Tajikistan - Education Reform Project (LIL)

Document of The World Bank Report No: 18985-TJ PROJECT APPRAISAL DOCUMENT ONA PROPOSED LEARNING AND INNOVATION CREDIT IN THE AMOUNT OF SDR 3,700,000 TO THE REPUBLIC OF TAJIKISTAN FOR AN EDUCATION REFORM PROJECT May 11, 1999 Human Development Sector Unit Azerbaijan, Tajikistan, Uzbekistan and Aral Sea Country Unit Europe and Central Asia Region  CURRENCY EQUIVALENTS (Exchange Rate Effective February 1999) Currency Unit = Tajikistan Rubles (TR) US$1 = TR900 FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank CAS Country Assistance Strategy CQ Consultant Qualification DC Direct Contracting ECA Europe and Central Asia Region FSU Former Soviet Union GOT Government of Tajikistan IDA International Development Association IMF International Monetary Fund IS International Shopping LIL Learning and innovation Loan LR Leninsky Rayon M&E Monitoring and Evaluation MIS Management Information System MOC Ministry of Culture MOE Ministry of Education MOF Ministry of Finance NCB National Competitive Bidding NGO Non-Governmental Organization NS National Shopping PAD Project Appraisal Document PIP Project Implementation Plan PIU Project Implementation Unit PMR Project Management Report PPAP Pilot Poverty Alleviation Project PAP2 Poverty Alleviation Project 2 PHRD Policy and Human Resource Development (grant) PTA Parent Teacher Association RFP Request for Proposal SAC Structural Adjustment Credit SDP School Development Proposal SOE Statement of Expenditures SSA State Statistical Agency SW Small Works TA Technical Assistance TASIF Tajikistan Social Investment Fund UNICEF United Nations International Children's Emergency Fund Vice President: Johannes Linn Country Manager/Director: Ishrat Husain Sector Manager/Director: James Socknat Team Leader: Marit Granheim  Tajikistan Education Reform Project (LIL) CONTENTS A. Project Development Objective ..................................................................2 l. Project development objective ................................................................. 2 2. Key performance indicators ..................................................................2 B. Strategic Context ..................................................................2 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project ........3 2. Main sector issues and Government strategy .................................................................3 3. Sector issues to be addressed by the project and strategic choices .................................6 C. Project Description Summary ..................................................................7 1. Project components ..................................................................7 2. Key policy and institutional reforms supported by the project ................................I ... 10 3. Benefits and target population . ................................................................. 0 4. Institutional and implementation arrangements ............................................................ 11 D. Project Rationale ................................................................. 12 1. Project alternatives considered and reasons for rejection ............................................. 12 2. Major related projects financed by the IDA and/or other development agencies ......... 13 3. Lessons learned and reflected in the project design ..................................................... 14 4. Indications of borrower commitment and ownership ................................................... 14 5. Value added of IDA support in this project ................................................................. 1 5 E. Summary Project Analysis ................................................................. 15 1. Economic Assessment ................................................................. 15 2. Financial Assessment .................................................................1 5 3. Technical Assessment .................................................................. 16 4. Institutional Assessment ................................................................. 16 5. Social Assessment ................................................................. 17 6. Environmental Assessment ............................ 18 7. Participatory approach ............................ l 8 F. Sustainability and Risks ............................ 18 1. Sustainability ............................ 18 2. Critical Risks ............................ 19 3. Possible Controversial Aspects ............................ 20 G. Main Credit Conditions ............................ 20 1. Effectiveness Conditions ............................ 20  ii H. Readiness for Implementation ........................ 21 I. Compliance with IDA Policies ........................ 21 Annexes Annex I Project Design Summary Annex 2 Project Description Annex 3 Estimated Project Costs Annex 4 Procurement and Disbursement Arrangements Table A: Project Costs by Procurement Arrangements Table B: Procurement Plan Table C: Summary of Procurement Activities Table D: Allocation of Loan Proceeds Annex 5 Project Processing Budget and Schedule Annex 6 Documents in Project File Annex 7 Status of Bank Group Operations in Tajikistan - Operations Portfolio Annex 7A Statement of IFC's Committed and Disbursed Portfolio Annex 8 Financial Management Annex 9 Country At A Glance Map IBRD 30115  Page 1 Tajikistan Education Reform Project (LIL) Project Appraisal Document Human Development Sector Unit Azerbaijan, Tajikistan, Uzbekistan, and Aral Sea Country Unit Europe and Central Asia Region Date: May 11,1999 Team Leader: Marit Granheim/Michael Mills Country Manager/Director: Ishrat Husain Sector Manager/Director: James Socknat Project ID: TJ-57953 Sector: Education Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Human Development; Poverty Reduction Poverty Targeted Intervention: [X] Yes [ I No Project Financing Data [ I Loan [X] Credit [ 3 Grant [ Guarantee [ Other [Specify] For Loans/Credits/Others: Amount (US$m): $5 million Proposed terms: [ ] To be defined [ ] Multicurrency [ ] Single currency Standard Variable [ Fixed [] LIBOR-based Grace period (years): 10 Years to maturity: 40 Commitment fee: Standard Service charge: 0.75% Front-end fee on Bank loan: Government $0.5 m $0.5 m IBRD IDA $3.8 m $1.2 m $5.0 m Other (specify) Total: $4.3 m $1.2 m $5.5 m Borrower: Republic of Tajikistan Guarantor: Not applicable Responsible agencies: Ministries of Finance and Education Estimated disbursements (Bank FY, US$M): i Y t 0*0 j 2001 - Z-- - - Annual $1.5 m $2.0 m $2.0 m Cumulative $1.5 m $3.5 m $5.5 m Project implementation period: 36 months Expected effectiveness date: 7/15/99 Expected closing date: 12/31/02 Implementing agencies: Ministry of Education; Leninsky Rayon and Dushanbe City; coordinated by the Project Management Unit Contact person: Minister Munira lnayatova Address: Ministry of Education, 13 Chekhov Street, Dushanbe Tel: 7-3772-233392/214605 Fax: E-mail:  Page 2 A: Project Development Objective 1. Project development objective (see Annex 1): The main goal of the project is to improve access to high quality education as well as to raise learning achievements of students. The main project development objectives are: (i) to develop and pilot enhanced teaching and management methodologies; (ii) to rehabilitate 20 pilot schools in a way which could later be replicated geographically; (iii) to reform the system of textbook development, publishing and distribution to improve the availability of good quality textbooks; (iv) build management capacity in the Ministry of Education (MOE), the two pilot rayon school administrations and at the pilot schools; and (v) to learn from this pilot experience in order to apply lessons learned to broader reforms in the education sector. The project will introduce innovation and reform in primary education in Tajikistan focussing on the primary grades and carried out through the MOE piloting new methods of teaching, management, school rehabilitation and textbook development in a participatory approach. It will involve the central, regional and school administrations, as well as parents, students and the community at large. 