Malaysia - First and Second Primary and Secondary Education Sector Projects

Docuent of The World Bank FOR OFFMCIAL USE ONLY Report No. 13145 PROJECT COMPLETION REPORT MALAYSIA FIRST AND SECOND PRIMARY AND SECONDARY EDUCATION SECTOR PROJECTS (LOANS 2685-MA AND 2987-MA) .JUNE 14, 1994 Population and Human Resources Division Country Department I East Asia and Pacific Regional Office This document has a restricted distribution and may be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EOUIVALENTS (as of December 1992) Currency Unit - Malaysian Ringgit (M$) US$1 - M$2.51 M$1 - US$0.398 Average Annual Exchange Rates to US$1.00 1985 1986 1987 1988 1989 1990 1991 1922 M$ 2.48 2.58 2.52 2.62 2.71 2.71 2.75 2.58 FISCAL YEAR/SCHOOL YEAR January 1 - December 31 ACRONYMS AND ABBREVIATIONS CDC - Curriculum Development Center DEO - District Education Office DERC - District Education Resource Center (renamed Teachers' Activity Center) DSD - Development and Supplies Division (MOE) EPRD - Educational Planning and Research Division (MOE) EPU - Economic Planning Unit (Prime Minister's Department) ETD - Educational Technology Division GOM - Government of Malaysia IAB - Institute Aminuddin Baki (MOE) KBSM - Kurikulum Bersepadu Sekolah Menengah (Integrated Secondary School Curriculum) KBSR - Kurikulum Baru Sekolah Rendah (New Primary School Curriculum) MOE - Ministry of Education MOLM - Ministry of Labor and Manpower PGDE - Post Graduate Diploma in Education PIU - Project Implementation Unit PSESP - Primary and Secondary Education Sector Project PWD - Public Works Department RC - Resource Center SAR - Staff Appraisal Report SED - State Education Department SERC - State Education Resource Center SPM - Sijil Pelajaran Malaysia (Upper Secondary School Certificate) SRP - Sijil Rendah Pelajaran (Lower Secondary School Certificate) TED - Teacher Education Division TTC - Teacher Training College UPSR - Ujian Pencapaian Sekolah Rendah (Primary School Achievement Test) USM - Universiti Sains Malaysia (University of Science)  FOR OFFICuL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operatlons Evaluation June 14, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Malaysia First and Second Primary and Secondary Education Sector Projects (Loans 2685-MA and 2987-MA) Attached is the Project Completion Report on Malaysia--First and Second Primary and Secondary Education Sector Projects (Loans 2685-MA and 2987-MA) prepared by the East Asia and Pacific Regional Office. It constitutes a satisfactory account of project performance. Part II was prepared by the Borrower. While it is in broad agreement with the Bank's findings, it provides useful clarification and highlights the importance of Bank staff understanding the country context. These two projects constituted the first investment slices of the Govern- ment's 10-year general education development program (1980-85). Their objectives were quality improvements in primary and secondary education, better sectoral management, and a more even regional spread of educational resources. While the first Loan was closed with an 18-month delay, with 14 percent of the funds cancelled, the second was disbursed on time and fully. T'he outcomes of both projects are rated as satisfactory: the operations exceeded their quantitative targets and met most of their quality improvement objectives. Institutional development was substantial, despite occasional shortfalls. The sustainability of project benefits appears likely because of their modest impact on the budget. Covenant compliance was broadly satisfactory, with some instructive exceptions: belated submission of annual audit reports, failure to reduce primary class sizes and continued operation of numerous small, uneconomical schools. No audit is planned. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT MALAYSIA FIRST AND SECOND PRIMARY AND SECONDARY EDUCATION SECTOR PROJECTS (LOANS 2685-MA AND 2987-MA) TABLE OF CONTENTS Page No. PREFACE EVALUATION SUMMARY .................................................... i PART I. PROJECT REVIEW FROM THE BANK'S PERSPECTIVE Project Identity .......................................... 1 Project Background ........................................ 1 Project Objectives ........................................ 2 Project Components ........................................ 2 Project Design and Organization ........................... 3 Project Implementation .................................... 4 Major Results and Benefits of the Projects ................ 8 Project Sustainability .................................... 14 Bank's Performance ........................................ 15 Borrower's Performance .................................... 16 Findings and Lessons Learned .............................. 17 Project Relationship ...................................... 19 Consulting Services ....................................... 19 Project Documentation and Data ............................ 20 PART II. PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE Adequacy and Accuracy of Factual Information in Part III.. 21 Government's Comments on the Projects ..................... 21 Evaluation of Bank's Performance .......................... 22 Evaluation of the Borrower's Performance .................. 22 Major Lessons Learned ..................................... 22 Relationship with the Bank ................................ 23 This document has a rsicted distribution and may be used by recipients only in the performance of their |official duties. Its contents may not otherwise be disclosed without World Bank authorization.l  TABLE OF CONTENTS (cont.) Page No. PART III. STATISTICAL INFORMATION 3.1 Related Bank Loans .. 24 3.2A Project Timetable (Loan 2685-MA) . . 27 3.2B Project Timetable (Loan 2987-MA) . . 28 3.3A Estimated and Actual Disbursements (Loan 2685-MA).. 29 3.3B Estimated and Actual Disbursements (Loan 2987-MA).. 31 3.4A Project Implementation (Loan 2685-MA) . . 33 3.4B Project Implementation (Loan 2987-MA) . . 37 3.5A Project Costs (Loan 2685-MA) . . 39 3.5B Project Costs (Loan 2987-MA) . . 40 3.6A Project Financing (Loan 2685-MA) . . 41 3.6B Project Financing (Loan 2987-MA) . . 42 3.7 Project Results A. Benefits (Loans 2985-MA and 2987-MA) ........... 43 B. National Examination Results ................... 51 C. Studies (Loan 2985-MA) ......................... 52 3.8A Compliance with Loan Covenants (Loan 2685-MA) ...... 55 3.8B Compliance with Loan Covenants (Loan 2987-MA) ...... 58 3.9A Bank Missions (Loan 2685-MA) . . 61 3.9B Bank Missions (Loan 2987-MA) . . 64 3.10A Bank Staff Inputs (Loan 2685-MA) . . 66 3.10B Bank Staff Inputs (Loan 2987-MA) . . 66 fAVPS - IBRD Nos. A 19300R - A 1931n7 - A 19305R - A 19315R  PROJECT COMPLETION REPORT MALAYSIA FIRST AND SECOND PRIMARY AND SECONDARY EDUCATION SECTOR PROJECTS (LOANS 2685-MA AND 2987-MA) PREFACE This Project Completion Report (PCR) relates to the First and Second Primary and Secondary Education Sector Projects in Malaysia, for which Loans 2685-MA and 2987-MA in the amounts of US$127.0 million and US$58.8 million were approved on April 29, 1986 and August 2, 1988, respectively. Loan 2685-MA was closed on December 31,1992, 18 months behind schedule. At the Government's request, US$15.3 million had been cancelled on June 23, 1992. The final disbursement was made on April 15, 1993, and US$2.5 million of undisbursed funds was cancelled on September 29, 1993, the date on which the recovery of the Special Account and the refund of the remaining balance was made. Loan 2987-MA was closed on schedule on December 31, 1992 and was fully disbursed. The final disbursement was made on March 12, 1993. The PCR assesses the degree of success in implementing not only the project components but also the sectoral policy and strategies which constituted the agreed justification of both Projects. The PCR was jointly prepared by the Population and Human Resources Division, Country Department I, East Asia and Pacific Regional Office (Preface, Evaluation Summary, and Parts I and III) and the Borrower (Part II). The Borrower's comments on the Bank's perspective were taken into consideration in preparing the final version of Part I. The PCR is based, inter alia, on the Staff Appraisal Reports, the Development Loan Agreements and other legal documents, supervision reports, progress reports of the Borrower, project files of the Bank and the Borrower, interviews with Bank staff and discussions with Government officials during the Project Completion Missions which visited Malaysia in September 1992 and May 1993.   - iii - PROJECT COMPLETION REPORT MALAYSIA FIRST AND SECOND PRIMARY AND SECONDARY EDUCATION SECTOR PROJECTS (LOANS 2685-MA AND 2987-MA) EVALUATION SUMMARY Obiectives i. The First and Second Primary and Secondary Education Sector Projects (PSESPs) were the continuation of a chain of seven education projects, started in 1969, which had established a strong institutional base for sector development (para. 1.8). They constituted the first investment slices of the Government's 10-year general education development program (1986-95), considered as an integral part of the wider national socio-economic policy (para. 1.1). It was the first attempt at adopting a sectoral approach tackling education and training issues in a comprehensive manner. While direct preparation for employment was to be provided through specific industrial training with closer links to the profession, general education was to produce trainable graduates with higher mental skills, as required by modern economy. In this context, the objectives of the Projects were to: (a) improve the quality of general education, through improvement of teacher training, and provision of educational resource facilities and staff quarters to help recruit and retain qualified teachers in hardship areas; (b) increase the efficiency of educational management to ensure the feasibility and sustainability of sectoral development, through staff development, research and evaluation; and (c) expand access to better education to achieve the highest level of equity in the distribution of educational resources, through provision of primary and secondary schools, with priority given to underprivileged areas, and boarding facilities for students who otherwise could not benefit from secondary schooling (paras. 1.4 to 1.6). Implementation Experience ii. The major variances between planned and actual implementation affected: (a) the scale of the following components: (1) under the First PSESP, the school construction program was increased by 40%; the equipping of rural primary schools was reduced by over 20%; and the provision of Tamil and Chinese school library books was reduced to a relatively small proportion, as compared with Indian and Chinese enrollments, due to the limited availability and suitability of such books on the market; and (2) the training programs for key educators and managers under both Projects were increased from 8,000 to 18,500 participants (para. 1.9). (b) the First PSESP costs: these costs were overestimated at appraisal, at a time when it was impossible to predict the steep recession into which the economy was to slip, resulting in low construction prices, and the favorable currency exchange rates in the mid-1980's. This  - iv - resulted in about 15% cost underrun and the cancellation of US$17.8 million from the Loan (para. 1.10). (c) the implementation period of both Projects: The First PSESP was completed two and a half years behind schedule and closed 18 months behind schedule. The Second PSESP, which benefited from the, experience of the First PSESP, was virtually completed one year behind schedule and closed on schedule (para. 1.11). iii. The scope and scale of both Projects combined were appropriate, and the longer duration of project implementation was the result of: (a) a combination of local conditions, difficult to forecast with precision, which mostly affected the First PSESP, such as contractors' default due to cash-flow problems; staffing constraints and insufficient initial coordination between or within some Government agencies; shortage of available sites; and the need for revision of equipment lists due to adjustments brought to the new curricula; and (b) the phased implementation of additional programs, as the Projects progressed, to make full use of undisbursed funds. This enabled the Government to build substantially more schools and train a larger number of key staff, without any risk of duplication, as original Project targets were below the needs of the sector (para. 1.12). Results iv. The Projects exceeded their physical implementation targets and met most of their qualitative input objectives. To improve the quality of education (para. 1.15), the Projects provided three Teacher Training Colleges (TTCs) with a total of 3,500 new places. Educational resources needed to implement the new curricula were provided to 4,200 underprivileged rural primary schools, 365 District Education Resource Centers (later renamed Teachers' Activity Centers) and the four State Education Resource Centers. However, the application of the Ministry of Education's (MOE) regulation to equip only fully assisted schools- resulted in 1,200 non-fully assisted rural schools2 not being equipped under the Projects. A total of 11.8 million library books were provided to 7,000 schools, TTCs and Resource Centers. Both Projects also provided about 1,400 staff quarters to accommodate 4,500 qualified teachers mostly in hardship areas. At the same time, MOE implemented new primary and secondary school curricula; produced related textbooks and teacher's guides; and introduced a new testing system, as planned. Teacher-class ratios were raised to the levels prescribed in MOE regulations to provide teachers with sufficient time to discharge their new assignments. Secondary schools were provided with special function teachers Fully assisted schools are schools that are established and fully maintained by the Government. 2/ Non-fully assisted schools are schools that receive full operating grants and partial capital grants from the Government but whose land and buildings are owned and maintained by a private board.  - v - to take care of students in areas outside academic teaching. Academic standards in secondary education were raised by increasing the number of university graduate teachers in secondary schools. Teacher trainers' qualifications were upgraded. However, difficulties are still experienced in implementing the new pedagogical approaches, and concerns remain with regard to persisting urban/rural gaps in students' achievements, and some disappointing, or even deteriorating, primary education achievement test scores. Moreover, over 20% of candidates failed the lower secondary examination in 1992. This situation probably results from insufficient remedial instruction for low achievers, overcrowding of facilities and double shifting, discrepancies between the informal concepts of the curricula and the still prevailing formal school culture, and subsequent teachers' difficulties in teaching the new curricula. v. To increase the efficiency of educational management (paras. 1.16 and 1.17), about 18,500 key educators and managers benefited from Project staff development programs. However, the training provided by local universities did not meet all specific Project objectives. It is felt that overall the program was instrumental in sensitizing key staff to major sectoral issues, and preparing them for designing and implementing necessary changes to the extent the current centralized, directive management system will allow. The impact of the managerial and leadership orientation of the programs has not yet been felt and it is proposed to evaluate this impact through a collaborative team including MOE officers and external specialists, to be identified by the MOE. Monitoring and evaluation of sectoral development, and the Project Implementation Unit's capacity and procedures were noticeably improved. Nine studies were carried out to refine the analysis of major issues affecting quality, cost efficiency and equity in education. The findings of the studies were utilized by MOE to plan its activities, while universities used them in their research programs. However, the studies did not strengthen national research capabilities as substantially as expected. The originally planned efficiency measures (e.g., consolidation of underenrolled schools, expansion of multigrade teaching, and reduction of classroom areas for small classes) could not be successfully implemented. This, compounding the Government's school staffing policy and low student- teacher ratios, remains the prime cause of the high and increasing share of education in the national recurrent budget and GNP, which overtime may jeopardize the smooth and balanced development of the sector. The Government's opinion is that the above efficiency measures are either difficult to implement in the socio-political context of Malaysia or could be detrimental to the quality of education. However, the MOE is taking measures, such as alternate-year students' intake, to increase class sizes in small schools and thereby make these schools more efficient. vi. To expand access to better education (para. 1.18), the most critical classroom shortages were alleviated, and progress was made in improving equity in the geographic distribution of facilities. The 5,141 classrooms in 571 primary schools, built under both Projects, benefited 240,000 students, i.e., 9% of total primary enrollments, and contributed to maintaining universal primary education. The 3,887 classrooms in 256 secondary schools accommodated 210,000 students, i.e., 15% of secondary education enrollments. This assisted the Government in its drive towards achieving universal lower secondary education and raising the overall secondary enrollment ratio. Boarding facilities were provided to 8,700 students who otherwise would have  - vi - been beyond reach of secondary education. However, despite these efforts, the shortage of school facilities remains acute, overcrowding still detrimentally affects the quality of education, and double shifting still restricts instruction time and generates commuting hardships. Sustainability vii. The Projects per se are viable and sustainable: both Projects provided a total of 361,000 places accommodating about 450,000 students, i.e., 11% of the 4,066,000 primary and secondary enrollments. Project- financed boarding and staff housing facilities accommodated 6% of all secondary boarders and 3.5% of all primary teachers. Therefore, within the whole education sector, the Projects generated relatively limited incremental recurrent expenditures. In addition, the strong institutional foundation within the MOE ensures that it has the functional tools required to manage the sector adequately (para. 1.19). viii. There is, however, a sustainability issue in relation to the sector at large: the share of education recurrent expenditures has reached historically high levels as a result of the high student unit costs generated mostly by staffing norms. High unit investment costs also originate from current space and construction norms and practices. The above levels of expenditures cannot continue to increase without question, as Government revenue may be slowing down, and competing claims on education allocations are growing, particularly for higher education (para. 1.20). Maior Findings and Lessons Learned ix. Detailed project preparation, and initial agreement on clear policies, plans of action and performance indicators are essential for smoothly monitoring progress in implementing the diverse contents of sectoral projects (para. 1.8). x. Major problems still affecting a preceding project should be fully resolved before project components are replicated or expanded under a repeater project. However, considerable practical guidance derived from the experience of the First PSESP helped to alleviate the difficulties of the Second PSESP (para. 1.8). xi. The strategy to implement the Projects under the highest MOE authorities in collaboration with the central planning and financing agencies ensured that the policy changes, which were the prime justification of the Projects, were universally supported at the highest Government level; MOE's implementation capacity was maximized by constant positive interaction among all agencies; management structures and procedures were improved under the pressure of Project requirements and all Government agencies' commitment to progress in implementation and disbursement (para. 1.26b). xii. Greater attention should have been paid to general factors which bore directly on project implementation, such as sectoral legislation on resource allocation and the exceptional sensitivity of certain policies and sub-sectors (para. 1.26c).  - vii - xiii. Whenever sectoral development at large constitutes the basic justification of a project, the partnership between the Government and the Bank should allow an open, constructive discussion of information on all relevant activities, even though the Bank does not finance some of them (para. 1.26g). xiv. Centralized authority finds an increasing difficulty in controlling all sectoral activities and responding to the growing diversity of educational needs. Greater flexibility and efficiency would probably result from greater autonomy and accountability brought about by adequate decentralization and empowerment of local authorities down to school level (para. 1.26h).   