Argentina - Vocational Training and Technical Education Project

Document of The World Bank [fljp FOR OFFICIAL USE ONLY Report No. 2978b-AR ARGENTINA STAFF APPRAISAL REPORT OF A VOCATIONAL TRAINING AND TECHNICAL EDUCATION PROJ September 10, 1980 Regional Projects Department Latin America and the Caribbean Regional Office 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.  CURRENCY EQUIVALENTS (as of January 15, 1980) Currency Unit = Peso Argentino ($a) US$1 = $a 1,620 $a 1 = US$0.000617 $a 1,000,000 = US$617 WEIGHTS AND MEASURES 2 1 hectare = 10,000 m = 2.47 acres2 100 hectares =1 square kilometer (km ) = 0.39 square miles I meter = 3.28 feet 1 kilogram (kg) =2.2 pounds 1.060 kgs = 1 metric ton = 0.98 long ton 1 liter (1) = 0.26 gallons ABBREVIATIONS CONET = National Council of Technical Educatinn CNE = National Council for Education ENET = National School for Technical Education INSPT = National Higher Institute for Technical Education Teachers OAS = Organization of American States VTC = Vocational Training Center (run by CONET) ILO = International Labour Organization GDVT = CONET's General Directorate for Vocational Training GOVERNMENT OF ARGENTINA Fiscal Year January 1 to December 31 Academic Year Mid-March to Early December  FOR OFFICIAL USE ONLY ARGENTINA STAFF APPRAISAL REPORT VOCATIONAL TRAINING AND TECHNICAL EDUCATION PROJECT TABLE OF CONTENTS Page No. I. SOCIO-ECONOMIC BACKGROUND AND ECONOMIC POLICIES RELATED TO EDUCATION AND TRAINING DEVELOPMENT ...... 1 - Socio Economic Background ......................... 1 - Human Resource Requirements for Development ........ 3 II. THE EDUCATION AND TRAINING SYSTEMS .... ............... 5 A. The Education System ........ ..................... 5 - Overview ....................................... 5 - Administration ........... . 0......... .... .* .. . 5 - The Different Levels of Education .............. 6 - Financing ................. .*............. 8 - Efficiency .................................................. 9 B. The Vocational Training System ................... 10 - Overview ................................................... 10 - The National Council of Technical Education (CONET) .................... ............ 11 - Strategy for the Development of Vocational Training ............ .... 17 III. THE PROJECT ............... . .. 19 A. Objectives and Content ................... ........ 19 B. Elements of the Project ....... ............. 21 - Vocational Training ................... ... 21 - Technical Education ........ ...... 25 - Technical Assistance ......... 25 IV. COST ESTIMATES, FINANCING AND IMPLEMENTATION OF THE PROJECT .. .. ........27 Cost Estimates ..................... . .27 Financing ...29 Implementation .................30 Procurement ..... . ......... . .32 Disbursements . ..33 This document has a restricted distribution and may be used by recipients only in the performance of their ofllcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (Continued) Pag,e No. V. BENEFITS AND RISKS .........................*.....* 34 Benefits ... ...... , .. . 34 Risks .o............ ...***..*..**.... *............ 35 VI AGREEMENTS REACHED AND RECOMMENDATIONS ........ ..... 36 ANNEXES ANNEX 1 - Supporting Tables and Charts Tables T-1 Comparative Education Indicators T-2 Distribution of the Labor Force by Occupational Category and Sector of Economic Activity, 1960-1990 T-3 Qualified Workers Demanded and Supplied per Year, 1980-1990, in the Manufacturing, Utilities, and Construction Sectors T-4 The Patterns of Schools and Enrollments, 1977 T-5 Growth and Distribution of Enrollments, 1973-1977 T-6 Secondary Education: Establishments and Enrollments, 1977 T-7 Secondary Education: Basic Cycle/Bachillerato Course: Coefficients of Retention and Dropout T-8 CONET Training Output, 1985 T-9 Technical Assistance T-10 Project Costs Estimates T-11 Annual Recurrent Costs Generated by the Project T-12 Implementation Schedule T-13 Disbursement Schedule Charts C-1 The Education System of Argentina C-2 Organization of the Ministry of Culture and Education C-3 Organization of CONET C-4 Present Organization of CONET's Vocational Training Directorate C-5 Proposed Organization of CONET's Vocational Training Directorate ANNEX 2 - Plan of Studies for "Dual System" ANNEX 3 - Selected Documents Available in the Project File MAP This report is based on the findings of an appraisal mission that visited Argentina in January-February 1980. The mission consisted of Messrs. S. Apergis (Economist), A. Alberti (Vocational Trainer), I. Matallana (Architect, Consultant) and J. Gailer (Technical Educator, Consultant).  I. SOCIO-ECONO01IC BACKGROUND AND ECONOMIC POLICIES RELATED TO EDUCATION AND TRAINING DEVELOPMENT Socio-Economic Background 1.01 Argentina, the second largest Latin American country, possesses abundant natural resources ranging from excellent agricultural land with various potential uses (cattle grazing, grain production, fruit and vege- table cultivation, etc.) to extensive fish banks, energy sources (oil, coal and waterfalls) and a varied array of minerals. Many of these resources are still unexploited or even unexplored. Even so, the country had reached an in- come per capita of US$1,910 in 1978, one of the highest in Latin America, although it is clear that its economic potential is much higher than this figure indicates. 