prepared for productive employment, the Diploma would gain in credibility with employers and Grade 10 graduates would become a cheaper and attractive source of educated and trainable workers. 2.51 The current SLC examination could reman a pass/fail test specifically geared to selection for higher secondary education. It could be renamed the Higher Secondary Selection Examination and it could be devised as a more difficult extension of the proposed SSGD. Candidates would only sit if they were informed by their teachers that they were capable of a high level of achievement and a chance of being selected for one of a known number of available places in HSE. Candidates' competencies would need to be especially high in communication skills and problem- solving across the curriculum, skills required at higher secondary level. The requirement that candidates should reach specific levels in all of seven subjects could be replaced by requirements that they should perform well in communication skills, science and mathematics and a specialist subject to be studied in HSE. 2a Wih Asian Development Bnk assance.  - 29 - 2.52 Whether or not the above proposals were adopted, training of test item writers and teachers is needed alongside the development of curriculum learning objectives and content. Test item banks need to be further developed. Teachers need to be trained in how to help learners communicate in various modes, how to undertake critical, rational thinking and how to teach for mastery of knowledge and skills to be attained by the end of lower secondary and secondary education. 2.53 Textbooks and Educational Materials. There is a need for reviews and action plans to remedy deficiencies in the content, design, affordability and availability of textbooks. The other main instructional materials element of the reform package that needs a great deal of development is the reference and reading materials and libraries to support the exploratory, problem-solving approach of the revised curriculum. These are needed for pupils as much as teachers. Without them, all the efforts in developing new curricula and changing the way teachers teach and pupils learn will fail. A national strategy must be put in place to develop private sector initiative so that the recurrent costs do not fall entirely on the education budget. 2.54 Textbooks and other printed materials aue critical inputs to secondary education in order to help reduce dropout, increase grade promotion rates and enhance quality. Detailed study is needed on many complex aspects of secondary level books and materials, such as design, coverage, availability and affordability. In Grades 9 and 10, only one book per subject is published by JEMC and is meant to cover both grades. This practice needs investigating for its educational usefulness, its cost efficiency and its implications for student retention. Where the book provides two full years' study content, this may be a useful means, for say Grades 6 and 7, for reducing unit costs and even encouraging pupils who have invested in the books to remain in school for the second year. A book- mapping study, school by school, is needed to ascertain how readily available and affordable secondary textbooks are to students in government-aided and community secondary schools, especially outside main urban centers. 2.55 Textbook prices, according to JEMC have risen from paisa 7 a page over the last three years to paisa 10 or 11. Studies done for the BPEP project revealed substantial opportunities for tore efficient production and it is important that these efficiencies are realized so that the price of books for secondary level does not become prohibitive for poorer students. In this regard, the development of local commercial textbook publishing is desirable. The CDC's role should be to provide guidelines to private publishers on curriculum revisions and curriculum and pedagogical advise to authors, thus acting as a catalyst to increase private sector capacity to produce high quality and diverse secondary titles for sale to schools and teachers. 2.56 A cautionary note is needed on science development. If the lessons of recent experience with the science education initiative are not fully taken on board, there is a real risk that the proposed re-introduction of compulsory secondary science education will remain limited to a few financially well-endowed schools able to afford implementation of a curriculum that calls for sophisticated science equipment and materials. One among a number of shortcomings is that the curriculum developed assumes far wider accessibility to science equipment and materials than is feasible for most secondary schools in the near future. In any follow-up program, the possibilities of teaching science to a fairly advanced level with inexpensive items and local environmental resources need to be investigated as real alternatives to high-tech science.  - 30 - 2.57 Teacher Development and Training Reform. At the heart of quality improvement are the teachers. A comprehensive 10-year teacher development and teacher training plan is needed to systematically provide upgrading and career opportunities for teacher trainers, serving teachers and new teachers. A diversified, promotional career structure should be developed to provide incentives to attract well qualified recruits into classroom teaching and related fields such as career counselling, curriculum development, testing and assessment and teacher training. Contract teaching could be considered as a way of attracting skilled personnel from other fields to serve as teachers for specific periods of time. The previous volunteer scheme for qualified graduates could be redeveloped. Special schemes to assist female teachers would be required. The development of a countrywide network of secondary education professionals is critically important and the plan should include a deployment policy to ensure teachers are available. 2.58 Training the trainers should be the first priority. About 200 teacher trainers should be selected from amongst the best secondary and university teachers and be trained in specific subject methodologies. They should be trained in subject groups, ideally alongside curriculum and examinations experts, and existing teacher trainers, so as to build up a critical mass of expertise and collegiality. Training outside the country would be preferable because that would provide opportunities for the teacher trainers to become acquainted with the best international practice. But the programs need also to be geared closely to the country's new curriculum. 2.59 In the meantime the lower secondary teachers with only a Certificate Level qualification need to gain a bachelor degree in the subjects they teach and the secondary teachers with only a bachelor or Certificate Level qualification need to gain master level qualifications. 2.60 Once the new teacher trainers have been trained, they would need to develop teacher training curriculum modules and materials. They would need to work in collaboration with subject specialist experts, health and nutrition experts, environmentalists and representatives of industry, agriculture, commerce and the various Nepali cultures. The process of developing and refining curricula and materials is bound to be protracted. When the training programs are developed, in- service training in the new curriculum needs to begin for all serving secondary teachers, initially for lower secondary teachers (if this is where curriculum implementation is to start). The first priority needs to be for those teachers in lower secondary and secondary who have had no training at all. 2.61 Over the decade, the teaching force will need to double in size just to cope with enrollment expansion. Therefore, a plan for the pre-service training of qualified graduates is also needed. To ensure graduates have the appropriate teaching and communication skills and to restore the credibility of the profession, pre-service training should be made compulsory within five years. One-year full-time or two-year part-time programs for postgraduates, with extended practicums in schools, is the intenational norm towards which the country should move. Or, as an acceptable alternative, four-year bachelor or three-year master degrees in education could be mounted for teacher candidates willing to commit themselves to teaching for a period of years. Ideally, capacity to provide pre-service training would be built up regionally so that graduates could expect to train near their homes and return to teach there. In particular, this would benefit female graduates and married people. 2.62 Regarding teacher training curricula, the plan for teacher training has to be visionary to cope with the new leaming needs of the next century. The new secondary teacher training would be  - 31 - very different from the conventional lecture-based mode. It would use modelling and coaching techniques on how to encourage learners in thinking skills, problem solving, self-directed study and collaborative learning, as related to specific topics in the curriculum. Award of a teaching qualification might be delayed after the completion of formal training, until a new teacher had served for one year in school under the supervision of an experienced teacher-tutor. Teacher trainers in the Faculty of Education, District Education Officers, supervisors/inspectors and school and community leaders need to collaborate in devising training programs that keep the trainees as close to the schools as possible. Ideally, each secondary school in each district would have a teacher training and school improvement development plan that combined pre-service training, in-service training and ongoing technical support. 2.63 Management and Supervision. The new decentralization policy affords an opportunity for the management of secondary schools and supervision of teachers to be localized, within a national regulatory framework. SNICs need to be established where they are not functioning. To enhance their accountability key menmbers should be elected by the parents. Public awareness campaigns should be launched to inform parents of the proper role and functions of SMCs and school principals. The campaign should also inform parents what knowlee.e and skills their children should acquire by the end of lower secondary and secondary education. upervisory guidelines need to be reviewed and developed. Leadership training is essential for school principals and supervisors because experience worldwide shows that they are critical change agents. 2.64 Imroving the Ouality of Private Education. The key issue in the quality of private education is the low-quality of community schools. In light of the future increasing role of community schools in meeting the projected demand for secondary education, the improvement of the quality of these schools (and of government schools) should have a high priority in the overall development of secondary education. Two general approaches to quality improvement can be considered: improving educational input and process, providing incentives for improved performance. 2.65 Teachers should be once again at the center of the approach to improving educational inputs and processes. In-service training to improve the pedagogical skill of teachers and gender awareness is necessary. In addition, due to the serious problem of teacher absenteeism, improved educational management with proper incentives and sanctions against teacher absenteeism is also needed. Two other strategies may contribute to quality improvement in private schools. One strategy is to reduce government influence over the school management committee so that more decision power is vested in community/private control and that the school is less politicized. The other strategy is to update tax exemption on education items purchased by private schools (see further discussion in Chapter M). 2.66 Incentives should also be provided for improved performance. In the Eighth Plan period MOEC would be providing some salary support to teachers in community schools. Nepalese educators point out that this grants-in-aid method provides no incentive for improved performance on the part of the teachers. They suggest that, instead of distributing available funds to a school based on teacher characteristics (such as, the number, qualification, and training of such teachers in the school), the distribution should be based on some mechanism that takes into account both, teacher charcteristics and school outcomes. For example, if the government has a grant that can support 50% of teacher salary, then a portion (say 20%) will be distributed to teachers according to teacher  - 32 - characteristics, and the rest (30%) will be distributed to the school (and subsequently to teachers in the school) based on its improvement over time on a set of school outcomes. There should be a significant difference between high-performing schools and low-performing schools in the amount of aid they receive from the government. As there are technical difficulties regarding the identification, evaluation, and comparison of school outcomes, as well as potential problems of subjectivity and favoritism in implementation, cautious and careful experimentation of outcome-based proposals are absolutely essential. D. Recommendations 2.67 The following presents a summary of the recommendations which would achieve improvement of quality in secondary schools: (a) Strengthen the quality and accuracy of the educational and financial data needed for planning the development of secondary education; (b) Finalize major current policy decisions regarding secondary education. Consolidate the capacities of the central institutions and strengthen local capacities in planning and technical fields. Empower local management (school management committees); (c) Formulate a national secondary development plan. This should include reform of the curriculum, examinations and textbooks and other reading materials, as well as a teacher development and training plan and a management and supervision program; (d) Begin the process of reforming the curriculum. A detailed curriculum plan for the entire secondary education subsector (Grades 6-12) is essential and should include plans for curriculum design, trials, implementation, dissemination and evaluation. The practice of developing curriculum and textbook materials for Grades 6-10 by the Curriculum Development Council and for Grades 11-12 by the Council for Higher Secondary Education should be discouraged. Curriculum reform should be done by the same agency to ensure sequencing of contents. Phase I work can begin durng the Eighth Plan in the lower secondary grades and build upwards in later phases. The emphasis in the Eighth Plan period should be to consolidate institutional capacity in curriculum development at central level and the training of curriculum experts; (e) Development of the secondary curriculum needs to be conducted alongside development of the Grade 10 examinations so that curriculum and examinations are coherent and test the same competencies. The "send up" examination would test mastery of knowledge and skills prescribed in the curriculum. The current SLC examination could remain a pass/fail exam specifically geared to selection for higher secondary education. Training of test item writers and test item banks are needed alongside the development of curriculum learning objectives and content; (f) There is a need for reviews and action plans to remedy deficiencies in the content, design, affordability and availability of textbooks. Reference and reading materials and libraries to support the approach of the revised curriculum are needed. Accessible science equipment and materials should be introduced;  - 33 - (g) A comprehensive 10-year teacher development and teacher training plan is needed to systematically provide upgrading and career oppornites for teacher trainers, serving teachers and new teachers; (h) The new decentalization policy affords an opportunity for the management of secondary schools and supervision of teachers to be localized and many SMCs need to be established. Supervisory guidelines need to be reviewed and developed. Leadership training is essenial for school principals and supervisors; and (i) High priority should be assigned to strengthening quality of private schools, focussing on commuity schools, and providing for the training of teachers. Community accountability should be inaeased. Outcome based methods for distibution of financial assistance to counity schools should be established.  - 34 - Chapter III: ACCESS TO EDUCATIONAL OPPORTUNITIES A. Access and Eauitv 3.1 Analysis of official educational data indicates that rapid development and aggregate growth of secondary education have contributed little to reducing inequalities in educational opportunities. High and increasing inequalities in access to secondary education, unequal distribution of higher secondary schools and major differences in female participation have been observed. In addition, low participation of poor and disadvantaged groups, differences in the quality of schooling in economically backward communities and a thriving PBS sector are all integral part of the process for preparing elites, effecting social selection, and perpetuating social inequality in Nepal. 3.2 Regional Ineuualities in Participation Rates. Nepal is divided into 75 districts under three ecological belts (Mountains, Hills, Terai) and five development regions (Eastern, Central, Western, Mid-Western and Far-Westem). There are 16 development and ecological regions including the Kathmandu/Central Valley. The Mountain region which has 16 districts occupies 35% of the country's area and about 8% of the total population. The Government of Nepal has recognized these Mountain districts and two underdeveloped Hill districts (Dahding and Gorkha) as the remote districts of the country. The density of population per sq kn is the lowest in the Mountains followed by Hills and Terai. The average density was 125 persons per sq km in 1991. 