PROJECT COMPLETION REPORT MALAYSIA FIRST AND SECOND PRIMARY AND SECONDARY EDUCATION SECTOR PROJECTS (LOANS 2685-MA AND 2987-MA) PART I. PROJECT REVIEW FROM THE BANK'S PERSPECTIVE Proiect Identity Project Names: Primary and Secondary Education Sector Project (Eighth Education Loan) Second Primary and Secondary Education Sector Project (Tenth Education Loan) Loan Numbers: 2685-MA 2987-MA RVP Unit: East Asia and the Pacific Region, Country Department I Country: Malaysia Sector: Education Subsector: Primary and Secondary Education Proiect Background 1.1 Policy Context. The New Economic Policy articulated in 1971 set forth the development goals for the next twenty years as being accelerated growth, eradication of poverty and restructuring of society so as to eliminate regional inequalities and the connection between ethnic groups and economic functions. This policy of growth with equity largely achieved its objectives through growth in GNP, which averaged 7% per annum over the 1970-1990 period; employment, which grew by over 3% annually; and reduction of poverty incidence which declined from 49% of households to 17%. This was combined with social programs to promote national identity and integration. Education played a crucial role in this process and was always considered an integral part of the wider national socio-economic policy. It was also recognized that expanding and diversifying the manufacturing and services sectors towards high technology could not be achieved if the education and training system could not deliver the quantity and quality of manpower required. 1.2 Linkages between the Proiects and the Sector Policy. The two projects constituted the continuation of a chain of seven education projects, started in 1969 (Table 3.1), and an attempt at widening the project approach from a number of individual institutions to a whole education subsector. In contrast to an earlier emphasis on meeting manpower needs through secondary technical and vocational schools and a technical bias in general secondary education, Bank assistance began, with the 1976 Fourth Education Project, to adopt a sectoral approach tackling education and training in a more comprehensive manner, and to finance direct preparation for employment through specific industrial training projects with closer links to the profession.  - 2 - While the Sixth and Seventh Education Projects addressed these technical training needs at middle levels, and the Ninth Education Project at the engineering level, the two Primary and Secondary Education Sector Projects (PSESPs) represented overlapping investment slices of the Government's 10-year general education development program (1986-95). The conceptualization of the First PSESP started in 1984 when the Government was reexamining the development of the education sector within the preparation of the Fifth Malaysia Plan (1986-1990). 1.3 Sector Development Strategy. The Government's strategy for the development of general education was described in a ministerial Letter of Policy dated March 5, 1986. The policy focused on improving the quality of general education and producing trainable graduates with higher mental skills, as required by modern economy; increasing the efficiency of educational management to ensure the feasibility and sustainability of sectoral development; and expanding access to better education to achieve the highest level of equity in the distribution of educational resources. Prolect Obiectives 1.4 Improve the Ouality of Education. The First PSESP (Loan 2685-MA) focussed on improving teacher training and providing educational resources to primary schools and District Education Resource Centers (DERCs), later renamed Teachers' Activity Centers, particularly in underprivileged rural areas, while the Second PSESP (Loan 2987-MA) was to provide adequate physical facilities for these DERCs. Both Projects would also provide new school facilities to reduce critical double-shifting and overcrowding, and staff quarters to help recruit and retain qualified teachers in hardship areas. 1.5 Increase the Efficiency of Educational Management. Both Projects were to finance staff development programs to fill urgently needed key educators' and managers' positions in the Ministry of Education (MOE), the 13 State Education Departments (SEDs), the 113 District Education Offices (DEOs) and schools; and help implement such efficiency measures as consolidation of underenrolled schools; expansion of multigrade teaching; and development of more cost efficient classroom size standards. Loan 2685-MA was also to finance research and evaluation. 1.6 Expand Access to Better Education. Both projects were to provide new primary and secondary school facilities, with priority given to districts where availability of adequate educational opportunities was below the national average, and to replace critically dilapidated facilities. Boarding facilities would also be provided, particularly to students who otherwise could not benefit from secondary schooling. Proiect Components 1.7 To improve the guality of education, Loan 2685-MA was to provide: (a) three new Teacher Training Colleges (TTC); (b) eight million library books for about 6,700 primary schools; and (c) audio-visual materials and equipment for 5,400 rural primary schools and 350 DERCs, while Loan 2987-MA would provide physical facilities for 295 DERCs. The two projects were also to finance 500 and 290 staff quarters to accommodate 1,500 and 1,200 teachers, respectively. To increase managerial efficiencv, the two Projects allowed for the training of 540 trainers and 7,400 key educators and managers. Loan 2685-  - 3- MA would also finance nine studies on major sectoral issues with a view to improving the Government's educational planning, monitoring, qualitative assessment, and policy- and decision-making capabilities, and thereby increasing efficiency in educational investments. To expand access to better education, Loan 2685-MA would finance construction, equipping and furnishing of about 3,300 classrooms in 330 schools (2,200 in 260 primary schools and 1,100 in 70 secondary schools). An additional 4,400 classrooms in 390 schools (2,100 in 240 primary schools and 2,300 in 150 secondary schools) would be provided under Loan 2987-MA. The two Projects would also provide 24 and 16 hostel units to accommodate 4,700 and 2,800 boarders, respectively. Project Design and Organization 1.8 Institutional Base. The Projects benefited from the experience acquired through the seven previous projects. A competent and experienced Project Implementation Unit (PIU) was in operation within the regular structure of the MOE Development and Supplies Division (DSD), the Educational Planning and Research Division (EPRD) was an established and well-developed policy-making, data gathering and processing, planning and decision-making entity in the MOE, the Curriculum Development Center (CDC) was a highly competent educational think-tank, and the MOE as a whole was well structured and experienced in comprehensive sectoral development. This ensured a strong institutional base allowing the adoption of a sector investment approach in Bank lending, with greater flexibility in the use of funds within each Project and between both Projects. The modulation of the various project components according to their individual progress maximized MOE's overall implementation capacity at all times, even though establishing priorities in the execution of the two concurrently running Projects sometimes presented difficulties. For example, construction operations under the Second PSESP did not start on schedule because of the emphasis placed by MOE on completing the First PSESP which was still affected by implementation difficulties. On the other hand, a clear policy (para. 1.3) and a precise description of project components, procedures, criteria and guidelines for project preparation and implementation avoided imbalances in the distribution of Project funds and benefits, and made implementation monitoring easier. The Projects were carefully prepared (para. 1.22) in close cooperation between the Government's central planning and financial authorities- , the MOE and Bank staff. Within the regular structure of MOE, under the Educational Planning Committee, the highest policy-making and planning body for education, a Project Implementation Committee was established, together with its Joint Secretariat, comprising DSD and EPRD, and Appraisal/Implementation Sub-Committees in charge of the respective Project components. 1.9 Modifications: The following modifications mostly affected the First PSESP: (a) The scale of the school construction program was substantially increased. The program exceeded appraisal targets (para. 1.7) by 40% with a total of 4,626 classrooms built in 441 schools, including 337 The Economic Planning Unit of the Prime Minister's Department (EPU), the highest policy-making and planning authority in the country, which allocates investment budgets, and the Federal Treasury, which allocates recurrent budgets.  - 4 - primary schools (3,070 classrooms) and 104 secondary schools (1,556 classrooms), 32 boarding units to accommodate 5,900 students and about 1,100 staff housing units to accommodate 3,300 teachers. (b) While the original DERC equipment program was expanded, only 4,229 rural primary schools were equipped instead of the 5,400 originally agreed, following /the MOE'S decision in late 1987 that only fully assisted schools- could be equipped under the Project, according to sectoral legislation. The resulting available balance of funds was used to provide complementary equipment to about 1,700 schools and also to DERCs from which non-fully assisted schools (mostly Chinese- and Tamil-medium schools) could benefit. (c) The MOE also decided to reduce the number of long-term advanced degree fellowships abroad under Loan 2685-MA in order to increase the number of short-term fellowships, and advanced degree courses in local universities, as a more economical approach at a time of economic recession. This resulted in 1,780 key staff being trained, well above the 541 originally planned. While the Bank insisted on not converting long-term fellowships abroad into too many short-term fellowships, as it increased travel costs substantially, it agreed to convert 31 out of 41 advanced degree fellowships abroad into 76 local post-graduate fellowships, provided the contents of local university courses, and staff's qualifications and availability of full-time programs in the specific fields required, were adequate. As for local short-term courses, the number of trainees quadrupled from 400 to about 1,600. Under Loan 2987-MA, efficient management resulted in the outcomes of the program exceeding its original targets (about 16,700 beneficiaries, as compared to 7,400 originally planned), due to the multiplier effect of the outreach programs set up by Institute Aminuddin Baki (IAB), the national institute in charge of training key educators and educational managers. 1.10 Evaluation of Proiect Design. As a whole, the scope and scale of the Projects combined were generally appropriate, and the implementation time extension required was the result of a combination of local conditions, difficult to forecast, which affected the First PSESP. While the assessment of the Government's implementation capacity was overly cautious, project costs under Loan 2685-MA were overestimated at appraisal, at a time when it was impossible to predict the steep recession into which the economy was to slip, resulting in lower construction market prices than anticipated at appraisal, and the favorable currency exchange rates of the mid-1980's. As a result, not only did the school construction program exceed its targets but US$17.8 million was cancelled from the Loan. Project costs and Project financing are shown in Tables 3.5A and 3.5B, and 3.6A and 3.6B, respectively. Project Implementation 1.11 Critical Variance in Project Implementation. The major variances between planned and actual implementation affected the scale of the First PSESP (para. 1.9) and the implementation period of both Projects (Tables 3.4A 2/ For the definition of "fully-assisted" and "non-fully assisted" schools, see footnotes 1/ and 2/, respectively, on page ii.  and 3.4B): the First PSESP was completed two and a half years behind schedule and closed 18 months behind schedule. The situation greatly improved with the Second PSESP which was virtually completed one year behind schedule and closed on schedule, due to the considerable practical guidance derived from the experience of the First PSESP (Tables 3.2A and 3.2B). The major delays affected: (a) the construction of TTCs, the planned completion date of which was June 1989. The Batu Pahat TTC could not be completed earlier than May 1992, due to the default of the original contractor and the time- consuming rebidding process to avoid the same risk. As for the Sri Pinang TTC, it was completed only in December 1992, due to the change of site; the need for the Public Works Department (PWD) to redesign the TTC for the new site, and site development problems. (b) The school construction program under Loan 2685-MA was implemented in two phases: Phase I corresponding to the originally planned program (2,295 classrooms for primary education and 1,022 classrooms for secondary schools), and Phase II including over 1,300 additional classrooms (775 in primary and 534 in secondary schools), financed with funds undisbursed under Phase I. The first phase was virtually completed on schedule and the second phase was started in October 1988 in Peninsular Malaysia, where the program had run more smoothly. Additional schools were included in the East Malaysia program in mid-1989 to give Sabah and Sarawak, where project implementation was slower, sufficient time to complete the original program. However, on the original June 1991 Closing Date, school construction under Phase I was still incomplete in East Malaysia, and a number of Phase II schools were still under construction in Peninsular Malaysia as well as in Sabah and Sarawak. On the December 31, 1992 Closing Date, 15 schools under the First PSESP and 28 under the Second PSESP were still under construction, expected to be completed by the end of 1993. (c) TTC equipment lists under Loan 2685-MA, originally drafted in 1986, had to be revised in mid-1989 to be consistent with the adjustments brought to the new school curricula and related TTC training objectives and programs. The final lists were completed by the MOE Teacher Education Division (TED) in mid-1992. As the construction completion dates of the three TTCs were well apart in time and no storage facilities were available, procurement of equipment was carried out separately rather than in bulk, as originally planned. (d) Procurement of library books. resource materials and school equipment under Loan 2685-MA was planned to be completed by June 1989. The book selection process was more time-consuming than originally anticipated, as language level and cultural values had to be taken into consideration, and teachers were brought from rural areas to Kuala Lumpur to evaluate the proposed books. In addition, the procurement of Chinese and Tamil books raised some problems: as their availability on the local market and their suitability were limited, few publishers were willing to supply these books at acceptable prices, while imported books were not deemed suitable within the context of Malaysian culture and curricula. As a result, the proportion of Tamil and Chinese school library books was less  than 1% and 5%, respectively, of the total amount of books procured. The procurement of books in the Malay Language (the National Language) was completed in December 1989. Tamil books were delivered in January 1991, and English and Chinese books in 1992. The provision of teaching and audio-visual aids and equipment for schools and Resource Centers (RCs) was delayed by a detailed study on the most appropriate contents of the lists, in view of the adjustments brought to the new curricula. It also took some time for the MOE to decide on the use of undisbursed funds which eventually allowed provision of library books to new schools, and direly needed reference books and complementary equipment to TTCs, the four State Education Resource Centers (SERCs) and DERCs. The last contracts were signed in May 1992. (e) Of the nine studies which were planned to be completed by June 1989, five were actually completed in late 1989, another three in mid-1990 and the last one in early 1991. Delays were due to research staff's external commitments and investigation difficulties, as the studies progressed. Following the review of the findings of the studies in v February 1991, it was decided that remaining funds would be utilized to carry out a school mapping exercise in Peninsular Malaysia along the same successful lines as in East Malaysia. This exercise was completed in June 1992. (f) While the original staff development program under Loan 2685-MA was virtually completed in June 1990, as scheduled, about 1,300 additional staff under the extended program (para. 1.9c) completed their training in 1991 and 1992. Under Loan 2987- MA, completion of 10% of the local training program had to be postponed from December 1990 to mid-1991. However, the above delays made it possible to expand the scale of both programs from 7,800 to about 18,300 key staff trained locally and from about 160 to over 200 staff trained abroad. 1.12 Implementation Evaluation. The longer duration of project implementation as a whole was the result of the phased implementation of additional programs, as the Projects progressed, to make full use of undisbursed funds, according to the sector approach (Tables 3.3A and 3.3B). There was no risk of duplication in doing so, as original Project targets were below the needs of the sector. The major delays originated from: (a) contracting locally during acute economic recession, resulting in strong competition and low bidding; cash-flow problems for contractors who could not borrow money or obtain bonds; and critical shortages of qualified labor on a number of sites. This could not be avoided in view of the many dispersed and small school building contracts which could be handled only at the district level; (b) staffing constraints in the federal PWD and the autonomous PWDs in Sabah and Sarawak, and their administrative difficulty to hire consultants for small contracts, however large the number of these contracts might be; (c) technical and accounting staff constraints in the PIU, in view of the surge of processing and control requirements relating to Bank-financed projects and other externally-financed projects for which the PIU was also responsible; (d) acute shortage of available and suitable sites; non-availability of funds at the appropriate time for land purchase; and complicated land acquisition procedures, compounded in Sabah and Sarawak by native land rights.  - 7 - 1.13 Proiect Risks. The Staff Appraisal Report (SAR) assessed the greatest risks as: (a) investment and recurrent budgetary constraints, which might affect the scale of the construction programs and the staffing required to reduce the shortage of educational facilities, and implement the ambitious reform of curricula; and (b) possible teachers' difficulties in carrying out the additional professional burdens deriving from the new integrated curricula, active student-centered teaching methods, and co-curricular activities. Eventually, no financial constraints affected the Projects: the Government exceeded the planned targets up to its highest physical implementation capacity, and the number of teachers in the system reached the planned figures. On the other hand, the second risk was real and difficulties are still experienced in integrated subject teaching, implementing various teaching methodologies, and carrying out the tasks required by the new approach to class management, co-curricular activities and student testing. However, the SAR did not forecast: (a) the extent of managerial constraints resulting from shortages of professional staff, complicated administrative procedures, slow inner working of, and insufficient coordination among, MOE divisions and other government agencies involved in technical, financial and auditing operations; (b) the limited capabilities and relevance of local universities in relation to specific Project requirements; (c) the difficulty to implement cost-efficiency measures (para. 1.16b); and (d) the ultimate outcome of the Government's school staffing policy (paras. 1.15f and g) and resulting low student-teacher ratios (para. 1.20a). 