2. Key performance indicators (see Annex 1). The indicators for the project include: (i) the use of "active learning" techniques by teachers in the pilot schools, and active learning included in the new curriculum by 2002; (ii) the performance levels of students in the pilot schools; (iii) the number of children attending primary school and the number of students completing primary education; (iv) the number of managers having completed management training, the development of clear roles and responsibilities for managers at central and local level established nationwide, and the implementation of them in the pilot rayons and schools; (v) 20 schools upgraded to functional standards; (vi) the number of students nationwide who have received textbooks, and particularly the number of textbooks distributed in 20 schools; (vii) a transparent system of writing, editing, printing and distribution of textbooks-with participation of the private sector; (viii) parents' contributions to school resources and maintenance; and (ix) the extent to which the lessons of the project are used by the education authorities for further design and implementation of further reforms in the sector. As the proposed project is a Learning and Innovation Loan (LIL), emphasis is placed on learning from the piloting of new methodologies. During the course of project implementation, additional indicators will be added and the current indicators will be augmented relating to the development, testing and implementation of the new teaching and management techniques, as well as to the rehabilitation of the pilot schools and textbook development. B: Strategic Context Tajik3.tan is a very poor country with an estimated per capita income of around US$330. The country has been hit hard by a combination of civil war, economic collapse and localized natural disasters. Wages and salaries, once the primary component of family income, have ceased for most families to be the major source of income. By the end of 1998, real wages had fallen to less than 5 percent of their 1991 level, and the average monthly salary of teachers and health care workers was TR 2,400 (US$7)-well below the estimated cost of an individual adult 2400 kCal minimum diet. Poverty has intensified in many parts of the country, especially in remote and war-affected areas, with women (especially single women and female headed households), children and orphans particularly vulnerable. Roughly 85 percent of the population of 6 million is considered poor. Despite the severity of the situation, there is hope that poverty can be reduced over time. The Government's approach toward poverty reduction consists of the following elements: (i) continued macroeconomic stabilization with inflation and the budget deficit kept down, and acceleration of the privatization process; (ii) peace and security, including repatriation and reintegration of refugees and internally displaced  Page 3 people, demobilization and reintegration of ex-combatants, and physical reconstruction; (iii) land reform, farm restructuring and additional job creation measures, especially to assist the poor and landless who do not benefit directly from the reform measures; and (iv) protection of basic social service budgets and structural reforms in health and education. Since the Government and United Tajik Opposition signed the peace agreement in 1997, the Government has made good progress in stabilizing the macro environment. The IMF is supporting the macroeconomic strategy under the Post Conflict Emergency Assistance Mechanism, and in 1998 there was positive growth of about 5 percent. 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project (see Annex 1): CAS Document number: 18075-TJ Date of latest CAS discussion: June 25, 1998 The Bank's strategy in the social and human development sectors comprises four elements: protection of the minimum necessary budget for priority services (in coordination with the IMF), investments in key activities, support for policy change, and institution building efforts. First, under the Structural Adjustment Credit (SAC), the Government has already agreed that the health and education sectors' share of the total government budget will not fall below an agreed minimum proportion. The SAC agreement also includes agreements about the elimination of salary arrears, the bulk of which are presently owed to education and health workers. Second, there are some key investments aimed directly at the needs of the poor. In particular, the ongoing Pilot Poverty Alleviation Project (PPAP) supports demand-driven microprojects and the programs of three international non-government organizations (NGOs). Under the PPAP, the Tajikistan Social Investment Fund (TASIF) is designing and implementing microprojects, with an emphasis on community participation. Through both the microprojects and also the programs of the three international NGOs, the aim is for the PPAP to benefit 250,000 people (5 percent of the total population). The PPAP should be fully implemented by early FY00, at which time a follow-up project (PAP2) is planned. There is also an ongoing Post-Conflict Emergency Reconstruction Project which is aimed at reconstruction following the end of civil war. In addition to the proposed Education Reform Project, there will also be an IDA-supported investment in the health sector in FY00. This project will focus on pilot testing approaches to reorient health services toward primary care delivery and building institutional capacity to define and carry out reforms, including rationalization of services. In total, 20 percent of Bank lending to Tajikistan during FY99-FYO1 is being directed to the social sectors. In all of its social sector project work, the Bank will continue to work closely with the other agencies which are already active there. Third, there is also support for policy change relating to some of the key structural issues facing each of the sectors, such as financing, decentralization and personnel management reform. This will build upon what is already being done by the Government, for example through an increased emphasis on cost sharing by patients (in the health sector) and by parents/students (in education). Fourth, there is an emphasis on building up institutional capacity, partly through the IDA-supported education and health projects, but also through coordination with the World Bank Institute program (such as was done with the design of the PPAP) and in conjunction with other relevant donor and NGO partners. In the design and evaluation of projects, local consultants are being used wherever feasible. 2. Main sector issues and Government strategy: Like in other Former Soviet Union (FSU) republics, investment in social infrastructure during the Soviet period allowed Tajikistan to reach the level of educational development in middle income countries, though it was mainly the result of the large budget subsidy from Moscow. Prior to independence, Tajikistan had achieved a high adult literacy rate (99 percent in 1990), almost universal eleven years of compulsory education, and a  Page 4 relatively well educated labor force (e.g., 77 percent having ten or more years of schooling). Educational institutions at all levels have been fairly accessible to the majority of the public in terms of both location and numbers. Unfortunately, this situation rapidly changed in the early 1990s. An increasing number of students are now not attending school, and dropout rates are on the increase at all levels of education. According to figures from the State Statistical Agency (SSA), in 1996, about one-fifth of boys and one-quarter of girls, aged 7- 1 8 years old, did not attend school. In the past, illiteracy did not exist, but there are now children who cannot read or write. Tajikistan inherited its educational structure from the FSU, and the overall structure and programs of the previous Soviet system appear to have been maintained with some minor revisions only in school curricula. Like other FSU countries, Tajikistan has kindergartens, general secondary schools (which include primary grades 1-4 and secondary grades 5-9), upper secondary schools (grades 10-1 1), specialized vocational and technical schools, and higher education institutions. At present, education is compulsory for all children up to the ninth grade, having been reduced from 11 years in 1996. Each year, there are about 180,000 children who should go to school for the first year. Since population growth is now around 3 percent, there is an increasing demographic pressure on the general education system. The MOE is responsible for overall education policy, curriculum and textbook development, and the administration of preschool, primary, secondary, specialized secondary and higher education. The MOE is itself responsible for financing specialized secondary education, higher education and the internats (boarding schools for students with minor and severe mental and physical disabilities, orphanages, and sanitaria). However, the local governments have become increasingly responsible for the delivery and financing of primary and secondary education, even though their planning and management (including financial) capacity has been extremely weak. In 1997, about 82 percent of actual state expenditure on primary and secondary education was funded at the local level. While part of local government expenditures is transferred from the Central Government, local governments cover the balance through their own resources. The Ministry of Labor is responsible for administrating and financing vocational and technical education. Currently, there are 56 higher educational and secondary technical vocational schools. Table I presents a snapshot of Tajikistan's education profile with respect to the basic education indicators. In 1992, there were 3,320 primary and secondary schools in the country, with a total of 1.3 million students. The education system has a total of 112,500 employees from pre-school to universities. Most primary and secondary teachers in the urban areas are women, while most of the teachers in the rural areas are men. Table 1: Selected Education Indicators LevelTof dbe of Ndumcbr o . . en T * ke eentage Preschools 792 10,000 112 11 -25.8 General Education 3,392 92,578 1,308 14 1.1 Universities 25 2,000 76 37 -19.1 Source: UNDP Human Development Report, 1997.  