Nicaragua - Second Education Project

FILE COPY Report No. 1003a-NI Appraisal of a Second Education Project Nicaragua March 25, 1976 Education Projects Division Latin America and Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its conitents may not otherwise be disclosed without World Bank authorization.  Currency Equivalents Currency Unit - Cordoba (C) US$ 1.00 = C 7.0 1 Cordoba = US$ 0.143 Measures and Equivalents 1 meter (mi) = 3.28 feet 1 sq. meter (m2) = 10.8 sq. feet 1 kilometer (Km) = 0.62 mile 1 sq. kilometer (M2) = 0.39 sq. mile 1 hectare (ha) = 2.47 acres Fiscal Year January 1 - December 31  FOR OFFICIAL USE ONLY NICARAGUA APPRAISAL OF AN EDUCATION PROJECT TABLE OF CONTENTS Page No. BASIC DATA SUMMARY AND CONCLUSIONS ...... ................. i - iii I. INTRODUCTION . . .......... 1 II. SOCIO-ECONOMIC SETTING ....................... 2 Socio-Economic Background .. .................. 2 Rural Development Strategy and Human Resources. 2 III. EDUCATIONAL DEVELOPMENT ................... .... 3 Overview ......... ......................... 3 Primary Education ............................. 5 Secondary Education .............. ............. Teacher Education ...... ............... 6 Agricultural Education ................. 7 Vocational and Technical Education ............ 7 Nonformal Education .. ......................... 7 Educational Finance .................. 8 IV. THE PROJECT .......................... 9 Project Strategy and Content ......... .......... 9 Elements of the Project .................... ... 10 Cost of the Project ...... ..................... 15 V. IMPLEMENTATION AND DISBURSEMENTS ........... ... 17 Project Administration ........... .. ........... 17 Project Implementation Schedule ............... 17 Professional and Technical Services ........ ... 17 Sites ......................................... 18 Procurement ... ....... .. 18 Disbursements ....... ....................... 19 VI. AGREEMENTS REACHED AND RECOMMENDATIONS ........ 19 This report is based on the findings of an appraisal mission which visited Nicaragua in August 1975. The mission consisted of Messrs. A. Freire (Gen- eral Educator), H. E. Peirce (Agricultural Educator), P. Eklund (Economist, Consultant) and L. Secco (Architect, Consultant). 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.  TABLE OF CONTENTS (continued) ANNEXES 1. Comparative Education Indicators 2. Enrollments in Public and Private Institutions by Area and Grade, 1974 3. Education Pyramid 4. National Education Finance 1974-81 5. Expenditures by Level of Education 1970-75 6. Summary of Project Institutions and Technical Assistance 7. Summary of Estimated Costs 8. Contingency Allowances 9. Implementation, Expenditure and Disbursement Schedule 10. Estimated Schedule of Disbursements CHARTS 1. Structure of the Formal and Nonformal System of Education and Training 2. Organization of the Ministry of Education 4AP  NICARAGUA BASIC DATA 1974 2 Area 130,000 Km. Population /1 2.022 million Urban 0.991 million Rural 1.031 million Density 15 per Km.2 Annual Growth 2.5% GNP (at market prices) 2 US$ 1,359 million Per Capita us$ 540 Annual growth in real terms (1965-74) 4.9% Literacy Rates '3 (15 years old and over) Country 57.0% Urban 80.0% Rural 34.0% Including Excluding Enrollment Ratios Overage Students Overage Students Primary Education 88% 65% - in urban areas 118% 84% - in rural areas 59% 6% Secondary Education 23% 17% Higher Education 7% - Education Finance Share of education in central government budget 14.2% Education expenditures as proportion of GNP 4.1% - public 2.5% - private 1.6% /1 United Nations Yearbook L2 Bank Atlas a3 Census 1971   NICARAGUA APPRAISAL OF A SECOND EDUCATION PROJECT SUMMARY AND CONCLUSIONS i. This report appraises the Bank's second education project in Nicaragua, for which a loan of US$11.0 million is proposed. The project would assist the government in implementing its rural development strategy by providing basic and nonformal education and training opportunities for children and adults in rural areas, expanding access to lower secondary education in semi-rural towns and decentralizing the national system of educational administration and super- vision. ii. The first Bank financed education project is supporting government efforts to improve and expand secondary education in major cities and upgrade primary teacher training. Despite delays in implementation, related largely to the 1972 earthquake in Managua and some administrative problems, most project schools are now in operation and all will be completed by the end of 1976. The Association is also financing an education component of the earthquake reconstruction project, which includes provision for Managua of four temporary general secondary schools, two new multilateral secondary schools and a post secondary technical institute. The four temporary schools are now operating satisfactorily, and the rest of the project will be completed by the end of 1976. iii. In Nicaragua, as in many developing countries, past public sector efforts have