China - Basic Education in Poor and Minority Areas Project

Docume of The World Bank FOR OVICUL USE oNLY Report No. P-6375-CUA ' EDlRAlDW AND REVOMHEDATION co OF TIHE PRESIDENIT OF TME 2 W INTERATIONAL DEVELOPMENT ASSOCIATION Z" xTO THE < ; mECuTIVE DIRECTORS 0 ~~~~ON A PROPOSED CREDIT OF SDR 69.2 ICLLION TO THE PEOPLE'S RE1PUBLIC OF CHINA FOR A BASIC EDUCATION IN POOR AIND MINORITY AREAS PROJECT AUGUST 10, 1994 This document has a restricted dibution and may be usd by reetss only in the perfonmane of their official dutiest Is contents may not otherwise be disclosed witout Wodd bank autorizatio  CURRENCY EQ' VALENT: (As of March 10, 1994) Currency Name = Renminbi (RMB) Currency Unit = Yuan (Y) Y 1.00 = $0.11 $1.00 = Y8.7 ABBREVIATIONS AND ACRONYMS EDPP - Education Development in Poor Provinces Project EMIS - Educational Management Information Systen F .LO - Foreign Investment and Loan Office SEdC - State Education Commission GLOSSARY Province - Chma is divided into provinces, autonomous regions and municipaliies. In this report 'province' refers to any of these, as appropriate FISCAL YEAR January 1 - December 31 ACADIEMIC YEAR September 1 - August 31  FOR OFFICIAL USE ONLY CEINA BASIC EDUCATION IN POOR AND MINORITY AREAS PROJECT CREDIT AND PROJECT SUMMARY Bonrower. People's Republic of China Befik des: Ste Education Commison (SEdC) and six participadng provinces (Xinjiang, Iner Mongolia, Guangi, Jiangxi, Sichuan and probably Ningxia) Amout: SDR 69.2 milion ($100 million equivalent) Terms: Sundard IDA terms, with 35 years' maturity Flnacdng Pb Lma EQECgn ITa1 ($ million) Govnment of China: Provinces and counties 76.2 0.8 77.0 IDA 97.9 2.1 100.0 174.1 22 .7..Q Economic Rate of Retuh: Not applicable Poverty Category: Program of Targeted Intervention. This project is targeted at 5 million of China's poorer primary school children. Special programs of targeted intervention are included to benefit the poor and particularly girls. Staff Appraisal Report: Report No. 13026-C}A Map: IBRD No. 25954 Ts doen has a resticted distibuton and may be u._ b -ecipient ol in the pfm ftheir offical dutits contents not ofthi be d with.iut World Bank authorizt,on.  MEMORANDUM AND RECOMMENDATION OF THEENT OF THE INTERNATIONAL DEVELOPMENT ASSOCATION TO THE EXECUTIVE D)RECTORS ON A PROPOSED CREDIT -TO THE PEOPE'S R3PUIUC OF CINA FOR A BASIC EDUCA TION IN POOR AND MNORITY AREAS PROJECT 1.- I submit for your apprval the followiag memoradum and recommendation on a propd development creit to the People's Republic of China for SDR 69.2 mmion, the equivalent of $100 million, on standard IDA trm with a maturity of 35 years, to help finance the Basic Education in Poor and Mnority Areas Project. The Governmt of China would onlend approximately $98 million equivalent to the project provinces for 20 years, including a 5-year gre period, at a fixed annual interest rate of 1.2 percent. The provinces would bear the foreign exchange risk. Approximately $2 million would be used for a central component administered by the State Education Commission (SEdC). 2. Background. Compared with ote developing countries, China's cess in providing comprehensive basic education to its populaton has been remarkable. Enrollment rates in the first nine years of schooling are higher than most other lower income countries, with more than 95 percent of the 6-11 age cohort enrolled in primary school and over 60 percent of the 12-15 age cohort in lower secondary school. 3. These impressive summary statistics, however, conceal the disparity in education attainment among China's 1.185 billion inhabitants. While the goal of nine-year compulsory education is already achieved in most large cities and coastal areas, many poor and remote areas have not even reached universal primary education. The education system m these areas suffers from insufficient, dilapidated or dangerous classrooms and schools; high numbers of unqualified teachers; poor teaching materials; high dropout and repetition rates; unsatisfactory management; and difficult access. 4. Many of the poor and remote areas in China are inhabited by minority nationalites 1/ with economic and education levels lower than the national average. The average rural annual income per capita in state-supported poor minority counties is below Y 320 compared to the national average rural income of Y 784.21 According to a sample survey of 25 minority counties carried out by SEdC, fte gross enrolment rate of school age minority children is about twenty percentage points lower than the national mean, with the female enrollment rate being much lower. In addifion to the chaacteristics of education in poor areas, education of minority nationalities suffers from shortage in 1/ China has 55 minority nationalites toaling 91.2 milln people and constitng 8 percent of the populatia Areas inhabitd by these minoities occupy 64 percent of the entie couy. Uwere are 80 spoken I _ asnd over 30 wwntiog systems used by th minort natonalities Both are Stato Staddical Bureaw (SSB) figures for 1992, expressed in 1992 pries.  -2 - teachiag mates and adequatey trained teachers. -3ilingual educatton,/ tgrded as instrumental to promoting minority nationalities to advance to upper and postseondary education, also suffers from various shortcomings: -a shortoge of qualified teachers; unsatisfactory instctional materials; and insufficient attention and reseah in the pedagogical, linguistic, psychoogical and curriculum aspects of bilingual education. 5. A dispadrty also exists between the education of girls and boys. Although thie Chinese government has made significant progress in equalzing access to education fr boys and girls, high female dropout rates at the primary level and low female enollment at the secondary level continue to be difficult problems. Factors that contribute to these problems are related to (a) high direct and indirect costs of schooling; (b) a nonsupportive leaning environment; (c) limited access; and (d) low expectations for continuing education and employment. Somne of these problems cal be dealt with at the macro level, e.g., measures to address fee structures, expand access to higher levels of educaton, or modify labor ma.-ket structes. Others can be tackled within the specific sociocultural setting in which they arise as is the intent of the proposed project's innevation program. For example, expanding boarding facilities may be acceptable to some groups but not to others. Still other problems will have to be dealt with by changing the social environment within which education is offered, for instance through informaton campaigns and increased community involvement. This project will specifically advance female education by (a) maintaining a dialogue with educational officials at the Government, proveice and county levels on important macro issues (through the innovation progam-supported studis, project supesion, and national semis); (b) imprving the lening environment (through gender sensitive textbook development, teacher/administrative taining, a specidal program of supporting female principals, and experimnts with single- sex schools); (c) expanding access, espeay in the poorer and more remote rural areas (through such programs as distribution of free textbooks to girls); and (d) fostering innovation and experimentation to promote female education within a local context. 6. Lesons Larned Under Prevlous Bank Group Projects. China has two ongoing IDA-supported projects assisting poor provinces in their efforts to universalize basic education, Gansu Provincial Development Project-Education Component (Loan 2812/Credit 1793-CHA) and the Educational Development in Poor Provinces (EDPP) Project (Credit 2339-CHA). Implementation of these projects is pwceeding smoothly and experience gained with them has been used in the design of the proposed project. Leons learned have been that (a) national cordination of technical assistance, aining, coLection of educational and project indicators, and disseminaion of lessons leamed are necessary to achieve efficiencies of scale, countrywide coherence in the development and expression of education policy and the development of national standards; 0) projects are better designed and implemented when they concenae on fewer provinces; and (c) local capacity building is necessay t phn, monitor and direct project activities. Experience derived from earlier project also improved the poverty and minority targedng capacity of SEdC in this project. 3/ Bilnga educaion is urently employed by 24 minority nationalities.  -3 7. Ratonle for IDA liwolveImet. The prwosed leing operaton is conistent with the Country Asistance Strategy discussed by the Board on August 3,1993 which calls for priority in-the cial secrs to be given to the problems of the poore areas, including basic educatio of girls. Under the project, the Association would be deepening its support for China's efforts in improving basic educaion in poor and remote area m China, inchlng those inhated by minonity nationsaties. The poject would also be in line with IDA's report Cli. S=vegiesfbr Reducing Poveny In &e 1990 (Report No. 10409-CA, 1992) which identfiinvestment i human captal, in paricular targeted intevtion to the poor and vulnerable, as a key cumponent of the poverty alleviation efforts g to healthier and smller families, higher adoption rates of new agricultural technology, and increased access to altenative off-farm employment. The project also incorportes the Association's concern about improving the status of women in the development process by supporting targeted opeaions resr-rch activities and possible consequent interventions to incras girls' enrollments, esialy ' minority areas. 