Page 5 The main issues now facing the sector include: (i) a deterioration of the quality of education; (ii) the need for a change of "mentality" among teachers, students and education administration officials; (iii) inequitable access to school; (iv) inadequate management capacity; (v) inefficiencies in funding; (vi) unsatisfactory school facilities; and (vii) a serious shortage of textbooks. (a) Deterioration of Education Quality. The break-up of the FSU and the subsequent collapse of the Tajik economy has led to a deterioration of school buildings and school furniture, a lack of textbooks, highly insufficient funds for school supervision and management, and a flight of teachers away from the profession and even away from the country. As a result of all these factors, the quality of the education provided has significantly deteriorated, affecting all children in the population and particularly children of the poorest families. There is now a serious danger of a "lost generation" with little or no education at all. (b) Needfor a Change of "Mentality". The development of democracy and a market economy in the country represents a formidable challenge to the mindset of people who need to embrace concepts such as personal responsibility, accountability, and proactive and entrepreneurial attitudes. Education needs to play an important part in bringing about these changes. However, there must first be a change in the attitudes and way of thinking among teachers. Therefore, teacher training is a critical prerequisite to the overall development and change of mentality in education and thus in society as a whole. A related teacher education issue is the single subject specialization of teachers beginning in grade 5. As in other FSU countries, teachers often teach in that narrow specialization.. This practice is one of the major contributors to the low student-teacher ratio in general education, since most single subject teachers are not able to teach "full-time equivalent" particularly in smaller schools. Training single subject teachers as "general specialist" or "dual subject specialist" could, in time, provide some cost savings in smaller schools due to a decline in the number of teachers in the system. More importantly, to re-train single subject specialist teachers as "generalist" or "dual subject" teachers is particularly important in the context of curriculum reform, since the number of compulsory courses will be reduced sharply. As a result of a sharp reduction in the number of specialized courses, many teacher need to be re-trained to teach courses related to their specialization. (c) Inequitable Access to School. An important consequence of the persistent under-funding of education is the declining access to education particularly for those children coming from poor families and rural areas. Site visits and the available evidence indicate that an increasing number of children from poor families are unable to attend even primary education because of the increasing direct and indirect costs of attending schools. Indirect costs include children's work to earn money to support their families, while direct costs include payments for schools in the form of school fees and/or expenditures for textbooks and other educational materials. The net effect of the increasing cost of education is that an increasing number of children from low-income families or rural areas drop out before completing school or are not even able to attend school. (d) Lack of Management Capacity. In order to improve its management and to develop policy capacity, the MOE needs to strengthen its management information system (MIS), and develop the managerial skills of its staff at the central, local government, and the school levels. This will require a reassessment of the roles and responsibilities of the MOE and how/which responsibilities are delegated to local authorities and schools and how they are divided between MOE and other players at the national level, e.g., the Ministry of Finance (MOF) and other agencies. In addition, it is essential to improve the quality and availability of data at all levels of the system, so that managers can monitor those parts of the system for which they are responsible, and develop policy and action plans based on information that is accurate and timely. (e) Inefficiencies in Funding. Existing norms for average class size and student teacher ratios in determining education budget result in considerable inefficiencies in allocating government funds for the education sector. Greater local and school level flexibility in resource mobilization and allocation needs to be accompanied by transparent mechanisms of financial accountability, which will consist of several elements,  Page 6 including an improved and relevant MIS, and the strengthening of the reporting requirements of school managers to school councils and parent groups. G9 Unsatisfactory School Facilities. The majority of schools in the country were constructed very poorly and had no central heating or water supply systems although close to 25 percent of the schools were built in accordance with Soviet standards. The disintegration of the Soviet Union, social upheavals, and the civil war had a serious effect on the education infrastructure. Over 200 schools were destroyed and plundered in Khatlon, the Gharm Valley and parts of the Rayons of Republican Subordination. In addition, natural disasters like earthquakes, heavy floods and mud floods, have also contributed to the poor standard of school facilities in the country. Some schools lack floors, have unfinished ceilings and insufficient lighting. More than 600 schools are buildings with only two or three classrooms, and many schools have no glass in windows, broken doors, leaking ceilings, and no electrical supply. Exacerbating this situation, schools lack furniture, and three or four children often have to share one desk. Most school buildings have not been maintained and repaired in years, so there is a great and accumulated need for maintenance and repair. Some of the most severely affected rayons are in need of a comprehensive school rehabilitation program. (g) Shortage of Textbooks. Traditionally, the Government provided all basic textbooks for grades 1-1 1 free of charge. However, since 1996, the Government has not been able to provide funds for textbook publishing and has stopped providing free textbooks. Few textbooks are even available on the market, and the available ones are sold at high prices by private traders. The lack of textbooks and high costs of basic textbooks have resulted in a rapid deterioration in the quality of general education. At the same time, the textbook problem has been exacerbated by the outdated content of textbooks in many subjects. The production and distribution system of textbooks also needs to be reformed, as textbook publishing is monopolized by the Ministry of Culture (MOC). 3. Sector issues to be addressed by the project and strategic choices: As indicated above, there are many complex issues to be addressed in the education sector. One approach might be to try to tackle them one by one. However, this will not be an effective or feasible approach, as the issues are intrinsically interlinked. For example, the quality of education is unlikely to be improved significantly only through a program of teacher retraining: also necessary will be an investment in the learning materials, in school management, and in at least basic physical improvements in some of the schools. Therefore, the design of the proposed project is based on two main pillars: the need for some key strategic planning in all of the identified issues at the national level, and the associated piloting of the reforms in two selected areas of the country. The strategic planning relates, for example, to the teacher retraining program, to the development of new forms of school and sector management, to changes in the ways textbooks are produced and utilized, and to the revision of standards for school buildings. In each of these areas, the plan is to design a national framework, and then to learn from the first phase of implementation through the proposed project. The project has also been designed as a relatively small and quick pilot project, and with as much flexibility of design as possible. In addition, the project includes a considerable amount of monitoring and evaluation from which lessons of experience will be learned. The selected areas for the project comprise Leninsky rayon (chosen due to its accessibility to Dushanbe, its relatively safe security situation and the interest of the local authorities there) and some adjacent parts of Dushanbe. In these selected areas, a total of about 20 pilot schools will be supported through the project. These schools were selected partly through a competitive process, in order to identify the schools and local communities most interested in and willing to carry out reforms; and partly on the basis of need, in order to try to contribute (albeit modestly) to poverty alleviation efforts. It is hoped and expected that other external agencies (including perhaps the Asian Development Bank-ADB) may be interested in providing parallel assistance to the education reform program through investing in a similar way in other rayons of the country.  