3.3 There is a wide range in lower secondary and secondary gross enrollment ratios (GER) by region indicating high inequalities in educational participation from region to region and from rural to urban areas. For example, in 1990-91 the GER was 40.2% and 32.4% in lower secondary and secondary levels respectively. In both lower secondary and secondary levels, the GER was the highest for the Kalmiandu Valley followed by Western Hill. Of the 16 regions, only 5 regions achieved a GER above the average. The Mid Western Mountain is the most disadvantaged region of the country. The GER in the Western Hill region was 2.8 times higher than that of Mid-Western Mountain in the lower secondary level and 3.5 times in the secondary level (Table 3.1). 3.4 Regional inequalities increase with higher levels of education. In primary education, total enrollment in 1990-91 was more equally distributed across regions. The distribution of enrollment, however, became progressively uneven in lower secondary, secondary and higher secondary levels. For example, Kathmandu Valley which comprised 6% of total population in 1990-91 had 6.7% of total primary enrollment. The proportion of enrolment in the Kathmandu Valley increased to 11% in lower secondary level, 13% in secondary level and 36.6% in the certificate level. Western Hill dominated in the distribution of enrollment in all three school levels with almost a constant share of 20%, despite the fact that this region is occupied by only 13.1% of the total population. The regional share of enrollment decreased with the increase in school levels in all Mountains and Hills, except in the Western Region (Table 3.2).  - 35 - Table 3.1: Gross Enrollment Rtado By Region, 1990-91 (Percentage) Tower Secn arv Leve Secoa Level Total G1rls BOYs lotal lr$s km Average 40.2 26.9 52.1 32.4 19.5 44.3 EM 46.5 32.6 S9.1 35.2 20.6 48.9 EH 43.3 29.1 56.4 36.0 20.3 60.8 ET 43.0 33.7 51.1 41.1 28.0 52.8 Cm 26.5 12.8 38.7 16.9 6.7 26.3 CH 30.0 18.3 40.6 22.2 11.6 31.9 CT 29.8 17.2 40.3 24.5 12.6 34.8 CV 73.9 66.6 80.0 71.6 61.3 80.5 WM 33.2 35.8 31.0 20.4 16.3 23.8 WH 61.9 45.4 78.4 49.6 30.4 69.1 WT 33.8 22.3 43.7 21.4 13.5 28.4 KWH4 21.6 4.1 36.7 14.0 2.4 24.1 MWH 29.4 11.7 45.7 19.7 7.6 31.2 M0f 37.1 22.5 49.7 19.7 13.5 36.4 FWr 29.5 5.7 51.7 18.9 3.5 33.5 FWH 24.3 4.4 43.3 15.9 2.2 29.4 FWr 30.9 16.2 43.7 18.7 8.1 28.1 E: Easwern: C: Central; W: Western; MW: MidWestern; FW: FarWestern M: Mo' itain; HI: Hill: T: Terai; V: Valley. Sour : MCEC Table 3.2: EnroDlment Distribution By Region, 1990-91 (Percentage) Lower 6-10 s-cools Primary Secondary Secondary CL Total Per 100 Primary (1-5) (6.7) (8-10) (11-12) Population Schools Nepal 100.0 100.0 100.0 100.0 100.0 22 EN 2.5 2.2 2.1 0.7 2.0 22 EH 9.5 8.3 8.6 5.0 7.7 19 ET 12.6 15.4 18.3 15.9 14.4 30 Cm 2.8 1.7 1.3 0.2 2.6 15 CH 8.8 6.4 5.8 2.3 8.5 17 CT 11.4 12.1 12.4 11.0 16.4 24 CV 6.7 11.0 13.1 36.6 6.0 39 Wm 0.1 0.1 0.1 0.1 28 WH 19.6 20.2 20.0 14.2 13.1 21 WT 5.9 6.0 4.7 4.7 7.1 22 10dM 1.1 0.8 0.6 0.1 1.4 23 1481 6.9 4.8 4.0 2.2 6.2 15 MwT 4.3 4.6 4.0 4.5 5.0 26 FWN 1.7 1.3 1.0 0.3 1.8 18 FWH 3.2 2.2 1.8 0.4 3.6 22 FWT 2.9 2.8 2.1 1.8 3.7 21 E: Eastern; C: Central: W: Western; MW: MidWestern: FW: FarWestern M: Mountain; H: Hill; T: Terai; V: Valley. Source: MOEC  - 36 - 3.5 In order to find out the extent of regional equality in access, the ratio of secondary schools (Grades 6-10) per 100 primary schools has been computed for all the regions (access ratio). It shows that on average there were 22 secondary schools in the country for every 100 primary schools. The access ratio however, was a high 39 for Kathmandu Valley and 30 for Eastern Terai and a low 21 for Western Hills and 15 for Mid-Western Hills. 3.6 Regional distribution of certificate level education facilities shows that access to education by region is most unequal in the case of Grades 11 and 12. In 1990/91, there were altogether 65 Tribhuvan University campuses, of which only 56 offered certificate level (technical as well as general subjects). Most of these campuses are concentrated in Kathmandu Valley and Eastern Terai. Of the 75 districts of the country, 48 had no TU campuses offering Certificate level courses in general subjects. To fulfill the growing demand for higher secondary education, private campuses have been established with conununity initiative and support. Most of the private campuses are located in Kathmandu Valley, followed by Western Hills and Eastern Terai. The number of private campuses reached 45 in the Hills and 43 in Terai. Private campuses have also reached districts not covered by TU campuses. There are 14 districts, however, without any campuses offering Grades 11 and 12 classes. 3.7 During the 1992/93 academic year, the Council for Higher Secondary Education approved 36 secondary schools to run Grades 11 on an experimental basis. These higher secondary schools have been distributed over all regions except Eastern and Central Mountain. Of the 14 districts having neither TU nor private campuses, seven districts were covered by these new higher secondary schools. There remain seven districts with no facility to study certificate level. 3.8 Gender Differences in Educational Particination. Gender is one of the most important factors determining educational participation in Nepal. Although female enrollment in lower secondary, secondary and higher secondary levels is increasing rapidly, the gender gap in participation is very wide. In 1990-91, the GER for girls was 26.9% and 19.5% for lower secondary and secondary levels respectively. The GER for boys was almost double that of girls in both lower secondary (52.1%) and secondary (44.3%) levels. Region wise, Kathmandu Valley had the highest GER for girls (73.9% in lower secondary and 71.6% in secondary). Regions that had girls' GER above average were Western HiUls, and Eastern Mountain, Hills and Terai. Far-Western and Mid- Western regions performed poorly in terms of female GER (Table 3.3). 3.9 The proportion of females in total enrollment decreases with the increase in the levels of education. This ratio was 37.2% in primary level and decreased to 31.5% in lower secondary, 28.7% in secondary and 24.6% in certificate level. The same pattern has been observed for all 16 regions. The proportion of female enrollment was the highest in Kathmandu Valley, followed by Western Mountain, Western Hill and Eastern Terai for all levels. The lowest proportion was 9% in lower secondary level (Far Western Hills), 6.7% in secondary level (Far Western Hills) and 6.4% in certificate Level (Far Western Mountain).  - 37 - Table 3.3: Female Participation Ratio By Region, 1990-91 Lower Sec GFR fl Seconarv ZR ProDortlon of Female Enrollment Boys Girls Boys Girls LS Sec CL Total 52.1 26.9 44.3 19.5 31.5 28.7 24.6 EM 59.1 32.6 48.9 20.6 33.6 28.4 18.4 EH 56.4 29.1 50.8 20.3 32.1 27.3 18.0 ET 51.1 33.7 52.8 28.0 36.3 32.0 23.6 CM 38.7 12.8 26.3 6.7 22.9 19.0 16.4 CH 40.6 18.3 31.9 11.6 28.8 25.2 25.0 CT 40.3 17.2 34.8 12.6 96.2 23.7 22.7 CV 80.0 66.6 80.5 61.3 41.1 39.5 30.8 Wl 31.0 35.8 23.8 16.3 48.3 36.2 Wm 78.4 45.4 69.1 30.4 36.6 31.1 1^i 43.7 22.3 28.4 13.5 30.5 29.4 24.4 \WM 36.7 4.1 24.1 2.4 8.7 8.2 16.3 HWH 45.7 11.7 31.2 7.6 19.0 18.6 12.3 HWT 49.7 22.5 36.8 13.6 28.0 24.6 15.8 FWM 51.7 5.7 33.5 3.5 9.3 9.1 6.4 FWH 43.3 4.4 29.4 2.2 9.0 6.7 8.5 FWT 43.7 16.2 28.1 8.1 24.5 20.6 8.2 Urban Area 41.0 39.1 Source: MOEC 3.10 Many studies have shown that dropout rates, non-enrollment ratios and irregularity in school attendance were higher for girls than for boys. The high opportunity cost to parents and poor economic condition of the family were identified as the two most important reasons for low female participation in education. As an example, the personal cost of secondary education (school fees, ition, books, stationary, uniforms and shoes, and kerosene for lamps to study at night) was also identified as one of the main out-of-school factors responsible for low secondary education levels for girls in Bangladesh. As a result, the Government of Bangladesh has recently started to provide sfipends to girls encouraging them to enter and continue in secondary school. Urbanization has also a positive impact on female participation in education. In 1990-91, female students constituted 44%, 41% and 39% in primary, lower secondary and secondary level enrollments in the urban areas of Nepal. 3.11 There is low female participation in technical fields. In 1990-91, 19,768 females studied in TU and private campuses. This represented 24.6% of total enrollment in Certificate Level studies. The proportion of female enrollment was 65.1% in medicine, but less than 12% in engineering and forestry. In the general subjects, the proportion of female enrollment was highest in Humanities (31.7%), followed by Education (24.9%) and Management (18.8%). 3.12 Contributing to the low participation of females in secondary education is the lack of female teachers in the schools. Of the total stock of 24,632 secondary school (6-10) teachers in 1990- 91, female teachers accounted for only 9.8%. This means that for every 1.7 schools, there was .-a average only one female teacher. Evidence in other Asian countries suggests that a shortage of female teachers can inhibit girls school attendance, especially at the secondary level. In Kerala, for example, which has the highest female literacy and enrollment rates of all states in India, over 60% of  - 38 - the teachers are women, compared with fewer than 20% in the states of Bibar and Uttar Pradesh, which have the lowest female enrollment rates. 30 3.13 Secondary schools in Kathmandu Valley employed 1,438 female teachers, i.e. 59% of total female teachers of the country were in schools in the Valley and the ratio of schools and female teachers was 3.5 in average. There is a wide range of female teacher participation from region to region. The lowest proportion of female teachers was in Far Western Mountain (0.6%). The proportion of female teachers was below average in all regions except in the Kathmandu Valley (Table 3.4). This means that many secondary schools, especially in the rural areas, did not have any female teachers at the secondary level. Table 3.4: Distribution Of Secondary Schools (6-10) Teachers By Sex, Qualification And Region, 1990-91 Female Total Female Qualified Qualified Total 24,632 9.8 93.3 89.5 EM 654 2.9 87.8 94.7 EN 1.996 4.6 86.9 63.7 ET 2.725 7.0 95.2 91.7 cM 481 2.1 80.9 90.0 CH 1.730 6.6 81.3 76.3 CT 2.533 4.4 94.6 84.8 CV 4.106 35.0 95.8 96.2 WM 124 1.6 96.0 100.0 WH 4.852 4.3 83.3 69.3 WT 942 6.8 95.3 98.4 HWM 440 2.3 99.5 100.0 NWH 1,247 3.6 80.5 60.0 HWT 830 6.9 95.1 89.4 FWM 504 0.6 96.4 100.0 FWH 918 2.3 72.9 23 8 FWT 550 6.6 97j3 100.0 Source: NOEC 3.14 Low Participation of the Poor and Disadvantaged Ethnic Groups. The National Planning Commission (NPC) has defined the poverty line on the basis of income needed to provide for the minimum caloric requirements. According to this definition, a person needs a monthly income of NRs. 210 (in the Hills) and NRs. 197 (in Terai) in 1988/89 prices to meet the minimm caloric requirements. Using the above measure of poverty, NPC estimated that 40% of the population is in absolute poverty. A World Bank Study 3 referred to the NPC estimates as conservative and concluded that the incidence of absolute poverty is in the neighborhood of 50-60%.32 3 Herz, Barbara et al., Letting Girls Learn - Pronisine Aporoaches in Primary and Sboondarvy ducaion, World Bank Discussion Paper, 1991. 31/ World Bank (1991). Nepal: Poverty and Incomes, a World Bank Country Study, Washington, D.C. 32t The present analysis uses the NPC definition as infornation on educational participation is availabe only for the NPC nmeasure.  - 39 - 3.15 MOEC does not collect educational data by economic status. Available information from sample studies shows that the gap in educational participation between the poor and the non-poor is very wide. A study carried out by Nepal Rastra Bank (1989) indicated that only about 11% of the secondary school age children from the poor families in the rural Hills are enrolled in secondary schools. This rado was about 30% for the non-poor. Table 3.5 shows gross enrollment rados for the poor and the non-poor by ecological regions and urban/rural areas. Table 3.5: Enrollment Ratos By Economic Status (%) Rural Hill Terai -ountain Rural Ueban Rural Urban Primary Poor 37.1 49.2 64.9 30.1 37.2 Non-poor 55.1 64.5 79.0 53.0 63.4 Secondary Poor 17.8 10.9 23.9 13.0 22.0 Non-poor 21.3 29.8 48.5 29.7 42.0 Source: World Bank 3.16 Although Urban Hills and Terai performed better in terms of participation rate, no imp,rovement was observed in the disparity between the poor and the non-poor. The poor are less able to pay the direct costs such as fees, uniforms and stationary. The poor are also less able to bear the indirect costs of labor foregone. The opporunity cost is higher for girls as they are more involved in domestic works than boys. Similarly, the demand for children's labor is very high during the peak agricultural seasons (transplanting and harvesting). Finally, long and rigid schools hours limit educational participation of the poor. 3.17 E ic Groups. Data on popuation and education by ethnicity is not available. Brahmins, Chhetris and Newars have been commondy noted as educationally advantaged ethmic groups, whereas minor ethnic groups living in remote and isolated places such as the Chemg, Tamang, Darai, Dura, Jirel, Thami, Surel, Satar, Rajbansi, Lepcha, Pahari, Jhangar are known as stionl diav,aed gmu. Other educationally disadvantaged groups include ethnic and/or racial minorities namely, Sunnwars, Sherpas, Limbus, Hayus, Lowas, Chhatels and Gaines." These groups partiipate less, not only because they cannot afford direct and indirect costs but also bezause of social reasons. Almost all the teachers in schools are generally from the socially advantaged community. A recent study 34 collected information on students who appeared in the SLC in 1988 from selectad schools noting that, of the 208 SLC sitters, only 3 students (1.4%) were from the disadvantaged groups. Another study observed a secondary school gross enrollent rato of w MOEC (1990), Promoton of Primary Educatlon for Girls and Disadvantaged Grows, Kathmandu. !w! Op. ciL  -40 - 10% and 21.7% for Tharu (Dang) and Chepang (Makawanpur) boys respectively. No girls were find enrolled in the sample households of these cornnunities-Y 3.18 Regional Differences in the OWaity of Schooling. Factors that affect the quality of sdcooling in Nepal include the quantity and quality of schools, the availability of qualified teachers, the relevance of the curriculum, the hostel facilities and the availability of textbooks and educational materials. MOEC does not collect information on physical facilities of the schools and hostels. Local commitles are responsible to develop, improve and maintain physical facilities of the schools. This means that economicaly backward communities may not have been able to contribute to improving the school physical facilities, except with voluntary labor. 3.19 Regarding the availability of qualified teachers, MOEC data indicate that Mountain regions had more qualified teachers, because the Government supports 100% of teachers salaries of secondaty teacher in most of these districts. MOEC data, however, relates to the stock of teachers and does not show whether or not the schools have been able to get the required teachers in subjects like Engrlish, Science and Mathematics. Accounts from the rural areas reveal that most of the rural schools lack qualified teachers in these subjects. Also, teachers in lower levels are known to teach in highe levels due to lack of teachers in critical subjects. 3.20 To analyze the regional differences in the quality of schooling, the SLC reslts of 1990 (a high pass year) were examined. The overall pass rate of regular students in 1990 was 48.5%. The pass rate was around 37% even in backwards regions (Par Western Hills and Mountains). The proportion of SLC pass students obtaiing First Division has also been analyzed to see the differences in the quality of schooling on the assumption that schools that provide quality teaching also perform beuer in SLC results (Table 3.6). A comparison of the proportion of SLC pass students obtaining First Division in the 1990 SLC, shows a wide difference in performance. This proportion was the highest in Katmandu Valley (39.1%) followed by Central Terai (20.5%). Very few students obtned First Division in backward regions such as Far Western Mountin (1.6%) and Western Mountain (1.3%). The performance of the private and boarding schools was noteworthy and most of these schools are located in Kahmdu Valley and Urban areas. 36 " RIDAIUNICEF (1991), Status of the Girl Child in Nenal: A Survey Xevvt Katmandu. w In 1991, the overal SLC pass rate of regular sudents fell sharply (24%) and most of the students (37,000 out of 94,000) Stid in Eqsh with less than 15 marks. Many shools in ural and remote areas performed very badly and in seval cases the pass rate was zero.  - 41 - Table 3.6: SLC Resuts By Region, 1990 (Regular Candidates) Grade 10 SLC SLC Pass ist X of 1st Enrollment Aooeared Pass Rate Division Division Nepa'i 100.382 48.656 48.5 7.595 15.6 EM 2,491 2,159 982 45.5 51 5.2 EH 9.085 7.814 3,134 40.1 169 5.4 ET 21.203 19,802 7,839 39.6 1.150 14.7 CM 1.828 1.500 6-3 43.5 28 4.3 CH 6.421 5.887 2.870 48.8 358 12.5 CT 14.996 12.790 7.870 61.5 1.616 20.5 CV 14,398 12,666 6,394 50.5 2.503 39.1 WM 65 103 78 75.7 1 1.3 WH 21.607 19.741 10.804 54.7 1.003 9.3 WT 5.441 S.025 2.289 45.6 260 11.4 MWM 619 637 397 62.3 14 3.5 MWH 3.818 3,677 1,593 43.3 125 7.8 HWT 4,611 4.267 1.824 42.7 201 11.0 FWM 1,366 1.170 431 36.8 7 1.6 FWH 1.798 1.403 514 36.6 26 5.0 FWT 2.225 1.713 956 55.8 60 6.2 Source: MOEC B. Private Secondary Education 3.21 The poor quality of government-aided schools has pushed some parents to look for alternative schooling opportumities. PBS schools offer a much higher quality, serving children primarily from the upper echelons of Nepalese society. Even though PBS schools provide some fteeships to "poor" students (about 2.5% of the total secondary enrollment in these schools), most of these "poor" students are from the relatively poor families in Kahmandu Valley and other urban areas and are not the "real" poor in the Nepalese context. In addition, as the current level of government expenditure on lower-secondary and secondary education is insufficient to provide enough government-aided schools to accommodate all students, community schools have emerged to meet the shortage in government-aided schools. PBS schools have also a role, albeit small, in meeting this shortage. 3.22 Private Enrollments Table 3.7 shows secondary enrollments for the period 1989-91. For Grades 6-10, private schools accounted for 19.0%, 20.5%, and 21.7% respectively of total enrollment in this period. Private enrollment increased at a faster rate than government enrollment so that the private share of total enrollment in Grades 6-10 has been increasing in recent years. However, the private share varied significantly between lower-secondary and secondary grades: it was about 11% for both Grade 6 and Grade 7, but it increased sharply to about 30% iM Grade 8. It averaged 29.4% in Grade 9 and 26.5% in Grade 10. In other words, private education has a much larger presence at the secondary level dtan in the lower-secondary level.  - 42 - 3.23 Private enrollments are distributed very unevenly across the 16 regions. In particular, private enrollment is concentrated in the Kathmandu Valley area (see Table 3.8). In terms of development region, private-school students are mostly found in the eastern, central, and western regions. In general, enrollments in goverunent-aided schools have a similar geographical distribution to that for PBS and community schools enrollment, reflecting the underlying geographical distribution of school-going children. The major difference is that goverunent enrollment is not as concentrated in the Kathmandu Valley area; this area has only 8.4% of government enrollment compared to 25% of private enrollment. PBS schools have less than one third of the total enrollment in private schools, accounting for 4-7% of the total enrollment in Grades 6-10. Table 3.7: Student Enrofiment In Grades 6-10, 19991 1939 1 990 1991 _ Grade 6 All 174,339 183.593 208,749 Private 18.620 20,192 23.102 X Private 10.68 10.99 11.0 Grade 7 All 150.898 160,545 169.729 Private 15,681 17.083 19,392 X Private 10.39 10.64 11.4 Grade 8 All 125,793 133.188 152,344 Private 37.693 42.845 50,463 X Private 29.96 32.16 33.1 Grade 9 All 110.018 119.365 131.048 Private 29,810 35.105 42.732 i Private 27.09 29.40 32.6 Grade 10 All 102.968 111.972 111.938 Private 24,346 29.997 32.603 X Private 23.64 26.78 29.1 Grade 6.10 All 664.016 708.663 773,808 Private 126,150 145.222 168.392 X Private 18.99 20.49 21.7 Source: Enrollment data from Ministry of Education and Culture. Nepal.  - 43 - Table 3.8: Private Secondary Education EnroDment By Region And Zone, 1991 Mountaln Hill Teral Valley Sub-Total A. Enrollment Eastern 2.323 8,218 27.042 37.583 Central 2.356 7,700 13.797 42,599 66,452 Western 27 35.393 10.896 46.316 Mid-Western 170 3,916 7,040 11.126 Far Western 994 1.106 4,715 6.815 Sub-Total 5.870 66,333 63.490 42.599 168,292 (Total) B. Percentage Distribut1on Eastern 1.38 4.89 15.56 21.83 Central 1.40 4.58 8.21 25.35 39.54 Western 0.02 21.00 6.48 27.50 Mid-Western 0.10 2.33 4.19 6.62 Far Western 0.59 0.66 3.26 4.51 Sub-Total 3.49 33.46 37.70 25.35 100.00 (Total) Source: Enrollment data from Ministry of Education and Culture. Nepal. 3.24 In Nepal, Grades 6-10 can be found in different schools offering different grade levels (Grades 1-6, 1-7, 14, 1-9, 1-10, 4-10, 6-10, and 8-10). MOEC has recently estimated the number of schools for each of the three types of schools. In 1991, among schools with one or more grades in 6- 10, 2,695 (66.1%) were government-aided schools, 293 (7.2%) were PBS schools, and 1,089 (26.7%) were community schools. Thus 79% of the private schools were comrmunity schools. In 1992, PBSO identified 314 PBS schools with Grades 6-10 in the country. Over half of the schools were located in the Katmandu Valley alone; no such schools were found in the mountain zones and very few schools were located in the mid-western and far-western regions. 3.25 Teahers. The distribution of teachers in private schools is quite different from that for government-aided schools. For both the lower-secondary and secondary levels, govermnent-aided shools have a much higher percentage of trained teachers. On the other hand, private schools have a higher percentage of teachers with education qualifications above the miimum ones. At the same time, private schools also have a higher percentage of teachers with educaaion qualifications below the minimum ones. Available data are inconclusive with respect to the relative teacher quality between private schools and government-aided schools. 3.26 Revemne and Expenditure of PBS Schools, Up to now, very little information was known about PBS schools in Nepal. As part of the present study, a survey was conducted in 1992 of 75 secondary PBS schools. The data collection was undertaken by representatives from the national PBSO office and its affiliated district offices. The 75 schools represent about one-quarter of the total nmmber of PBS schools with Grades 6-10. The sampling was based on a geographical distnbution of  -44 - PBS schools with Grades 6-10 by zone and tegion; the distribution of the sample generally resembles dtat of the national sample space." 3.27 Table 3.9 shows the average revenue of non-boarding and boarding PBS schools in the survey. Obviously, the revenue of a school depends on its enrollment and fees, For a non-boarding PBS school, the revenue comes almost exclusively from school fees (96% of total). For boarding PBS schools, revenue comes mostly from school fees (55%) and boarding fees (43%). The other sources bring in very little revenue. Table 3.9: Sources Of Revenue For Grades 6-10 In Private And Boarding Schools, 1991 PBS SchOolS Non-Boardina Boarding Average revenue per school (NRs.) 631.562 1.099.968 X Distribution by Source: Fees 96.4 55.3 Transportation 2.4 1.4 asits 0.8 0.5 Others 0.4 0.2 Boarding 42.6 Total 100.0 100.0 Source: Survey of PBS Schools 3.28 In addition to tuition fee, secondary PBS schools collect about a dozen other school fees ftom their students. The amounts and the number of other school fees vary by school. Table 3.10 shows how much a student, on average, has to pay in each of the 14 fee categories. For a non- boarding satdent, the total annual fee is 4,251 rupees (1992), and tuition fee accounts for two-thrds of the total. In a boarding school, the total boarding fee is as high as 10 times of the total non- boading fee. 3.29 The fees charged by PBS schools are high compared to those in other schools.38 Table 3.11 shows that, in 1992, the total (non-boarding) fee for the average PBS student is about five t:- ies that for a student in a government-aided school or a community-school student. It is instructive to note that a university student pays only one-fourth of the fee of a secondary student in a PBS school. ' I The survey instrument was designed and field-tested by a local consulant and a representative from PBSO. Data were colDected to allow an estimation of the revenue and expenditre of secondary PBS schools. Given a lImitaton in time, the question of access to school records, and the physical difficulty of reaching some of these schools, no effort was made to randomly select a number of surveyed schools to check the accuracy of the reported data. In particular, one canmt detennine the degree of under-reporting of school revenue or over-reporting of school expenditre. Neverheless, the results are generally consistent with one another so that they probably give the right 'order of magnitude* for revenue and expenditure in PBS schools. Bajracharya, R.B., A Renort on Private and Boardina Lower Secondarv and Secondary Schools in Nepal, Kathmandu, 1992. w To provide a rough comWarison, the school fees charged by government-aided schools and community schools were esimated from data obtained from school visits.  - 45 - Table 3.10: Average School Fees In Private And Boarding Schools 1991-92 Amount Per Year SNRs.1 TMDe of Fees 191 1992 Tuition 2,301 2,733 Admission a/ 79 90 Deposit a/ 71 179 Games 87 97 Library 52 59 First Aid 39 47 Poor Student Fund 10 12 Educational Materials 23 28 Laboratory 15 18 Maintenance 55 61 School Magazine 5 Examination 101 119 Stationery 3 Transportation b/ 700 800 Total for Non-Boarders 3.541 4,251 Boarding Fee c/ 34.764 40.951 Total for Boarders 38.305 45.202 a/ Prorated to obtain fee per year. l/ Estimated based on information supplied by the Private and Boarding Schools Organization. c/ Include room, food and other boarding items. Table 3.11: Comparison Of Fees, 1992 (Rupees Per Year) Tuition Other Total As of Fee Fees Fee PBS Total Secondary PBS Schools a/ 2.733 1.518 4.Z51 0U0 Secondary Government Schools b/ 600 140 740 17 Secondary Community Schools b7 640 250 890 21 Tribhuvan University: c/ Certificate Level (Grades 11-12) 500 500 1.000 24 Bachelors Level (Grades 13-14) 600 590 1.190 28 Masters Levels (Grades 15-16) 700 450 1.150 27 Sources: a/ From survey of PBS schools. E/ From visit of schools (based on a very small sample, large error possible). C/ From fee schedule of university. 3.30 Table 3.12 shows the average recurent expenditure of a PBS school (excluding boarding expenditues). It shows that personnel expenditures accounted for 53% of total recurent expenditure in 1991. For non-personnel expenditures, rent and transportation amounted to 27% of total recurret expenditure. It is interesting to note that, in 1991, the average school revenue was 631,562 rupees (Table 3.9) while the average recurrent expenditure was 514,447 rupees (see Table 3.12); the difference between the two figures would be a measure 6f the sum of the development expenditue and profit of the average PBS school. If no development expenditure had been made in 1991, the maximum profit would have been equal to 23% of the recurrent expenditure. In reality, the rate of profit will be somewhat lower since some PBS schools are likely to engage in some capital  - 46 - investment. But running a PBS school can be a very profitable and attractive "business" compared to otter alternatives (e.g., Nepalese banks pay 12-14% interest to PBS schools for their deposits). 3.31 The per-student recurrent expenditure of PBS schools was 3,113 rupees in 1991 and was about six times that of government-aided schools (542 rupees/student by the government) in 1990/911 Table 3.12: Average Recurrent Expenditure Per Private And Boarding School, 1991 (NRs. per year) tXDendlture ItemS Amount X Tota Personnel Expenditures: Salary. Teaching Staff 225,637 43.86 Salary. Non-Teaching Staff 34.927 6.79 Administrative Cost 10.448 2.03 Sub-Total 271.012 52.68 Non-Personnel Expenditures: Rent 45.377 8.82 Regular Maintenance 22.493 4.37 Stationery 13,683 2.66 Books 12.457 2.42 Examination 20.458 3.98 Educational Materials 8.3'8 1.62 Scholarships 7.524 1.46 Co-Curricular Activities 7,554 1.47 Transportation 96.593 18.78 Water 2.016 0.39 Electricity 4.107 0.80 Telephone 2.835 0.55 Sub-Total 243,435 47.32 Total Non-Boarding Expenditure 514.447 100.00 Per-Student Recurrent Expenditure 3.113 3.32 School fees are not the only direct costs of education for parents. Other direct costs for parents (known as "direct private costs of education") include spending on uniform and shoes, textbooks and reference books, writing pads and pencils and other similar items, transportation, and other schooling-related items. No survey was conducted to determine precisely the magnitude of these costs and their economic burden on families (defined as the ratio of total direct private cost to total household income). Teachers in a secondary PBS school in Kathmandu estimated that, in 1992, parents would spend about 1,500 rupees a year on uniform and shoes and other clothing, 500 rupees per year on textbooks and reference books in Grade 6 and up to 1,000 rupees in Grade 10, and about 1,100 rupees per year on school supplies. In other words, the sum of these other direct costs for parents (at least 3,100 to 3,600 rupees per year) would be at least as large as the sum of school fees. The total direct private cost of secondary schooling would be at least 7,500 to 8,000 rupees per year per child in 1992 in the Kathmandu area. Note that in 1991/1992, per-capita GDP of Nepal was about 7,650 rupees, very close to the direct private cost of secondary schooling. In Nepal, as it is in  - 47 - otber developing countries, parental expenditures on education constitute a significant proportion of the total cost of education." 3.33 The economic burden of direct private cost of secondary schooling in Nepal can be assessed as follows. According to a recent study, the per-capita income of the top 10% of Nepalese households in the urban areas ranges between 19,140 to 22,300 rupees.' Assuming a family size of 6 41 for these household, the household income would be 114,840 to 133,800 rupees. Thus, the direct private cost of secondary schooling would account for 6-7% of the income of these top urban households; it is clear that these households can afford a secondary education at least for some of their children. On the other hand, the average household income is estimated to be 24,960 rupees.4 The direct private cost of secondary schooling per child is equal to 32% of the average household income, a very heavy burden indeed (note that, because of the low level of income, a large percetage of household income has to be devoted to physical subsistence). For the poorest 10% of mral households. the average direct private cost of secondarv schoolin, would amount to about 95% of household income! Cross-national data show that households in low-income countries typically spend less than 5% of their income on education.43 3.34 Although no study has been conducted on the family backgrounds of students enrolled in secondary PBS schools, it can be inferred from the above discussion that such schools are affordable only to the top income/asset groups of Nepalese society. Discussion with Nepalese educators as well as the visit to PBS schools indicate that, as a rough approximation, PBS families consist mostly of three groups: government officials and industrialists/businessmen, professional and other technical workers, as well as individuals who own land in high-price areas (such as Kathmandu). 3.35 In 1992, the PBS schools in the survey provided an average of about 10 freeships (awards to students by which students do not have to pay any school fee) per school, or about 5% of the secondary student enrollment in these schools. About one-quarter of the freeships were given to students on a meritorious basis and another one-quarter to students who are children of the school staff. The remaining half of the freeships were given to poor and deprived children. According to PBSO, freeships to the poor are usually awarded in two ways, one based on recommendations from a committee in the local ward, and the other through direct application by students to the school. 3.36 Student Achievement. Available data definitely support the overwhelming superiority of PBS schools in the SLC examination. In 1991, the total passing rate for PBS schools was 79.1%, compared to 17.5% for, community schools and 22.4% for government schools. PBS schools also w Tsang, M. and Taoolam, W. (1992), The costs of Govermment and Private Primary Education in Thailand. Internadonal Journal of Educational Develow, 12 (3), 177-190. 4 Estimated from World Bank (1991), Nepal: Poverlv and nes, Table 2.1 (1992/92 prices), Washington, D.C. *u Op. ciL ' Computed ftom World Bank (1991), Neoal: Povery and Incomes, Washington, D.C. at Estmaed from World Bank (1990), World Develonment Roort, WashWngton, D.C.  - 48 - have the highest percentage of first division pass. The two types of private schools are radically different from each other in terms of performance. PBS schools perform much better than government-aided schools which in turn perform better than community schools. In fact, PBS schools have consistently performed well above the national average and that the top scorers have come almost exclusively from PBS schools. 3.37 A number of factors can be taken into account for understanding differences in student achievement among schools and between the sexes. First, the backgrounds of students in PBS schools are very different from those in the other two types of schools. PBS schools are urban schools; their high fees are affordable to only a small minority of households. Second, PBS schools have some degree of autonomy in school-management which is not available to government-aided schools. Two aspects of such autonomy are important: student selection, and personnel practices. PBS schools can have admissions tests to select their students; such a practice is especially common among the top PBS schools. PBS schools can select and fire their teachers; in fact PBS schools often fire their low- performing teachers or teachers who are consistently absent from their classes. In government-aided schools, teacher management is a major problem and many teachers are absent from their classes. Third, the large difference in SLC examination results is actually the accumulation of differences in educational opportunities in previous grades. A great majority of PBS schools offer classes from nursery and/or kindergarten to Grade 10. There is also a private sector in pre-primary education which feeds students into PBS schools. 