1.14 Government's Actions Taken or not Taken which Affected the Projects: (a) The application of MOE's regulation to equip only fully assisted schools fesulted in about 1,200 non-fully assisted rural primary schools- not being equipped under Loan 2685-MA (para. 1.9b). (b) Inadequate assessment and monitoring of local universities' capabilities and assignments account for the limited usefulness of some studies (para. 1.17), and the staff development programs not meeting the specific Project objectives (para. 1.31). However, a positive outcome was that the staff development exercise strengthened local post-graduate programs. (c) The cost-efficiency measures originally envisaged to alleviate the fiscal burden of the education reform (para. 1.16b) were limited (e.g., expansion of multigrade teaching, consolidation of uneconomical underenrolled schools, adoption of alternative classroom designs for classes below 40 students), or not implemented (e.g., adjustment of school staffing norms to increase the student-teacher ratios). This remains the prime cause of the high and increasing share of education in the national recurrent budget and GNP, which over time may jeopardize the smooth and balanced development of the sector (para. 1.20). (d) Project implementation in the later years was improved through the availability of funds provided by EPU for the systematic acquisition of sites in advance of future projects; more stringent selection of 3/ For the definition of "fully-assisted" and "non-fully assisted" schools, see footnotes 1/ and 2/, respectively, on page ii.  - 8- contractors; more flexible payment conditions; rationalization of the collection and processing of payment vouchers; and appointment of qualified permanent accounting and technical staff within the PIU. This enabled the PIU to process Project finances more expeditiously, and follow up technical and payment issues in the field more efficiently. Improvement in PIU's staffing, equipping and procedures was a major institution building achievement. Maior Results and Benefits of the Proiects 1.15 The Projects exceeded their physical implementation targets and met most of their qualitative input targets (Table 3.7A). However, a number of sectoral policy objectives stipulated in the agreed plans of action and performance indicators of the Projects could not be reached. With regard to improving the quality of education, Project achievements were as follows: (a) The three new TTCs, built under Loan 2685-MA, provided about 3,500 new student places, as planned. This contributed to increasing the teacher training capacity to cope with the natural enrollment increase, upgrade academically qualified teachers without professional certification, introduce qualified teachers to the new curricula and teaching methods, and replace inadequate training facilities. In 1992, there were 23 TTCs in Peninsular Malaysia, four in Sabah and three in Sarawak. These 30 TTCs have a total capacity of 28,400 places and over 60% of the trainees are boarders. This capacity currently allows an annual output of 10,500 new teachers, as planned, including 8,000 new primary teachers, 1,000 non-graduate lower secondary teachers and 1,500 graduate secondary teachers. TTCs also provide 2,700 annual participants with in-service training programs focusing on the new curricula and teaching methodol}gy. In addition, six universities enroll 6,400 teacher trainees- , with an annual output of about 2,200 graduates over recent years. The MOE feels that the above outputs may be insufficient to cope with future pre- and in-service teacher training needs. However, a cautious approach is required in view of the declining growth rate in primary enrollments; the slow growth of lower secondary enrollments in public schools; and the high recurrent unit costs of education, due to low student-teacher ratios. A reassessment of teacher training needs is underway. (b) To provide teachers with the educational resources needed to help them implement the new curricula, under Loan 2685-MA, over 4,200 underprivileged rural primary schools, 365 DERCs and the four SERCs were equipped. A total of 7,000 schools were provided with 11.8 million library books, and reference books were also provided to TTCs, IAB, DERCs and SERCs. The program was successful overall, although the planned books-primary student ratio of 5:1 was not reached, and problems remained with regard to equipping about 1,200 non-fully assisted rural primary schools (para. 1.14a) and providing Chinese and Tamil library books (para. l.lld). Under Loan 2987-MA, 4/ Including 1,700 first degree holders preparing a Post Graduate Diploma in Education (PGDE) and 4,700 students preparing a Bachelor of Arts/Science with Education Degree.  - 9 - new facilities for 295 DERCs were built, as planned. The utilization of resource centers, a relatively recent institution in Malaysia, has had a slow start. However, continued and widely disseminated staff training is gradually producing the critical mass of familiarity needed to make investments on instructional aids and equipment more pedagogically productive in the future. (c) In order to retain qualified teachers in hardship areas by improving their living conditions, both Projects provided a total of about 1,400 staff guarters to accommodate 4,500 staff. In 1992, a total of 15,400 staff quarters accommodated 20,000 teachers, including 13,200 primary teachers (in 9,800 housing units) and 6,800 secondary teachers (in 5,600 units). This represented 10% and 9% of all primary and secondary teaching staff, respectively. However, about 9% of Project staff quarters are reported to be currently utilized as libraries, school RCs and teachers' rooms, as they were unoccupied because of the urbanization process and economic development which offered a greater supply and a better choice of housing in some areas. (d) While the Projects were being implemented, new curricula covering the 11 years of primary and secondary education were implemented grade by grade starting in 1983. They reinforce basic communication and mathematical skills and include integrated environment-focused general science subjects, and practical living skills (commercial practice, manipulative skills, family living skills and basic agricultural knowledge), and community-oriented co-curricular activities. The new primary school curriculum (KBSR) was fully implemented in 1989 and the new secondary school curriculum (KBSM) for lower secondary education, including its innovative living skills component, in 1992. The KBSM will be fully implemented in 1993 in upper secondary education, including its humanities, vocational and technological, scientific, and religious electives, as planned. Related textbooks and teacher's guides were produced. The Government expanded the textbook loan scheme proportionately to the increase in primary and secondary school population. Over 90% of this school population benefits from the scheme, which provides about eight million books annually, at a cost of US$25 million equivalent. School-based assessment and a national primary school achievement test (UPSR) were introduced. Practical implementation of the new curricula, and related textbooks and guides were evaluated and revised on a continuing basis through EPRD, CDC and the Federal Inspectorate. (e) Teacher training curricula and related equipment and materials in TTCs and Faculties of Education were modified to meet the requirements of the new school curricula, with particular regard to improving resourcefulness, strengthening student-centered classroom management, use of educational technology, evaluation skills and teaching techniques for integrated subjects, and multigrade and remedial instruction. (f) Secondary schools were provided with special function teachers to take care of students in areas outside academic teaching, as planned. In 1992, for 1,395 secondary schools, there was a total of 8,001  - 10 - special function teachers (as compared with 5,509 in 1986). The most noticeable increases related to guidance and counselling, sports, media, library and students' welfare. Moreover, in 1992, two new academic special functions were introduced, namely senior subject teachers (6,997) and senior co-curriculum teachers (378). This sharply increased the total number of special function teachers to 15,375. (g) The primary teacher-class ratio was raised from 1.2:1 to 1.5:1, as prescribed in the MOE regulations to provide teachers with sufficient time to prepare and discharge their new curricular assignments. However, if special function teachers are taken into account, the ratio reached 1.72:1 in regular schools, and 1.64:1 if underenrolled schools (with enrollments below 150 students) are taken into consideration. These ratios are the major cause of the high and rising education recurrent expenditures (para. 1.20). The ratios could be improved by reducing the number of special function teachers, staffing underenrolled schools on the basis of their enrollments rather than in accordance with the standard staff allocation, and promoting multigrade teaching to obtain cost- efficient class sizes in the 2,500 underenrolled schools. Moreover, to reach the prescribed primary staffing level, a rather high proportion of untrained teachers had to be hired. MOE currently estimates that 22,000 primary and 8,000 secondary unqualified teachers need to be replaced. In secondary education, the ratio is 1.8:1, or 1.9:1 if special function teachers are taken into consideration. (h) Academic standards in secondary education were raised by increasing the number of university graduate teachers in secondary schools from about 18,500 in 1986 to 34,000 in 1992. This increased their proportion among the secondary school teaching staff from about 32% to 43% (23% and 77% in lower or upper secondary classes, respectively). (i) Teacher trainers' qualifications were upgraded, as planned. In 1992, out of 2,687 trainers, 2,204 were graduates (i.e., 82%, as compared with 63% in 1986) and post-graduates represented 12% of TTC staff, including six PhDs and 326 MA degree holders. The remaining non- graduates were attending specialized in-service courses and 54 of them were pursuing first degree and post-graduate programs. New trainers are recruited among graduates. (j) The objective not to exceed 45 students per class in 1990 could not be reached, although relative progress was made in reducing the proportion of overcrowded classes: in 1992, classes with enrollments exceeding 40 represented 29% and 14% of the total number of primary and secondary classes, respectively, as compared with 33% and 23% in 1986. However, overcrowded primary classes increased in absolute numbers from about 22,400 to 23,200, of which 9,000 exceeded 45 students. This reflected a dramatic increase, as compared with 6,000 in 1986, and only minor progress as compared with the peak of 9,400 in 1989. Moreover, classes of 45+ still represented 11% of all primary classes and the proportion was even higher in Sarawak (15%) and in Sabah (16%). The most noticeable progress was made in  - 11 - secondary education, with the number of overcrowded classes being reduced from 8,600 in 1986 to 6,000 (14% of all classes, as compared with 23% in 1986). In addition, the 1,239 classes of 45+ students represented only 3% of all secondary classes and compared well with the 1,600 in 1989. However, the proportion was still overly high in Sabah (33% for classes above 40 students and 15% above 45). (k) In 1992, double shifting still restricted instruction time and generated commuting hardships. The situation was serious overall and critical in secondary education. In primary education, the number of classes detrimentally affected by double shifting increased from 11,300 to 13,200 (17% of all classes), almost exclusively in Peninsular Malaysia and Sabah (the numbers were negligible in Sarawak). In secondary education, although the number of classes affected was slightly reduced from 11,700 to 10,500, this still represented an abnormally high proportion (25% of all classes). The situation was still more critical in Sabah (36%). (1) Despite the above substantial inputs to improve the quality and efficiency of education, major concerns remain with regard to the persisting urban/rural gap in students' achievements, and the generally low, or even deteriorating, achievement test scores in mathematics, English and National Language in primary education (Table 3.7B). However, the rising trend of the average pass rate at the end of lower secondary education (78% in 1992, the first year when the KBSM was fully implemented) is a positive development at a time when the Government heads for universal upper secondary education and has embarked on accelerated promotion from lower to upper secondary education on the basis of an achievement test which replaces the selective national lower secondary school certificate (SRP). The repetition rate is minimal due to automatic promotion over the 9-year primary and lower secondary cycle. However, over 20% of candidates failed the SRP in 1992 (although the first KBSR cohort to take the SRP has shown some improvement). This situation probably results from insufficient remedial instruction for low achievers, overcrowding of facilities and double shifting, discrepancies between the informal concepts of the new curricula and the still prevailing formal examination-oriented school culture, and the subsequent difficulties for teachers with insufficient practical qualifications to teach the new curricula. 1.16 To increase the efficiency of educational management, the Projects contributed the following: (a) Under Loan 2685-MA, a staff development program was offered to 1,780 key education officers, including: (i) about 900 teachers and headmasters, trained as educational leaders and trainers in schools and RCs, and (ii) about 900 senior educators and managerial staff at State and MOE levels. All programs were provided by IAB, except for post-graduate courses which were offered in local and foreign universities. Under Loan 2987-MA, an additional 16,700 senior officers, school principals, advisors, teacher trainers, master teachers and resource staff benefited from the training program. The training of trainers and advisors helped IAB not only to improve its in-house programs but also to create a multiplier effect and  - 12 - disseminate staff development down to school level through a network of outreach courses. It is felt that the program was instrumental in sensitizing key staff to educational, cost efficiency and managerial issues, and preparing them for designing and implementing necessary changes and innovations to the extent the current centralized, directive management system will allow. However, the impact of the managerial and leadership orientation of the programs has not yet been felt, and a number of questions have been raised regarding such impact which will be evaluated by a collaborative team including MOE officers and external specialists, to be identified by the MOE. It should also be noted that 30% of fellowships for advanced degrees were awarded to women. This was a positive development in view of the prevailing family roles of women in Malaysian society. (b) With regard to sectoral policy, the following planned efficiency measures could not be successfully implemented: (i) The number of underenrolled schools remained at about 2,500 and their average class size was 15.5, below the 1986 figure; (ii) multigrade teaching was practiced in 738 schools only (29% of all underenrolled schools, as compared with the planned 60%); and (iii) designs of reduced classroom size for small classes were used in only 23 schools and the protracted study on the educational impact of classroom size reduction has not yet produced conclusive findings. This and the need felt by the Government to maintain the present teacher-class ratios have resulted in the relatively low cost efficiency of the Malaysian education system (para. 1.20). (c) However, monitoring and evaluation of education was noticeably improved, as anticipated. EPRD established procedures and indicators to assess educational inputs and students' achievements, and developed an efficient statistical collection and processing system. This enabled EPRD to produce high quality annual evaluation reports and statistical yearbooks, and provided the data required for planning, decision making and policy implementation monitoring. Thus, as the Project progressed, the distribution of educational facilities by district, as compared with classes and enrollments, and the changing position of individual districts in relation to national averages, were monitored annually, and adjustments in allocating Project resources could be made, as required, to alleviate the most critical shortages and achieve greater equity. This was a major institutional building achievement. 1.17 Under Loan 2685-MA, five research and four evaluation studies were carried out to refine the analysis of major issues affecting quality, cost efficiency and equity in education (para. l.lle). The studies were originally intended to constitute the starting block of a continuing assessment system through periodical updates. However, MOE felt that some studies were based on a limited number of opinions rather than objective primary data collected and processed with adequate analytical tools, although many of their findings and conclusions were pertinent and worth considering. The findings of the studies were discussed among high level MOE officials and headmasters during a national seminar. Many of the findings were utilized by MOE in planning its activities and preparing reports, while universities used these findings in their research programs. There were follow-ups to some studies in the fields of teacher attributes by the Teachers' Education Division (TED), tracer  - 13 - studies by the Technical and Vocational Education Division, and school mapping by EPRD. However, the studies did not strengthen national research capabilities as substantially as expected (Table 3.7C). 1.18 To expand access to better education, the Projects inputs were as follows: (a) A total of 9,028 classrooms in 827 schools were built under both Projects, including 5,141 classrooms in 571 primary schools and 3,887 classrooms in 256 secondary schools. This respectively provided about 206,000 and 155,000 places which benefited an estimated 240,000 primary and 210,000 secondary students (taking double shifting into consideration), i.e., 9% of primary and 15% of secondary enrollments. (b) Boarding facilities were provided to 8,740 students under both Projects. In 1992, a total of 51,400 primary and 159,600 secondary students were boarders, i.e., 2% and 11% of primary and secondary enrollments, respectively, as planned. Boarding units were established mainly in rural schools to expand school catchment areas and in some urban schools to accommodate out-of-town students who otherwise would have been beyond reach of secondary education facilities. (c) These inputs contributed to alleviating the most critical classroom shortages and improving equity in the geographic distribution of facilities. The most significant improvement occurred in Sarawak, with the most underprivileged districts still located in Sabah and Peninsular Malaysia. Universal primarv education was maintained, as planned, with 2,641,000 students enrolled in public primary schools in 1992. Between 1986 and 1992, there was little progress in the overall classroom-students ratio which improved from 1:40 to 1:39. If underenrolled schools are excluded, the ratio was lower (1:43) in regular schools. However, equity improved, as 24 districts, out of a total of 113, were below the national average in 1992, as compared with 39 in 1986. The classroom-class ratio also increased slightly, from 84% to 85%, with 35 districts (instead of 51) below the national average. Secondary education was expanded: in 1992, there were 1,424,700 secondary education enrollments (73% of the relevant age- group), of which 983,300 were in lower and 441,400 in upper secondary education, representing respective enrollment ratios of 82% and 58%. This was below the planned targets to enroll 1.0 million lower secondary and 500,000 upper secondary students in 1990, in order to reach a 92% enrollment ratio, with a view to achieving universal lower secondary education in 1995, and raise the overall public secondary enrollment ratio from 72% in 1986 to 77% in 1990. Moreover, while upper secondary enrollments increased noticeably by over 20% from 366,000 in 1986, the growth of lower secondary enrollments was a modest 5%, as compared with its 935,000 level in 1986. This may be partly attributed to the competition of private schools. The classroom-student ratio improved from 1:52 in 1986 to 1:44, and 43 districts were below the national average in 1992, as compared with 56 in 1986. The classroom-class ratio rose from 70% to 75%, with 48 districts (instead of 57) below the national average. However, despite this effort, the shortage of school facilities remains acute, as indicated by the above ratios. This results in  - 14 - overcrowding still detrimentally affecting the quality of education, and double shifting still restricting instruction time and generating commuting hardships (paras. 