Page 7 As part of the project design work, a social assessment was carried out. The main conclusion of that assessment is that the project must address factors such as the inadequate school facilities, textbooks and the extremely low salaries for teachers. The project design also needs to take account of the poverty of many families, and the increasing size of the student drop-out problem. Therefore, the project will address the physical reconstruction of schools, the procurement of textbooks and the involvement of parents in maintaining and partly financing their children's schools. Another conclusion of the assessment is that the project must address the strong need for a change in mentality. The Minister of Education and students agree about the need for interactive teaching methods that encourage creativity. However, the changes in the curriculum are not understood well by the teachers. It is, therefore, a main area of the project to train teachers and managers in new methods of teaching and managing. The focus will be on the need for teachers to be proactive and take initiatives, and on a participatory approach and the involvement of students. In parallel with the implementation of the project, overall budgetary issues (and especially ensuring the payment of teachers' salaries and protecting the proportion of the budget allocated to the education sector) will continue to be addressed through the structural adjustment program. Maximum use is also being made of the experiences of other donors, and in particular UNICEF, which has already been investigating the potential for the establishment of a textbook revolving fund. Regarding teacher retraining, there has also been close liaison with the Aga Khan Network, with a representative of the Aga Khan University working with the project design team in order to share experiences of teacher retraining programs within the region. As part of the project development, a meeting was organized of all external agencies (such as the Open Society Institute, the Red Cross, Save The Children US and Save The Children UK) working in the education sector in order to coordinate programs. In order to assist the design work and also to start the process of building up planning capacity within the Ministry of Education, a PHRD (Policy and Human Resource Development) grant was approved by the Government of Japan. Inter alia, this was used to encourage the counterparts and the client to share and learn as much as possible from the education programs of other countries in the region. C: Project Description Summary 1. Project components (see Annex 2for a detailed project description and Annex 3for detailed cost estimates): The total cost of the project is $5.5 million, and the local contribution will amount to $0.5 million. Of this amount, half will be made available in kind by the Government through the provision of the accommodation for the Project Implementation Unit (PIU) and through contributions from local communities through their support for schools within the pilot rayons. The balance ($230,000) of the local contribution will come from the MOF through the budget: the equivalent of $50,000 will be approved in CY99; $100,000 in CY0O; $60,000 in CY01; and $20,000 in CY02. The following three components will be implemented under the project: (i) capacity building; (ii) improving education assets and materials; and (iii) project management, and monitoring and evaluation.  Page 8 A. Capacity building 1. Training Training, * Training for teacher trainers Technical 0.15 2.7 0.15 3.0 * In-service training teachers in pilot schools Assistance, 0.11 2.0 0.11 2.2 * Parents meetings in pilot schools and study 0.03 0.5 0.03 0.6 tours 2. Management training * Ministry of Education * Rayon Ed. Administration Training, 0.22 4.0 0.22 4.4 * School Administration Technical assistance and study Total: tours 0.52 9.5 0.52 10.4 B. Improving educational assets/materials I . Refurbishment and equipment * Pilot schools: Civil works and equipment Training 2.09 38.0 1.93 38.6 * MOE: Equipment Technical 0.02 0.4 0.02 0.4 * Pilot rayon: Civil works and equipment assistance 0.08 1.5 0.07 1.4 * Teacher training centers/teacher retraining Civil 0.17 3.1 0.16 3.2 center works, goods 2. Textbooks * Printing of 18 titles Training 1.65 30.0 1.65 33.0 * Textbook distribution Technical 0.05 0.9 0.05 1.0 assistance Goods Total: 4.06 73.8 3.88 77.6 C. Project Management * Setting up efficient project management Training 0.78 14.2 0.46 0.92 * Monitoring and evaluation Technical 0.09 1.6 0.09 1.8 * Audit assistance 0.05 0.9 0.05 1.0 Total: 0.92 16.7 0.60 12.0 TOTAL: 5.50 100 5.0 100 (a) Capacity Building Teacher training. This is a key component in achieving the project objectives, as it is needed to bring about active learning in the classrooms, as well as a greater understanding and openness to decentralization, community involvement and participation.  Page 9 More active teaching methods. The approach will be to select and train about 20 teachers with suitable skills as teacher trainers, using overseas trainers during three 5-day training courses. The trainers' courses will have four main elements: personal development in independent learning; teaching and learning methods; planning school improvement; and team and training development. The courses will be linked to action planning and work-based learning which is subsequently mentored and monitored. These trainers will then train about 900 teachers from the 20 pilot schools, using two different approaches: 10 of the schools will have a school-based training strategy (in which 6 training days each year are provided in-school, with the training days linked to classroom and school action plans), and the other 10 schools will have a 6-day center-based course each year (with the benefits of inter-school dialogue, but the disadvantage of a less school-focused course). Most types of training will be linked to action plans. Training will also be provided for school principals. In addition, parents in each of the pilot schools will be invited to meetings to involve them as "participatory parents", who are partially responsible for the financing of the schools and for exerting influence on the governance and maintenance of the schools. Management training. This will be provided through the establishment of three management support units, one in the MOE and one in each of the pilot rayons, equipped with basic information technology and office equipment. Local and international specialists will provide training in general management subjects such as: (i) management responsibilities; (ii) the effects of various management styles applied in specific organizational cultures; (iii) setting and implementation objectives; (iv) decision making; (v) management information systems; (vi) budgeting and finance; and (vii) recruiting and deployment of human resources and development and implementation of incentive systems. In addition, management training for school managers will cover specific education subjects such as the roles and responsibilities at the central and local levels of the education sector; school laws and regulations; curriculum; control and assessment of teachers and student performance and feedback; organizing the school year; time schedules and the allocation of classrooms; cooperation with parents and the community; fund raising; management of student flows; developing, implementing and using an MIS in education; and the procurement, delivery and revolving of materials and equipment. The training courses will be for about 5 officials from the MOE, 10 managers from the two rayon administrations, 40 principals and vice- principals from the pilot schools, 2-4 teacher trainers, and 2 officials from the PIU. In addition, there will be study tours for the selected staff. (b) Improving Education Assets and Materials Refurbishment and equipping of the pilot schools, the MOE, the pilot rayons and the teacher training institution. The MOE and the education officials in Dushanbe and Leninsky selected 20 pilot schools based on needs and competition. Fifty percent of the schools (seven schools in Leninsky and three schools in Dushanbe) were selected on a competitive basis, based on the school plans for improving activities and the involvement of communities, parents and teachers. These plans include proposals for the involvement of communities to enhance the delivery of education, to improve attendance levels of school children and to facilitate the access to schools by poor children. The remaining 50 percent of schools (eight in Leninsky and two in Dushanbe) were selected because of urgent need and poverty targeting. This selection was based on the potential of these schools to change and improve. The selection committee included the MOE, the local government (hukumat) and the Pedagogical University. The rehabilitation of the pilot schools will only be up to a functional level, with priority being given to the following: roof repairs, insulation from the weather; repair and replacement of windows; installation of heating systems and lighting; provision of adequate water and sewerage systems; repair of toilets; and painting of walls and floors, etc. The criteria for the work to be done will include economy, simplicity of materials, use of local materials wherever possible, and sturdiness. The work will be carried out in school year 1999 -2000, so that as many as possible of the rehabilitated schools will be ready for use by September 2000. The average cost of the work done per school is estimated to be in the region of $75,000. In addition, furniture will be provided, at an  Page 10 estimated cost of about $20,000 per school. Minor rehabilitation will also be carried out to the teacher retraining institute and two pilot training centers, and information technology equipment will be provided to the MOE itself. Textbooks. The project will support the introduction of an innovative textbook rental system in the 20 pilot schools. Under the scheme, sets of textbooks will be rented out to students for one school year with them paying about one third of the cost. The money collected will go into a special fund which will pay for the purchase of further copies of textbooks. Particularly poor children such as orphans, will be able to borrow sets of textbooks free of charge, with the cost of the "free rentals" being met by the local authority. The storage of textbooks in the selected schools over the vacations will be addressed through the school refurbishment program, as each classroom will have cupboard space and shelving provided as part of the renovations. The operation of the rental scheme in the pilot schools will be monitored, starting with school year 2000-2001 and finally evaluated in school year 2002-2003. The project will finance the publication or reprinting of about 18 mainly primary school textbooks and teacher guides which are not covered by the ongoing UNICEF project (which provides for printing paper for 9-10 titles). Almost all of the relevant textbooks and teacher guides are ready for publishing, having gone through the MOE's testing and manuscript approval system. The project will purchase finished textbooks through international competitive bidding. The contractor that is awarded the contract will be responsible for paying the authors their fees for publishing their textbooks, as laid down in the Authors' Law of Tajikistan. It will edit, design and illustrate new textbooks and teacher guides, and draw up production specifications for all books covered by the project. In addition to the textbooks for the pilot schools, the project will pay for the MOE to distribute textbooks to the other 78 rayons in Tajikistan. (c) Project Management Project coordination. This component will finance local consultant services, equipment and project audits. The salaries of the PIU director and any other local consultants working on the implementation of the project as well as PIU operating costs will be financed by the project. This component will also provide for the monitoring and evaluation of the project. 