3.38 Control and Incentives. Through the regulations specified in the various Amendments to the NESP, the govermment seeks both to control the operation of private schools and provide incentives for their development (a summary of the current regulations is given in Annex 3). The control-related regulations concern the issuance of permit and registration, minimum physical facilities, teacher pay, the school curriculum and examination, supervision and inspection, and school management. They are meant to ensure minimum quality in terms of education inputs, promote national unity through a common curriculum, and to protect the interests of pardcipants in private education. In particular, they require that private schools should: (1) meet certain conditions in order to obtain a permit, (2) provide certain minim*u physical facility, (3) follow the government curriculum and be subject to the SLC examination, and (4) have teachers whose qualifications and compensation are at least comparable to those of teachers in government-aided schools. They also specify the composition of the school management committee such that the government has a strong influence on the membership of the committee. 3.39 The incentive-related regulations specify conditions for stimulating the establishment of private schools. In particular, private schools are exempted from sales tax and customs duty on a number of education-related materials, equipment, and other items. Private schools do not have to pay house tax and their earnings will not be taxed. However, private schools will not receive grants from the government. 3.40 The enforcement of the current regulations is actually quite lax. Because of financial constraints, the government does not have the necessary personnel to conduct regular supervision or inspection and to determine whether or not private schools are complying with the regulations that concern physical facilities, and teacher qualification and compensation. School permits are issued not necessarily according to the specified conditions. Private schools complain that the goverment does not have a published list of tax-exempt education items and that the reguations are not comprehensive  - 49 - enough; uncerainties about the appropriate course of action governing prvate schools may encourage corruptive behavior among the concemed govermnent staff or officials. On the other hand, some PBS schools were reported to have abused their tax exempt privileges. These schools bought tax- exempt items and then sold them in the market at mark-up prices. 3.41 However, private secondary schools are registered with the government and they do follow the government curiculum closely, particularly because their students sit in the same SLC examination as government students, and only students from registered schools are allowed to take the examination. PBS schools usually adopt additional reference books from a list approved by MOEC. 3.42 PBSO has been discussing with MOEC two control-related issues. The first issue concerns the extent of autonomy of private schools. The management of a private school is undertaken by a school management committee. But the government has a large say in the composition of the nine-member committee. For example, the chiman of the committee is nominated by the concerned district education officer; and the officer (or his/her represetative) is also a member of the committee. Two other members of the committee are nominated by local government units. PBSO wants more control over the membership of the committee (nomination of the chairman and the majority of other members) so that school-related members have more decision- making power. It contends that since the government does not provide direct financia support to the school, the school should be given autonomy in its operation. 3.43 PBSO is also urging the government to provide additional incentives to private sector involvement in education. Its proposal concerns the ownership of private schools and the government's assistance in securing loans for construction of school building. PBSO maintains that if individuals (or groups of individuals) establish and invest their resources in private schools, they should be the owners; this practice is analogous to that of investment and ownership in the economic sector. The private poprie sch_ol is like a private firm. Without private ownership, PBSO asks, why would individuals invest in private schools? On the other hand, indhiduals, groups, and other non-profit organizations can operate non-profit schools for educational purposes; the annual surplus of such schools will be plowed back to the schools for further development. For these jinprfit schools, ownership will belong to a trust. 3.44 According to PBSO, 95% of the PBS schools that were established after 1980 are operated on rented property. The rented school buildings were constructed for residentia purposes, not for running a school. Some PBS schools are occasionally forced to move to another site when they cannot afford a large and unexpected increase in building rent. The lack of a permanen school building and uncerinty about rent increase create a sense of insecurity for private schools. Opponents to the PBSO argue that the school should be a community or government property. Education should not be a profit-making sector. Individuals cannot extract resources from the community (through charging large school fees) and claim such resources to be theirs. They also point out that many PBS schools are making substantil profits which can be acumulated for building constuction; they draw attention to some private schools with own buildings constructed that way. 3.45 The recent Education Act (Fiffth Amendment) indicates that the property of the school shall be considered as public property, not the property of any individual. Educational mle 120 also states that the ownership of a private school shall be with the concerned school 'as long as it is in smooth operation". In case the school is closed or not found in operation condition, the prperty of  - so- such school shall be considered as public property. This provision has renewed the debate and the PBSO has filed its case in the Supreme Court. In fact, the 1992 Education Regulations failed to classify private schools in terms of profit making and non-profit making trusts and therefore could not rolve the issue. C. Provision of Eauitable Educational Oppornmities 3.46 Promotion of Reponal Eguity. As shown above, one of the major challenges facing Neplese policymakers in the development of secondary education, is associated with the highly unequal educational opportunities for children from different backgounds. In order to improve equity across regions, the Government should give priority to remote and ruwal areas while providing asistance to community schools. As noted above, most of the conmmnity schools are located in economically advanced regions. These relatively better-off communities are anticipating that, under the free secondary education policy, already established community schools are likely to be converted into Government schools. The Government should, instead, give priority to remote and mral areas in this process. 3.47 In the early 1980s, the Government initiated a plan to establish model "quality schools" in regions, as well as a national school in the Katmandu Valley. Based on this policy, bfinnilkawha school was established as a national school and Gandaki Boarding school, in Kaski, as a regional school. Both schools are located in educationally advanced regions and, until recently both schools were boys-only schools. The Budhail School enrolls talented students from all over the country and provides some scholarships to promote equal opportmity of quality education. There is a need to establish such model secondary and higher secondary schools in backward areas where private secor involvement is non-existent. 3.48 Female teachers and teachers of critical subjects, serving in remote areas, should receive extra allowances. The Govermment has been providing Grants-in-aid to lower secondary and seconday schools in remote districts to meet 100% of teachers salaries. This policy has a positive impact on increasing the nmnber of qualified teachers in these districts. However, schools in remote disticts still lack qualified teachers in critical subjects such as English, Science and Mathematics. Female teachers are also scarce in remote areas. 3.49 Tnbhuvan University has recently proposed a policy of reserving 25% of the seats at the Certificate Level programs in its best campuses and in the technical institues, to students from the five development regions on an equal basis. The proposed policy may not contribute to reduce regional disparities as it treats equally aU regions. From an equty point of view, it would be sppropriate to reserve 25% of seats to students from backward regions only, or preferentially. Also, the University should set the requirement that students seekig admission to these "reserved seats" should have studied and completed their secondary schooling in the remote and rural regions, so that there would not be a misuse of the reserved seats. 3.50 At present, educations facilities to study in Grades II and 12 are concentrted in Kathmandu Valley, Eastern Terai and Western Hill regions, which are considered by the Government as educatoally advanced regions. The Council of Higher Secondary Education requires that the schools deposit a fixed amount of money equivalent to NRs. 650,000 (approximately US$13,000 at the current exchange rate) to run Grades I I and 12. This policy could further increase regional  - 51 - disparities as it discourages the establishment of higher secondary schools in economic backward regions and rural and remote areas. The Council should carry out feasibility studies with a view of supporting the establishment of higher secondary schools with community participation in rural and economically poor areas. 3.51 Promotion of Gender Eguitv. The major task of reducing gender disparity is in primary education. However, one of the reasons for low female enrolment in secondary schools, especially in rural and backward areas, is also the lack of female teachers in secondary schools. The Government has recently adopted the policy of employing at least one female teacher in each primary school. This policy needs to be extended to the secondary schools, with additional support for the remote and poor areas. Similarly, the representation of ethnic groups and disadvantaged conmmunities as teachers in the secondary schools, is necessary to increase the participation of children from these communities. 3.52 Participation of the poor and disadvantaged groups, especially girls, is also hindered by the high opportunity cost to parents of schooling in general and secondary schooling in particular. The rigid school hours of 10 a.m. to 4 p.m. are not suitable for many of these children. Schools that open in the morning and in the evening for 2-3 hours are needed to attract these students to secondary schools. There are experiences in Nepal which show that if flexible arrangements are made, older age children can complete two grades in one year with schooling of only 2-3 hours daily. The Non- Formal Unit under the Basic and Primary Education Project (Cr. 2537-NEP) has been implementing an Out-of-School program (OSP) for 8-14 year old children deprived of schooling opportunities. It is expected that participants who complete OSP I (nine months) and OSP II (another nine months), will achieve the knowledge and skills required from a primary education graduate. The project staff are also trying to develop OSP HI, to provide income generating skills to OSP II graduates. 3.53 Another way to increase girls enrollment is to establish girls-only schools in areas where there is low enrollment of girls. There are also social barriers for parents to send the girls to co- educational schools, especially in some comm.unities in Terai. Separate girls schools are more important at the secondary school level, as the social barriers increase with the increase in the age of the girls. 3.54 MOEC has recently announced that about 40,000 girls students in all school levels will be provided scholarships of various kinds under the Government's Women Education Program. Close to 32,000 girls in primary school will receive NRs. 250 per annum. In lower secondary and secondary level, 8,000 girls students will get NRs. 70 (Grade 7) to NRs. 100 (Grade 10) as a monthly stipend for ten months. Scholarships are also provided to female students participating in teacher trainig programs. In the past, MOEC provided scholarships based on the number of girls enrolled. This failed to promote girls education in rural areas because there were scarcely any girls enrolled. The scholarship policy could be made more equitable by providing more scholarships to girls studying in remote areas. Studies have shown that parents find it difficult to provide school uniforms and stationery such as notebooks to girls. As a result, many girls do not want to attend s'hool. Support to parents to buy school uniforms and stationery is even more important in secondary than in primary level, as the female students are older and conscious of their poverty status. 3.55 It has been shown that female participation in Grades 11 and 12 is low, especially in technical subjects like Forestry and Engineering. Currently, Tribhuvan University has reserved 10% of the seats for female students in technical fields. The Istitute of Agriculture and Animal Science  - 52 - and Institute of Forestry have also set special requirements for females. Tribhuvan University intends to extend this policy to other institutes and faculties to promote female education. This is a positive step and the University should monitor the implementation of this policy. 3.56 T_e Role of the Private Sector. One way to mitigate inequality in secondary education is to enlist the assistance of PBS schools in the education of students from poor and remote backgrounds. PBS schools at the secondary level currently provide freeships to 5% of their students, some 600 students. But half of the freeships are not designated for poor students and the other half are not necessarily given to the poor students in the Nepalese context. In fact, some freeships may be given to children of influential people instead. 3.57 As part of its policy on private ownership, the government may require that a portion of the total freeships be designated for students from poor backgrounds and remote areas and that such freeships will be allocated by the government. The exact proportion is a matter of negotiation between the government aid PBS schools. The key requirements are: (i) that a higher percentage of freeships be designated for students from poor and remote backgrounds; and (ii) that the government has control over the allocation of the majority of such freeships. 3.58 In this regard, gender and regional differences in educational opportunities should also be seriously considered. Although freeships from girls schools will naturally go to female students, a conscious effort has to be made to ensure that poor female students get a fair share of the total number of freeships (at least 30% according to female enrollment, and more desirably 50%). Also, an effort has to be made to award freeships with boarding provision to students from remote areas. The survey of PBS schools shows that 14% of Grades 6-10 students are boarders. D. Recommendations 3.59 Recommendations that would improve the access to educational opportunities can be summarized as follows: (a) Promote regional equity by giving priority assistance to community schools in remote areas, increase incentives for qualified teachers to go and teach in remote areas, establish model schools, reserve Grades 11 and 12 "seats" for SLC pass students from backward regions and encourage the establishment of community higher secondary schools in rural and remote areas; (b) Promote gender equity by extending the primary teachers policy of "one female teacher per prinary school' to the secondary levels, establishing single sex schools where low enrollment of girls exist, improving the scholarships policy, providing uniforms and stationery and reserving Grades 11 and 12 "seats" for females who cannot get into higher education through the general procedures; and (c) Secure agreement with PBS schools on the total quantity and distribution of freeships to be provided by these schools. MOEC would coordinate the allocation of freeships on a national basis and would ensure that students from remote areas which do not have PBS schools will obtain freeships ftom PBS schools with boarding facilities. More than 600 students would be benefitting from this approach.  - 53 - Chapter IV: EXPENDITURE OPTIONS AND PRIORITIES A. Trends in Government Expenditures in Education 4.1 The govermnent education budget is part of the budget of the central government. Government budgets are divided into regular budgets and development budgets. The distinction between regular budgets and development budgets is not a meaningful one because development budgets contain many items which should have been put under the regular budgets (such as salaries, subsidies and transfers) under the conventional accounting framework.4 The budget is financed by tax and non-tax revenues of the government and by external aid to the government. Nepal has a centrized system for mobilizing public resources to support public (or government-aided) education. 