concentrated on the expansion of infrastructure and social services in urban areas, with the result that the economy's substantial postwar gains have not been reflected in any noticeable improvement of rural standards of living. Although the main objective of the government's present development strategy is to achieve a more diversified economic structure, high priority is also attached to improving agricultural productivity and thereby raising rural incomes. This will require an expansion and upgrading of rural basic education and skill training opportunities, which are currently limited in scope and effectiveness. Only 402 of rural primary schools offers at least four grades, which is considered the minimum for attaining functional literacy, and only 2% of children who enter the first grade in rural schools completes grade six compared with 35% in urban schools. Access to secondary education is also limited in rural areas, with most schools located in the large cities. Some small scale efforts have been undertaken to provide training and exten- sion services to adult farmers, but these need considerable strengthening. The government has recently reformulated its education plan for the 1975-79 period to accord with the abovementioned needs, and the proposed Bank proj- ect is designed to assist in its implementation. iv. Specifically, the proposed project would comprise: (a) Construction, furnishing and equipping of: (i) 18 rural basic education nuclei (including 152 four grade and 52 six grade primary schools and 18 community learning centers);  - ii - (ii) 18 semi-rural lower secondary schools (grades 7-9); (iii) 4 agricultural secondary schools (grades 10-12); (iv) 9 agricultural training centers; (b) In-service training for about 1,100 teachers and admin- istrators of project institutions; and (c) Related technical assistance, including 11 man/years of specialist services and 17 man/years of fellowships for local staff. v. In order to extend educational opportunities in rural areas in a more efficient manner, the government would adopt a "nuclei" system of school facilities planning, administration and supervision, and the proposed project would finance the establishment of the first 18 such nuclei. A nucleus con- sists of one central school offering the full six grades of primary educa- tion, surrounded by several four grade associated schools strategically located to serve the school age population of the catchment area. The central school provides technical supervision and administrative support to the associated schools and also serves as a community learning center where nonformal education and training activities are offered for youths and adults. In all, about 120,000 persons would be served by the 18 nuclei, in areas selected from among those with the least access to adequate educa- tion and training opportunities. After evaluation of the experience, it is expected that the nuclei system would be expanded on a national scale. vi. The project would also support the decentralization of secondary school administration and supervision through the establishment of regional secondary education centers. Each center includes an upper secondary insti- tute (selected from among existing schools financed under the first Bank project), located in a departmental capital and offering diversified educa- tion, and several associated lower secondary schools. About 8,640 students would be accommodated in 18 lower secondary schools to be constructed under the proposed project. vii. To assist in meeting the demand for middle level agricultural man- power in a more cost effective manner, the project would provide for the consolidation of six small and inadequate agricultural secondary schools into four regional institutions with a capacity of 210 students each. A new curriculum which has already been developed would be implemented, plac- ing emphasis on practical training and on the specialized agricultural activ- ities of the respective regions. viii. To support the government's rural development program and to meet the agricultural skill needs of young and adult farmers, the project would establish nine (five replacement and four new) agricultural training centers in the same communities where a central nucleus school would be provided.  - iii - The agricultural training centers would offer a ten month work study course for youths and short courses for farmers and their wives. A total of about 2,500 persons would be trained annually. ix. About 11 man/years of specialist services and 17 man/years of fel- lowships would be provided to help implement the project and train local counterparts. Specialists would assist in establishing the nuclei system in rural areas; organizing the regional secondary education centers; upgrad- ing primary, secondary and agricultural teachers; and administering agricul- tural training programs. The training of local staff, through fellowships, would be primarily in multigrade teaching techniques and agricultural school administration. x. The total project cost is estimated at US$19.8 million, including contingencies, with a foreign exchange component of US$8.3 million. Prices as of January 1976 were used to estimate the base costs, to which a physical contingency allowance of 10% and a price contingency allowance of 20% have been added. The proposed loan of US$11.0 million, equivalent to 55% of total project costs, would finance the foreign exchange component and 23% of local costs. xi. The project would be implemented by a new Directorate established within the Ministry of Education and charged with planning and executing all externally financed education projects, including those of the Bank. The Director of this office would be assisted by a full time team assigned specifically to manage implementation of the proposed project. xii. Contracts for civil works would be awarded on the basis of competi- tive bidding advertised locally and in accordance with local procedures ac- ceptable to the Bank. Since most civil works are small and scattered through- out the country, foreign contractors are not expected to participate, although they would not be precluded from bidding. Prequalification of contractors would be required to ensure efficient work. Contracts for procurement of furniture and equipment would be awarded on the basis of international com- petitive bidding. However, furniture and equipment which cannot be grouped in bid packages of at least US$15,000, not exceeding in the aggregate US$300,000 (equivalent to 10% of the estimated total cost of furniture and equipment), would be procured in accordance with local procedures ac- ceptable to the Bank. xiii. The proposed loan would be disbursed over a four and one-half year period. Retroactive financing of up to US$150,000 would be provided to cover expenditures incurred after September 1, 1975, in respect of professional ser- vices, technical assistance and project administration. xiv. The project constitutes a suitable basis for a Bank loan of US$11.0 million equivalent to the Republic of Nicaragua for a period of 25 years, in- cluding a grace period of seven years.   NICARAGUA APPRAISAL OF A SECOND EDUCATION PROJECT I. INTRODUCTION 1.01 The Government of Nicaragua has requested Bank assistance in fi- nancing a project designed to meet the highest priority education and train- ing needs of the rural population. The total cost, for which a Bank loan of US$11.0 million is proposed, is estimated at US$19.8 million. This would be the second Bank loan for education in Nicaragua. The first (Loan 532-NI, signed April 10, 1968), for US$4.0 million, is supporting government efforts to improve and expand secondary education in major cities and upgrade primary teacher training. Despite delays in implementation, related primarily to the 1972 earthquake in Managua and some administrative problems, 13 of the 20 project schools are now in operation and the remaining seven will be com- pleted by the end of 1976. The Association is also financing an education component (US$2.0 million) of the reconstruction project (Credit 389-NI, signed June 6, 1973), which includes the provision for Managua of four tem- porary general secondary schools to replace facilities destroyed by the earth- quake, two new multilateral secondary schools and a post secondary technical institute. Four secondary schools are now operating satisfactorily, and the rest of the project will be completed by the end of 1976. 1.02 The proposed second education project would: (a) expand and im- prove education and training opportunities in rural areas by establishing basic schools and community learning centers offering formal and nonformal programs for school age children, out-of-school youths and adults; (b) in- crease agricultural training opportunities by establishing centers offering nonformal training to farmers and their families; (c) contribute to meeting the manpower needs of the agricultural sector by establishing agricultural secondary schools in strategic geographic zones; (d) expand and improve secondary education for the semi-rural population by establishing lower secondary schools in selected small towns; and (e) improve teacher quali- fications by providing technical assistance to establish in-service train- ing programs in rural primary, general secondary and agricultural second- ary education. 1.03 Sector work for the proposed project was carried out in 1972 by a UNESCO mission and updated in 1974 by local specialists, with planning assistance from the Bank. In May 1975 a Bank reconnaissance mission vis- ited Nicaragua to discuss with the government the content of a possible second education project, and in July 1975 the government prepared the project with assistance from UNESCO and the Bank. The project was appraised in August 1975 by a Bank mission comprising Messrs. A. Freire (General Edu- cator), H. Peirce (Agricultural Educator), P. Eklund (Economist, Consultant) and L. Secco (Architect, Consultant).  