1.15j and k). Proiect Sustainability 1.19 The Projects. The Projects per se are viable and sustainable: both Projects provided a total of 361,000 places accommodating about 450,000 students, i.e., 11% of total primary and secondary enrollments (4,066,000). Project-financed boarding and staff housing facilities accommodated about 6% of all secondary boarders and 3.5% of all primary teachers, respectively. Therefore, within the whole education sector, the Projects generated relatively limited incremental recurrent expenditures. In addition, the sequence of Bank-financed projects since 1969 and both Projects, in particular, have established a strong institutional foundation within the MOE (para. 1.8): with EPRD for policy- and decision-making, planning and monitoring functions; DSD/PIU for programming and physical implementation; CDC for improving the substance and methodology of education; and IAB and the teacher training network for teacher and manager training and upgrading. This ensures that MOE possesses the functional tools required to manage the sector adequately. 1.20 The Sector. There is, however, a sustainability issue in relation to the sector at large which results from policies, and overly generalized norms and standards: (a) The shares of education in the recurrent and total national budgets have reached 20.1% and 18.1%, respectively, and about 6% of GNP. This is high, considering that universalization of lower secondary education is still at a distance (para. 1.18), and that the 58% upper secondary enrollment ratio and the current development of higher education are still insufficient to provide the quantity and type of labor currently required by the economy. This results from the high student unit costs of education which are 25% above the overall average for 15 Asian countries5/, and 39%, 12% and 24% above for primary, secondary and higher education, respectively. These high unit costs are mainly due to staffing norms, such as the 1.7:1 primary teacher-class ratio (para. 1.15g) or the assignment of three non-teaching staff even in small schools, resulting in low student- teacher ratios (20:1 iT primary education overall and 12:1 in underenrolled schools- , and 18:1 in secondary education). The tendency for primary teachers to specialize in subject teaching and to teach in the same grade for years also accounts for wide variations in actual teaching workloads. In secondary education, residential and vocational schools and junior science colleges are estimated to cost about four times as much as general schools and they account for 35% of upper secondary education recurrent expenditures, although they enroll only 9% of upper secondary students. The rising trend of education recurrent expenditures is 5/ Mingat and Tan, Educational Development in Asia, October 1989. 6/ As a comparison, the average primary student-teacher ratio was 33:1 in 15 Asian countries and 24:1 in 26 upper middle-income countries in 1989.  - 15 - still more concerning: during the 1988-90 period, the number of teachers in primary and secondary education increased faster (about 10% and 12%, respectively) than enrollments (about 5% and 1%). Between 1990 and 1992, primary and secondary education unit costs increased by over 30%, largely due to salary increases; education recurrent expenditures increased faster than national recurrent expendituresj,and the 1992 budget was 38% higher than actual 1990 expenditures- . (b) High unit investment costs also originate from a general tendency to build new facilities rather than remodel and expand existing ones; space and construction norms (e.g., standard 750 square-foot classrooms, even for classes below 40 students, instead of the generally accepted 600 sq. ft.), and facility utilization (i.e., the use of secondary school facilities on a fixed, as opposed to rotating, classroom-class basis). A significant reduction of critical overcrowding and double-shifting, which would require an estimated 20,000 additional classrooms, demands more cost-efficient norms and practices. The above levels of expenditures cannot continue to increase without question, as Government revenue may be slowing down, and competing claims on education allocations are growing, particularly for higher education. Bank's Performance 1.21 Strengths and Weaknesses. The Bank was instrumental in the overall success of the Projects through close and dynamic operational relationships and advice focussing on substantive educational and managerial issues as well as physical and financial issues. Bank staff were greatly helped in the knowledge of the sector by the sequence of projects since 1969. In addition, the unusual fact that the same Task Manager and Legal Officer were in charge of the Projects throughout their whole implementation period ensured deeper appreciation of sensitive issues and continuity in relationships, which helped build up a high level of mutual trust. However, disbursement problems would have been alleviated more efficiently with greater clarity and coordination in the signals given by the Bank regarding its procedures and requirements. 1.22 Proiect Preparation. Loan 2685-MA took a rather long time (nine missions and 122 staff-weeks) to be prepared, over a period of about three years, as it was the first attempt at the sector approach in education development in Malaysia. This time was required to ensure full understanding of, and compliance with, the specific definitions, procedures and requirements, about which clarifications were still needed within the Bank itself. As for overestimated project costs at appraisal, they can be accounted for by the need to be cautious at a time when the economy was particularly unstable (para. 1.10). In comparison, only five missions and 70 staff-weeks, over a period of two years, were necessary to prepare Loan 2987- MA, following the lessons learned from the implementation of Loan 2685-MA (Tables 3.9A and 3.9B). 7/ Past Trends and Future Options for Education Expenditure, Annex 3, Staff Appraisal Report, Third Primary and Secondary Education Sector Project (Loan 3536-MA), The World Bank, November 9, 1992.  - 16 - 1.23 Project Supervision. Monitoring progress in implementing the Projects was facilitated by adherence throughout the implementation period to initial agreements on a clear sectoral development policy (para. 1.8), a practical format for supervision and Government's review reports, and precise performance monitoring indicators. There were 13 review missions (about 70 staff-weeks) over a period of six years for Loan 2685-MA, and seven review missions (45 staff-weeks) over a period of three and a half years for Loan 2987-MA (Tables 3.10A and 3.10B). Bank implementation reviews were generally regular (every six months), in accordance with the Loan Agreement, and synchronized with PIU's and EPRD's annual reporting agenda. Their skill mix was generally adequate to carry out supervision tasks. Every other mission was an in-depth review mission analyzing the status of the quality of education, annual education statistics and examinations results as well as physical and financial progress. Review missions for both Projects were combined and supervision was carried out jointly with preparation of oncoming projects. This increased the missions' cost-efficiency, and ensured close coordination of Bank sectoral operations and their adherence to a common set of objectives. Implementation performance was improved, except for cost- efficiency measures, by the formative assessment of constraints and sustained pressure by Bank missions for Government's appropriate action to resolve critical issues. Review missions always prepared detailed aide-memoires which were discussed in-depth during wrap-up meetings in the field, and follow-up letters, upon return to Headquarters. Borrower's Performance 1.24 Education has always been considered as a top priority for socio- economic development in Malaysia (para. 1.1) and the Projects were part and parcel of the national education development policy. Therefore, the Government continuously demonstrated strong commitment and support to the Projects, as reflected in the priority given to the Projects for the mobilization of resources within the MOE and other Government agencies involved. In terms of finance, once a budget is approved by the Parliament, the necessary liquidities are made available to the executing ministries, as required, within the approved limits. Full integration of the Projects within this budgetary system ensured adequate funding at all times. It should be noted that, under these conditions, Special Accounts were useless and even added cumbersome administrative procedures, as demonstrated under Loan 2685- MA. However, the Bank kept insisting on the necessity to establish a Special Account for Loan 2987-MA and agreed later that this requirement could be waived from the Loan Agreement. In terms of staffing, the Treasury and the Public Service Department appointed the additional permanent qualified technical and accounting staff required for the PIU to improve disbursements. In Sabah and Sarawak, trouble-shooting intersectoral committees were established at the highest level of local government to come to grips with specific local site acquisition, procurement and disbursement problems. Implementation review reports were carefully prepared by PIU and MOE Project Sub-Committees (para. 1.8), and contributed to improving Bank missions' efficiency. Supervision wrap-up meetings, chaired by EPU or Treasury, were always attended by higher level officials from the major Government agencies (EPU, Treasury, PWD, Public Service Department, Auditor General's Office, Accountant General's Office). This gave the representatives from the various agencies an opportunity to engage in candid discussions on major issues, with a view to taking appropriate action. The Government sent to the Bank detailed  - 17 - comments and amendments to mission aide-memoires and follow-up letters, demonstrating deep commitment to the success of the Projects. 1.25 Major Loan covenants were complied with (Tables 3.8A and 3.8B). However, there were difficulties in the following areas: (a) interaction between the MOE and the universities, in relation to the studies and the staff development program, was insufficiently structured and collaborative; (b) there were substantial delays in submitting audit reports; and (c) protracted delays in collection and processing of perforated vouchers, required by the Bank as appropriate proof of payment for expenditures under statements of expenditures, resulted in disbursement losses. Most of these deficiencies were the result of staff shortages and limitation of skills, inadequate managerial structures and processing, and insufficient information systems. These difficulties were only alleviated in the last year of project implementation. Findings and Lessons Learned 1.26 The following lessons learned from the implementation of the Projects were taken into consideration for the preparation of the Third Primary and Secondary Education Sector Project (Loan 3536-MA): (a) Detailed project preparation and initial agreement on clear policies, plans of action and performance indicators are essential for smooth monitoring and formative assessment of progress in implementing the highly diverse components of sectoral projects. For repeater projects, such as the Second PSESP, the temptation should be avoided to replicate a number of components without fully resolving major problems still prevailing under the preceding project (para. 1.8). (b) The strategy to implement, monitor and evaluate the Projects under the highest MOE authority in collaboration with the Prime Minister's Department, Treasury and PWD was highly positive as (i) educational policy changes, which constituted the prime justification of the Projects, were universally supported at the highest Government level, (ii) MOE's planning, decision-making, financing, monitoring, evaluation and coordination functions were reinforced and its implementation capacity was maximized by constant interaction, consensus and assistance among all agencies, which was a noticeable institutional development achievement, and (iii) management structures and procedures were improved under the pressure of Project requirements and all Government agencies' commitment to progress in implementation and disbursement (para. 1.8). (c) Greater attention should have been paid to general factors which bear directly on project implementation, such as sectoral legislation on public resource allocation to the various types of schools (para. 1.14a), the high sensitivity of any matter pertaining to higher education, which resulted in the MOE deeming inappropriate and unnecessary for Bank missions to have direct access to university staff involved in Project-financed studies and training programs (para. 1.31), specific problems relating to conformity of Chinese and Tamil literature for school libraries with the national education philosophy (para. l.lld), and criteria for selection of major  - 18 - fellowship recipients to improve the balance between gender and ethnic groups. (d) The preparation of terms of reference for sectoral studies should have included methodology guidelines following consultation between the client and the supplier of research services, as well as precise and objective review mechanisms. The studies have shown that research staff development is still needed in sophisticated research and measurement techniques, and in the specific fields covered by the studies (paras. 1.17 and 1.31). (e) Institutional relationships between local and reputable overseas educational institutions should have been tapped to a greater extent for research studies and staff development abroad or locally. Twinning arrangements could have improved the quality of studies and staff development in local universities through greater continuity in objective advice and professional cooperation (para. 1.29). (f) Inclusion of a financial analyst in Bank review missions might have allowed earlier detection of the growth of education unit costs and budgets, and might have had a greater influence on the Government to address underlying causes (para. 1.20). Under the Third PSESP, the MOE will strengthen its financial and economic analysis capabilities and work more closely with the Treasury to achieve efficiency gains while enhancing quality. The skill composition of Bank missions will support this process. (g) While both PSESPs contributed to institutional strengthening and capacity expansion, the Bank was not directly involved in the design of quality components and did not have easy access to related data. Therefore, its "value-added" was not as high as it could have been at a time when learning outcomes were disappointing (para. 1.151). For instance, successful implementation of the new curricula was the basic educational justification for both Projects and, therefore, required careful Bank scrutiny. However, as curriculum development was not financed by the Bank, it was not considered by the Government as part and parcel of the Projects. This misunderstanding led to virtually denying Bank missions direct access to researchers and their assessment of curriculum implementation. With "Vision 2020" placing new qualitative and managerial demands on the sector, future operations should reflect an improved balance between hardware and software, and the partnership between the Government and the Bank should allow an open, constructive discussion of information relevant to all sectoral objectives, irrespective of the source of funding. (h) Two characteristics of the Malaysian education system have been its centralized nature and high.cost. As the country enters the transition to New Industrialized Country (NIC) status, greater flexibility and efficiency will be increasingly critical to achieving the growth and equity objectives of the system. To respond to the specific educational needs of vastly different rural and urban school populations and to adjust the skills output to rapidly changing technology, greater autonomy and accountability will be needed at all levels. Greater empowerment of local authorities, down to the school level, within broad national guidelines oriented towards cost-  - 19 - efficient and educationally creative initiatives, might be highly beneficial in this respect. The Third PSESP will address these issues through improving the Management Information System, promoting innovation and research, independent evaluation of staff development programs, and an organization and management assessment of DSD. To contain the growth of government spending on education, it is proposed to study combined public and private interventions, keep spending norms under scrutiny and define possible spending targets. (i) Increased flexibility and greater attention to efficiency imply a shift in performance monitoring away from inputs towards resource allocation and outcomes, to determine which approaches are most pedagogically effective and financially affordable, and to measure the ultimate impact of projects. The Third PSESP proposes a set of indicators linking inputs, costs and outputs to guide decision and policy making, and some micro-level monitoring. Such a system might place Malaysia at the cutting edge of educational management. (j) The bi-annual MOE-focused review format brought limited support for implementation of educational recommendations in schools (e.g., the practice of multigrade teaching), which could have made an impact on efficiency. The Third PSESP is expected to offer MOE and Bank staff greater opportunities for educational interaction and demonstration in the field. Project Relationship 1.27 Government and Bank staff had excellent personal and professional relationships at all times. EPU, Treasury and MOE staff had considerable experience over more than two decades in dealing with the Bank. Relationships were open and amiable, even when differences occurred about policies and issues of a sensitive nature. Mutual trust often helped in exchanging sensitive information, as required to better appreciate problems. Unbroken continuity in the relationships between key Bank staff (para. 1.21) and Government higher level officials were positive factors in Project implementation. The only difficulties of communication which occurred at times were due to MOE and Bank missions' staff turn-over. Consulting Services 1.28 Architectural and engineering services were provided by PWD which is responsible for public construction. The quality of designs for the TTCs was satisfactory, although delays resulted from staff shortages. For schools, architectural services were limited, as standard designs were used. These designs, successfully utilized for previous projects, were appropriately adjusted. PWD supervisory services, including collection of payment vouchers from contractors, were often insufficient for such a widely dispersed school construction program. However, after initial delays, private consultants could be hired by PWD to assist with project implementation. 1.29 Foreign high level specialists from reputable universities and specialized agencies overseas assisted IAB with its training courses for key educators in specific fields and education managers under Loan 2685-MA. The role of the foreign consultants was significant in establishing linkages with  - 20 - foreign institutions and constructive interaction with the local faculty, developing training courses, and expanding the training network (para. 1.16a). 1.30 Overseas training was also contracted with universities and specialized agencies of high repute. The specialized training programs, not available in Malaysia, covered the whole gamut of major topics relevant to the educational and managerial skills required. The outcomes were satisfactory to the beneficiaries. However, given the cost of the program, an impact evaluation is planned as a basis for further improvement. 1.31 The studies and post-graduate training programs contracted with local universities were generally disappointing (para. 1.14b) with regard to timely programming, availability of qualified and fully committed staff, and relevance of training programs to Project objectives. This resulted from insufficient identification of researchers and trainers available for the specific tasks required, and inadequate preparation of the work agenda, methodology, reporting and review mechanisms. Bank staff's limited contacts with researchers and trainers (para. 1.26c) precluded sustained and open discussions on work processes, the findings of the studies, and training program contents and outcomes. Project Documentation and Data 1.32 Adequacy of SAR and Major Papers. The SAR and supporting papers were satisfactorily prepared and provided generally well articulated references required to monitor Project implementation easily and efficiently. Bank s pervision reports and Government periodic review reports were carefully epared according to agreed formats. They were generally consistent in their findings and recommendations which were regularly conveyed to the highest Government authorities for comment and action. Project files in the Asia Information Center and in the Division, and the SAR relating to the Third PSESP provided documents needed to prepare the PCR. 1.33 Availability of Relevant Data to PCR Mission. The PCR mission benefited from the excellent cooperation of all MOE divisions, IAB and universities involved in Project implementation. The mission could collect most of the necessary data through interviews and analysis of documents. Essential MOE project data, which were computerized during Project implementation, were of high quality and well related to the needs of the mission.  - 21 - PART II. PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE Adeguacy and Accuracy of Factual Information in Part III 2.1 The Coverrunent is satisfied with the adequacy and accuracy of the factual information in Part III of this report. The information was prepared by the Bank in collaboration with representatives of the Government. The data should provide readers with insights to the strengths and weaknesses of Project implementation. Government's Comments on the Projects 2.2 The Government's comments are as follows: (a) Provision of Equipment. In relation to provision of equipment to schools, it should be noted that there are schools which were originally established and managed by private associations and built on private land. These schools are of a special category and by virtue of their establishment, do not receive the full complement of government assistance in terms of development budget. (b) Teacher-Class Ratio. We appreciate the Bank's concern regarding the teacher-class ratio in primary schools. However, this ratio is necessary in view of the high degree of professional commitment required of teachers under the new primary school curriculum. This includes preparation of materials in line with the pupil-centered approach in teaching, continuous assessment of pupils' progress including project work and overseeing the implementation of co-curricular activities. In addition, the teaching of subjects which are very specific in nature such as Islamic Religious Education, English Language, Music, Art and Pupils' Own Language (Tamil, Mandarin and Iban) requires special subject teachers and thus contributes to the high teacher-class ratio. Other special needs of the schools, such as remedial instruction, library services, sports and media also require special teachers as these are special functions. A high teacher-class ratio allows sufficient time for teachers to undertake their responsibilities more efficiently and this eventually helps to improve the quality of primary education. (c) Multigrade Teaching. We appreciate the Bank's concern but due to the lack of trained teachers and materials, the implementation of multigrade teaching has not been effectively carried out. However, MOE has already taken steps and action to overcome these problems. (d) Consolidation of Underenrolled Schools. Most of the underenrolled schools are in remote areas which are not easily accessible. Attempts to consolidate these schools have not been successful. However, the MOE is taking measures to make these schools more effective by improving multigrade teaching and promoting, whenever possible, alternate-year students' intake, to increase class sizes.  - 22 - (e) Reduced Classroom Size. The present size of classrooms are suitable for the implementation of KBSR, as it allows ample space for classroom activities as well as a better display of materials, and the setting up of resource corners, as emphasized by the KBSR in its active group learning approach. The reduction of classroom size would not necessarily result in substantial cost saving and may not facilitate the effective implementation of the KBSR in the above- mentioned areas. (f) Staff Development. The conversion of advanced degree fellowships abroad to local university programs was to enable a larger group to benefit from staff development programs at the post-graduate level. In addition, in view of the lower English proficiency of some candidates, courses conducted locally were more suitable. However, there were difficulties arising from insufficient facilities and manpower to cope with the sudden increase in the number of full-time students as well as some specific areas of study at the post-graduate level. The structure and design of the course which was prepared for part-time students did not work in favor of full-time students. Monitoring of the staff development program could not be undertaken efficiently as the staff development unit was newly established and consisted of officers who were also involved in other full-time assignments. However, the MOE has taken steps in requesting the establishment of a staff development unit to be manned by a full complement of staff. The MOE agrees to the need of evaluating staff development programs and will itself undertake this responsibility. (g) Studies. The MOE is aware of the need for an open discussion pertaining to studies between the Bank and the relevant agencies. Therefore, the MOE will endeavor to facilitate such discussion when the need arises. Evaluation of Bank's Performance 2.3. The Bank has provided a significant input into the preparation and implementation of the Projects. There has been a close rapport between both parties and we have been able to proceed with the Projects with not much hindrance. It would be greatly appreciated if new Bank personnel could familiarize themselves with the social, political and economic situation in the country for a more effective and meaningful contribution. Evaluation of Borrower's Performance 2.4. Even though there were some problems in the implementation of Projects, overall objectives of the Projects were achieved and helped to improve education in the country. Maior lessons learned 2.5. The MOE is well aware of the importance of close and systematic monitoring of project implementation. Efforts are being made to strengthen the monitoring mechanism as well as the upgrading of skills of officers involved in monitoring activities at all levels. The delay in school construction is due to the lengthy process of land acquisition. In view of  - 23 - this, land has to be acquired well in advance before construction begins. This requires an early disbursement of funds. Relationship with the Bank 2.6. The Government of Malaysia has always been able to discuss openly and resolve amicably any issues with the Bank. It is hoped that this cordial relationship can be sustained and further strengthened.  - 24 - PART III. STATISTICAL INFORMATION Table 3.1: RELATED IBRD LOANS Loan Number Year of Aporoval Project Title Purpose Status Comments Loan 599-MA Expand general secondary 1969 General objectives successfully achieved First education in the Completed except for targeted enrollments of Education underprivileged State of in November technical and agricultural schools, due to Project Sabah, reorient general 1977 inadequate student admission criteria and education towards a more incentives, and the weak practical practical bias, and increase technical component of school curricula. the output of skilled Implementation delays resulted in a 67% middle-level manpower. time overrun. Under-utilization of technical assistance resulted in a 1 5% project cost underrun; about 20% of the Loan was cancelled. Loan 810-MA Improve curriculum 1972 Successfully implemented overall, except Second development and in-service Completed for the high examination failure rate in Education teacher training; expand in December vocational schools. There was a 63% Project the use of educational 1980 implementation time overrun and a 3% media; increase the output cost underrun. However, the and quality of graduate establishment of the Curriculum science teachers and Development Center was a major scientific manpower; and institutional development achievement. further expand vocational and technical training. Loan 974-MA Improve the quality of 1974 Major objectives successfully achieved Third Education education, particularly in Completed except for the difficulty to attract Project science and technology, in June 1984 secondary students into science streams, and expand educational and under-utilization of media in the media coverage, classroom due to inadequate financial particularly in Sabah and and human resources. Implementation Sarawak. was problematic, resulting in a 19% cost overrun and a 66% time overrun. Loan 1329-MA Improve the quality and 1976 Major objectives successfully Fourth equity of basic education, Completed implemented except for the non-formal Education strengthen the school in July 1985 component, eventually financed by the Project mapping and planning Borrower, and for the staff trained lost to capacity of the MOE and project institutions for lack of positions in the PWD, improve the MOE and PWD. There was an overall 6% quality and increase the cost underrun and an implementation output of skilled workers, time overrun of 92%. Delays were due improve technical teacher to staff shortages in the MOE and training, and initiate the Ministry of Labor and Manpower (MOLM) development of nonformal Project Implementation Units (PlUs), and education. inexperienced and undercapitalized contractors. However, establishing four State Education Resource Centers (SERCs) and strengthening the MOE Educational Planning and Research Division (EPRDI were major institutional development achievements.  - 2 5 - Table 3.1: RELATED IBRD LOANS (cont.) Loan Number Year of Approval Project Title Purpose Status Comments Loan 1657-MA Further improve the 1979 Project objectives successfully reached Fifth quality and equity of general Completed except for the occupational training Education education and promote in March study, eventually financed by other Project national integration in 1987 sources, and per capita grants for disadvantaged districts, operating expenditures insufficient to improve the planning, provide an enriched environment in implementation and schools. The Loan was fully disbursed management capabilities of two months ahead of the Closing Date. public administration staff, The overall cost overrun was 11 % and and prepare an overall plan time overrun was 45%. for occupational training of Implementation delays were due to basic education graduates. difficulties in site acquisition and contractors' performance. Establishment of a National Institute of Educational Management and a National Institute of Public Administration was a major institutional development achievement. Loan 2145-MA Expand the training capacity 1982 Major objectives successfully met Sixth Education for technicians and skilled Completed except for the fellowships program (Industrial workers, and improve the in June 1989 under the MOLM, and studies on new Training) Project quality of training curricula training and incentive schemes. and teachers, and the Inadequate staffing of MOE and MOLM management and monitoring PlUs, and problems with technical of the training systems and assistance contracting, equipment related recurrent procurement and construction resulted expenditures of the MOE in a 44% time overrun. The cost and the MOLM. underrun was 54%, due to appraisal overestimates, economic recession and favorable currency fluctuations. About 32% of the Loan was cancelled. Loan 2601-MA Further increase the 1985 All major project components Seventh supply of technicians and Completed completed except for the staff Education skilled workers, improve the in June 1992 development program under the MOLM, (Second quality and management of most of which was financed by other Industrial training, strengthen sources. Difficulties similar to those Training) Project) manpower development affecting the preceding project resulted planning, and further in a 42% time overrun and a 50% cost promote training in industry. underrun. About 51 % of the Loan was cancelled.  - 26 - Table 3.1: RELATED IBRD LOANS (cont.) Loan Number Year of Approval Project Title Purpose Status Comments Loan 2887-MA Expand university enrollment 198 All major project components Ninth Education capacity to meet priority Completed completed except for the establishment (University manpower needs in in December of a long-term university development Development industrial engineering and 1992 plan and strategies. The project was Project) medical sciences, strengthen completed one year behind the original university management, and Completion Date. improve planning of university development and operations. Loan 3536-MA Promote quality and 1992 Under implementation. Third Primary excellence in the teaching- Effective and Secondary learning process, expand on March 16, Education Sector access to quality education, 1993 Project and improve efficiency of sectoral and project management. 3571 -MA Increase the quantity and 1993 Under implementation. Polytechnic quality of technical Effective on Development manpower for industry September 2, Project through the expansion of the 1993 nation's training capacity and improvement of pre- service training for higher level skilled workers and technicians.  - 27 - Table 3.2A: PROJECT TIMETABLE (LOAN 2685-MA) ----------------Dates------------------ Revised Revised Stage Planned (Jan. 1991) (Jun. 1992) Actual Reconnaissance 04/83 04/83 ' Identification 08/83 08/83 Preparation I 10/83 10/83 Preparation II 06/84 06/84 2' Pre-Appraisal I 10/84 10/84 l/ Pre-Appraisal II 03/85 03/85 Appraisal 05/85 05/85 Post-Appraisal I 11/85 11/85 Post-Appraisal II 02/86 02/86 Loan Negotiations 03/86 03/86 Board Presentation 04/29/86 04/29/86 Loan Signing 05/23/86 05/23/86 Loan Effectiveness 08/01/86 08/01/86 Completion 06/30/90 12/31/92 Loan Closing 06/30/91 06/30/92 12/31/92 12/31/92 " Preceded by preliminary discussions in late 1982 and early 1983; initial Project Brief issued in June 1983. ' Government's Preparation Document completed in July 1984; revised Project Brief issued on July 27, 1984. a' Final Project Brief issued on January 3, 1985; draft Policy Paper completed in February 1985.  - 28 - Table 3.2B: PROJECT TIMETABLE (LOAN 2987-MA) - Dates - Stage Planned Actual Preliminary Discussions 02/86 02/86 Reconnaissance 10/86 10/86 Identification 04/87 04/87 2' Pre-Appraisal 08/87 08/87 3/ Appraisal 02/88 02/88 Loan Negotiations 06/88 06/88 Board Presentation 08/02/88 08/02/88 Loan Signing 08/11/88 08/11/88 Loan Effectiveness 10/25/88 10/25/88 Completion 12/31/91 12/31/92 Loan Closing 12/31/92 12/31/92 " Initial Executive Project Summary issued in December 1986; initial Project Brief issued in February 1987. 2' Project Brief issued in June 1987. V' Final Executive Project Summary issued in November 1987.  - 29 - Table 3.3A: CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (LOAN 2685-MA) ----------------------------- Cumulative disbursements in USS million ---------------------------- Actual Appraisal Revised V' Revised 2/ as % of IBRD fiscal estimates estimates estimates appraisal year/semester May 1985 Actual Dec. 1990 Actual Jun. 1992 Actual estimates 1987 1st 2.5 5.5 5.5 5.52' 4 2nd 5.0 14.2 14.2 14.2 11 1988 1st 10.1 25.2 25.2 25.2 20 2nd 21.5 35.4 35.4 35.4 28 1989 1 st 35.5 35.4 35.4 35.4 28 2nd 54.4 41.4 41.4 41.4 33 1990 1 st 73.5 48.0 48.0 48.0 38 2nd 92.7 59.5 59.5 59.5 47 1991 1st 110.7 80.8 70.0 70.0 55 2nd 127.0 95.8 75.9 75.9 60 1992 1st 111.8 81.6 81.6 64 2nd 120.8 91.9 91.9 72 1993 1 st 127.0 98.7 96.1 76 2nd 111.7 109.24' 86 1' In December 1 990, the Government requested an extension to the original Closing Date by one year, to June 30, 1992, to accommodate the delayed construction of the Batu Pahat and Sri Pinang Teacher Training Colleges (TTCs). 2' In June 1992, the Government requested a second extension of the Closing Date by six months, to December 31, 1992, to allow for the procurement of equipment for the Batu Pahat and Sri Pinang TTCs. The Government also requested the cancellation of US$1 5.3 million of the Loan; this amount was cancelled on June 23, 1992. 3' Including the US$8.5 million initial deposit into Special Account made on January 25, 1988. 4' The final disbursement was made on April 15, 1993, and an additional US$2.5 million of undisbursed funds was cancelled on September 29, 1993, the date on which the recovery of the Special Account and refund of the remaining balance was made. Loan 2685-MA disbursements proceeded smoothly and ahead of schedule during the first two years of implementation, but slowed in the following two years to less than two-thirds of appraisal estimates. They lagged behind the November 1990 revised estimates, and as of the Closing Date of December 31, 1992, represented 76% of the original Loan or 86% of the revised Loan Amount following the cancellations. The final amount disbursed reached 98% of the June 1992 revised estimates. A major cause of disbursement delays was the collection of payment vouchers by different government agencies, depending on the type and location of expenditures, without sufficient coordination (e.g. for fellowships abroad, the Accountant General's Office within the Treasury collected the vouchers relating to fellowships in Britain through the High Commission in the United Kingdom, while the MOE Finance Division collected those from other countries through the Malaysian Students' Department in each specific country). For civil works, the vouchers were collected by PWD; however, the understaffing of PWD resulted in its inability to collect vouchers from the many individual contractors. The problem was compounded by the weak initial linkages between PWD and the MOE or State Education Departments (SEDs), particularly in Sabah and Sarawak, and by the PIU's accounting and technical staff shortage. This kept PIU from ensuring adequate coordination between all MOE divisions and external government agencies involved, and travelling to East Malaysia as required to help expedite the collection of vouchers.  - 30 - Figure 3.3A. DISBURSEMENT GRAPH (LOAN 2685-MA) 1t0 120- 100- 92 80 60- 40- 20- 0 , * . . 1987 1988 1989 1990 1991 1992 1993 IBRD fiscal year Appmiml stimate -U- nvimed. Nov. 90 E3 Reviwd. Juim 92 in Actual  - 31 - Table 3.3B: CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (LOAN 2987-MA) ---- Cumulative disbursements in US$ million ---- Appraisal Actual as % IBRD fiscal estimates of appraisal year/semester Feb. 1988 Actual estimate 1989 1st 2.4 0.0 0 2nd 10.9 0.0 0 1990 1 st 30.8 6.7 11 2nd 46.7 16.5 28 1991 1st 54.5 26.4 45 2nd 58.3 34.6 59 1992 1 st 58.6 38.7 66 2nd 58.7 50.4 86 1993 1 st 58.8 56.5 96 2nd 58.8 58.8 100 Note: The Closing Date was December 31, 1992. Loan 2987-MA disbursements progressed satisfactorily. Although delayed by one year, they virtually caught up with the appraisal schedule over a period of three and a half years, rising from 22% of the Loan at the beginning of the second year of Project implementation to 96% as of the Closing Date of December 31, 1992. Remaining expenditures incurred prior to the Closing Date were fully disbursed by March 12, 1993. Disbursements under Loan 2987-MA were faster than under Loan 2685-MA because they related to school construction and staff development programs which were easier to manage, following the lessons learned from the First Project and the alleviation of major implementation difficulties.  - 32 - Figure 3. 