4.2 The majority of the total allocation to secondary education is found in the regular budget. For the other subsectors, the total budgetary allocation is found almost entirely in the development budget. For example, allocations to primary education, higher education, and vocational/technical education, adult education, curriculum and textbook, teacher training, female education, scholarship and grants, and other items are put under the development budget. The development budget for primary education and higher education, however, contain allocations for both recurrent and capital items in these subsectors. 4.3 Table 4.1 gives the bud&etarv allocation by subsectors of education for the FY88-FY92 period. During this period, the budget for education (development and regular) increased from NRs. 1599.5 million to NRs. 3,205.0 million. Primary education had a steady increase in its share of the education budget, from 42.9% in FY88 to almost 50.0% in FY92. Secondary education's share remamied constant at about 13.7%. Higher (university) education dropped from 23.8% in FY88 to 21.8% in FY90 and then returned to a 28.1% level in FY92. Vocational and technical education and adult (non-formal) education maintained their small shares of the total education budget at about 1.7% and 0.4% respectively during the period. 44 World Bank (1992), Neall: Public Resource Management in a Resource-Scarce Economy, SAlCO.  - 54 - Table 4.1: Nepal Education Sector Budgets Allocations By Subsector (Development And Regular) (In NRs. Milion) Aver FY88 FY89 FY90 FY91 FY92 aFY88 Budget Allocat, X Allocat. S Allocat. X Allocat. 4 Allocat. X Allocat. X Primary 686.0 42.9 779.0 44.8 967.0 45.3 1.003.0 48.2 1.592.0 49.7 1,005.4 46.2 Secondary 219.0 13.7 235.0 13.5 289.0 13.5 293.0 14.1 443.0 13.8 295.8 13.7 Higher 380.0 23.8 381.0 21.9 466.0 21.8 485.0 23.3 902.0 28.1 522.8 23.8 Voc/Tech 29.0 1.8 32.0 1.8 33.0 1.5 34.0 1.6 54.0 1.7 36.4 1.7 Adult 4.5 0.3 8.0 0.5 8.0 0.4 8.0 0.4 20.0 0,6 9.7 0.4 Other 281.0 17.6 305.0 17.5 371.0 17.4 256.0 12.3 194.0 6.1 281.4 14.2 Total 1.599.5 100.0 1.740.0 100.0 2,134.0 100.0 2,079.0 100.0 3,205.0 100.0 2,151.5 100.0 Source: MOF 4.4 In view of the high illiteracy levels and the low enrollment rates the education sector is underfimded. Table 4.2 presents the total allocations and expenditures during the period FY88-FY92. It shows that the total education expenditures ranged between 2.0% to 2.3% (average 2.1 %) of GDP, a low level compared to the average 3.0% for Asian countries and about 4% for developing countries during the period FY88-FY92. The education expenditures also averaged close to 10% of the total govement expenditures during this period; this level is somewhat lower than the 12.5% average for Asian countries and much lower than the 15-16% average for developing countries.45 FY92 estmates indicate that total education expenditures increased to 11.4% of total Govemment expenditure. Table 4.2: Nepal Education Sector Total Allocations And Expendiures To Educaton (In NRs. Million) Average FY89 FY20 ----- Y9 9-2 cA IF r 8 8 . penAF d89 . Al1ot- pNd,ATloca. p , Alct. Ex Aend oCa Regular 271.2 262.0 286.0 275.0 398.0 311.8 350.0 392.1 471.0 472.8 355.2 342.7 Develop 1,328.3 1,227.0 1,454.0 1,248.7 1.736.0 1,474.6 1,729.0 1.708.1 2,734.0 2.330.4 1,796.3 1,597.8 Total 1,599.5 1,489.0 1,740.0 1.523.7 2.134.0 1,786.5 2.079.0 2,100.5 3,205.0 2,803.2 .151.5 1,940.6 Z Educ. Exp/ Total Exp 10.6 9.7 9.1 8.9 11.4 9.94 S Educ.Exp/ GOP 2.1 2.3 2.1 2.0 2.1 2.1 S Educ.Exp/ Educ. Alloc. 0.93 0.88 0.84 1.01 0.87 0.91 Note: Average rates of growth FY89-FY92 only. Source: MOF and Mission Estimates. 4' See Tan, J. and Mihgat A. (1989), Educaional Develooment in Asia: A Comoaative Study FgossimA on Cost and mncing Issues, Washington, D.C.: The World Bank .  - 55 - 4.5 Expenditure Shares. The percentage of total education budget allocated to p_rim education (46.2 %) during the period FY88-FY92 was somewhat lower than the average for Asian countries (48%) and was near the high end of the expenditure range (40-50%) for developing countries. About eighty six percent of the development budget for the primary subsector corresponds to primary teachers' salaries. 4.6 As has been pointed out, most of the total expenditure on secondar education is found in the regular account, not the development account (the reverse is true for most of the other sectors). During the FY88-FY92, an average 13.7% of total education budget was allocated to secondary education (Table 4.1). Information from an earlier study by the British Council 46 suggests that there has been a long-tern decline in the share of the total education expenditure devoted to secondaiy education. According to this study, the share averaged 22.3% between 1978 and 1980 and 16.9% between 1981 and 1985. The 13.7% level was significantly lower than the average of 31% for Asian countries in 1985.47 A total of about NRs. 1,500 million (in current prices) was spent on secondary education by the government during the past five years (FY88-FY92). Data from the Ministry of Finance indicate that about 88% was provided to secondary government-aided schools as salary support for teachers; 10% was spent on the ADB-fmnanced secondary science education project, directed at government-aided schools. 4.7 The decline in the shares of secondary and higher education subsectors seem to reflect an increased commitment to primary education development by the government over the past years. The long-term decline in the share for secondary education was also accompanied by a similar decline in the share for higher education until FY90. Allocations to the higher education subsector have increased during FY91 and FY92. However, development expenditures in higher education have decreased during the past four years. 4.8 Compared to other sectors, education receives relatively little external aid. For example, in 1990/91, external aid to education amounted to 12.5% of total education development expenditure, while the corresponding share was 32.9% for health, 45.3% for agriculture, and up to 86.3% for communications and 98.6% for power. Education has had a relatively low share of external aid over time. B. Filancing of Secondanr Education 4.9 Financine of Secondary Education. For secondary education as a whole, one can distinguish between four financing sources: government allocation to secondary education, external aid, parents and the local community. Government-aided schools and community schools are underfinanced in Nepal, especially those schools in the rural areas. Although about 78% of the students in Grades 6-10 attend Govemment-aided schools, the Government has a minor role in the financing of secondary education. The major external donor to-date for secondary educaion has been 4" British Council (1991) Nenal- Secondary Education Development with Special Reference to Science. Mathematcs and English, Kaftnandu. 47 Tsang, M. (1988) Cost Analysis and Policy Making in Education: A Review of Cost Studies in Education in Developing Countries, Review of Educadonal Research, 58 (2).  - 56 - the Asian Development Rank, through the implementation of a secondary science education project. Data from the Ministry of Finance indicates that the expenditure on this project was 43.2 NRs. million in 1988/89, 29.76 NRs. million in 1989/90, and 17.3 NRs. million in 1990/91, corresponding to 16.5%, 10.6%, and 4.8% of total expenditure on secondary education in the three years respectively. In other words, external aid averaged about 10.6% of total secondary expenditure during 1988-1991. 4.10 Parents are a significant fmancing source through their spending on their children' secondary schooling, such as expenditures on school fees (fees for tuition, games, library, educational matrials, stationery, examination, transportation, and others), textbooks, writing supplies, and uniforms and shoes. The amounts and types of school fees levied on students vary across the tmree types of secondary schools and among schools in each type. A survey of secondary PBS schools in 1992 indicates that the total school fee averages NRs. 4,251 (NRs. 2,733 for tuition fee, and NRs. 1,518 for other school fees) per year in 1992 for a non-boarding student and NRs. 45,202 for a boarding student in PBS schools (Table 3.10). School fees are used to finance all kinds of recurrent and capital expenditures in PBS schools. On the other hand, preliminary estimates put the total cost of the other parental spending (on textbooks, writing supplies, uniform, etc.) between NRs. 3,100 to NRs. 3,600 per year per student in 1992 for PBS schools. Thus the total direct p ivate cost of secondary schooling amounts to about NRs. 7,500 per year for a non-boarding student in PBS schools. 4.11 A survey of several government-aided and community schools in Kathmandu Valley and MOEC data yield some mgh estmates of school fees in this area. The total school fee is about NRs. 330 per student per year for Grade 6 studens and NRs. 880 per student per year for Grades 7- 10 students in govermment-aided schools. It is about NRs. 1,100 per year per student for Grades 6-10 students in community schools. According to MOEC data, textbooks in Grades 6-10 in these two types of schools cost parents an average of NRs. 120 per year per student in 1992. 4.12 The local cmmunty (including parents) is important for secondary education because it contributes (in cash and in kind) to the construction of government-aided and community schools. The community financing of secondary education is not a recent phenomenon; between 1950 and 1970, schools founded by the community grew rapidly, with little support from the government. But the 1971 government policy for a national system of education dramatically increased the financing and administrative role of the govermment in secondary education. Since 1980, the government has allowed communities to establish new schools with virtally no financial support from the government. No data exist on community expenditure on school construction.  - 57 - Table 4.3: National Expenditure On Secondary Education, 1990-91 (NRs. Millon) Tvoes of Secondary Schools Government-Aided Conminity PBS Subtotal Sources Government 360.0 .0 .0 360.0 (includes external aid) (26X) Parents 579.5 157.7 229.7 966.9 (direct private costs) (69X) Comminity 58.0 15.8 0.0 73.7 (5X) Subtotal 997.5 173.4 229.7 (71X) (12X) (17X) Total from all sources 1.400.6 Assumntions: National expenditures on secondary education in 1990/1991 were estimated as follows: (1) Govermment expenditure on govermnent-aided school was based on expenditure data reported by MOF. (2) Parental expenditure on govermnent-aided schools: this equals per-student direct private cost (DPC) times number of students in government aided schools. There were 608,097 such students in 1991 (data from MOEC). The per-student DPC was estimated to be NRs. 953 per year for 1990/1991; it was equal to .81 (90% times 90%) of the value NRs. 1,176 for 1992/93. The figure 90% was based on price changes in the 1988/89-1990191 period (from CBS data). All parental spending was assumed to be used on such schools. (3) Parental expenditure on community schools: this equals per-student DPC tines the number of students in community schools. The number of students was estimated to be 75% of total private enrollment in 1991 (168,053, from MOEC). Per-student DPC for 1990(91 was estimated to be NRs. 1,251 (which was calculated to be 819% of the value of NRs. 1,545 for 1992/93). All parental spending was assumed to be used on such schools. (4) Parental expenditure on PBS scihools: this equals per-student DPC times the number of students in PBS schools. The number of students (42,013) was estimated to be 25% of total private enrollment in 1991. Among these students, 14% (5,882) were boarding students and 86% (36,131) were non-boarding students. In 1990/91, DPC for non-boarding students averaged NRs. 3,187 and NRs. 34,475 for boarding students (as 90% of the corresponding figures of NRs. 3,541 and NRs. 38,305 in 1991/92 from survey of PBS schools). However, not all parental spending was used on PBS schools; school owners were assumed to pocket 15% of such spending as profit. Thus actual expenditure was estimated to be NRs. 2,709 for non-boarders and NRs. 29,303 for boarders. (5) Community contribution to government-aided schools (for physical facilities): this is assumed to be 10% of parenta spending on government-aided schools. (6) Community contribution to community schools (for physical facilities): this is assumed to be 10% of parental spending on comniunity schools. Source: MOF, MOEC, CBS, PBS Survey.  - 58 - 4.13 Table 4.3 provides rough estimnates of total national expenditure on secondary education by financial source and type of school in 1990/1991. It shows that total national expenditure amounted to about NRs. 1,400 million (or 1.4% of GDP). However, the Government's share (including external aid given to the Government) was only 26% (0.37% of GDP) while parents' share was 69% (0.98% of GDP) and the community share was 5% (0.071% of GDP). Thus private financing (parents and community) accounted for 74% of total national resources devoted to secondary education in 1990/1991, i.e., the Government only had a minor role in the financing of secondary education. C. Unit Costs 4.14 Per-Student Recurrent Cost of Secondary Education. In 1992 government-aided schools have a per-student total recurrent cost of NRs. 2,098, 43.9% of which was financed by the govermnent (see Annex 4: Unit Costs of Secondary Education in Nepal). The unit recurrent cost of community schools is NRs. 1,545 and is only 74% of that for government-aided schools. In contrast, PBS schools have a unit recurrent cost of NRs. 6,008 which is 2.86 times that of government-aided schools. PBS schools have more resources devoted to students in terms of both school-related resources and student-related resources. 4.15 It is important to understand the magnitude of public and private costs in the planning of secondary education. Even for government-aided schools, the government pavs for less than half of the total recurrent cost of secondary education. Poor parents may not be able to send their children to government-aided schools even if the government can sunply student places for their children. As pointed out before, PBS schools are accessible only to a amall minority of the secondary students who come primarily from the top echelons of Nepalese society. The relatively low per-student recurrent cost for community schools does not mean that they are efficient and inexpensive, it mostly reflects their low educational quality and the inability of the government to provide financial support to such schools. 4.16 Per-Student Capital Cost of Secondary Education. There is a lack of data on expenditure on capital inputs such as land, school buildings, furniture, equipment, laboratories, and other school facilities at the secondary level. There is also no information on the current stock of capital inputs to secondary education. There is no unit within MOEC that deals with the design and construction of secondary schools; and thus there is no estimate of standard capital cost per student place. Some estimates of the capital cost per student place for secondary education may be obtained by drawing upon the experience of some externally funded projects. School buildings in the Kathmandu area built with concrete typically cost US$20 per sq ft (1992). The construction cost would be US$30 per sq ft in hill areas and US$40 per sq ft in mountain areas if the same construction materials were used. However, for hill and mountain areas, the use of more locally available construction materials can reduce the construction cost to US$15-20 dollars per sq ft. Using a standard of 16 sq ft per student (excluding laboratories) in gross construction area (equivalent to 10 sq ft per student in actual construction area), the construction cost will be about US$320 per student in 1992. Furniture (desks and chairs) costs about US$15 per student. 4.17 Information from the Secondary Science Education Project indicates that a typical laboratory for demonstration purposes costs NRs. 800,000 in space, NRs. 50,000 in furniture, and NRs. 100,000 in equipment in 1992. The laboratory has a capacity of 30 students. Assuming that  - 59 - there is an average of one laboratory for every 150 secondary students (about one laboratory per school), then the laboratory cost is NRs. 6,333 per student. Excluding land, the total capital cost for buildings, furniture, and laboratory is about NRs. 23,100 per student place. Assuming that school buildings last for 30 years and other capital inputs last for five years, the annualized capital cost is NRs. 3,566 per student place per year (at a discount rate of 10%). 