II. SOCIO-ECONOMIC SETTING Socio-Economic Background 2.01 Nicaragua's major natural resource is its arable land, which is divided into three distinct agricultural regions suitable for a variety of products: the Pacific, where the majority of the population is engaged in small scale farming of basic grains using traditional technology, along- side a few large modern farms specializing in cotton and sugarcane; the mountainous Central, devoted mainly to coffee and livestock; and the large but sparsely populated Atlantic plain, whose potential in forestry and live- stock is gradually being exploited. Although agriculture's share in total GDP has been steadily declining, it remains the main source of economic growth, employment (50-60% of total) and export earnings (70-80%). 2.02 The economy's substantial postwar gains have done little to miti- gate disparities between urban and rural areas, where per capita incomes have shown no noticeable improvement for years, largely as a result of the dualistic nature of agricultural production and the highly concentrated pat- tern of land ownership. About one-third of the rural population, with only some 3.5% of the country's arable land, produces basic grains using tradi- tional techniques. Such small scale farmers receive limited technical assis- tance and other modern inputs, and the average yield of their farms is very low. This overall situation has led to substantial migration to cities and towns, where earnings in marginal sectors such as petty services are often 50% above average rural incomes. 2.03 Past public sector efforts to address the needs of the poorer seg- ments of the rural population have niot been very ambitious. Total fixed pub- lic investment has been mainly for transport and electric power, and to some extent for urban education. The labor force in general reports very low edu- cational attainments, with about two-thirds having fewer than three years of formal schooling and only 6% having post primary education. In rural areas more than 60% of workers are illiterate. These data suggest low productiv- ity, high training costs for the modern sector and little adaptability of the rural population to new technology. Rural Development Strategy and Human Resources 2.04 Although the main objective of the government's present development strategy is to achieve a more diversified economic structure, high priority is also attached to improving agricultural productivity and thereby the incomes of the rural poor. Several steps have already been taken in this regard: (a) new institutions are being established to implement integrated rural development programs, and the densely populated Central Pacific and Central Interior regions have been designated as the target areas for the first such intensive effort (INVIERNO); and (b) tax changes were adopted in November 1974 to generate the additional revenue needed to finance these and other public sector rural development programs. The government intends to transfer these revenues primarily to the rural poor through agricultural credits and improved public services.  - 3 - 2.05 The whole education and training system has been undergoing a thorough review to determine ways to improve its internal efficiency and better adapt it to the development needs of the country. Formal and non- formal systems need to be better integrated to economize available re- sources; training opportunities for existing workers and new entrants to the labor force must be expanded; and key institutions responsible for pre- paring those individuals who will implement development projects need strength- ening. In rural areas, raising skill levels to improve productivity would re- quire revision and major expansion of basic education and agricultural train- ing programs. 2.06 The effectiveness of efforts to extend the use of modern farming methods is greatly hampered by the limited training opportunities in rural areas and by the qualitative and quantitative inadequacy of the agricultural extension service. With only 95 field agents, the service is inadequate, a problem compounded by the fact that most of the agents lack practical train- ing and are not prepared to advise farmers on the particular products of each geographic zone. By 1980 the government plans to establish an addi- tional 160 agricultural technician posts, which would substantially lower the national farmer/agricultural technician ratio from the present 1,100:1 to 400:1. Although there is no imbalance in the projected national demand and supply of agricultural technicians through 1984, it will be necessary to offer better financial incentives for extension agents to attract more agricultural technicians to public field service. A good start in that direction has been made in the INVIERNO rural development scheme, which may have a spillover effect to other regions. Finally, agricultural tech- nicians should receive more specialized training oriented towards the speci- fic needs of different geographic zones and towards the newly developing sectors such as forestry. [II. EDUCATIONAL DEVELOPMENT Overview 3.01 The structure of the Nicaraguan formal education system comprises one to two years of preprimary schooling, six years of primary followed by five to six years of secondary education, and two to five years post second- ary and university education (Chart 1). This is supplemented by various nonformal education and training programs. Private institutions, located mainly in urban areas, account for about 15% of primary, 38% of secondary and 25% of higher education enrollments. 