2. Key policy and institutional reforms supported by the project: The proposed project is responding to the commitment of the Government generally, and the MOE in particular, to carry out reforms in the following areas: (i) the replacement of the current hierarchical and specialty driven approach to education with a more general, creative and flexible compulsory education; (ii) the rationalization of schools and the redefinition of school functions; (iii) the introduction of innovative ways to retrain teachers, principals, school administrators and teacher tutors; and (iv) the move from budgeting by norms to budgeting by inputs, and the development of new ways to fund primary education (particularly through community participation). No policy reforms are explicitly expected or made as a condition of this learning project. Hov,-ver, it is anticipated that this operation will have a catalytic function in supporting and continuing the ongoing education policy reform agenda in Tajikistan. In addition, there will be some significant institutional reforms, both in the MOE and also in the local governments in Leninsky and Dushanbe. The project will be monitored closely, and the lessons of experience will be fed into the reform process. The Tajikistan lending program includes a follow-up Social Sector Rehabilitation Credit Project in FY01, and the design of that project will be based, inter alia, on the achievements of the Education LIL. 3. Benefits and target population: There will be three types of benefit from the project: (i) students in the pilot schools will have a better quality of education; (ii) teachers in the pilot rayons will have improved knowledge and skills for use in the classrooms; and (iii) there will be an increase in the capacity of the MOE officials and of the education authorities in the pilot rayons to plan and carry out reforms. More specifically, the students in the pilot rayons, and specially  Page I 1 the poor students, will have an improved access to high quality education, an improved learning environment, and an improved quality of learning. Students in other parts of the country will also benefit from an improved supply and provision of textbooks. Teachers in the pilot rayons will have an improved working environment, better knowledge and skills from in-service training, improved motivation and more interest from their co-operation with parents. The various managers in the MOE, the pilot rayons and the schools will have improved management knowledge and skills, better procedures and more modem equipment for schooling. 4. Institutional and implementation arrangements: Overall responsibility for project coordination and implementation will lie with the PIU, located in the MOE. During the entire duration of the project, the PIU could have the following staff: a director (selected through a fully competitive process), an education and monitoring specialist, a procurement specialist, a financial management specialist, accountant, a MIS/computer specialist, an interpreter, a secretary and a driver. The project director will report directly to the Minister of Education and has been appointed under the terms of reference, experience and qualifications satisfactory to the International Development Association (IDA). There will also be a Steering Committee for the project, chaired by the Minister of Education, and with representatives from the MOE and other relevant ministries, the two rayon authorities, and the university or private sector. The responsibility for the rationalization of education at the rayon level will be shared between the MOE, the two pilot rayon administrations and the 20 pilot schools. The implementation period for the project will be three years. All procurement will be carried out according to the usual World Bank procedures. A special account has already been opened for the ongoing PHRD grant, and another account will be opened in a commercial bank acceptable to the IDA for the project account. The PIU will be directly responsible for financial management during the project, on behalf of the MOE. The MOE was responsible for managing the PHRD grant of US$245,000, and has transferred this responsibility to the PIU. The PIU has an accountant who is responsible for financial management and control under the PHRD and the project itself. The accountant reports to the PIU director. Technical assistance will be made available to the PIU in project and financial management during the first year of project implementation. This will include training workshops for the PIU and project coordination staff at the local level. The project team has mobilized grant funding from other sources to provide procurement, accounting and financial management expertise within the PIU. The PIU is to receive basic office equipment (printer, fax, copier) out of PHRD funds. Further equipment will be financed through the project. A basic project financial and accounting program will be developed prior to effectiveness, with support from IDA, and in coordination with other existing PIUs in Tajikistan. Given the project size, this will be kept as simple as possible. The system to be designed will have, inter alia, an accounting and internal control system with the capacity to record and retrieve in a timely manner. The system will: (i) reliably record and report all assets, liabilities, and financial transactions of the project; and (ii) provide reliable financial information for managing and monitoring project activities. The accounting system will be classified by component, reflect the sources of funds, and be broken down into different types of expenditures for the project. Further, it will provide information on the receipt and use of funds, and will be able to produce financial reports comparing budget with actual expenditures at any given time. The system will be capable of providing financial data to measure performance when linked to the outputs of the project. The PIU will maintain consolidated accounts for the project and will ensure appropriate accounting of the funds provided. The PIU will be responsible for preparing Project Management Reports (PMR) on a quarterly basis, and furnish to IDA not later than 45 days after the end of each calendar quarter, a PMR for such period, which: (i) sets forth actual sources and application of funds for the project, both cumulatively and for the period covered by the report, and projected sources and applications of funds for the project for the six-month period following the period covered by the report; (ii) shows separately expenditures financed out of the proceeds of the credit during the period covered by the report and expenditures proposed to be financed out of the proceeds of the  Page 12 credit during the six-month period following the period covered by report; (iii) describes physical progress in project implemenltation, both cumulatively and for the period covered by the report, and explains variances between the actual and previously forecast implementation targets; and (iv) sets forth the status of procurement under the project and expenditures under contracts financed out of the proceeds of the credit, as at the end of the period covered by the report. Tlhe Minister of Education (or her designate) and the PIU director will be authorized to sign withdrawal applications, authorizing direct payments from the credit account and/or requesting replenishment of the special account. The PIU will be responsible for ensuring that the financial statement, special account, and Statement of Expenditure (SOEs) are audited by an independent auditor, acceptable to IDA, in accordance with standards on auditing that are acceptable to IDA. The annual audit will be carried out in accordance with the Guidelines for Financial Reporting andAuditing of Projects Financed by the World Bank (March 1982). The auditing assignment terms of reference will be prepared based on Annex XVIII of the World Bank Financial Accounting Reporting and Auditing Handbook (January 1995), including reporting obligations of the PIU for the auditors, auditing standards, the management letter, statement of access to the records and personnel available to the auditor, etc. The audit report will include a separate opinion for SOEs against which disbursements