4.18 Per-Student Total Public Expenditure by Subsectors of Education. Another way to compare unit costs across levels of education is to consider per-student total (regular plus development) public expenditure by level. Table 4.4 gives per-student public expenditures on primary education, secondary education, and university education, as well as unit-cost ratios between these three sub-sectors, for the period 1988/89-1990/91. It shows that per-student government expenditure on secondary education averaged 1.5 times of that on primary education, but the per- student public expenditure ratio of university education to primary education averaged 12.4. The unit-cost ratio between university education and primary education was declining over time in this period. Table 4.4: Per-student Public Expenditure By Levels, 1988/89-1990t91 Average 1988/89 1989/90 1990/91 1988-90 A. Per-student Expenditure in Current Prices Public Primary Education 301 350 404 352 Government-Aided Secondary Education 485 498 592 525 University. Public Campuses 4.336 4.351 4,439 4.375 B. Ratio of Per-student Expenditure Secondary/Primary 1.6 1.4 1.5 1.5 University/Primary 14.4 12.4 11.0 12.4 Sources: Expenditure and enrollment data are from MOEC and HOF. D. Financing Strategies 4.19 Nepalese policymakers are faced with major challenges in the development of secondary education, most significantly: (i) improving the internal efficiency and the quality of inputs and process of secondary education so that a desired level of learning is attained, (ii) promoting equity in secondary education, and (iii) properly addressing and financing the growing demand for secondary education to meet social and production needs. In view of these challenges, the Government would need to formulate a set of strategies for financing current and planned developments in the secondary subsector. Financing options would involve both govermnent (including external resources through the government) and private resources. 4.20 In this regard, there is scope for reallocating existing Govenmnent resources, using them more efficiently, targeting Government programs at specific population groups and mobilizing additional resources. For example, as highlighted below, Government resources flowing to the free secondary education policy could be reallocated to programs to improve the quality and equity in the  - 60- subsector. Similarly, improvements in the quality of school inputs contributing to reduce repetitions and dropouts, or measures to achieve cost savings in the sector, such as the Higher Secondary Education reform, would allow for more efficient use of available resources. Greater equity in access to eduational opporlunities could be achieved by targeting programs at female, poor and minority ethnic groups. Mobilization of additional Government resources may involve increasing the share of education in total government expenditure or increasing the share of secondary education in government education expenditure. Financing approaches related to private resources would include increasing parental spending and community involvement in the secondary sector. The Free Secondary Education Policy 4.21 As we have seen, existing resources in the secondary sector are not efficiently utilized due to low internal efficiency and poor quality. Repetition and dropout rates are very high and educational quality, as proxied by student achievements in the School Leaving Certificate examination, is very low for government-aided schools and community schools. Education inputs are very inadequate for govermment-aided schools and community schools, as reflected by poor physical facilities, lack of instrucdonal materials, teaching aids, equipment, and laboratory, as well as a significant number of untrained teachers. In addition, there are highly unequal educational opportunities for children from different backgrounds. A large number of school-age children are not in secondary schools. Access to secondary education favors children living in urban areas and the more developed regions of the country. 4.22 Although secondary education suffers from these major problems of quality, efficiency and equity which are not being adequately addressed, the Government is further compounding these difficulties with the free secondary education Molicv in the face of continuing resource constraints. The Government is exempting secondary students in government-aided schools from paying tuition and providing additional resources to such schools to compensate for the foregone tuition revenue. The implementation of this policy started in 1992 and the government-aided schools are not charging tuition on Grades 6 and 7 students across Nepal. The additional government resources are being allocated mainly to salary subventions. 4.23 The policy creates a significant challenge to the Government to search for additional public resources. Estimates of financial requiremts of different scenarios for the development of secondary education shown in Annex 5 for the period 1992/93-2001/02 are high. They depend on a mmiber of factors such as the magnitude of per-student recurrent costs and per-student capital costs (reflecting some measpre of school quality), the government's decision regarding the implementation of the free secondary-education policy, projected enrollments of secondary education, and the share of projected enrollments among the three types of secondary schools. 4.24 Comparing the case where no free secondary education is presumed to prevail with other possible scenarios involving free secondary education, it is clear that if the Govermnent continues with the current practice of not charging tuition to Grades 6 and 7 students, the total recurrent cost of secondary education to the Government will be about NRs. 3,956 million in the Eighth Plan period and about NRs. 5,761 million in the Ninth Plan period. In other words, it will increase the Govermnent's financial commitment to the secondsa subsector by about 38 % (some US$54 million) in the tenear period to fully compensate government-aided schools for the loss in tuition revenue from Grades 6 and 7 students, as coMared to the case where no free secondarv education policy  - 61 - existed. Another possible scenario, a free-tuition policy for Grades 6-10 in government-aided schools -hased over the ten-vear period, would add 50% to the Government financial commitment to the secondary subsector. This case would require a very high average annual growth rate (in real terms) in Government expenditure on secondary education: 12.0% during 1993-1997 and 11.5% during 1998-2002. 4.25 The difficulties would be compounded if the Government honors its commitments in the primary and higher education subsectors. Projected expenditures in primary teachers' salaries and the basic and primary education program during the Eighth Plan period are close to NRs. 12 billion (1992 prices). Also, requirements for Tribhuvan University for the same period reach another NRs. 6 billion (1992 prices). A large proportion of these expenditures represents investments in quality improvements which will have important pay-offs in the medium- and long-term and without which the education system would continue to deteriorate and call for much larger investments in later years. 4.26 While this policy reduces the economic burden for poor families with children in secondary schools, it also reduces private financing of secondary education, even from families who can afford the tuition fee. The free secondary education policy should be discontinued. If this is not politically feasible, the scope of the policy should be limited and the pace of implementation should be slowed down as much as possible. Instead, the Government resources should be reallocated to improve the quality of government-aided schools (or even commnty schools), to promote equity in secondary education, or to provide additional student places in govermnent-aided schools. The Higher Secondarv Education Reform 4.27 Increased efficiency in the utilization of available resources could be achieved by interventions to improve the quality of school inputs, thereby reducing repetitions and dropouts as discussed in Chapter II. In view of the high per-student public expenditure in the university (Table 4.4), efficiency in the education sector would also be improved with measures that would achieve cost savings, such as the Higher Secondary Education reform. The reform is envisaged as extending by two years the secondary education offered in schools beyond the SLC in Grade 10 to "higher" secondary level in Grades 11 and 12. SLC pass students would continue to study within the school system rather than switch to university campuses which currently accommodate them. Concomitantly, the Certificate Level courses, which cater to the equivalent student cohorts, would be dropped from the campuses. 4.28 Backround. Certificate Level courses are run by Tribhuvan University in its own 65 campuses and in 133 of the affiliated, private campuses. Certificate Level students comprise 65% of total enrollments (Table 4.5). Though there are more than twice as many private campuses, they enroll only one quarter of students in higher education and one third of Certificate Level students.4 Many private campuses have very small enrollments (under 100 students), they are often close to one another in towns and tend to concentrate on offering courses in management (commerce), humanities and social sciences, but not science, nor bachelor and master degree programs. TU campuses generally enjoy a higher status than private ones and, within TU, some campuses enjoy a higher reputation for certain courses than others. a' Prahan, Panna Las, Policy Paper: Ewrollment Control in IU. unpublished ms. (n.d. 1992).  - 62 - Table 4.5: Tribhuvan University And Private Campuses Total And Certificate Level Enrollment 1989-1990 1990-1991 TOTAL CL S CL Total CL X CL TU 78.768 48.768 62 94.130 54,510 58 Private 22.638 20.094 89 29.656 25.785 87 Total 101,406 68.862 68 123,786 80.295 65 Source: Tribhuvan University 4.29 The Higher Secondary Education reform is mainly aimed at mitigating the impact of the large projected enrollment increases in Grades 11 and 12 on Tribhuvan University campuses. A number of other rationales for the reform have been suggested. For example, the addition of two years to secondary education in Grades 11 and 12 and upgraded bachelor degrees will enable Nepalese graduates to claim international comparability for their qualifications and increase their status and mobility. The South Asian Association for Regional Cooperaticn (SAARC) countries are the main reference group, especially India. Also, the rationale for enhancing the quality of education and the academic achievement of 'earners has been top priority amongst the objectives envisaged by the reform studies. Finally, the reform is related to concerns about youth migration and social unrest. Assuming that Grades 11 and 12 would be added to existing schools vwith Grade 10 and that there would not be stand-alone two-year Higher Secondary Schools, secondary teachers could provide continuity of attention to the learning needs of Grades 11 and 12 students with whom they are already familiar and discipline would be tighter in schools than on campuses. 4.30 The various rationales for implementing the restructuring of secondary and higher secondary education all have justification. However, an implementation plan with measurable targets needs to be put in place. Otherwise, rapid and large-scale changeovers could exacerbate the very quality, equity and efficiency issues that the reform is intended to remedy. The mere relabelling of Grades 11 and 12 education as secondary rather than higher education will not address the issues. Nor will this reform succeed if isolated from other financing and educational reforms needed in the secondary subsector. If the restructuring fails, potential unrest on the part of pupils and parents can be anticipated and the social costs may be high. 4.31 Can the secondarv subsector cope with the additional enrollments? It is clear that without more resources, private and public, to develop the higher secondary schools and to operate them effectively, a wholesale changeover is unlikely to lead to an improved quality of education in Grades 11 and 12, in terms of inputs, teaching-learning processes or learner outcomes. The Eighth Plan aims to establish HSE in 125 schools to catet to a projected enrollment of over 136,000. This would mean that by the end of the plan period in 1997, these schools would need about 4,500 qualified specialist teachers, the schools would each need to have on average enough capacity to enroll over 1,000 pupils and recruit something in the order of 40 teachers, assuming a pupil-teacher ratio of 30. 4.32 First and foremost is the issue of who is to teach in the HSE schools. Master degree holders are required under current plans for HSE. These teachers would already be qualified to teach at secondary level, and would be expected to have the necessary depth of subject matter specialist  - 63 - expertise and the potential to teach at a more advanced level. But in 1991 there were about 1,000 master degree holders (about 9%) teaching in Government-aided and private secondary schools (Grades 8-10). This means an overall secondary pupil-(master degree) teacher ratio of 395. Secondary level teaching-learning quality would be further weakened if these teachers were to 'teach up" to Grades 11 and 12 instead. The 9,252 bachelor degree holders in secondary schools have only the minimal subject specialist depth to teach secondary level and are not immediately a source of teachers for HSE. 4.33 Tribhuvan University has for the time being ruled out transferring its own teachers to schools, except on a voluntary basis. The university points out that a majority of its own teachers have only bachelor degrees and need upgrading. If Tribhuvan University teachers were to teach Grades 11-12, they would certainly need training in pedagogical methods and would need to conform to school timetables as school managements required. In fact, Tribhuvan University and private campus teachers already moonlight in secondary schools. They could presumably do the ,ame in HSE schools, where they are accessible to them. But this would mean that they would devote minimal time to their school responsibilities and the objective of providing a better supervised educational environment for HSE students may not be attained. Unemployed master degree holders may possibly be a source of recruitment into teaching at this level, if trained and offered incentives, and especially as jobs in govermment service are retrenched, but their availability in the areas where the HSE schools need to be developed is not known. Whatever pool of teachers is tapped, it is clear that subject matter and pedagogical training would be required and a workable deployment policy would be needed to ensure the upgraded personnel remained in the HSE schools to which they were assigned for a useful period of two to three years. 4.34 If, as Tribhuvan University envisages, the transfer of the Certificate Level were to release its facilities for bachelor programs, the secondary school system would need to take over the influx of some 98,000 Grades 11 and 12 students in 1993/94 (as per projections in Annex 6). There are few data, (except from a recent survey in an earthquake area in the east of the country), on whether government-aided, community and private schools have adequate capacity for current enrollments, let alone whether they are suitable for advanced education, with the essential libraries and science laboratories, electricity and water, as well as hostels and teachers' accommodation in remote areas. However, it is known that there is an inequitable distribution and shortage of adequate facilities, equipment and materials across school types and even within school districts. Double and triple shifts are a possibility and these occur already where university campuses utilize the early mormings in government-aided lower secondary and in community schools. But where there is no lighting, shifts would have to be accommodated in daytime and there is a risk that the school day would be reduced for all pupils using the schools affected. 4.35 If the HSE schools are to cater to the less advantaged populations, it is very likely that the community schools are the best located and would be intensively utilized for HSE. But these are the least well maintained and equipped of all school types. The poor state of their facilities, together with more intensive use, would adversely affect the teaching-learming process for all pupils and teachers who use the schools. If repetition were substantially reduced in lower grades, space would becomne available for some additional HSE enrollments. The Center for Educational Research, Innovation and Development (CERID) is currently conducting a secondary schools space survey, a teachers' availability study and a feeder schools survey which will provide data for the reform plan.  - 64 - 4.36 Management of the Reform Process. The CHSE is to implement the reforn program for HSE. It is a "semi-autonomous" body, like TU, responsible directly to the Minister of Education and is not an integral part of the structure of the MOEC. The current organizational setup is shown below (Table 4.6). Its proposed functions would be to affiliate HSE schools, develop curricula and textbooks and mage examinations. Table 4.6: CHSE ORGANIZATION STRUCTURE (REVISED) Minister Education, Culture and Social Welfare Hgher Secondary Education Assembly Council Member Secrea |Admiistration and Affiliation Curriculum and Textbook Examination Division Dvon Division Affilatn Committee Curriculum Committee Examination Committee Plost4illing Committee_______ __ ________ Adminitave Section Curriculum Section Examination Section Account Section Textbook Section RegItration and Records Affiliaton & Planing Section Total Staff: 28 Source: CHSE 4.37 Statts of Implementation. Several schools have been given permission by the CHSE to introduce HSE. In 1992, 36 schools were selected from among interested schools across the country to start Grades 11 and 12 during the daytime shift. Most are community schools and the regional distribution is fairly wide. As an interim measure the curriculum offered is modified from the Certificate Level course, adjusted to regional standards and with more topics and local content. Nearly half the schools are offering humanities and only four science. All schools except one are offering only one track. The main selection criterion for 31 of the schools was that they should deposit NRs. 400,000 the first year and NRs. 250,000 the second year in a fixed three-year bank deposit account in the name of the school. The deposit is to ensure teachers' salaries can be paid. Only the interest may be used. Other criteria were adequate facilities, including the additional classrooms needed, five qualified (Master's degree) teachers, 2-10 sets of prescribed textbooks per subject and an established School Management Committee. Five more schools were selected later which did not satisfy all criteria. Formal monitoring and evaluation of educational outcomes would need to be done in order to provide feedback into policy for expansion of the scheme. 