3.02 Educational opportunities are unevenly distributed throughout the country. Some 60% of rural primary schools offers three grades or less, while almost all urban schools offer more than four grades, which is con- sidered the minimum for attaining functional literacy. About 84% of the 7-12 age group attends urban primary schools, but in rural areas the fig- ure is less than half that. Only 40% of rural teachers, against 90% of urban teachers, is qualified. Finally, in rural schools about 2% of  - 4 - children enrolled in first grade complete grade six, compared with 35% in urban schools. Opportunities for secondary education are also lim- ited in rural areas; most schools are located in large cities and the few in small towns operate under poor conditions. Enrollment figures for pri- mary and secondary education do not suggest any discrimination between the sexes, with girls accounting for about 48% of total enrollments at both levels. 3.03 Educational administration (Chart 2) is highly centralized. With little delegation of responsibility, the Minister himself often has to resolve minor problems. The lack of appropriately qualified professional staff and of proper administrative regulations and manuals are major obstacles to im- proving the situation. The government plans to remedy this by (a) training and upgrading national and regional administrators and (b) regionalizing the administration of primary and secondary education. The proposed proj- ect supports this strategy through the establishment of rural primary edu- cation nuclei (para. 3.08) and regional secondary education centers (para. 3.11). USAID is also planning to include technical assistance for educa- tional administration in its next sector loan. 3.04 Educational supervision requires considerable strengthening. In each of the 16 departments primary education is supervised by an inspector, assisted by two or three teachers who are expected to visit an average of 120 schools per year; however, they lack technical preparation, transporta- tion, equipment and subsistence allowances. Secondary education is super- vised from the Ministry of Education headquarters by a total staff of four. The government recognizes the present weaknesses and has plans to improve both primary and secondary education supervision (paras. 3.08 and 3.11). 3.05 Educational planning and evaluation are the responsibility of the Planning Department of the Ministry of Education. Since its establishment about ten years ago, units have been set up in the Department (for curriculum development, educational research and evaluation), personnel have increased and substantial technical assistance has been received from USAID, UNESCO and the OAS. However, the efficiency of the Planning Department has suffered from frequent staff turnover, no clear definition of responsibilities, poor administrative procedures and limited space and equipment. Some of these deficiencies should be remedied when recommendations of the specialists financed by the abovementioned external agencies are carried out and planned new facilities become available. 3.06 Government strategy. In 1971 the Planning Department of the Min- istry of Education completed a Ten Year Education Development Plan (1971-80) which underscored the need to continue improving and expanding secondary edu- cation, with greater emphasis on prevocational courses to better prepare grad- uates for entry into the labor market or for further specialization. The first Bank financed education project and the education component of the earthquake reconstruction project were designed to assist in meeting this objective. Recently the government has been reformulating its Education Development Plan for the 1975-79 period to reconcile it with the National Development Plan and to accord higher priority to the problems of the poorer  - 5 - segments of the population. The revised Plan emphasizes formal and nonfor- mal education and training for rural children and farmers, expansion of rele- vant prevocational secondary education and strengthening of upper secondary agricultural education. Primary Education 3.07 In recent years some qualitative improvements have been introduced. For example, the number of courses has been lowered from 14 to 7 and made more flexible, and although curricula are identical in all parts of the country, school directors are allowed to adapt course content to local con- ditions. Primary education is characterized by a shortage of schoolrooms and qualified teachers, mainly in rural areas, as well as by high dropout and repeater rates. In 1974 