have been made or are due to be made from the credit, and SOEs which will be included in the audit report accompanying the financial statements. The audited financial statements of the special accounts, and SOEs of the preceding fiscal year, includinig a separate opinion by the auditor on disbursements made against certified statement of expenditures, will be sent to the Bank within six months of the end of the Government's fiscal year. The estimated overall budget for auditing under the project will be around $45,000, which appears to be reasonable, given the size of the project, and existing in-country auditing capacity. Auditing services will be procured on a least-cost basis, and packcaged as a recurring audit, with no requirement for a new engagement letter, except in the special circumstances. D: Project Rationale 1. Project alternatives considered and reasons for rejection: (a) Chioice of a LIL. The LIL is an appropriate response to the conditions in the education sector in Tajikistan, as there are emergency conditions which require urgent action, where structural reform is clearly needed, but where the client is new and there are many innovations to be made and evaluated. A LIL will allow for the introduction of innovative methods in education by the MOE, the selected rayon governments and the local communities. These innovations include community management of schools and new approaches to cost- sharing; new approaches to teaching training; reconfiguring the teaching environment through refurbishment of classrooms; and the production and distribution of textbooks using new methods of production and distribution. Monitoring and evaluation will be emphasized to make the lessons applicable to future policy and sector reform. (b) Choice of two districts for the pilot. It is planned for the project to work in one urban district (in Dushanbe) and in one fairly rural one (Leninsky). There will be about 20 pilot schools in these rayons (about 5 in Dushanbe and 15 in Leninsky). Although testing innovations in the MOE and in only two rayons limits somewhat the ability to generalize the results to other rayons, Tajikistan is a relatively small country; and including more rayons in the pilot project will complicate the project design and increase the danger of over- loading the limited design, implementation and evaluation capacity of the MOE. (c) Inclusion of the textbook component. The printing and distribution of textbooks for primary education in Tajikistan might not be considered to be a "typical" investment component of a LIL. Nevertheless, as confirmed by the social assessment, the shortage of textbooks is so extensive that it is necessary to address this  Page 13 constraint as part of the package of investments in the project. Tajikistan is in danger of having a growing proportion of the population illiterate within a relatively short timeline unless textbooks are provided. Therefore, the proposed project aims to fund some textbooks, particularly to test out reform options in this important area. (d) Demand-side financing. As Tajikistan is a poor country, with maybe as many as 85 percent of the population below the poverty line, consideration might have been given to including some specific "demand-side" financing arrangements in the project design. This could have been done, for example, through the inclusion of special scholarships for the poor. For several reasons, however, it was decided not to do this. First, the reasons for school non-attendance are unclear. It does seem that the opportunity cost of labor is one of the reasons, especially with many poor people having to go to pick the cotton crop. But it also appears from the social assessment that there is still plenty of demand for schooling and that a primary reason for low attendance is the perceived (and actual) low quality of schooling available. Efforts made to improve teaching and the availability of learning materials may, therefore, be expected to have a significant effect on attendance. The Government is also tightening up the regulations about the use of children for cotton-picking. With the extent of poverty, it will also be difficult to target those most in need. In addition, the changes to be made at the local level in encouraging communities to provide financial support to schools will take into account the particular needs of the poorest groups. Finally, with the extremely limited management capacity, there was considerable concern about making the design of the project more complicated. Nevertheless, the link between poverty and school attendance will be monitored through the implementation of the project, and lessons learned in this important area will be incorporated in the proposed follow-up project in FY01. 2. Major related projects financed by the Bank and/or other development agencies: Latest Supervision (Form 590) Sector Issue Project Ratings (Bank-financed projects only) Implementation Development Progress (IP) Objective (DO) Bank-financed Ongoing (IDA): * Institution Building Technical Assistance Project (TA) S S * Pilot Poverty Alleviation Project S S * Structural Adjustment Credit I U S . Post-Conflict Emergency S S Reconstruction Project * Emergency Flood Assistance S S Planned (IDA): . Health Project (LIL) Other development agencies UNICEF * Aga Khan Foundation * Open Society Institute * Islamic Development Bank * Save the Children US * Save the Children UK IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)  Page 14 3. Lessons learned and reflected in the project design: Lessons of experience need to be considered from three perspectives: (a) the lessons of other projects in Tajikistan; (b) the lessons of other education projects elsewhere; and (c) the lessons of other LILs. Concerning the first perspective, some of the main general lessons from working in Tajikistan include the following: (i) the need for high-level support and political commitment for key policy reforms and project design; (ii) the realization that institutional reforms take time to achieve; and (iii) the emphasis that needs to be given to staff development and training, including particularly on Bank-related procedures, for efficient project implementation. One implication, in particular, is the need for careful planning of ways to strengthen institutional capacity, especially as it is clear that the Government is often reluctant to use loan or credit funds for foreign technical assistance. Although IDA has not invested directly in the education sector in Tajikistan before, it has supported a small education component (carried out by Save the Children UK) in Vakhsh District through the PPAP. That component has recently been evaluated, and the main findings were that school committees can be successfully established, that communities can be mobilized to assist with the funding of local schools, and that a variety of approaches at the school level can be used to promote better school attendance by children. There is also an education component in the Post-Conflict Emergency Reconstruction Project, and that it is now supporting the rehabilitation of selected schools in the Karategin Valley. Second, the lessons of other education projects suggest that the most successful reforms are the ones involving the community in the management and operation of the schools. Parents and communities need to participate in the decision making process at the school level. The teaching and learning process has also become more relevant, and teachers need to be given in-service training programs as well as incentives to perform well. Model schools have been used successfully in some reform programs as a basis for innovations in teacher training programs. However, the experience of countries in a similar situation to Tajikistan indicates that expectations for a large and immediate development impact through a single project cycle is probably unrealistic. Third, a recent interim report to the Board suggests that adaptable lending (including through LILs) is fulfilling original expectations. The numbers of loans approved, the purposes for which the instruments are being used, and the cost and timeliness of responding to borrowers' requests for the loans are all on track with expectations. Feedback from borrowers and staff shows that the LIL approach does respond to perceived needs. Borrowers have indicated that the LIL is allowing them to build capacity and stakeholder consensus, as well as to develop prototypes for future application, in order to become prepared for a follow-on program. Seven borrowers specifically cited the need for an urgent response to development issues as a factor in choosing a LIL. 4. Indications of borrower commitment and ownership: The Government is well aware of the deterioration of critical services and of the need to develop service systems that are sustainable in the new economic environment. The Government is also aware of the importance that the public places on these issues. For example, survey data indicate that improved education is the second highest priority of the population-exceeded only by the concern over security. The Government is prepared to move quickly to change the existing system. It is prepared to restructure the delivery mechanism for all major public services and the MOE has been working on strategy documents to reform the education sector. Some experimentation is already taking place through cooperation with donors and NGOs. Indications of commitment for this project have been expressed in clear statements by the Prime Minister, as well as by the Minister of Education who came to Washington DC personally and requested support from IDA.  