8. Prject Desig and Preparation. ihe proect uas bee designed to fiuter develop the Borrower's capacty to prep= and implement projects. Building on the xectr work which informed the design of the EDPP project as well as the current proposed project, SEdC, with IDA's assistance, has prepared six subprojects, one for each province. Five of the six subprojects have been fully rmviewed. The sixth subproject, Ningxia, has been preared by the provincial authorities with assistance from SEdC and the Assoation. IDA has done a prelminary review of the Nmgxia subproject; SEdC will carry out a full review acording to agreed cntena. The SEdC report will be reviewed by the Association. Tbis approach will be expanded and refined for the prepartion of psible future education projects. 9. Project Objectives. The project would (a) support the aainent of universal primary education and expsion of covrage of lower secondary education in poor and minority areas, and @) build stronger institutions responsible for education delivery. The project would contribute to the Government's poverty reductio efforts by focussing on education, and thus the income earning potential, of about 5 milion children in some of the poorer counties in China. The project will have a direct impact on approximately 40,000 schools, and will provide varyn lengths of training for approximately 135,000 teachers and education managers. 10. Dsrption. The project would comprise thre components. Under the bisiuaiona cponent the project would finance renovation, abilitation, and some new construction of primary and lower middle schools; furniture, instruc equipment and texts and other books; staff upgrding; and a pilot activity in rationalizing and strengthenng a small number of normal schools that train elementary school teachers. Technical assistace in this component relates directly to training claom teachers, school principals and local education admini to provide better instruction in and leadrhip of educational institutions at the provincial, county and village levels. 11. The mamageent imVrovment component will develop maagement capabilities for the education system at the cental, provincial and institutional levels  -4- through staff tain, e provision of equipment aid euprt evices. It wil indude three suboomponents: (a) the training of local education mangemneit au ies; (b) the tining of local project imlementaion authorifies; and (c) the development of an educaon information management system. The qualy enhawcem component would finance inovatons and other improvements by supporting a prognrm of self-generated acdon- odentod rarh activits and th deopment- of minority and biling book and textok preparation, production, publication and- distribution, as well as constuctiton of a minority educaton tWaining center, and eblishment of an Innovation Assement Group and a p.nel of experts for the project. The innovation progam will provide resources to facilitate research and eimion I a number of areas suh as: (a) improving education deliveq to poor and minority communities; and (b) working with individual schools and school prncipals, as well as county and provincial education bureaus, to oveome problems of girls' educaton, esecilly low initia; enrollment, high repetition rate, and low transition rates to lower secondary schools. This componet will also support national capacity building and the coordinaton of cean technical asistance activities. 12. The project is estimated to cost about $177 million. The povincial and county governments are exected to provide $77 million and IDA about $100 million (56 percent of total project cost). A breakdown of project cost and the financing plan are shown in Schedule A. Amounts and methods of p ent and disbursment, and the disbursement schedule are shown in Schedule B. A fimetable of key pojec pcessig events and the sts of Bank Group opeations id the country are preseted in Schedules C and D, respectively. A map is also attached. The Staff Appraisal Report, No. 13026- CHA, dated August 8, 1994, is being distributed sepaately. 