3B. DISBURSEMENT GRAPH (LOAN 2987-MA) 60 50- ,to 10- 20- 10 0* 1989 1990 1991 1992 1993 IBRD fical year Appraiml Etimxate -- Actual  - 33 - Table 3.4A: PROJECT IMPLEMENTATION (LOAN 2685-MA) Objective and Targets Actual Accomplishments Teacher Trainina Colleaes To contribute to meeting All three TTCs at Raja Melewar (Seremban), Batu Pahat (Johore) and teacher demand and replace Sri Pinang (Bukit Mertajam) are in operation. Tendering was inadequate teacher training completed in November 1986 and construction in January 1990, facilities, build, equip and April 1992 and December 1992, respectively. Original equipment furnish three TTCs to be lists were drafted in 1986. Their revision in accordance with the completed in June 1989. new school curricula started in mid-1989 and was completed In May 1990. Due to subsequent adjustments to TTC training objectives, the lists were updated in 1992. School Construction To alleviate critical shortages The outcome of the program exceeded appraisal targets by 40%, of facilities in underprivileged as follows: districts, build, equip and Actual furnish new schools and Plan Total Phase I Phase II related boarding and staff housing facilities, and extend Classrooms: Primary 2,200 3,070 2,295 775 existing facilities to establish Secondary 1,100 1,556 1,022 534 more cost-efficient primary schools, relieve the pressure Total 3,300 4,626 3,317 1,309 in crowded secondary schools, and provide Schools: Primary 260 337 258 79 specialized and administrative Secondary 70 104 68 36 facilities. The primary and secondary school construction Total 330 441 326 115 programs were planned to be completed in December 1988 Boarding units: 24 32 24 8 and June 1989, respectively. Boarders accommodated: 4,700 5,890 4,370 1,520 Staff quarters: Blocks 105 171 118 53 Units 503 1,096 772 324 Staff 1,500 3,300 2,330 970 The school construction program was geographically distributed as follows: Primary Secondary Staff Schools Schools Quarters Boardina Tota Peninsular Malaysia 256 78 113 34 479 Sabah 45 6 17 -- 62 Sarawak 36 20 41 -- 64 Total 337 104 171 34 605  - 34 - Table 3.4A: PROJECT IMPLEMENTATION (LOAN 2685-MA) (cont.) Objective and Targets Actual Accomplishments School Construction The original program was virtually completed on schedule: (cont.) in December 1988, 89% of the primary schools were completed or close to completion, and in June 1989, 98% of the total original program was completed. To utilize undisbursed funds, a second phase, including 97 schools, 49 staff quarters and 8 boarding units, was started in October 1988 in Peninsular Malaysia, and 18 schools were added to the East Malaysia program in mid-1989. On the original June 1991 Closing Date, 9 schools each in Sabah and Sarawak remained to be completed under Phase I, and the construction of 15 schools in Peninsular Malaysia, 2 schools in Sabah and another 8 in Sarawak were still incomplete under Phase II. On the December 1992 Closing Date, 6 schools and one staff quarter in Peninsular Malaysia, 3 schools in Sabah, and 5 schools in Sarawak were still under construction, expected to be completed by the end of 1993. Educational Resources (a) To improve the quality of The book program was implemented in three phases. A total of universal primary education, reach over 11.8 million books under 2,248 titles were distributed to a primary student-library books 7,017 schools. The first two phases, focusing on books in the ratio of 1:5 by 1990 through the National Language, were completed virtually on schedule in May provision of about eight million 1988 and December 1989. The third phase raised some library books to about 6,700 problems: the 110,000 Tamil books could not be delivered primary schools, supplementing the earlier than January 1991, and the 4.4 million English books and existing libraries of about 2,000 560,000 Chinese books not earlier than mid-1992. Undisbursed larger schools and creating new funds allowed the provision of library books to new schools libraries in the 4,700 most under the Loan 2685-MA extended construction programs and underprivileged rural schools. The Loan 2987-MA, and reference books to 28 TTCs in 1989 and program was planned to be 1990, and the four SERCs and 365 District Education Resource completed by mid-1989. Centers (DERCs), including 350 located in selected schools, 14 located in State Education Departments (SEDs) and one located within the MOE Educational Technology Division (ETD), in May 1992. (b) To promote an active learning The school equipment program was implemented in three approach, as emphasized by the phases: Phase I provided teaching and audio-visual aids, hand new primary school curriculum, tools and electrical kits to the 365 DERCs (314 in Peninsular provide the 5,400 rural primary Malaysia, 25 in Sabah and 26 in Sarawak). It was completed in schools with basic sets of audio- July 1987. Under Phase II, TVNCR equipment and micro- visual aids and equipment so that computers were provided to the DERCs in mid-1 988 and mid- they can benefit from MOE radio 1989. Phase IlIl provided: (a) basic equipment to 4,229 school and TV programs, and provide Resource Centers (RCs), which was delivered to 850 schools in equipment to 365 DERCs to assist Sabah in 1989 and to 3,379 schools in Peninsular Malaysia and teachers in satellite schools to Sarawak in 1990, and (bl complementary equipment which was produce better teaching-learning delivered to DERCs in Peninsular Malaysia and Sarawak in materials for the specific needs of September 1990, and in Sabah in September 1991. The their classes. The program was to remaining contracts, providing equipment to the four SERCs and be completed in June 1989. the 295 new DERCs built under Loan 2987-MA were signed in May 1992. The last delivery of multi-media kits to DERCs is expected to be completed in late 1993.  - 35 - Table 3.4A: PROJECT IMPLEMENTATION (LOAN 2685-MA) (cont.) Objective and Targets Actual Accomplishments Studies Proaram To improve educational development planning The studies were assigned to major universities as and qualitative assessment of the education follows: (a) University of Science--(1) and (7); system, and to increase the efficiency of (b) University of Agriculture--(2) and (8); (c) investments in education, carry out five University of Malaya--14) and (9); (d) National research and four evaluation studies to refine University--C5); and University of Technology--(6). the analysis of major issues affecting quality, In addition, the MOE's EPRD carried out the school cost efficiency and equity in education. The mapping exercise in East Malaysia. The terms of research studies included: 'The Relationship reference of the studies were developed by the Between Teacher Attributes and their Project Sub-Committee on Research and Evaluation Effectiveness" (1); 'The Management of on the basis of universities' and EPRD's proposals. School Facilities, Including Education Resource They were reviewed by the Bank in 1987. Interim Centers" (2); "School Mapping in Sabah and reports were reviewed in April 1989, except for the Sarawak' (3); "The Effect of Educational analysis of graduates' occupational opportunities in Inputs, and Socio-Economic and Environmental Study 4 which was completed later. In late 1989, Factors on Students' Achievement and Job the final reports of studies (1), (2), (5), (6) and (8) Opportunities" (4); and "The Process of were completed. The last study (9) was completed in National Integration in the Educational Setting" early 1991. The Bank's comments were conveyed to (5). The evaluation studies included: universities through EPRD. Undisbursed funds were "Employment of Polytechnics Graduates, and utilized to conduct a national seminar on the findings Technical and Vocational Schools" (6); "The of the studies in February 1991 and to carry out a Educational Media Service" (later renamed the school mapping exercise in Peninsular Malaysia, Educational Technology Division) (7); "The which was completed in June 1992. Textbook Loan Scheme" (8); and "The System of Educational Evaluation and Testing in Malaysian Schools" (9). The program was planned to be completed in June 1989. Staff Development Proaram To increase the efficiency of educational The program was implemented as follows: management and fill urgently needed key Actual positions at federal, state, district and school Plan 1990 1991 1992 levels, finance fellowships and specialist services. The program was to be completed Fellowships abroad in June 1990. MA degrees 41 8 9 9 PhD degrees 0 0 0 1 Short-term courses 100 103 116 175 Sub-total 141 111 125 185 In-country fellowships Short-courses 400 600 704 731 Specialist courses 0 494 624 664 Training Module Development Program 0 -- 111 124 MA degrees 0 44 73 75 Advanced diplomas 0 1 1 1 Sub-total 400 1,139 1,513 1,595 Total 541 1,250 1,638 1,780  - 36 - Table 3.4A: PROJECT IMPLEMENTATION (LOAN 2685-MA) (cont.) Objective and Targets Actual Accomplishments Staff Develooment Proaram (cont.) The program was often modified after a hesitant start to accommodate programs financed by external sources and, in 1987, the number of advanced degrees abroad was reduced in order to increase the number of short-term fellowships abroad, in-country short-term programs and advanced degree courses in local universities. Institute Aminuddin Baki (IAB) had a roster of qualified foreign specialists at an early stage of project implementation and 34 foreign specialists of high repute could be recruited for a total of 45 staff-months of services. Ten local specialists also participated in the program for a total of 24 staff-months of service. However, the recruiting process was delayed by extended negotiations between IAB, the Treasury and the identified specialists.  - 37 - Table 3.4B: PROJECT IMPLEMENTATION (LOAN 2987-MA) Objective and Targets Actual Accomplishments School and Resource Center Construction To further alleviate critical The program virtually reached all appraisal targets. It was shortages of facilities in implemented in two phases: Phase I, completed in December 1990, underprivileged districts, build, represented about 90% of the overall program, with emphasis on equip and furnish new schools primary schools, staff housing and resource centers; and Phase II and related boarding and staff represented the remaining 10%. The program was implemented as housing facilities; and to follows: optimize the use of Actual educational resource Plan Total Phase I Phase II equipment and materials provided to the DERCs under Classrooms: Primary 2,100 2,071 2,071 -- Loan 2685-MA, provide new Secondary 2,300 2,331 1,865 466 physical facilities to 295 DERCs. Total 4,400 4,402 3,936 466 Schools: Primary 240 234 234 -- Secondary 150 152 120 32 Total 390 386 354 32 Boarding units: 16 16 12 4 Boarders accommodated: 2,800 2,840 2,130 710 Staff quarters: Blocks 51 50 50 -- Units 290 295 295 -- Staff 1,200 1,200 1,200 -- Resource Centers: 295 295 295 -- The program was geographically distributed as follows: Primary Secondary Staff Schools Schools Quarters Boardina Centers Tot Peninsular Malaysia 213 149 50 16 253 681 Sabah 4 1 -- -- 21 26 Sarawak 17 2 -- -- 21 40 Total 234 152 50 16 295 747  - 38 - Table 3,4B: PROJECT IMPLEMENTATION (LOAN 2987-MA) (cont.) Objective and Targets Actual Accomplishments School and Resource Center Construction started about one year behind schedule. Construction (cont.> In June 1990, only 50% of staff housing and 40% of the resource centers were completed, as compared with the planned 100%. In December 1990, primary schools, which should have been fully implemented, were only 53% complete. In June 1991, the planned completion date for secondary schools and boarding, these components were only 53% and 44% complete, respectively. However, on December 31, 1991, the original Project Completion Date, Phase I and Phase II were, respectively, 100% and 89% complete in Peninsular Malaysia, 85% and 80% complete in Sabah, and 81 % and 50% complete in Sarawak. By the December 1992 Closing Date, 16 schools, one staff quarter and 2 boarding blocks in Peninsular Malaysia, 3 schools in Sabah and 6 schools in Sarawak were still under construction, expected to be completed by the end of 1 993. Staff Development Proaram To further increase the efficiency of Due to the multiplier effect of IAB outreach programs educational management and fill key down to the school level, delivered by the trainers trained positions in the MOE, SEDs, DEOs and under the First PSESP, the outcome of the program school levels, provide fellowships exceeded the targets as follows: abroad in educational, technical and managerial fields, and local programs Actual to train school principals, and Plan 1990 1991 1992 advisors, master teachers, teacher trainers and resource staff. The Fellowships abroad program was to be implemented by MA degrees 17 8 8 1 December 1 990 for local training and December 1991 for fellowships In-country abroad. School principals' course 800 1,325 119 0 Outreach programs 6,600 13,207 2,035 0 Sub-total 7,400 14,522 2,154 1 Total 7,417 14,530 2,162 1  - 39 - Table 3.5A: PROJECT COSTS (LOAN 2685-MA) (in US$ million) Estimated Costs ' Final Costs (Appraisal, May 1985) (December 31,1992) Category Local Foreign Total Local Foreign Total Civil Works 145.5 80.2 225.9 163.2 82.0 245.2 Land 6.2 - 6.2 6.1 - 6.1 Professional Services 6.2 1.1 7.3 0.1 0.1 0.2 Furniture 8.3 2.8 11.1 4.7 1.6 6.3 Equipment 3.5 32.0 35.5 1.5 18.7 20.2 Library books 14.3 4.9 19.2 13.1 4.4 17.5 Fellowships abroad 0.5 5.1 5.6 0.3 1.9 2.2 Local Training 0.5 0.1 0.6 0.3 0.1 0.4 Specialist Services 0.1 0.6 0.7 0.1 0.2 0.3 Studies 0.5 0.2 0.7 0.4 0.2 0.6 Total Proiect Cost 185.8 127.0 312.8 189.8 109.2 299.0 In Ringgit (M$) million 456.9 312.8 769.7 509.1 289.5 798.6 2' Including physical and price contingencies. The total Project cost was estimated at appraisal at US$312.8 million, including US$47.7 million of contingencies, for expenditures over a five-year period. At the appraisal exchange rate of Ringgit IM$) 2.46 to US$1.0, this was equivalent to M$ 769.7 million. The final Project cost was M$ 798.6 million, expended over seven years. Based on average annual exchange rates fluctuating from M$ 2.58 in 1986 to 2.75 in 1991, the final Project cost Is estimated at US$299.0 million. The underrun of US$13.8 million represents 4% of the originally estimated total Project cost. The foreign exchange component was estimated as follows: 35% for civil works; 15% for professional services; 25% for furniture and books; 90% for equipment, fellowships abroad and specialist services; and 20% for studies and local training.  - 40 - Table 3.5B: PROJECT COSTS (LOAN 2987-MA) (in US$ million) Estimated Costs v' Final Costs lAppraisal, February 1988) (December 31, 19921 Category Local Foreign Total Local Foreign Total Civil works and professional services 93.7 51.0 144.7 101.8 51.4 153.2 Furniture 4.5 1.5 6.0 5.8 1.9 7.7 Equipment 0.6 5.4 6.0 0.4 4.7 5.1 Fellowships abroad 0.1 0.8 0.9 - 0.8 0.8 Local Training 2.1 0.1 2.2 1.6 - 1.6 Total Proiect Cost 101.0 588 1598 109 6 5 8 168.4 In Ringgit (M$) million 252.6 146.9 399.5 299.2 160.5 459.7 1' Including physical and price contingencies. The total Project cost was estimated at appraisal at US$159.8 million, including US$13.4 million of contingencies for expenditures over a four-year period. At the appraisal exchange rate of Ringgit (M$) 2.50 to US$1.0, this was equivalent to M$ 399.5 million. The final Project cost was M$ 459.7 million expended over four and a half years. Based on average annual exchange rates fluctuating from M$ 2.62 in 1988 to 2.75 in 1991, the final Project cost is estimated at US$168.4 million, which represents an overrun of M$ 8.6 million, i.e. 5% of the originally estimated total Project cost. The foreign exchange component was estimated as follows: 35% for civil works; 25% for furniture; 90% for equipment; and 100% for fellowships abroad.  - 41 - Table 3.6A: PROJECT FINANCING (LOAN 2685-MA) (in US$ million) Estimated Financing Final Financing (Appraisal, May 1985) (December 31, 1992) Category GOM IBRD Total GOM IBRD Total Civil works 125.6 67.7 193.3 163.2 82.0 245.2 Land 5.6 - 5.6 6.1 - 6.1 Professional services 5.4 0.9 6.3 0.1 0.1 0.2 Furniture 6.8 2.3 9.1 4.7 1.6 6.3 Equipment 2.9 25.6 28.5 1.5 18.7 20.2 Library books 11.9 4.0 15.9 13.1 4.4 17.5 Fellowships abroad 0.5 4.3 4.8 0.3 1.9 2.2 Local training 0.3 0.1 0.4 0.3 0.1 0.4 Specialist services 0.1 0.5 0.6 0.1 0.2 0.3 Studies 0.5 0.1 0.6 0.4 0.2 0.6 Contingencies 26.2 21.5 47.7 - Total 185.8 127.0 .312.8 189.8 109.2 299.0 The original Loan of US$127.0 million was to finance the foreign exchange component representing 41 % of the total Project cost. With the cancellation of US$15.3 million of Loan funds on June 23, 1992 and of US$2.5 million on September 29, 1993, Loan proceeds totalling US$109.2 million financed 36% of the final total Project cost.  - 42 - Table 3.6B: PROJECT FINANCING (LOAN 2987-MA) (in US$ million) Estimated Financing Final Financing (Appraisal, February 1988) (December 31, 1992) Category GOM IBRD Total GOM IBRD Total Civil works and professional services 86.4 46.4 132.8 101.8 51.4 153.2 Furniture 4.1 1.4 5.5 5.8 1.9 7.7 Equipment 0.5 4.8 5.3 0.4 4.7 5.1 Fellowships abroad 0.0 0.8 0.8 - 0.8 0.8 Local training 2.0 0.0 2.0 1.6 - 1.6 Contingencies 8.0 5.4 13.4 - - Total 101.0 58.8 159.8 109.6 168 4 The original Loan of US$58.8 million was to finance the foreign exchange component representing 37% of the total Project cost. With a cost overrun of USS8.6 million, the Loan financed 35% of the final total Project cost.  - 43 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits I. QUALITY OF EDUCATION TEACHER TRAINING Obiective: Increase the capacity Actual: In 1992, there were 30 TTCs offering the three planned and improve the quality of teacher pre-service training programs, namely the 2 1/2-year Primary training to meet the needs of the Teacher Certificate course, the 2 1/2- to 3-year Non-Graduate new curricula and cope with Lower Secondary Certificate course, and the one-year Post- natural enrollment increase, Graduate Diploma in Education (PGDE) course. TTCs also upgrade academically qualified provided in-service training programs to 2,700 annual teachers without professional participants, including three one-year Diploma courses, 19 one- certification, introduce qualified year specialized courses, 15 14-week professional courses, and teachers to the new curricula and a four-month course for professional upgrading of non-graduate teaching methods, and replace teachers. In addition, six universities provided 6,400 trainees 3,000 places in inadequate TTCs. with one-year Diploma-in-Education courses and 4-year Bachelor of Arts/Science with Education courses. The pre-service training programs progressed as follows: Faculties of Teacher Training Colleges Education Targets Actual Actual Actual Actual 1990 1986 Proiect 1992 1986 1992 Capacity Number of TTCs/Faculties 30 27 3 30 5 6 Estimated capacity _/ 30,000 25,000 3,500 28,500 5,500 6,400 Output Primary teachers 8,000 4,500 1,000 8,100 -- -- Non-graduate secondary teachers 1,500 1,000 180 1,000 -- -- Graduate secondary teachers PGDE 1,200 -- 150 1,569 1,800 1,543 BA/BSc (Education) -- -- -- -- 1,229 1,396 Total 10,700 5,500 1,330 10,669 3,029 2,939 a/ In 1990, TTC enrollments peaked at about 30,000, necessitating night shifts. EDUCATIONAL RESOURCES Obiective: Improve primary Actual: Under Loan 2685-MA, about 4,229 underprivileged students' and teachers' creativity rural primary schools, 365 DERCs and the four SERCs were by providing all primary schools equipped. A total of 7,017 schools were provided with over with educational resource facilities, 11.8 million library books. Reference books were also provided including a library, adequate to 28 TTCs, IAB, DERCs and SERCs. Under Loan 2987-MA, equipment and materials and 295 DERCs located in schools were provided with new physical physical facilities to DERCs facilities. (later renamed Teachers' Activity Centers) by 1990.  - 44 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) STAFF HOUSING Obiective: Retain qualified Actual: The 4,500 staff accommodated in Project staff quarters represent teachers in hardship areas about 3.5% of all primary teachers and over one third of primary teachers by improving their living accommodated in MOE staff quarters. In 1992, there were about 9,800 conditions through staff quarters accommodating 13,200 primary teachers and 5,600 provision of staff quarters. quarters accommodating 6,800 secondary teachers. This represented 10% of the 129,916 primary teachers and about 9% of the 79,687 secondary teachers. Project achievements were as follows: Loan 2685-MA Loan 2987-MA Total Taroets Actual Taroets Actual Taraets Actual Staff quarter blocks 105 171 51 50 156 221 Staff quarters units 500 1,096 290 295 790 1,391 Staff accommodated 1,500 3,300 1,200 1,200 2,700 4,500 CURRICULUM Obiective: Improve Actual: A new primary school curriculum CKBSR) was fully implemented curricula and teaching in 1989 and all subjects of a new integrated secondary school curriculum methods, focusing on (KBSM) were implemented up to Form IV (the first year of upper reading, writing, secondary education), together with the four Form V language subjects in mathematics and 1992. The KBSM will be fully implemented in 1993, as planned. Related environment-centered textbooks were produced and distributed through a textbook loan scheme integrated science which benefits over 90% of the primary and secondary school population subjects, with a student at current annual cost of M$65 million, i.e., USS 25 million equivalent) activity oriented approach. per annum for about eight million books. Teacher training programs and teachers' guides were modified to meet the practical requirements of the new curricula. School-based assessment testing and a national primary school achievement test (UPSR) were introduced. Curriculum evaluation and revision have been a continuing process carried out by MOE's EPRD with the collaboration of the University of Science Malaysia (USM) for the KBSR, and the University of Malaya for the KBSM. An evaluation of the KBSR, carried out by USM, was completed in 1990. CDC is revising the integrated KBSR science component, separating social from physical sciences to alleviate difficulties in teaching integrated subjects. TEACHERS WITH SPECIAL FUNCTIONS Obiective: Provide Actual: The number of special function teachers increased from 5,509 in secondary schools with 1986 to 8,001 in 1 992 for a total of 1,395 secondary schools. special function teachers to Moreover, two new academic special function categories, which were not take care of students in included in the Project Plans of Action, were added In 1992, namely areas outside academic Senior Subject Teachers (6,997) and Senior Co-Curriculum Teachers teaching. (378). This increased the number of special function teachers to 15,376.  - 45 - Table 3 .7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) MOE Targets Actual SDecial Function Teachers 1990 1995 1986 1992 Headmasters 1,300 1,400 1,179 1,211 Senior assistants 1,100 2,100 967 1,131 Afternoon supervisors 500 1,400 543 510 Guidance counsellors 1,300 2,800 1,083 1,233 Sports teachers 500 1,200 704 905 Media specialists 300 700 351 738 Librarians 500 1,300 682 1,111 Welfare specialists -- 1,000 -- 1,162 Total 5,500 9,900 5,509 8,001 TEACHER-CLASS RATIOS Obiective: Increase the Actual: In 1992, the ratios were as follows: teacher-class ratio from 1.2:1 to 1.5:1 in primary education, to provide All Regular Trained teachers with sufficient Teachers Teachers a/ Teachers / time to discharge their Primary new curriculum All schools 1.65:1 1.43:1 1.25:1 assignments. Regular schools c/ 1.72:1 1.49:1 1.33:1 Secondary All schools 1.81:1 1.61:1 1.52:1 a/ Excluding teachers with special functions. b/ Excluding teachers without professional qualifications. c/ Excluding underenrolled schools (below 150 students). SECONDARY TEACHER QUALIFICATIONS Obiective: Raise Actual: The number of graduate teachers in secondary education academic standards in increased by 84% from 18,477 in 1986 to 33,995 in 1992, and their secondary education by proportion among secondary school teachers was 43%, compared to increasing the proportion 32% in 1986. of university graduate teachers. MOE Targets Actual 1990 1995 1986 1992 Lower secondary 15% 40% 5% 23% Upper secondary 85% 100% 75% 77%  - 46 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) TRAINERS' QUALIFICATIONS Obiective: Raise teacher training academic Actual: In 1992, out of 2,687 trainers, 2,204 were standards by recruiting new trainers among graduates (82%, compared to 63% in 1986 and 69% in graduates or post-secondary specialized 1989), including 6 PhDs and 326 MA degree holders. diploma holders, and upgrade the 600 Post-graduates represented 12.2% of TTC staff. The unqualified trainers (out of the 1,600 remaining non-graduates were attending one-year trainers) to post-secondary qualifications. specialized in-service courses while six of them were pursuing first degree courses and 48 post-graduate programs (3 PhDs and 45 MAs) in universities. New trainers are recruited among graduates. OVERCROWDED CLASSES Obiective: Improve working conditions in Actual: In 1 992, the number of overcrowded classes the classroom by reducing the number of and their proportion in the total number of classes were overcrowded classes so that class size does as follows: not exceed 45 in 1990 and 40 in 1995. National 1992 1986 1992 Pen. Mal. Sabah Sarawak Number % Number % Number % Number % Number % Primary Classes of 40+ 22,432 33 23,194 29 18,894 30 2,468 28 1,832 22 Classes of 45 + 6,000 10 9,004 11 6,379 10 1,426 16 1,199 15 Secondary Classes of 40+ 8,558 23 6,082 14 4,482 13 1,040 33 560 15 Classes of 45 + 1,600 4 1,239 3 687 2 471 15 81 2 Note: Pen. Mal. = Peninsular Malaysia DOUBLE SHIFTING Obiective: Reduce double shifting Actual: In 1986 and 1992, the proportions of schools wherever it restricts instruction time and and classes practicing double shifting were as follows: generates commuting hardships. Primary Education Secondary Education National 1992 National 1992 1986 1992 Pen. Sab. Sar. 1986 1992 Pen. Sab. Sar. Schools Number 938 1,035 857 145 33 711 614 494 74 46 % of total 14 15 18 15 3 58 44 44 52 35 Classes Number 11,260 13,183 11,552 1,385 246 11,750 10,492 8,539 1,145 808 % of total 17 17 19 16 3 32 25 24 36 21 Note: Pen. = Peninsular Malaysia; Sab. = Sabah; Sar. = Sarawak  - 47 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) II. EFFICIENCY OF EDUCATIONAL MANAGEMENT STAFF DEVELOPMENT PROGRAMS Obiectives: Fill urgently needed key positions at Actual: Project achievements are as follows: all managerial levels from MOE to schools with adequately trained professionals. Loan 2685-MA Loan 2987-MA Total Proarams D/ Taraets Actual Taraets Actual Taroets Actual Abroad MA degrees 41 9 17 17 58 26 PhD degrees 0 1 -- -- 0 1 Short-Term courses 100 175 -- -- 100 175 Sub-total 141 185 17 17 158 202 In-country Short courses b/ 400 731 800 1,444 1,200 2,175 Specialist courses c/ 0 664 6,600 15,242 6,600 15,906 Training Module Development Program 0 124 -- -- 0 124 MA degrees 0 75 -- -- 0 75 Advanced diplomas 0 1 -- -- 0 1 Sub-total 400 1,595 7,400 16,686 7,800 18,281 Total 541 1,780 7,417 16,703 7,958 18,483 A/ The above training programs included the following topics: educational development; planning; financing and management; policy implementation and evaluation; administration and supervision; computers in information systems; curriculum development, evaluation and management; research methodology and evaluation; measurement and testing; education methodology: remedial education; computers in education; management of educational resources; book production; educational technology production and management; community education; and peer group facilitator skills. b/ Includes school principals' courses. r/ Includes outreach programs for advisors, teacher trainers, master teachers and resource staff down to school level under Loan 2987-MA. STUDIES All nine planned studies were completed (Table 3.4). Their outcomes are described in Table 3.7B.  - 48 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) COST-EFFICIENCY MEASURES Obiectives: (il Consolidate the 2,400 Actual: The above measures could not be underenrolled schools to bring up their average successfully implemented: (i} the number of class size from 18 in 1986 to 20 in 1990 and underenrolled schools increased to about 2,500 and 24 in 1995; (ii) expand multigrade teaching so their average class size was 15.5, below the 1986 that 60% of these underenrolled schools figure; (b) multigrade teaching was practiced In only practice it in 1 990 and all of them in 1995; and 738 schools (29% of all underenrolled schools); and (iii) implement designs and standards of reduced more cost-efficient designs for small class classroom size (600 sq. ft.) for classes below enrollments were used in only 23 schools. In 40 students. addition, no measures have been envisaged to reduce the overly high teacher-class ratio. MONITORING AND EVALUATION Obiective: Develop monitoring and evaluation Actual: EPRD developed an adequate statistical of the quality and efficiency of education by collection and processing system which enabled It establishing procedures and indicators to assess to produce high quality annual evaluation reports, annual progress in the provision of educational including national examinations results and inputs and in student achievement, and statistical yearbooks. Although this system could producing annual evaluation reports on the be further improved, it provides the data required for quality of education in conjunction with a planning, decision making and policy Implementation statistical report. monitoring, as expected.  - 49 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) III. ACCESS TO BETTER EDUCATION Obiectives: Assist in: (i) maintaining universal Actual: Project achievements in construction of primary education; (ii) expanding lower physical facilities and sector coverage are given in secondary education to reach an enrollment the following two tables: ratio of 92% in 1990 with a view to achieving universal lower secondary education in 1995; {iii) alleviating critical overcrowding of school facilities and double shifting; and (iv) providing boarding facilities to students who otherwise could not have access to secondary education. Loan 2685-MA Loan 2987-MA Total Taroets Actual Taraets Actual Taroets Actual Primary Education Schools 260 337 240 234 500 571 Classrooms 2,200 3,070 2,090 2,071 4,290 5,141 Places 92,000 122,800 84,000 82,800 174,000 205,600 Beneficiaries a/ 120,000 142,800 100,000 96,300 220,000 239,100 - % of total enrollments 5 5.4 4 3.7 9 9.1 Secondary Education Schools 70 104 150 152 217 256 Classrooms 1,100 1,556 2,320 2,331 3,420 3,887 Places 40,000 62,200 93,000 93,200 133,000 155,400 Beneficiaries a/ 60,000 82,900 110,000 124,300 170,000 207,200 - % of total enrollments 4 5.8 7 8.7 11 14.5 Total Schools 330 441 390 386 720 827 Classrooms 3,300 4,626 4,410 4,402 7,710 9,028 Places 132,000 185,000 175,000 176,000 307,000 361,000 Beneficiaries 180,000 225,700 210,000 220,600 390,000 446,300 - % of total enrollments 5 5.6 5 5.4 10 11.1 Boarding Boarding units 24 32 16 16 40 48 Boarders 4,700 5,900 2,800 2,840 7,500 8,740 - % of secondary boarders 3 4 2 2 5 6 A/ Taking into account estimated double shifting.  - 50 - Table 3.7: PROJECT RESULTS (LOANS 2685-MA AND 2987-MA) A. Benefits (cont.) Primary Education Secondary Education Target Actual Target Actual 1990 1986 1992 1990 1986 1992 Enrollments (in thousands) Primary -- 2,233 -- 2,500 2,641 -- Lower secondary -- -- -- 1,000 935 983 Upper secondary -- -- -- 500 366 422 Total Secondary -- -- -- 1,500 1,301 1,425 Enrollment ratios Primary 100% 98% -- 98% -- Lower secondary -- -- -- 92% 87% 82% Upper secondary -- -- -- 58% 48% 58% Total Secondary -- -- -- 77% 72% 73% Classroom-student ratios il 1:40 1:39 _l 1:52 1:44 - number of districts below NA I/ Al 39 24 DI 56 43 Classroom-class ratios DI 84% 85% DI 70% 75% - number of districts below NA gl DI 51 35 57 48 Number of boarders c/ 50,000 51,400 rI 132,000 159,600 - as % of total enrollments rl 2 2 Q/ 10 11 A/ To alleviate acute shortages of facilities and subsequent critical overcrowding and double shifting, improve classroom-student and classroom-class ratios, giving priority to the most underprivileged districts below national average ratios. k/ NA = national average: out of 112 districts in 1986 and 113 districts in 1992. Q/ Provide boarding facilities to students who otherwise could not have access to education; however, the number of boarders should remain minimal in primary education and should not exceed 10% of total secondary enrollments.  - 51 - Table 3.7: PROJECT RESULTS B. National Examination Results PRIMARY SCHOOL ACHIEVEMENT TEST (UPSR) a/ Type of School b/ Malay Chinese Tamil Year '89 '90 '91 '92 '89 '90 '91 '92 '89 '90 '91 '92 National Language c/ Comprehension 70 85 76 76 68 62 54 50 54 48 41 34 Writing 65 81 72 73 37 34 33 32 23 27 19 17 English c/ 63 53 53 53 69 73 69 70 57 63 51 56 Mathematics 75 57 60 61 92 89 87 87 68 48 50 56 Chinese/Tamil Language Comprehension - - - - 83 79 77 81 76 74 74 75 Writing - - - - 63 76 75 76 56 66 53 53 LOWER SECONDARY SCHOOL CERTIFICATE (SRP) d/ Year 1988 1989 1990 1991 1992 National average 69 69 69 77 78 UPPER SECONDARY SCHOOL CERTIFICATE (SPM) e/ Year 1988 1989 1990 1991 1992 National average 73 77 72 71 72 _/ Percentage of students achieving excellent, good or satisfactory mastery; the KBSR covered the full six-year cycle in 1 989. b/ By medium of instruction. q/ The tests in National Language and English for National Schools (Malay-medium) differ from those for the National-Type Schools (Chinese- and Tamil-medium) because they follow a different syllabus in these subjects. d/ Percentage of passes; 1992 was the first year that the KBSM covered the full three-year lower secondary cycle. _/ The KBSM will cover the full two-year upper secondary cycle in 1993.  - 52 - Table 3.7: PROJECT RESULTS (LOAN 2685-MA) C. Studies Puroose of Studies as Defined at Appraisal. The Project was to support: (a) research on major issues affecting the quality, recurrent and investment cost efficiency, and equity in education--namely teachers' attributes and effectiveness; the management of school facilities; geographic school distribution in East Malaysia (Sabah and Sarawak); the effects of educational inputs and socio-economic environment on students' achievement and occupational opportunities; and education as a factor of national integration; and (b) evaluation of major tools and outcomes of the education system--namely employment of technical and vocational graduates; production, distribution and utilization of educational media and textbooks; and educational evaluation and testing in schools. Studies were to be assessed on the basis of their potential contribution to policy making, planning and monitoring of program objectives and achievements. Five research and four evaluation studies on the above topics were identified in the Staff Appraisal Report. Status. The nine studies were carried out by major universities (Table 3.4), namely the University of Science (2 studies), the University of Agriculture (2 studies), the University of Malaya (2 studies), the National University (one study), and the University of Technology (one study). The MOE's EPRD carried out the school mapping exercise in East Malaysia. Results of Studies. The main objective of the studies as a whole was to establish a base for continued monitoring and assessment of the major sectoral issues. A subsidiary objective was to test educational research capabilities in the country. The degree to which the studies successfully addressed the specific issues at stake, and provided reliable inputs to the MOE and the Bank to guide subsequent reforms and lending, was variable. (a) The study on teachers collected basic information on teacher profiles, attitudes, motivation, satisfaction and perceptions as to effective teaching. It provided valid information on the still prevailing teacher-centered approach, deficient classroom management and prevalence of information questions and rote learning over inductive/deductive critical reasoning and higher level thinking skills. This corroborated the findings on the difficulties to implement the new curricula and helped specify changes to be brought to teacher training and curricula themselves, which are currently under review. (b) The study on school facilities focused on the quantity-quality dilemma in a rapidly developing system but did not tackle the issue of their management, as originally expected. It indicated that: inadequate designs and materials were often utilized for urgently needed large-scale new school construction; many schools badly needed repair or even replacement due to double session and overloaded classes; maintenance funds were insufficient; there was a severe shortage of specialized rooms for counseling, remedial teaching and computer education; sick bays, clinics, toilets, staff quarters and hostels were usually insufficient and in suboptimal conditions; education resource centers were generally underutilized because they were inconveniently located and insufficiently equipped, and regulations discouraged the use of their resources; and furniture, procured centrally, was of poor quality. The above points and the recommendation that rehabilitation of existing schools be considered as seriously as new school construction were taken into consideration when the Third Primary and Secondary Education Sector Project was prepared. (c) The school maooino exercise was of high quality and provided detailed information on the availability, location and access of educational facilities, including teacher quarters and boarding, in Sabah and Sarawak, two of the most disadvantaged states in Malaysia. The study led to a precise assessment of the need for schools and related facilities, linked to enrollment growth, and recommendations on the priority for future investment in rural areas, school size, consolidation of small schools and related transportation needs, and multigrade teaching.  - 53 - Table 3.7: PROJECT RESULTS (LOAN 2685-MA) C. Studies (cont.) Results of Studies (cont.) (d) The study on educational inDuts, socioeconomic environment and student achievement and iob opportunities was the best designed study, using primary data and sophisticated statistical techniques. The major findings were that education was the most important criterion of occupational status, and social class was more important to educational attainment than ethnicity, despite ethnically related determinants of poverty. Subsidiary findings were that: educational attainment was used as a proxy for ability by employers; parental attitude to education and fathers' level of education were the most determining factors; Bumiputeras had better opportunities for initial entry into the labor force but poor Indian students left school earlier and had comparably little access to higher education; and women had lower examination scores and lower levels of attendance in rural areas. These findings led to an important policy recommendation to continue to give priority to the poor, particularly in rural areas. (e) The study on education as a factor of national intearation made an effort to measure concepts which are difficult to define operationally, such as the sense of national culture and identity. The major findings were that: homes exerted a stronger influence on students' attitudes than schools; the sense of a specific Malaysian culture was uncertain, while English-speaking culture was strong in urban areas; friendship patterns were strongly influenced by ethnicity and native language; within the curriculum, the National Language, which most non-Malay students readily use in secondary education, helped national integration, as compared with history and geography which tended to leave students uninterested; and most students believed that their own culture was the best for themselves. These findings led to policy recommendations on the desirable emphasis to be placed on attractive aspects of Malaysian culture, such as the National Language, and cautioned against potentially counterproductive features, such as promoting a specific religious creed. (f) The tracer study on vocational and technical education (VTE) graduates indicated that VTE philosophy and objectives were still perceived with indifference or unfavorably, as less prestigious than general academic education. This was compounded by lower admission standards, and by the underprivileged situation of VTE in the education system, as reflected in the allocation of funds and facilities, particularly at the secondary education level. 'However, the rapid shift to an industrial economy and increasingly sophisticated technology, with their financial rewards, tended to gradually modify the negative attitude of the public. The study also found that VTE had not kept abreast with the recent development of industry and only Polytechnic students were offered practical training in industry, while students in secondary technical and vocational schools were not. These findings led to the following recommendations endorsed by employers, instructors and students: VTE should continue to be provided from upper secondary IGrade 10) onwards, and preparation to the modern world of work should be reinforced in the lower secondary curriculum; VTE should produce graduates with general, versatile, creative skills and a sense of discipline, while providing specific skills should be the responsibility of employers; VTE should provide an appropriate balance between theoretical and practical shop-floor training conducive to positive labor market entry behavior, and more business courses should be incorporated in VTE to prepare graduates for entrepreneurship; this would require raising admission standards for motivated students and providing avenues for advancement to higher levels of education for VTE graduates, while less academically able students could continue to pursue skills-oriented training; a more comprehensive evaluation method should assess leadership qualities and independence for work; employers should be involved in VTE curriculum planning and development, and practical training; attachment of instructors in industry should be sought, to improve the quality of instruction; and councils comprising industry leaders, VTE staff and Government officials should be established to develop and improve VTE. The study and the success of Bank-financed Polytechnics, which it acknowledges, impelled the Government to approach the Bank for advice on the overall reform of the training system, with particular regard to secondary technical and vocational schools.  - 54 - Table 3.7: PROJECT RESULTS (LOAN 2685-MA) C. Studies (cont.) Results of Studies (cont.) (g) The study on the educational media service indicated that educational media were underutilized because too much attention was given to program production and not enough to implementation logistics and staffing, and because of the lack of a strategy on the specific use of media. This resulted in media not being used particularly in isolated, poor rural schools, which would most benefit from them, for lack of workbooks, trained teachers and resource staff, suitable spaces and equipment. The findings of the study led to valid recommendations on targeting remote rural schools by priority, getting feedback from rural areas on their specific needs, producing taped materials for a majority of schools where broadcasting time does not tie in with regular instruction or which are located in shadow areas, and defining the programs that supplement or replace regular courses, depending on the level of assistance required by teachers in specific fields. The findings and recommendations of the study provided a precious contribution to the discussions on further development of distance education as a component of the Third Primary and Secondary Education Sector Project. (h) The study on the textbook loan scheme indicated that textbooks were the most significant predictor variable of examination results, particularly for low achievers; the books used in class were not necessarily those provided under the scheme, which many teachers used rather as reference materials because of their unsatisfactory quality as textbooks; and overly bureaucratic distribution procedures and lack of storage detrimentally affected the scheme. These findings led to recommendations on the desirable inclusion of workbooks and compensation for the additional cost through more tightly controlled students' qualification, income tax information and legal liability, and streamlined administration. The findings of the study are relevant at a time when textbooks are being reviewed in light of curriculum modifications. (i) The study on the evaluation system in Malaysian schools indicated that: national public examinations were universally accepted standards and criteria for summative evaluation, and were relevant to the syllabus and consistent from year to year; there were significantly more graduates in urban schools; and high achieving schools had a significantly higher number of university-trained teachers. As for school-based testing, the study indicated that: although most teachers were trained in evaluation and measurement, they made up their own tests using guide books, textbook questions and questions of previous years' public examinations; tests almost totally focused on syllabus contents and teachers were not encouraged to test a greater variety of cognitive, affective and psychomotor skills, despite the guidelines of the new curricula; and success at the primary school leaving test overshadowed any other consideration, resulting in teachers teaching 'to the book and to the test." These findings led to discussions on future testing in Malaysia during the preparation of the Third Primary and Secondary Education Sector Project, with particular regard to the current use of norm-referenced tests, possible introduction of criterion-referenced tests and the appropriate statistical treatment of tests. In this respect, the study provided interesting insights about the comparative validity of national public examinations and school-based testing as determinants of school teaching strategies and teacher training requirements. Evaluation. Little contact took place between most researchers and MOE which eventually questioned the relevance of the studies' approaches and the validity of their conclusions, and was reluctant to release the findings of two of the studies before they could be edited or qualified. In most cases, the methodology left much to be desired: generally no explicit experimental design was utilized to provide answers to specific questions; opinion surveys were used rather than direct measurements; most studies presented raw data and statistical conclusions with little interpretation; a low level of aggregation made the studies generally voluminous while the larger problems that engendered them remained virtually unanswered. However, they contributed to giving greater attention to major sectoral issues.  - 55 - Table 3,8A: COMPLIANCE WITH LOAN COVENANTS (LOAN 2685-MA) A. Loan Agreement Reference Covenant Status/Remarks 2.02 Open and maintain for the purposes of Complied with. The Special Account (b) the project a Special Account in a fully was established at Oriental Bank in convertible currency in a bank and on Kuala Lumpur in 1987. Initial terms and conditions satisfactory to the deposit of US$8.5 million was made Bank. on January 25, 1988. 3.03 Select, appraise and implement sub- Complied with. projects in accordance with guidelines, criteria and procedures satisfactory to the Bank. 3.04 Award fellowships in accordance with Complied with. criteria and procedures satisfactory to the Bank. 3.05 Monitor and evaluate, in accordance with Complied with. However, greater performance indicators satisfactory to the emphasis should have been placed Bank: on unit cost analysis and output (a) distribution of education facilities and monitoring. resources by district; (b) education quality and cost effectiveness; (c} level of education expenditures; and (d} teacher training for primary and secondary education. 3.06 In relation to actions taken pursuant to Complied with. For practical the Letter of Policy and Project purposes, in order to coordinate implementation: (a) by March 31 and supervision of both ongoing sector September 30 of each year, furnish a projects, it was agreed to adopt the report to the Bank; (b) by October 31 of same dates for this project as for the each year, review implementation and Second Education Sector Project agree with the Bank on performance (Loan 2987-MA), namely: indicators and targets to be established (a) February 1 5 and September 1 5; for the following year; and (c) by October and (b) March 31 and October 31. 31, 1988 conduct a mid-term review with the Bank. The mid-term review of the physical and financial implementation was conducted in November 1988. The mid-term analysis of 1989 educational achievements was carried out in April 1989. 3.07 Carry out studies according to terms of Complied with. However, there reference satisfactory to the Bank and were difficulties in gaining direct furnish to the Bank a summary and access to university staff involved in analysis of the findings promptly upon the studies. completion of such studies.  - 56 - Table 3.8A: COMPLIANCE WITH LOAN COVENANTS (LOAN 2685-MA) A. Loan Agreement (cont.) Reference Covenant Status/Remarks 4.01 Maintain records and accounts adequate to Complied with. (a) reflect, in accordance with sound accounting practices, the operations, resources and expenditures, in respect of the Project, of the department or agencies responsible for carrying out the Project. (bJ (i) Have the accounts referred to in Complied with. paragraph (a) of this Section, including the Special Account for each fiscal year, audited in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank. (ii) Furnish to the Bank no later than nine Complied with. However, months after the end of each fiscal year, annual audit reports were a certified copy of the audit report by received behind schedule as said auditors, of such scope and in such follows: detail as the Bank shall have reasonably requested. Calendar Year Date Received 1986 May 1988 1987 July 1989 1988 October 1990 1989 August 1991 1990 February 1992 1991 October 1992 The 1992 audit report was due by September 30, 1993, but has not been received. (c) Ci) Maintain separate records and accounts Complied with. for expenditures made on the basis of statements of expenditure (SOEs). (ii) Retain, until at least one year after the Comolied with. Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records evidencing such expenditures. (iii) Enable the Bank's representatives to Complied with. examine such records. (iv) Ensure that the audit report includes a Complied with. separate opinion on SOE accounts.  - 57 - Table 3.8A: COMPLIANCE WITH LOAN COVENANTS (LOAN 2685-MA) B. Supplemental Letter Reference Covenant Status/Remarks Annex 1 A(1) Following an analysis of past Complied with. However, objective deficiencies, assess the new assessments were difficult to obtain. curriculum and related teaching methods to determine whether they are expected to improve the quality and efficiency of education. A(4) Reduce class size (towards a Not complied with. In primary education, the maximum of 40) and double number of overcrowded classes increased in shifting. absolute terms, particularly for classes with enrollments above 45 students. The number of double shifting classes increased in primary education, particularly in Peninsular Malaysia and Sabah, while it declined in secondary education. However, the proportion of double shifting secondary classes remains high, particularly in Sabah. A(6) Consolidate small, Not complied with. No significant progress uneconomical schools; improve was made in consolidating underenrolled multigrade teaching; and schools, with class sizes averaging still 15.5 implement alternative designs students. Multigrade teaching methods were for classrooms of reduced size, introduced into teacher training curricula but i.e. below 40 students. was actually practiced in less than one-third of the 2,500 underenrolled schools in 1992. Alternative classroom designs for small classes were developed, but were used for only a negligible number of schools. B(3) Make suitable sites available by Complied with. However, acquisitions started the time program with considerable initial delays in some States, implementation is planned to particularly in Sarawak. start. Cli) Keep capital and recurrent costs Complied with. However, generous and areas per student construction and staffing norms and standards, reasonable. and low student-teacher ratios resulted in capital and recurrent unit costs being higher than in comparable countries of the world, and are rising. The share of education in government expenditures steadily increased to a historically high 20.1% for recurrent and 18.1% for total expenditures in 1992, as compared with 18.4% and 16.3%, respectively, in 1 986 when the Project started.  - 58 - Table 3.8B: COMPLIANCE WITH LOAN COVENANTS (LOAN 2987-MA) A. Loan Agreement Reference Covenant Status/Remarks 2.02 Open and maintain a special account in a fully Not complied with. However, (b) convertible currency in a bank and on terms the Bank agreed with the and conditions satisfactory to the Bank. Government that a special account was not needed. In early 1989, the Government informally requested that this covenant be eliminated but no official notification was ever received. 3.03 Select, appraise and implement sub-projects in Complied with. accordance with guidelines, criteria and procedures satisfactory to the Bank. 3.04 Carry out training in accordance with Comrlied with. (a) programs, schedules, staffing and facilities satisfactory to the Bank. lb) Award fellowships in accordance with criteria Complied with. and procedures satisfactory to the Bank. 3.05 Monitor and evaluate: (a) distribution of Complied with. However, education facilities and resources by district; greater emphasis should have (bl education quality and cost effectiveness; been placed on unit cost (c} level of education expenditures; and (d) analysis and output monitoring. teacher training for primary and secondary education, in accordance with performance indicators satisfactory to the Bank. 3.06 (a) By February 15 and September 15 of each Complied with. The mid-term year, furnish a report to the Bank; (b) by review of the project March 31 and October 31 of each year, implementation was conducted review implementation and agree with Bank on in May 1990. performance indicators and targets to be established for the following year; and Ic) by March 31, 1990, conduct a mid-term review with the Bank.  - 59 - Table 3.8B: COMPLIANCE WITH LOAN COVENANTS (LOAN 2987-MA) A. Loan Agreement (cont.) Reference Covenant Status/Remarks 4.01 (a) Maintain records and accounts adequate to Complied with. reflect, in accordance with sound accounting practices, the operations, resources and expenditures, in respect of the Project, of the department or agencies responsible for carrying out the Project. (bl (i) Have the accounts referred to in Comrlied with. paragraph (a) of this Section including the Special Account for each fiscal year, audited in accordance with appropriate auditing principles consistently applied by independent auditors acceptable to the Bank. (ii) Furnish to the Bank no later than nine Complied with. However, annual months after the end of each fiscal audit reports were received year, a certified copy of the audit behind schedule as follows: report by said auditors, of such scope and in such detail as the Bank shall Calendar Year Date Received have reasonably requested. 1988 April 1990 1989 November 1990 1990 March 1992 1991 October 1992 The 1993 audit report was due by September 30, 1993, but has not been received. (cc) i) Maintain separate records and Complied with. accounts for expenditures made on the basis of statements of expenditure (SOEs). Cii) Retain, until at least one year after the Complied with. Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records evidencing such expenditures. (iii) Enable the Bank's representatives to Complied with. examine such records. (iv) Ensure that the audit report includes a Comolied with. separate opinion on SOE accounts.  - 60 - Table 3.f8B: COMPLIANCE WITH LOAN COVENANTS (LOAN 2987-MA) (cont.) B. Supplemental Letter Reference Covenant Status/Remarks Annex 1 A(1) Following an analysis of past Comolied with. However, objective deficiencies, assess the new assessments were difficult to obtain. curriculum and related teaching methods to determine whether they are expected to improve the quality and efficiency of education. AM3 Reduce class size (towards a Not complied with. In primary education, maximum of 40) and double the number of overcrowded classes shifting. increased, particularly for classes with enrollments above 45 students. The number of double shifting schools and classes increased in primary education, and while it declined in secondary education, the proportion of double shifting secondary schools and classes remains high. A(5) Consolidate small, Not complied with. No significant progress uneconomical schools; improve was made in consolidating underenrolled multigrade teaching; and schools. Multigrade teaching was practiced implement alternative designs in less than one-third of the 2,500 for classes of reduced size, i.e. underenrolled schools in 1992. Alternative below 40 students. classroom designs for small classes were utilized for only 23 schools; the findings of a study on the impact of this reduction on the teaching-learning process were not reported. B(3) Suitable sites should be Complied with. However, acquisitions available by the time program started with considerable initial delays in Implementation is planned to some States, particularly in Sarawak. start. B(5) Per capita grants to schools Complied with. Per capita grants were should be increased in the 1989 increased in 1990 and 1992. budget to make up for their past erosion, and subsequently to offset inflation. C(1) The capital and recurrent costs Complied with. However, current and areas per student should be construction and staffing norms and reasonable. standards and low student-teacher ratios resulted in capital and recurrent unit costs being higher than in comparable countries of the world, and are rising. The share of education in government expenditures steadily increased to a historically high 20.1% for recurrent and 18.1% for total expenditures in 1992.  - 61 - Table 3,9A: BANK MISSIONS (LOAN 2685-MA) A. Identification through Appraisal Month/ No. of No. of Mission Year Persons Staff-Days Specializations Reconnaissance 04/83 1 2 Economist Identification' 08/83 2 10 Economist General Educator Preparation l 10/83 3 17 Division Chief/Economist Economist General Educator Preparation 11 06/84 2 20 Economist General Educator Pre-Appraisal l 10/84 4 84 General Educator General Educator Education Planner Economist Pre-Appraisal 11 03/85 3 21 General Educator Economist Architect Appraisal 05/85 4 84 General Educator General Educator Economist Education Planner Post-Appraisal l 10/85 4 70 Deputy Division Chief/ General Educator General Educator Architect Operations Assistant Post-Appraisal ll 02/86 2 28 General Educator Architect Subtotal 336 ' Missions combined with other missions in the country or the region. Operational start-up and pre-negotiations discussions.  - 62 - Table 3.9A: BANK MISSIONS (LOAN 2685-MA) B. Supervision Month/ No. of No. of Overall Implementation Mission Year Persons Staff-Days Specializations Status Problems Supervision 1 07/86 1 11 Architect 1 II' 10/86 1 14 General Educator 1 III 04/87 1 10 General Educator 1 IV 10/87 1 7 General Educator 1 V' 02/88 3 21 General Educator 1 C, M General Educator Architect VI 10/88 3 33 General Educator 1 C, M, F General Educator Architect VIl 11/88 1 4 Disbursement Officer Vill' 04/89 4 36 General Educator 2 C, M T, F General Educator Economist Architect IX 12/89 3 24 General Educator 2 C, M, T, F General Educator Disbursement Officer X' 05/90 4 56 General Educator 2 C, M, T, F General Educator Education Planner Procurement Specialist Annual in-depth implementation review, including review of education quality performance indicators and statistics. Specific review by the Disbursement Officer of problems relating to evidence of payment, SOE ceilings and reimbursement requests. No formal supervision, thus only a back-to- office report was filed. Overall status ratings: 1 -- Problem free or minor problems; 2 -- Moderate problems Implementation oroblems: C -- Compliance with Loan conditions; F -- Finance; M -- Management Performance; T - Technical Assistance  - 63 - Table 3.9A: BANK MISSIONS (LOAN 2685-MA) C. Supervision (cont.) through Project Completion Month/ No. of No. of Overall Implementation Mission Year Persons Staff-Days Specializations Status Problems Supervision (cont.) Xl 10/90 4 28 General Educator 2 C, M, T, F General Educator Education Planner Architect Xll' 07/91 4 40 General Educator 2 M, F Education Planner Operations Officer Architect X1il' 04/92 3 14 Operations Officer 2 M, F General Educator Architect Subtotal 298 Completion (PCR) I 09/92 1 2 General Educator 11 05/93 1 11 General Educator Total (all missions) 647 ' Annual in-depth implementation review, including review of education quality performance indicators and statistics. Overall status ratinas: 1 -- Problem free of minor problems; 2 -- Moderate problems Implementation problems: C -- Compliance with Loan conditions (e.g. audit reports, curriculum assessment results); F -- Finance (e.g. disbursements, special account); M -- Management performance (e.g. implementation delays, shortage of project management staff); T - Technical assistance.  - 64 - Table 3.9B: BANK MISSIONS (LOAN 2987-MA) A. Identification through Appraisal Month/ No. of No. of Mission Year Persons Staff-Days Specializations Preliminary Discussions 02/86 2 4 General Educator Architect Reconnaissance 10/86 1 10 General Educator Identification 04/87 1 10 General Educator Pre-Appraisal 08/87 4 68 General Educator General Educator Economist Facility Planner Appraisal 02/88 4 72 General Educator General Educator Economist Architect B. Supervision Month/ No. of No. of Overall Implementation Mission Year Persons Staff-Days Specializations Status Problems Supervision 1 10/88 3 21 General Educator 1 Architect Procurement Specialist 11 03/89 3 21 General Educator 2 C General Educator Economist ' Annual in-depth implementation review, including review of education quality performance indicators and statistics. Overall status ratinas: 1 -- Problem free on minor problems; 2 -- Moderate problems. Implementation problems: C -- Compliance with Loan conditions; F -- Finance; M -- Management performance  - 65 - Table 3.9B: BANK MISSIONS (LOANS 2987-MA) C. Supervision (cont.) through Project Completion Month/ No. of No. of Overall Implementation Mission Year Persons Staff-Days Specializations Status Problems Supervision (cont.) III 12/89 3 21 General Educator 2 C,M,F General Educator Disbursement Officer IV 05/90 4 28 General Educator 2 C,M,F General Educator Education Planner Procurement Specialist V 10/90 4 28 General Educator 2 C,M,F General Educator Education Planner Architect Vl 07/91 4 28 General Educator 2 C,M General Educator Operations Officer Architect Vll 04/92 3 18 Operations Officer 2 M General Educator Architect Sub-total 165 Completion IPCR) I 09/92 1 2 General Educator 11 05/93 1 10 General Educator Total (all missions) 341 Annual in-depth implementation review, including review of education quality performance indicators and statistics. Overall status ratinas: 1 -- Problem free on minor problems; 2 -- Moderate problems. Imolementation Droblems: C -- Compliance with Loan conditions; F -- Finance; M -- Management performance  - 66 - Table 3.10A: BANK STAFF INPUTS BY FISCAL YEAR AND STAGE OF PROJECT CYCLE (LOAN 2685-MA) (in staff-weeks) ------------------------------- Stage of Project Cycle -------------------------------- IBRD Appraisal Negotiations Project Fiscal To to to Completion Year Appraisal Negotiations Effectiveness Supervision Report Total FY83 4.9 4.9 FY84 13.0 13.0 FY85 36.8 23.3 60.2 FY86 2.7 41.2 8.3 2.8 55.0 FY87 6.5 6.5 FY88 10.4 10.4 FY89 17.1 17.1 FY90 14.6 14.6 FY91 6.2 6.2 FY92 7.8 7.8 FY93 4.8 9.3 14.1 FY94 1.0 1.0 Total 57.4 64.5 8.3 70.2 10.3 210.8 Table 3.10B: BANK STAFF INPUTS BY FISCAL YEAR AND STAGE OF PROJECT CYCLE (LOAN 2987-MA) (in staff-weeks) ----------------------------- Stage of Project Cycle --------------------------------- IBRD Appraisal Negotiations Project Fiscal To to to Completion Year Appraisal Negotiations Effectiveness Supervision Report Total FY86 0.4 0.4 FY87 12.0 12.0 FY88 35.3 22.4 7.0 64.7 FY89 4.5 13.0 17.5 FY90 11.4 11.4 FY91 6.4 6.4 FY92 7.5 7.5 FY93 7.3 8.5 15.8 FY94 1.0 1.0 Total 47.7 22.4 11.5 45.6 9.5 136.8   I  IBRD A19300R 1000 102 MALAYSIA 104