Page 15 5. Value added of IDA support in this project: While there are several other agencies already active in the education sector, the extent of external support is quite limited so far. The Aga Khan Foundation program is small and limited to Gorno-Badakhshan, whereas UNICEF support has mainly been for the provision of textbook paper and materials. There is a limited capacity within the MOE to carry out reforms, and no other agency has indicated possible support in this area. It is likely that the ADB will be interested in working in the education sector in due course, but Tajikistan only joined the ADB in 1998, and there has not yet been time for the ADB to do any project design work. IDA has already been working on education budgetary issues in the context of the ongoing SAC. There are also important links between the proposed Education Reform Project and other ongoing or planned projects financed by IDA (such as the PPAP now under implementation and the Health Project now under design). More broadly, the World Bank has extensive knowledge and experience of the education sector of many other countries in the ECA region, and is, therefore, in a good position to provide access to comparative experiences. E: Summary Project Analysis: 1. Economic: Fiscal sustainability is a key consideration in the design of the project design. The current level of public expenditure on education is so low that even a modest increase in operating costs may not be sustainable beyond the life of the project. However, the planned investments in the project (such as the retraining of teachers and the strengthening of management systems) will have low recurrent cost implications, and there is already an ongoing dialogue with the Government to ensure that the basic education budget is protected and increased as much as possible. This is being done through ongoing agreements relating to the budget in the SAC. In particular, the local government education budgets in Leninsky and Dushanbe will be analyzed and monitored carefully throughout the project. In addition, technical assistance will be provided to the MOE to review the budgeting process and to analyze possible measures to move the budget system away from the normative approach, and hence, to improve the efficiency of education spending, especially in the pilot rayons. This might be done, for example, through changes in pupil/teacher ratios, in the scope of work of teachers personnel/non-personnel expenditures, non- teaching staff/teaching staff ratios, and the use of boarding schools, etc. The plans for the rehabilitation for the 20 pilot schools will take into account possible ways to increase efficiency. The cost-effectiveness of different methods of teacher re-training will also be examined through the project. 2. Financial: The project will explore in the 20 pilot schools possible new measures to involve communities and parents in the maintenance and financing of schools. The school rehabilitation plans will also include measures to develop a new school accounting system. Special attention will be given to possible school financing reform measures which could improve the allocation of education spending to the poor, and reduce the cost of education to the poorest population groups-for example, through a reduction in the cost of basic materials to students and to encourage poor students to attend school. Part of the evaluation plan for the project will include an assessment of cost recovery mechanisms, financial control policies and accountability systems. To date, the financial management of the MOE appears to be weak, which is one of the reasons for establishing the PIU with staff with financial management skills. To provide further training to the PIU accountant, a foreign consultant is being recruited, using PHRD grant for two months immediately after  Page 16 negotiations, who will provide hands-on-training to the newly recruited local accountant in setting up the accounting system for the PIU. By effectiveness, an acceptable financial management system will have been in place. Disbursements will start using traditional disbursement methods-Statements of Expenditures (SOEs) reimbursements, direct payment, etc. After the PIU has gained experience with the financial management system and the reporting under project management reports (PMRs), and provided that an improved financial management system is reviewed and found satisfactory by IDA, the project may move to PMR-based disbursements. Disbursements will be made against SOEs for contracts for: goods less than US$50,000 equivalent; works less than US$50,000 equivalent; and all operating expenditures. This documentation will be made available for the required audit as well as to the Bank supervision mission, and will be retained by the PIU for at least one year after receipt by the Bank of the audit report for the year in which the last disbursement was made. The processing, disbursement and monitoring of the allocations of the proceeds of the Credit and Borrower counterpart financing will be managed by PIU, in coordination and consultation with the MOF. The existing financial management system is not adequate as per Annex 4-C of the LACI Implementation Handbook. As a result, an action plan was developed during the appraisal mission for strengthening the FMS to an acceptable level prior to project effectiveness (see Annex 8). To facilitate timely project implementation, the Government will establish, maintain and operate, under terms and conditions satisfactory to IDA, a special account, denominated in US Dollars, as well as project account in local currency. The authorized allocation for the special account will initially be US$250,000. 3. Techinical: The governments of many countries have initiated reforms aimed at enhancing both the quantity and quality of education. While the focus of these reforms has generally been on system-wide changes and innovations (e.g., curriculum reform, textbook development, the re-structuring of teacher education), attention in recent years has shifted from the system to the school level. This has led to a distinct trend towards focusing reform efforts at a level nearer to the "action": the school itself. The development of school clusters, the greater involvement of the local community in school affairs (and vice versa), and the movement in many countries towards more decentralized, school-based management and innovation are manifestations of this global trend. Within this broad perspective, however, there are many technical questions to be resolved. These include: (i) the definition of appropriate "functional level" standards for facilities and equipment; (ii) the appropriate modalities for the production and distribution of textbooks, and particularly the operational mechanisms for textbook revolving funds; (iii) the appropriate standards for learning outcomes; (iv) the contents and methods for teacher retraining; and (v) the most cost-effective way to retrain teachers. 4. Inistitutional: In order to improve its management through the delegation of responsibilities (with more self-government and more rights to local authorities and schools) and to develop policy capacity, the MOE is interested in strengthening its MIS, and develop managerial skills of its staff both at the central, local, and school level. This will first require assessing the role of the MOE and how responsibilities are divided between the MOE and other actors at the national level (e.g., Ministry of Finance), between the MOE and the local district level, and between the local district level and the schools. Secondly, it will require improvement of the quality and availability of data at all levels of the system, so that managers can monitor those parts of the system for which they are responsible, and develop policy action and action plans based on information that is accurate and timely. There are also some institutional issues relating to the appropriate technology needed for efficient and modern  Page 17 management, and the level of capacity building in the MOE. The project will provide some important investment in this area; including to the MOE itself, the pilot rayons and the pilot schools (plus one teacher training center in each of the pilot rayons and the Teacher Retraining Center). However, it will be critical to assess the impact of the first phase of support and to gauge the need for further investments in a possible later stage of project assistance. 