13. Jpladon. SEdC will implement national level tning, foreign study tours - overseas study, auditing and reporting, and the innovation program. SEdC's Finance Department will be responsible for -the coordination of the project's innovation program while other national level activities will be coordinated by the Foreign Invesnt and Loan Office (FILO) aud o apprpriate SBdC techical dqartmts, using technical and administrativ procedures that are fil to the Assodaion and have proved atisftory in the pas ILP was formed in 1981 to implement the first University Development Proect (Loan 2021-CHA/redit 1167-CHA) and has exensive epeience in the technical aspects of project execution. The aspects of implementation devolved to p cial educational bureaus will include monitoring implementation progress, povincial-level staff trning, p ent of goods and works, and development of the EMIS at that level, with coeation of FILO and the Educational Management Information Center of SEdC. 14. - The provincial components have been stucrd as a sector investment opeaon, with provinces meetng agreed eligibility criteria Qarge poor and/or minority populations, high ucbnal needs) and wishing to paracipate in the prqect, being reqired to prr acceptabe Education Pams for inclusion in tfe project and enter into acceptable Educaion Prgam Implementation Ar with the Govemment. So far, Education Pgams for five ovin (Xinjiang, Inner bongolia, Guang,  . .~~~~~~~5 Jiangx and Sichuan) have been appoved and one for a sixth pwvince (Ningtia) is under preparadon. At the provincial level, project activities would be overseen by provinci FLOs, which are headed by the Vice Commissioners of the respective Prvncial Fducation s, and staffed with officials fa witi educaton panning and management, financial management and accounting, civil works and equipmient. A similar sucture has been rpeatd at the couuty level. the proncal Os win ovsee the activities of the county PLOs and arnge for necessary q ainng. This model has proven successful under the EDPP project. 15. Sutalnablity.The project will partially finace school-base activities att the villge, township, county and provincial levels, which .support the key naional educadon policy of achieving univesal nine-year education by the year 2000. The modeate level of IDA financing for the project (approximately 56 percent) and the annual provincial level of counterpart fimding as a raio of the 1992 provincial educational budgets (i.e., a modest 10.6 percent on average) increase both the chances for susainability and affordability of the proect activites. Provincial education budgets are set for 1995 and 1996 and are generally expected to go up af that period, which will decrease the percentage of counterpar fumding (which has been budgeted at fixed annual levels duing the project) as a part of the provincial budgets. Additionally, the source of provincia counewpart fimding is balanced and sustainable-on average p ately 27 percent from the county, 66 percent from the province alf of which comes from an education surtax) and 7 peet from the national level. Likwise, the poverty reduction focus of the project is centmal to the Government's recently announced seven-year plan tf elminate abject poverty by the year 2000, a plan that specifically aims at upgrading education and litr in backward and poor areas. Built into the project are mtenance costr for schools, classooms and equmepnt procured under the project, equipment purement, technical ssistance and trining to develop an EMIS system. One component of the project, the innovations program, specifically supports policy-focused research and expeiiments in areas of increased efficiency of school adminis . The tning of ximay 135,000 teachers and school manage builds and strengthens existing and new human resource capacity which will remain in place long after the end of the project. 16. Agreed Actions. Agreement was reached with the Government on (a) credit relending trms to the provinces; (b) guidelines for the appraisal of provmcial Education Prgms; (c) by December 1, annual submission to IDA of the proposed Innovatis Prgam for the coming year; (d) arangements for project oversight at the prvincial, prefectural and county levels; (e) indicators and procedures for project monitorn and evaluafion, including amnual submision to the Association by April 1 of the results of the Government's review of project iplementation and a mid-term review report by June 30, 1997; and (f) project auditing reqements. 17. The provinces would be required to (a) carry out annual Education Progam action plans, which would be previously submitted to and found satisfactory by IDA; (b) for nonprqect supporedc carry out satsf action plans desged to ensure that educational achievements in-these counties do not deteiorate durng proect implementtion, monitortheprogress of suchplansbasedon agreed iicat, and submit  -6- mid-term and fna reports an such monitoring to the Government and ll)A; c) -prepare annual Innovation Prgramresech actvities for government and IDA approval; and (d) ensur adequate projec monitrng at the couty level. 18. As conditions of credit effectiveness, the Government will (a) esablish a Miority Education Training Center under SEdC's a t with terms of refernce and saffing satsfatory to IDA; (b) provide IDA with completed Education Progim Iuplementation Agreements, acceptable to IDA, between the Government and at least five provinces; and (c) establish an Innovation Assessment Group with terms oC reference and staffing acceptable to IDA. 19. Environmental A ossment. No negative environmental impact from the project is foreseen. No resettlement will be involved in this project. 