the average net participation ratio in primary education was about 65% of the age group (7-12 years), while in rural areas it was only about 46% (Annex 3). The national target is to increase net ratios to 80% by 1981. Since almost all school age children are now en- rolled in urban areas, the rural population would benefit the most. 3.08 The government plans to change radically the administration and supervision of primary schools through the establishment of an "educational nuclei" system. A nucleus consists of one central school offering the full six grades of primary education, surrounded by several four grade associated schools strategically located to serve the school age population of the catch- ment area. Multigrade teaching methods and a multigroup classroom organiza- tion would be introduced in the associated schools. The central school would provide technical supervision and administrative support to the associated schools and also serve as a community learning center where nonformal educa- tion and training programs for youths and adults would be provided. 3.09 Other measures designed to improve internal and external efficiency include: strengthening the curriculum development unit and the National Edu- cation Center, which has responsibility for teacher training and upgrading; introduction of automatic promotion from grades one through four (first pri- mary cycle) and grades five to six (second cycle) with a student selection system at the end of grades four and six; increasing the supply of teaching materials; raising salaries to attract teachers to the rural areas; and train- ing teachers in multigrade teaching techniques and practical subjects. The government expects to raise the primary education completion rate from 22% in 1973 to 28% in 1980, a modest target which will surely be surpassed. The proposed education project would assist the government in achieving these goals (paras. 4.02-4.07). Secondary Education 3.10 The first Bank financed education project supported a significant qualitative improvement of secondary education through the appointment of full time qualified teachers and the introduction of a well balanced cur- riculum, which is now being implemented in all secondary schools in the country. Secondary education consists of a common three year lower cycle (grades 7-9) providing general and prevocational courses, followed by a  - 6 - two-to-three year diversified upper cycle (grades 10-11 in academic streams and 10-12 in technical streams) offering specialization in science and humani- ties, commerce, agriculture, industry and primary teacher training. In 1974 enrollments in secondary schools represented 23% of the 13-18 age group, in- cluding overage students (Annex 3). Expanded opportunities and a more effi- cient flow of students in primary education, as well as a growing demand for better trained manpower, will place increasing pressure on the secondary school system in the future. The government's target is an annual rate of increase of about 8.5% in secondary enrollments during 1975-81, to achieve a 30% participation for the age group. Accordingly, secondary education facilities would be improved and expanded, mainly in semi-rural areas where they are most needed. 3.11 Future government efforts will also focus on decentralizing the administration and supervision of secondary education by establishing regional secondary centers, which will function as educational and administrative units. Each will consist of a central institution offering diversified upper secondary education and will be located in a departmental capital, surrounded by several associated lower secondary schools in semi-rural areas. The director of the central institute will be the administrative supervisor of all secondary schools in the department, and the senior teachers of the central institute will become technical supervisors responsible for providing technical assis- tance on teaching methods and content of syllabi to other departmental teach- ers. Implementation of this system is feasible, since there already exists a number of well equipped and properly staffed central institutes established under the first Bank education project; associated lower secondary schools in semi-rural areas will be provided in the proposed project (para. 4.13). Teacher Education 3.12 Primary teachers are trained in a three year upper secondary course (grades 10-12). Quality of training has improved since 1970 when the govern- ment (a) extended the training program from two to three years; (b) imple- mented a revised curriculum in which emphasis is given to teaching practice, workshop activities for preparing simple equipment and teaching materials, and strengthening knowledge of essential subjects such as language, math- ematics and science; (c) consolidated the 14 public and private teacher training schools into five well staffed public schools; and (d) provided adequate buildings, equipment, furniture and teaching materials for all five schools, three of which were financed under the first education proj- ect. The annual supply of about 400 graduates is adequate to meet demand, but there is need to upgrade 2,000 unqualified teachers (24% of the existing primary teaching force), assigned mainly in the rural areas. The proposed project includes technical assistance to help the newly established National Education Center implement such a program (paras. 