5. Social: As part of the project preparation work, a social assessment has been carried out. The preliminary conclusions have been summarized earlier, with the findings based on discussions with principals and teachers, with local authorities, and with parents and students themselves. The social assessment throws important light on local attitudes and views, but there are many questions which will need to be considered further as the project is implemented. Some of these questions relate to teachers, and especially to: (i) the teaching of children (what are the obstacles to teaching children the way that teachers were trained to do; how are teachers taught to teach children and do they feel that they need to change the way they teach children); (ii) the appropriateness of the new teacher training methods for their job (what they see as challenges for the future), reasons for attendance or non- attendance of students, and the number of lessons taught (in theory and in practice); (iii) the internal management of schools (what are the physical or organizational or personnel constraints that allow or prevent teachers from teaching; the lack of textbooks or other teaching guides; the lack of school supplies; the timetables, structures of lessons and number of teaching shifts); and (iv) the time devoted by teachers to subsistence outside schooling, non-attendance due to survival and coping activities, and the extent and patterns of informal payments. Other questions relate to the local authorities, and especially: (i) the constraints that they face for example due to norms or instructions from above or lack of budgetary discretion, the teacher recruitment/selection policies, support and interest from the MOE and other management; (ii) the salaries and working conditions of teachers (are salaries paid or not paid, the adequacy or inadequacy of salaries, remuneration from other sources); (iii) their view of the problems of schools, and changes that they will like to see made or to make themselves; (iv) the reasons for school non-attendance; (v) the expectations of the MOE; and (vi) how the local authorities will like to see parents involved. Still other questions relate to the views of the parents, focusing on such issues as: (i) their attitudes towards schools, the scope for more parental involvement and in what ways can they be more involved; (ii) the reasons for sending children to schools (including fees, work, differences between girls and boys, school policies such as uniforms); (iii) their expectations from schools (what do they expect from schools, are they sending children to school for decent jobs, etc., if they are not sending them to schools why not-what are the constraints); (iv) desired changes (what do they expect children to receive from school-materials like textbooks, quality of teaching); (v) the needs of schools and teachers; (vi) how much independence should schools have from the local authority; and (vii) how best to help the poor and what parental contribution should be (what do they do at the moment, how do they see their role, what could they do in the future individually and as a community). Finally, the views of students are also important, focusing on such issues as: (i) their attitudes towards teachers and variation among teachers; (ii) school conditions (heating, lighting, latrines and playgrounds); (iii) their reasons for non-attendance (themselves and other students); (iv) attitudes towards school meals; and (v) the most important changes needed to improve schools or learning. For all of these issues, it will also be important to monitor the impact or otherwise of the project investment.  Page 18 6. Environmental assessment: Environmental Category [I A [] B [XI C The project environmental assessment rating is Category C. There are no major environmental issues in this project, although there is a need to address environmental issues connected with minor civil works (school refurbishment) included in the project, such as the need to ensure adequate water supply and sanitation for project schools. 7. Participatory approach: The design of the project has been based on a participatory social assessment, which was carried out by a team of six national researchers working in conjunction with the MOE. Interviews were conducted with the MOE staff, officials in the selected rayons, school principals, teachers, students, drop-outs from school, parents, and other community members. The implementation of the project will emphasize the participation of parents and local communities in many ways: for example, in school financing, in encouraging mentality change by teachers, and in supporting active leaming by students. Parents and teachers will be central to the decision making processes at the school level. Parent-teacher associations (PTAs) including those of the ten need-based selected schools will further develop their existing plans into school development proposals (SDP). These SDPs will be the basis for the basic functional level refurbishment and operations of the schools. These individual 20 SDPs will be developed through an iterative process by PTAs and education officials. The SDPs developed by PTAs will be submitted to the education officials for discussion. They will then reach an agreement on the elements to be included for the final proposals to be submitted to the PIU. The community participation specialist consultants hired by the PIU will facilitate this process. Consultation meetings will be held at the school sites at a time when a maximum number of parents and teachers can participate. The purpose of these meetings will be: to explain the project to the PTAs, including the schedule for implementation and procurement procedures; and to explain how tendering for reconstruction will be done at the schools and by PTAs under the supervision of the PIU procurement specialist following World Bank guidelines (using the approach for procurement already adopted by the TASIF). During these meetings PTAs will elect representative members who will be responsible for operating the PTA fund and for coordinating activities between the PTA and the PIU. There will also be a PTA fund and the PTAs will decide on its usage. The PTAs will also decide on the type of contribution (minimum of ten percent of the total cost of refurbishment) which they will make for the refurbishment of the school. Several efforts have also been made to involve key stakeholders, including donors, in the project design process. For example, in late 1998, there was a major meeting in Dushanbe of all extemal agencies involved in the education sector; a representative of the Aga Khan Network participated in the project preparation mission; and discussions were held in both Dushanbe and Almaty with UNICEF officials to discuss that organization's experience in the education sector in Tajikistan. During the appraisal of the project, there was a round-table discussion of interested donors and there will also be a project launch workshop in July 1999. F: Sustainability and Risks 1. Sustainability: As noted earlier, fiscal sustainability is a key consideration in the design of the project design. In principle, all education institutions are financed by the state budget. However, a combination of revenue shortfalls and the loss of the budgetary subsidy from Moscow resulted in substantially fewer resources devoted to the social sectors, including education, after independence. The share of educational expenditures in GDP and in the total  Page 1 9 government budget were respectively about 2.1 percent and 13.9 percent in 1997. In addition, at least until recently, there has been a serious problem of problems of arrears in the education budget, partly due to the absence of a fully functioning treasury system. For example, at the beginning of 1998, the stock of government arrears was about 1.8 percent of GDP. Revenue collection is usually uncertain, budget revisions are common at the central and local levels, and spending plans are often approved only for a period of a few months. The sharp decline (until recently) in public spending on education contributed to a rapid deterioration in the quality of education and increased inequalities in education at all levels. Informal payments by parents have been increasing to cover a larger share of recurrent expenditures over the past several years, but these private payments are not reflected in the budget data. According to the 1999 budget, the priority expenditure areas are wages, health, education and the social safety net. Moreover, the Government has committed itself to allocating at least 22 percent of the total budget to the education and health sectors in 1999. In 1998, the budgeted figure for the education sector was about 13.4 percent of the total, and the Government has indicated that it plans to increase the share of the education budget in the total government budget to 15 percent in 1999. The Government has also committed itself to clearing all arrears (especially of wages), and to ensuring that the budget shares for these social sectors are actually realized in practice. Against the financial background depicted above, these are concerns that even a modest increase in operating costs may not be sustainable beyond the life of the project. In particular, funds will be needed for the following: (i) to maintain the refurbished schools and new equipment, and to ensure an appropriate inventory necessary for quality teaching; (ii) to continue with an adequate quality of teacher in-service training for teachers to change their mentalities and to introduce new teaching methods in their classrooms; and (iii) to continue support for the teacher training colleges and the Pedagogic Institute and Science Center. In total, these costs are not very large, and (as noted above) there is already an ongoing dialogue with the Government to ensure that the basic education budget is protected and increased as much as possible. This is being done through ongoing agreements relating to the budget in the SAC. An education economist has already been recruited to work with the MOE on these issues. In particular, the local government education budgets in Leninsky and Dushanbe will be analyzed and monitored carefully through the project. The project will explore in the 20 pilot schools possible new measures to involve communities and parents in the maintenance and financing of schools, and in the utilization of textbooks through the planned revolving fund. Based on the rather successful experience of the Save the Children UK program under the PPAP, it is felt that there is a reasonable chance that ways may be found through the project to improve the chance of sustaining project investments. 2. Critical Risks (reflecting assumptions in the fourth column ofAnnex 1): *ik $ v - -