20. Benefts. The project is expected to benefit about 5 million of the poorest school children in some of China's poorer provinces. It will significantly expa basic education among the poor, espeay in the remote areas ihabited by minority nationalities. Provision of education to remote and rural areas not only helps to create opportunitiesfor rural development but also helps to provide the skills necessary for target groups to participate in the economic growth in township and urban centers. It would also improve school attendance of female students. Minority nationalities students will be better prepard to partcipate m Chinese schools in the upper and postsecondary levels. Furthermore, the project includes speific interventions designed to improve planning and management capacity of the Central, provincial and county governments to prepe and imnplement similar comprehensive projects and to replicate them in other parts of the country. The project will have a direct impact on about 5 million children in 111 counties and approximately 40,000 schools, and wil provide varying lengfts of trainng for approximately 135,000 teachers and education managers. 21. Risks. There are thre main risks in this project. First, the central, provincial and county officials may not be able to adequately oversee the implementation of the project activities. Cognizant of this risk, management training at aU three levels is an important activity of the project. Additionaly, lessons leamned from implementing the IDA-supported EDPP project will be included in the training of provincial and county level implementation units for this project. Implementation experience of the EDPP project and the strong provincial and county level work necessary to develop the current prject indicate that this risk is not excessive. Second, the provinces may not ensure that the poorest population benefits from improved access to and quality of basic education. To deal with this, the project will require provinces to carry out acceptable and monitorable action plans to ensure that educational achievements in nonproject poor counties will not deteriorate during the implementation of the project. Finally, the tight fiscal situation in partcipating provinces may result in insufficient counterpart funding to match IDA credit funds. To reduce this risk provincial authorities have committed themselves, after extensive discussion, to provide adequate countrpart funds, which are estimated on a reaistic basis. Furthermore, SEdC has indicated that, if necessary, it will allocate funds  -7- from special categories in its budget earmarked for education in mnoty and poor areas to the six prqject provinces to assist in providing for any possible counterpart sotas. 22. . R.mdal. I am sified tat the prpod redt would comply with the Articles of Agreement of the Association and recommend that the Executive Directo approve the proposed credit. Lewis T. Presion President Attachments Washington, D.C. August 10, 1994  CHINA BASIC EDUCATION IN POOR AND MIORITY AREAS PROJECT ESTIM1TED CosTS AND FIMANCING PLA-N - ~~~~~~(S million) LAXc Poreig Total Fal Project Cost Compor,t Insttutional Component 121.4 5.6 127.0 Management Improvement Component 0.3 0.4 0.7 Quality Enhancement Component 2.6 0.0 2.6 Ba Cse 124,,3 6, 130. Physicad contingencies 9.3 0.1 9.4 Price contingencies 37.2 0.1 37.3 Total iec Cost 1086 217. Imdncng Phm. Jovernment of China, Provinces and Counties 76.2 0.8 77.0 IDA 97.9 2.1 100.0 11 174,~~~~~~~M L2 1M7.  Page 1 -CW0 BASIC-EDUCATION IN POOR AND MINORITY AREAS PROJECT PROCUtMENNT AND DISBURSEMENTS Procurement Agets ($ million) Project element Pouettmh d ICB LCB Othrs Total A. Civil works - 108.0 24.0 132.0 (54.0) (11.4) (65.4) B. Goods - 25.4 5.7 31.1 (19.4) (4.9) (24.3) C. Technical assistance - - 11.8 11.8 's.2) (8.2) D. Innovations - ^ 2.1 2.1 (2.1) (2.1) I~tai - 13A I7 o & :73.4) 06.@ (OQ X) Note: (1) Figues in parenthesis are the amounts finced by IDA. (2) Others includes local shopping, force account, and consuling serces.  - 10S-HDE B Page 2 Disburseenuft IDAM Alocation erentage of expediture ($ million) to be financed civil works 61.0 50% Goods 22.7 100% of forein expeditures; 100% of local expenditures (ex- factory cost); 75% of local expenditures for other items procured locally Conultant serices 2.0 100% Training 7.7 100% of foreign expenditures and 70% of local expenditures Unallocated 6.6 1 ,lQIL Bankl 1997 1998 '19 .2 Annual 8.9 28.8 37.0 15.6 8.7 1.0 Cumuiative 8.9 37.7 74.7 90.3 99.0 100.0  * -11-