4.15 and 4.16). 3.13 Secondary teachers are trained in the university faculties of education, where standards are comparatively high. Nevertheless, the number of graduates (about 100 per year) is insufficient to meet present and future demand. The National University has recently been expanding its teacher training program, in close collaboration with the government. The train- ing of teachers for practical subjects (industrial arts, home economics and  - 7 - agriculture) is almost nonexistent since the only program, organized by a private polytechnic, is very limited. The government will undertake a pro- gram in these fields, giving priority to teacher training for lower second- ary and agricultural secondary schools. Training of guidance counselors to assist secondary students in selecting fields of specialization will also be implemented under the proposed project; the National Education Center will coordinate this program (para. 4.15). Agricultural Education 3.14 Agricultural education is offered in six public (600 students) and three private (370 students) upper secondary schools. The former are handi- capped by unsuitable physical facilities, limited or nonexistent teaching equipment and materials, unqualified teachers, academically oriented cur- ricula and general inefficiency of operation. Ministry of Education plans to improve the quality and relevancy of agricultural education include (a) replacement of unsuitable facilities, (b) provision of equipment and teach- ing materials, and (c) development of new syllabi in accordance with the already revised curricula. The Ministry intends to concentrate all public efforts in four of the six government schools, by phasing out the other two. Through this consolidation some reduction of student unit costs will be ob- tained; the teaching staff will be better utilized; and study of the four major agricultural fields (forestry, livestock, sugarcane and basic grains) of importance to Nicaragua will be stimulated, with each school concentrating on one of them. The proposed project would assist the government in execut- ing this consolidation program (paras. 4.10-4.12). Vocational and Technical Education 3.15 The Ministry of Education administers the two most important voca- tional/technical institutions in the country--the National Technical Voca- tional Institute and the National Technological Institute--both operating in new and well equipped facilities. The first receives assistance from USAID and the other from Spain. However, the number of graduates (about 100 per year) is insufficient to satisfy the growing manpower requirements of the industrial sector; hence the earthquake reconstruction project provides for the establishment of a new two year post secondary technical institute. When fully operating in 1977, the institute will enroll about 500 students and will graduate some 250 technicians annually, which would meet estimated demand by 1981. The Overseas Development Administration (ODA) of Great Britain is providing technical assistance and equipment for the institute. Nonformal Education 3.16 Various nonformal education/training schemes are being implemented by public and private agencies. The Ministry of Education provides acceler- ated literacy courses, in which about 12,000 youths and adults have been enrolled. Also, trade training courses of varying duration are offered for skilled and semi-skilled workers by the Ministries of Education and Labor and by private agencies. The Central Bank recently completed an inventory  - 8 - and evaluation of the existing resources for manpower training in the coun- try and came to the conclusion that there are considerable duplication and overlapping of programs and a need to design a national scheme to coordinate vocational training and avoid further wastage of resources. The government has not yet decided on the timing for implementing these recommendations. 3.17 Rural training programs are being carried out by several agencies, but their scope is not commensurate with needs. The Ministry of Education operates eight agricultural schools (escuelas granjas) for out-of-school youths to complete their basic education and receive agricultural training. These schools have been unsuccessful because of irrelevant curricula, un- qualified teachers, inadequate procedures for selecting students and high unit recurrent costs at about eight times that of regular primary education and almost double that of secondary technical education. The Ministry has initiated a full conversion of the schools into agricultural training centers for small scale farmers and rural youths (paras. 