4.38 Higher Secondary Edution Reform Costs Annex 6 introduces physical and financial projecions for a possible plan of the Higher Secondary Education Reform (or Phase-out/Phase-in Plan). There are four types of institutions which would need to participate in a plan for a phased  - 65 - changeover, the TU campuses, the private campuses, the community higher secondary schools and the PBS schools. Under the assumption that Tribhuvan University campuses will be completely ghase- out by the year 2002, projections of the number of students, schools and teachers are as follows: (a) Students: the number of students in higher secondary schools (commerce, humanites, science and education) will reach 166,700. (t) Schools: to enroll 166,700 students in Grades 11 and 12, 991 higher secondary schools will be required by the year 2002. The number of secondary schools projected for that year is 4,134. The distribution of the estimated higher secondary schools indicates that there will be 74 higher secondary schools in the Mountains, 426 in the Hills, 169 in the Kathnmandu Valley and 322 in the Terai. Based on the assumption that the PBS schools participate in the Higher Secondary Education reform program, the projection estimates that there will be 310 private higher secondary schools and 681 community higher secondary schools. The number of higher secondary schools with science programs would be 176, of which 79 will be private. Finally, the number of higher secondary schools by the end of the Eighth Plan (1996/97) is estimated at 419. (c) Teachers: 8,475 teachers will be required to teach Grades 11 and 12 in private (2,885 teachers) and community (5,590 teachers) higher secondary schools. The sources of teacher supply will be teacher transfers from Tribhuvan University, existing teachers with Master Level degrees in secondary schools, upgraded teachers through in-service programs and fresh entrants to the teacher profession. It is estimated that 1,817 Tribhuvan University teachers could be transferred to teach in higher secondary schools during 1992/93-2001/02. Finally, a total of 4,300 teachers will have to be trained to upgrade their qualifications during the ten-year period. 4.39 Financial projections (see Annex 6) indicate that the total cost of the Higher Secondary Education Reform for the 1992/93-2000/02 period would be NRs. 8.6 billion of which 73% would be met from Government grants. The reform would cost the Government a total of about NRs. 6.3 billion during the ten-year period. About half of this estimed cost (NRs. 3.1 billion) will be used for the improvement of physical facilities of community and private higher secondary schools. However, not all of these costs are incremental, since investments in additional facilities and improvements would also need to be made if the Certificate-level remain at Tribhuvan University. 4.40 Annex 6 compares the Govermment's regla that would be incurred during FY1993-FY2002 "with" and "without" the implementation of the higher secondary education reform. Assuming that in the "without" case 70% of the Certificate-Level students continue to enroll in Tribhuvan University and the renaining 30% in private campuses, the net regular costs to HMG would almost double, from about NRs. 120 million in 1992/93 to NRs. 235 million in 2001/02 in the absence of the reform. With the introduction of the higher secondary education reform, the regular costs to Govermnent would increase from about NRs. 153 million to NRs. 184 million over the same period. Thus while there would be an increased burden on the Government's budget in the initial years, once the reform is in place, it would result in significant savings in regular costs to the Government, e.g., about NRs. 51 million in 2001/02, which is equivalent to about 22% of the projected regular Government costs in the absence of the reform in that year.  - 66 - Increased Private Sector Role 4,41 As indicated in Chapter I, enrollments in secondary education will increase from about 800,000 in 1991/92 to about 1,560,000 in 2001/02, due to both demographic factors and increased participation in primary education. The government's resources to the education sector are highly limited and secondary education has a low priority in intra-sectoral allocation in education. At the same time, the quality of secondary education remains very low overall. Therefore, the private sector has an increased role to play in the development of secondary education in Nepal. 4.42 There are three prominent objectives in secondary education that concern the private sector: (1) improving the quality of private education; (2) stimulating private provision of secondary education; and (3) promoting equity in education. As examined in Chapter II, one of the key issues in the overall development of secondary education in Nepal is the low quality of the community schools (and of Government-aided schools). Chapter III explored the role of the private sector in general and in promoting equity. The discussion in this chapter will concentrate on the Government's role in stimulating the provision of private education in order to compensate for the low public investment. 4.43 The government's stimulation of private education may consist of two approaches: (1) providing incentives to the establishment and operation of private schools, and (2) reducing barriers to private education. In the first approach, three options may be considered: private ownership of private schools, assistance to private schools to secure loans for construction of school buildings, and indirect subsidies. The second approach may consist of streamlining the regulatory framework for private education. 4.44 Private ownership of private schools may take different forms, such as individual ownership, group ownership, or ownership under a non-profit oriented trust. Private schools may also be operated under different modes: proprietary, or non-profit makdng. Proponents of private ownership of private schools are putting forward two supportive arguments: (1) private production of education is likened to private production in the economic sector, individuals or groups that invest in a private school should have a claim on the ownership of the school, and (2) individuals or groups that have ownership of a school are more willing to invest resources in the school for the further development of the school. 4.45 The first argument is predicated on private ownership (pronrietary private schools) and it is consistent with the government's intended policy of privatization of economic production and reduction of subsidies to public enterprises. The profit of the proprietary school could be subjected to Government taxation. Idividuals, groups, and organizations who wish to operate private schools for education purposes could also register their schools as non-profit private schools. These schools have to plough back their surplus into their further development. Their tax-exempt status is meant to encourage private production motivated by gemune interest in education service. 4.46 Experience in other countries has shown that profit-motivated individuals, groups, and organizations may cheat by registering their schools as non-profit schools and benefiting themselves in less explicit ways, such as paying themselves excessively high salaries, buying school equipment and  - 67 - other items for personal uses, and employing their friends and relatives.' With strict regulations and strong enforcement, such practices may be reduced to some extent. But one must carefully assess the administrative and enforcement capacity of the government in terms of its effectiveness in dealing with this potential problem. 4.47 Profit-motivated individuals will more likely invest in their schools if they own their school. One should, however, recognize that whether or not they will actually do so will depend on the conditions of the private education 'market". Such individuals will only do so if they are driven by the forces of the market; in particular, when the market is more competitive in nature and there is an effective indicator (such as examination results) for assessing the performance of the proprietary schools. 4.48 One can distinguish between three types of private investment in private education in the Nepalese context. The first type is investment for meeting quantitative expansion (by opening up new private schools, and/or hiring more teachers and adding new classes). For profit-motivated operators, the key factor is the profit rate. Given the profitable nature of PBS schools today, there is substantal incentive to invest in quantitative expansion even without private ownership of private schools. Private ownership will add to this incentive. The limiting factor is not the private sector's willingness to supply, but parents' ability to pay. The second type is investment in school buildin.s. As duisacss below, private ownership will encourage private investment in school buildings. The third type is investment in school quality, such as expenditure on upgrading the teaching staff, instructional materials, teaching aids, and equipment. Here, private ownership is likely to encourage private investment on school quality to some extent, but it is doubtful that it is the determining factor. A relevant factor is the relative quality between PBS schools and other schools. Since govemment-aided schools and community schools are relatively poor, operators of PBS schools do not have to invest a lot in quality to make themselves look good to parens. Parents (who can afford high fees) have no choice but to send their children to PBS schools. Some investment of the third type may be encomuaged by promoting quality-based (instead of price-based) competition among PBS schools. For example, information on the performance of PBS schools in the SLC examination should be made more easily accessible to parents. 4.49 In sum, if the government continues to pursue the policy of economic and education privatization, the pressure for private ownership of private schools will continue to mount; and private ownership of such schools could be inevitable. Private ownership will have a facilitating effect on private investment in private education; however its effect will not be as strong as the proponents of private ownership think it will be. Other relevant factors that affect private investment are the profit rate, households' income/asset level, and the structure of the private education market. As seen in Chapter HI, given the profitable nature of PBS schools, serious attention should be given to indirect methods for redistributing part of the profit of private education to promote equity. 4.50 Loans to private school for school construction. As mentioned previously, the Private and Boarding Schools Organization has approached the government for loans to private schools for construction of school buildings. With respect to the objective of stimulating private education, it is at James, E.(1987). Public policies toward nrivate education. Washington, D.C.: Education and Traiing Series, Report No. EDT84, The World Bank.  - 68 - highly doubtful that there exists a significant relationship between school buildings and private enrollment. In the twelve years since 1980, in the absence of a govermnent loan program, PBS schools have increased rather rapidly to meet the demand of urban families and have performed very well compared to government schools. In fact, there are several reasons for not having a government loan program for school construction. First, the construction cost involved is large compared to available resources. For example, assuming an actual area of 10 sq ft per student (equivalent to a gross area of 16 sq ft per student) and a construction cost of US$20 per sq ft (MOEC estimate for Kathmandu and other urban areas), the total construction cost for 38,800 Grades 6-10 students in PBS schools will be equal to US$12.6 million or about NRs. 630 million (equivalent to 1.8 times the total government expenditure on secondary education in 1991). Second, a government loan program can present challenging administrative problems. A badly run program can exacerbate existing corruption, and a huge loss for the go;ernment. Third, experience in Nepal has shown that well nm PBS schools can accumulate enough surplus to construct their own buildings. Fourth, from an equity viewpoint, it is highly problematic for the government to lend money to education institutions that primarily serve children from the most advantaged families while the children in govenmment and conmmunity schools are receiving a low-quality education. And fifth, if PBS schools compare their operation to that in the private economic sector, then they should be subject to similar financing practices govmrning private enterprises. 4.51 Actually, the issue of private ownership is closely tied to the construction of school buildings. In 1991, PBS schools spent over NRs. 45,000 per school on rent, or 9% of their total recurrent expenditure (see Table 3.12). Some of these schools have complained about the fast rising rents charged by owners of school buildings. A barrier to investment in school buildings is uncertaint; about ownership of school buildings. If private ownership is granted, individuals and groups will more likely invest their resources in school construction. 4.52 There are other ways for the government to provide incentives for private production of education. For example, the government may consider providing unused govermnent land at below- market prices for constructing a new school. The government may even consider a lower land price for non-profit schools (e.g., 25% of market value for non-profit schools and 50% for proprietary schools). And for community schools, the government may provide free land for school construction. In general, community schools and non-profit private schools may receive more favorable indirect subsidies from the government than proprietary schools. 4.53 Despite abuses by some private schools, the tax exemption on education items purchased by private schools should be continued. Tax exemption reduces the total cost of operating a school and encourages expenditure on quality-related inputs. Sanctions can be imposed on those schools which are found guilty of profiting from exempted items. 4.54 The second approach to the stimulation of private education consists in improving the reaulatory framework for private education. Within a basic framework agreeable to both the govermnent and the private sector, excessive control should be avoided; but rules and regulations governing private education should be explicit and comprehensive. From a policy viewpoint, there is a dilemma in exercising control over private education. On the one hand, certain amount of control is desirable for ensuring quality, equity and protecting the interests of students and parents. On the other band, MOEC has an extremely limited capacity to enforce such control, and sucb control may unintentionally lead to more corruption. It is not surprising to find that, in some countries, formal  - 69 - rules exist that control certain aspects of private education while the government has been lax in enforcing these rules. Education Expenditure Requirements 4.55 The level of education expenditures that would be needed during the Eighth Five-year Plan will be substantial. A large proportion of these expenditures represents investments in quality improvements which will have important pay-offs in the medium and long term, and without which the education system would continue to deteriorate and call for much larger investments in later years. For example, the sustainability of recent efforts and achievements towards primary education goals need to be ensured. In this regard, the Goverunent is committed to the Basic and Primary Education Project which, added to the primary teachers' salaries, represents virtually the complete primary education program. In higher education, Tribhuvan University is also involved in policy changes which could bring about significart savings in budgetary support for the sub-sector. 4.56 Tentative estimates of the education sector expenditures given in Table 4.7 below provide a sense of the magnitude of the resources that are needed for the sector. In the case of secondary education, the estimates are based on assumptions of continuation of the current free secondary education policy for Grades 6 and 7 and the beginning of the Higher Secondary Education reform in FY94. According to these estimates, total public spending on education will need to grow by an average 10% per year during the plan period. Table 4.7: NEPAL - Estimates Of Education Public Expenditures (NRs. miUlion) FY93 FY94 FY95 FY96 FY97 FY93 97 Total Education Sector 4,051 4.614 5.175 5.535 5.900 25,275 (rate of growth) 13.9X 12.2X 7.0$ 7.0X of which: Primary Education/a 1.821 2.056 2,291 2.527 2.870 11.565 Secondary Educatli/fb 610 661 837 900 948 3.956 Higher Secondary Education/c 335 552 647 657 2.191 Higher Education/d 1.336 1,256 1.164 1.103 1.039 5.898 Other (VTE. etc.37e 284 306 331 358 386 1,665 /a Includes teachers' salaries 7 Assumes current Government policy of no tuition for Grades 6 and 7. As Per Annex 6 projections. EFYP requirements for Tribhuvan University. Growing at 8%. 