4.08 and 4.09). Curricula, regulations for selecting students and the duration of courses are being determined by the Ministry of Education staff, in consultation with the Ministry of Agriculture. Sites for the new centers have been selected, and they include land for farm activities. The Ministry of Agriculture, through its limited extension service, provides some farmer training; the service will be reinforced by better coordination with the new centers and by hiring qualified graduates of the reorganized secondary agricultural schools (paras. 3.14 and 4.10). Educational Finance 3.18 In 1974 expenditures on education and training totaled 4.1% of GNP. of these, public expenditures amounted to 2.5% of GNP, with about one-tenth externally financed (Annex 4). Although public revenues and current expendi- tures have traditionally been low relative to GNP, the education and training sector has been accorded priority within the central government budget. Ex- cept for the recent transitory post earthquake years, the sector was allocated as much as 20% of the total budget and 27% of recurrent expenditures in the early 1970's, which compares favorably with other countries at similar stages of development. The Ministry of Education accounts for about 90% of total public education expenditures. A high 60% of the Ministry's budget is allo- cated to primary education (Annex 5), with the share of general secondary education remaining almost constant during 1970-74 at about 12% and that of public university education increasing by more than half to 13%. Starting in 1974, more emphasis has been given to vocational and prevocational training; nevertheless, agricultural training expenditures are still minimal at less than 2% of the total recurrent budget. About one-fifth of the Ministry of Education's total expenditures is for school construction and maintenance, naif of which was financed by external sources in support of ongoing projects at the primary (USAID), secondary (IBRD) and higher (IDB) education levels (Annex 5). 3.19 While public primary education is free, there is a rather high fee of about US$35 per year for public secondary schools. This fee generates  - 9 - important financing for school management, additional teachers, school main- tenance and materials. Although there is a scholarship program for deserving low income students, the fees are likely to limit the access of the poorer classes to secondary education when the demand for places rises as a result of increased output from the primary system, unless the scholarship program is expanded. In 1974 18% of students at the secondary level was on scholar- ships. The government has provided assurances that in future it will ensure that an adequate number of scholarships are made available to students from low income families wishing to attend lower secondary schools in semi-rural areas. 3.20 Based on enrollment targets discussed earlier (paras. 3.07 and 3.10), Ministry of Education expenditures are projected to increase by 8% per annum (1974 prices) during 1974-81, which is approximately the same growth rate as that projected for total consumption expenditures of central government (Annex 4). These projections assume that 20% of secondary enroll- ments will be in diversified education, and they include provision for in- creased teaching materials and maintenance and for a real growth in teachers' salaries. Unit costs for primary education are estimated to decline by about 20%, as a result of more efficient utilization of teachers and some double- shifting of students. Capital expenditures to implement the government's planned expansion and improvement of rural education would represent about 3% of total public investment for 1975-79, or about half the relative share in 1970-74. The decline reflects completion of the reconstruction of schools destroyed by the 1972 earthquake in Managua. Half of the proposed education investment plan will be financed externally. IV. THE PROJECT Project Strategy and Content 4.01 The proposed project is designed to support the government's rural education and training development strategy by (a) expanding and improving education and training opportunities through the establishment of basic schools and community learning centers; (b) increasing agricultural train- ing opportunities by establishing centers offering nonformal training to farmers and their families; (c) contributing to meeting the manpower needs of the agricultural sector by establishing agricultural secondary schools in strategic geographic zones; (d) expanding and improving secondary educa- tion for the semi-rural population and decentralizing education management by establishing regional secondary education centers; and (e) improving teacher qualifications by establishing in-service training programs. Speci- fically, the project would comprise (Annex 6):  - 10 - (i) Construction, furnishing and/or equipping of the following educational institutions: Student Schools Places am U +3~~~~~~~~~~~~~~C (a) Rural Educational Nuclei~~~~~~~~~~~~~~~~~~~~~~~~~a 0 0)b 0 , 4