4.57 Although the Government has taken some steps to increase education's share in sectoral expenditures in the early 1990s, e.g. education's share increased from 9.8% of total Govemment spending in the late 1980s to 13.6% in FY93, it is doubtful that it can continue to do so at the rate required by all sector objectives. In fact, the sector allocation under the Eigbth Plan (NRs. 17,290 million) only allows for an 8 percent real increase per annum. Given this resource situation, the Govermnent will need to select the combination of programs within secondary education which will  - 70 - best contribute to improving the quality of government-aided schools (and commnunity schools), promoting equity and financing the growing demand for secondary places. 4.58 The Government needs to confront some hard choices in the secondary education subsector. If fully implemented, the free secondary education policy will exacerbate the resource shortage even further, neither allowing for the reform in the higher secondary grades to proceed, nor improving the quality of secondary education. Even if the free secondary education policy continues to be implemented in Grades 6 and 7 only, the higher secondary education reform will need to proceed at a slower pace. The Government will need to review the free secondary education policy sulostantially however, if it intends to support the proposed improvements in learning achievements and the quality of schools and to promote more equitable opportunities for the secondary school age population. E. Recommendations 4.59 All major issues of low internal efficiency, poor quality, iniequitable educational opportunities and expanding demand have direct and indirect implications on key decisions regarding the mobilization, allocation and utilization of education resources. Key recommendations on expenditures in secondary education can be summarized as follous: (a) Discontinue the free secondary-education policy. If this is not politically feasible, limit the scope and slow the pace of implementation as much as possible. Consider reallocating Government resources to improve the quality of government-aided schools and community schools, to promote equity in secondary education, or to provide additional student places in government-aided schools. (b) Introduce the Higher Secondary Education Reform with the help of a Master Plan and in the context of a national plan for secondary education development. Ensure adequate contributions in terms of teachers and facilities from Tribhuvan University, increased cost recovery from the higher secondary students and a plan based on the results of the present introductory phase. (c) The projected increase in secondary enrollments has to be accommodated by both the government and private sectors, with the private sector playing a larger role over time. The provision of private secondary education should be stimulated by granting private ownership of private schools, providing indirect subsidies, and streamlining regulations. The Govermnent should allow private ownership of private schools, distinguishing between proprietary schools and non-profit schools. Giving loans to private schools for school construction is not recomnended; the granting of private ownership should encourage individuals, groups, and non- profit organizations to participate in private education. (d) The establishment of community schools should be encouraged and a sense of community ownership of such schools should be promoted. Providing indirect subsidies (such as free land and tax exemption on education items) and increasing community control of the SMC should be encouraged. If additional Government resources are available, tying direct assistance to some measure of school quality  - 71 - or outcome (such as teacher atendance or time on task and improvements in SLC results) is recommended. (e) The sector allocation under the Eighth Plan (NRs. 17,290 million) allows for an 8 percent real increase per anm. Given this resource situation, the Government will need to select the combination of programs within secondary education which will best contribute to improving the quality of government-aided schools (and community schools), promoting equity and financing the growing demand for secondary places. In this context, a review of the free secondary education policy '!iould be the priority choice. Savings could then be allocated to the quality and equity improvements recomnended above. Initial reforms in the higher secondary grades should proceed concurrently.  - 72 - ANNEXES Annex 1 NEPAL - Enrollment Projections Annex 2 Secondary Education Cohort Reconstruction (Grades 6-10) Annex 3 Regulations of Private Schools in Nepal Annex 4 Unit Costs of Secondary Education in Nepal Annex S Free Secondary Education Policy: Projected Financial Requirements, FY1993-FY2002 Annex 6 Physical and Financial Projections for the Phase-out/Phase-in Plan for Certificate Level Students at Tribhuvan University to the Higher Secondary Education System  - 73 - Annex I Page I of 20 NEPAL Enrollment Projections Projection Period The enrollment projection period covers the two national development plan periods of the Eighth Plan (FY1993-FY1997) and the Ninth Plan (FY1998-FY2002). A description of the assumptions used in the model (Table 7 of this Annex) follows: Phvsical Projections (Primary: Grades 1-5) The 1991 Population Census1 estimated a population growth rate of 2.1 % during the 1981-91 period, much lower than e 2.7% growth rate calculated for the 1971-81 period.2 The population projections are therefore based on the assumption that the population will grow at the rate of 2.6% for 1992/93-1996/97 and that improved family planning wil lower the rate to 2.5% for 1997/98-2001/02. The findings of a ten percent sample of the 1991 Census were used for age-group projections. The demographic bulge in the population aged 10 and below will not have an effect on the fertility rate or on school enrollment until the next century after the two plan periods. Rdm= eductafio enropments were projected because of their impact on secondary school enrollments. Table I provides the gross enrollment ratios for 1988/89 to 1990/91. Table I. l!dman Enrollment Ratos 1988/ 1988190 1990/91 Primary Znrollment('000) 2,s26 2,789 2,883 Males 1,651 1,785 1,809 Females 87s 1,004 1,074 Population (6-10) ('000) 2,586 2,654 2,723 Males 1,322 1,359 1,392 Females 1,264 1,297 1,331 Gross Zorolizent Ratio(GMR) (M) 98 105 106 Male. 125 132 130 Females 69 77 81 The gross enrollment ratio (GER) relates total enrollment at a given level of education to the population which, according to national regulations, should be enrolled at this level. The GER provides a useful indicator of available enrollment capacity as compared to the size of the relevant age group. The GER can exceed 100% because of repetition and because of admission of children below H MOG, Cu-v Bureauf cSta (199) POaat Cam - M991 (Advm Tabl), Vol: Nepal Kadmiad, Nepal. t The uaMrn wa tddia 1 d_e db dno were Ielatado way Comm woaer were rewardd wbich conlbted to over.amunW* in tke 1981 Caom, wbile Xr cmmWee usaab aq may heay u tDo umtu.amUq in f_ s 1991 Cus.  - 74 - Annex 1 Page 2 of 20 or above the official admission age. A reduction of repetition and admission of over- or under-age children will move GER closer to 100% By contrast, the net enrollment ratio (NER) includes only those pupils who are within the prescribed age for the level of education considered. It has 100% as its maximum value. The difference between the gross and net ratios for a given level is an indicator of the importance of under- and over-age pupils enrolled. In Nepal, data is not available on the age-specific school population, and therefore it is not possible to calculate the NER. However, it is possible to calculate the total GER, as well as the GER by gender. As reported by MOEC3, the GER for males has already exceeded 130% due to enrollment of over- and under-aged children and the result of high repetition, dropout and re-entry rates. The projections set a target for primary school GER for the year 2002, and then works backwards by changing the rates during the two plan periods. The projections were done for three scenarios, with different assumptions about the GER and the rates of declie in repetition and dropout: (i) No Improvement; (ii) Slow Improvement; and (iii) Improvement. The scenarios are presented in Table H. Table H. Scenarios with Different Assumptiops about GER and Repetition and Dronout Rates hnnn!rvmuet lnmprovemft mroeent 1. GER in year 2002 Males 133 12S 120 Females 90 100 110 2. Dropout rates 93-97 98-02 93-97 98-02 Grades 1-3 -3% -5% -5% -10% Grades 4-5 - -2% -4% -4% -8% Grades 6-7 - -1.5% -3% -3% -6% Grades 8-10 - -1% -2% -2% -4% Grades 11-12 - -0% -1% -1% -2% 3. Repetition Rates Grades 1-3 - -3% -5% -5s% -10% Grades 4-5 - -2% -4% -4% -8% Grades 6-7 - -1.5% -3% -3% -6% Grades 8-10 -1% -2% -2% -4% Grades 11-12 -0% -1% -1% -2% The first scenario (No Improvement) assumes the present trend will continue with 133% of GER for boys by the year 2002. However, the GER for girls will grow gradually to reach 90% by the year 2002. The second scc-ario (Slow Improvement) assumes the GER for boys will be 125% by 2002, while that for girls will be 100%. It also assumes gradual decline in repetition and dropout rates for Grades 1-3, Grades 4-5, Grades 6-7, Grades 8-10, and Grades 11-12.4 The - HMG, Miniry of Educadion (several yean) Educatoal Stadstics of Nenl, Kathmandu, Nepal. 41 Curent Ceificate Level sdents.  - 75 - Annex 1 Page 3 of 20 momentum of decline is assumed to be faster in the 1998-2002 period than in the 1993-1997 period due to the Government's commitment to basic and primary education. The third scenario (Improvement) assumes that the GER for boys will decline to 120 by 2002 and the ratio for girls wir reach 110 by 2002. It also assumes a steady decline in dropout and repetition rates for 1993-97, and a more rapid decline for 1998-02. Again, faster decline is expected in lower grades because of the Government's commitment to basic and primary education. The number of over- and under-age children would decline. Given the gross enrollment ratio for 2002 and the size of populadon aged 6-10, enrollment for the year 2002 by gender was calculated.5 The preliminary enrollment by grade for 1991 was provided by the MOEC. Based on the enrollment for 1991 and 2002, a constant geometric growth rate was used to project enrollment from 1993-2002. The projection was done for both males and females. Flow Model I Efficiny(flgyI) and-(Gik Estimation of the student flow requires usiLg promotion, repetition and dropout rates as system parameters. The MOEC has estimates of these rates for 1987/88, 1988/89, and 1989/90. Ihe 1989/90 estimates were available only for Grades 1-5. The 1990/91 estimates did not have information on four districts (Katbmandu, Morang, Kailali, and Banke). Because these rates fluctate from year to year and also because of incomplete information on the more recent years, a judgement was made after comparing the estimated rates for these years to arrive at the best estimates for use as base year information for 1991/92. These rates were also applied to 1989 and 1990 becmse of the incomplete information for these years. Gender-specific rates for the entire primary and secondary cycle were not available. Although the Staff Appraisal Report of IDA's Basic and Primary Education Project ( March 27, 1992) cited promotion, repetition and dropout rates separately for girls and boys, there was no information on these rates at the secondary level. Therefore, the same rates were applied to both males and females in the projection (Table III). Using these system parameters, the internal efficiency of the system was estimated for different years. 5 Ih fomula is GUR x Population - Eollment  - 76 - Amn I Page 4 of 20 Table m. MOEC Estinates of Repnttion & Dropout Rate Grades 1 2 3 4 5 7 2 1 Rmtltic 1987/88 .39 .18 .12 .13 .15 .09 .11 .10 .10 .19 1988/89 .49 .19 .14 .15 .16 .09 .11 .09 .10 .21 1989/90 .40 .20 .14 .1S . - - - - - 1990/91 .42 .19 .14 .14 .12 .09 .07 .08 .08 .21 Judgemant .40 .19 .13 .14 .14 .09 .11 .10 .10 .20 Promotion 1987/88 .38 .73 .80 .76 .62 .83 .73 .83 .82 0.0 1988/89 .40 .78 .85 .80 .65 .82 .78 .87 .86 0.0 1989/90 .38 .76 .84 .78 - - - - - 0.0 1990/91 .35 .71 .79 .76 .67 1.0 .88 .93 .88 0.0 Judgement .36 .75 .82 .78 .63 .82 .75 .85 .84 0.0 1987/88 .24 .06 .05 .08 .23 .09 .14 .05 .06 0.0 1988189 .11 .03 .01 .05 .19 .09 .11 .04 .04 0.0 1989/90 .22 .04 .02 .07 - - - - - 0.0 1990/91 .22 .08 .06 .08 .20 -.09 .05 -.1 .05 0.0 Judgement .24 .06 .05 .08 .23 .09 .14 .0S .06 0.0 The input-output ratios and efficiency rates result the same as those calculated from the recntutd cohort analysis (Annex 1). Secondary Education/Enrollment (Boysd an d.(Girls) The population growth rates of 2.6% for 1993-97 and 2.5% for 1998-2002 were used to project growth of the population of 6-year old children. Primary enrollment and Grade 1 enrollment for 1988/89, 1989/90 and 1990/91 were actual data. The new entrants in Grade I were obtained as residuals of Grade I enrollment less the repeaters from the previous year. The gross ratio of new entrants as a percentage of the six-year-old population was estimated to indicate how many children of under- and over-age had to be enrolled in Grade 1. This ratio will indicate the feasibility of achieving the primary gross enrollment ratio as targeted. Enrollment projections in Grades 2-10 are based on the promotion and repetition rates described above. The present systems parameters are assuned to take account of the new entrants in these grades. The promotion rate for Grade 10 is the SLC appear rate which was 62% in 1988/89, 90% in 1989/90, and 84% in 1990191.  - 77 - Annexc I Page 5 of 20 Higher Secondary Education Enrollment fBoys) and (Girls) Three types of students take/sit for the School Leaving Certificate (SLC) examination: (i) regular (those who take the exam for the first time), (ii) exempted (those who failed in all subjects in the previous years and retake the exam again) and (iii) compartmental (those who failed in less than two subjects in the previous year). Both the exempted and compartnental types have been aggregated into the exempted heading in the projection exercise. About 79% of those who failed in the previous year appeared as exempted and compartmental students in 1989/90. This rate was 86% for 1990/91. The pass rates of regular students for 1988/89 and 1989/90 were 44% and 48% respectively (Table IV). Due to the fact that in 1990/91, regular students' SLC pass rate was 24%, an assumption of 40% SLC pass rate was used as the basis for the projections(Mediunm scenario). From the three years' SLC appearance rate, an assumption of 80% school leaving rate is made under the same Medium scenario. Table IV. SLC Apeaamnce and Pass Rates 1988/89 1989/90 1990/91 Grade 10 Enrollment 102,968 111,972 112,125 Regular Appeared 64,166 100,382 94,534 % Appeared 62% 90% 84% Exempted Appeared 61,436 58,484 65,100 (One year lag) 79% 86% Total Appeared 125,602 158,866 159,634 Total Pass 51,232 83,403 53,200 Regular 28,319 48,656 23,200 Exempted 22,913 34,747 30,000 Pass Percentage 41% 52% 33% Regular 44% 48% 24% Exempted 37% 59% 46% Total Failed 74,370 75,463 106,434 Appeared (one year lag) 79% 86% The projection of enrollments in Grades 11 and 12 is based on three assumptions of high, medium, and low SLC appearance and pass rates. The scenarios are presented in Table V.  - 78 - Annex 1 Page 6 of 20 Table V. Mead_os of Biab. Medium and Low SLC Apearance and Pas Rates Hich Medium Low SLC Appearance rate Exempted 85 8o 75 SLC pass rate Regular 48 40 35 Exempted 60 45 35 The regular SLC appearance rate, however, depends on the dropout, repetition and promotion rates of Grade 10. The proportion of SLC-pass students who enrolled in Certificate Level courses (CL) in Tribhuvan University (TU) and private campuses was 79% in 1988/89, 78% in 1989/90, and 57% 1990/91. The projection under the Medium scenario assumes therefore that 70% of SLC-pass students will enroll in Grade II in higher secondary schools in the future. The projections under higher and Jew scenarios however, assume the enrollment rates of 80% and 55% respectively. Table VI presents the historical figures. Table VI. Enronmnt in Cerinte Lvel Courms in J and PrivaCamtuse 1987/88 1988/89 1989L90 199L191 SLC Pass 43,709 51,232 83,403 53,204 Fresh CL Students 39,247 34,734 40,217 47,878 TU 29,297 23,907 27,662 32,003 Private 9,950 10,827 12,555 1S,875 % Fresh Enrollment (one year lag) 79% 78% 57% Table VII shows the flow model used to project enrollments under the Slow Improvement Scenario. Table VIIl summarizes the projections of secondary enrollment (Grades 6- 10), lower secondary and secondary teachers and lower secondary and secondary schools by region.  Ta : NEPAL - ENRsOLLMENT fROJECWONS Sw ImPemm 8em.) PHSIICAL PROIRCTIONS (Pa*uayGrawdes 1-5) Year SS829 29990 90/91 91192 92193 93194 94(95 95196 96197 97198 98/99 99/00 00/01 01/02 93-97 98-02 1. PopmIMitk VW 17536 17992 18462 18942 19435 19940 2045 20990 21536 22074 22626 23192 23772 24366 2.60% 2.50% 2 FP (6-10 yr) 2586 2654 2723 2794 2866 2941 3017 3096 3176 3256 3337 3421 3506 3594 2.60