1.02 Total population was estima5ed at 26.7 million in 1978, and popula- tion density at 10 inhabitants per km . The low population density despite the abundance of natural resources has been mainly the result of: (a) the preference of policy makers for immigrants of European origin which, together with the slowdown of European emigration after the 1920's, resulted in low immigration for most of this century; and (b) the declining birthrates-- which have resulted at present in a population growth rate of 1.3%. 1.03 Population sparsity is further intensified for the majority of Argentina's twenty-two provinces by unequal distribution. One third of the population resides in the Greater Buenos Aires area, and over 50% in the Buenos Aires province which, however, occupies only 11% of the national territory. On the other hand, the Buenos Aires province produces about 80% of manufacturing output and about 45% of agricultural output. What these figures indicate is that probably Argentina is one of the few countries in which additional supplies of labor still produce increasing returns at the margin. Side by side with this phenomenon, however, it is easy to detect, e.g., from the distribution of employment by sector, that large numbers of economically active people in the big urban centers are employed in low- productivity jobs. Therefore, a more even distribution of population and labor force among provinces resulting from a relative reduction of low-produc- tivity workers in the large urban centers could increase the productivity of both labor and capital, while at the same time alleviating the existing problems of congestion and pollution, especially in the Buenos Aires area. 1.04 The central government is currently assessing the probable benefits, as well as problems, of reorienting its investment towards provinces with high potential but sparsely populated and of offering incentives to private inves- tors to move in the same direction. Some steps have already been taken in this direction as a result of the national government's decision to transfer several of its activities to provincial governments. An important additional measure in this context should be the decentralization of educational and training facilities, in order to create a qualified labor force at the local  -2- level as an attraction for prospective investors, and at the same time stem the outflow of young people towards the great urban centers in search of educational and training facilities. 1.05 Argentina's pattern of growth, and the principal policies determin- ing economic growth and structure, have also significant implications for the development and utilization of human resources. 1.06 In the last half century, and following the grave repercussions on the country's welfare produced by the Great Depression, which were felt particularly acutely because of specialization along the line of comparative advantage and reliance on international trade for the provision of the bulk of manufactured goods, Argentina has adopted a policy of industrialization by means of tariff protection, quantitative import restrictions, exchange sur- charges, and production subsidies. High protection to manufacturing (which has not always been consistent, as shown by comparatively high protection to manufacturing inputs as well) continued, until recently, even during periods when international conditions called for a more efficient international division of labor. During the first half of this period, tariff protection was less important relative to other policies promoting industrialization, while the opposite was true after 1960. As recently as five years ago tariff rates on the average were on the order of 90-100 percent. At present they are more moderate and for most manufactured items do not exceed 40-50 percent. However, in conjunction with relatively high international trans- portation costs and, at least until recently, sluggish demand for Argentina's main agricultural exportable products (which contributed to persistent pressures on the balance of payments), they resulted in fairly rapid growth of an extensive range of manufacturing activities, many of which could be expected to suffer seriously if exposed to full international competition. 1.07 Greatly increased exposure to international competitition is exactly the policy adopted by the present government, which has announced a plan of gradual tariff reductions that within five years would bring tariffs down to approximately half their present level. 1.08 Given the vulnerability of many industrial branches, the success of the liberalization policy--even its implementation in the first place--depends on the parallel adoption of measures that contribute to a smoother period of transition. An important measure in this regard is the acceleration of skill upgrading of the labor force by means of courses offered to employed workers as well as to those preparing for entrance into the labor force for the first time. At present manufacturing and other firms facing actual or potential competition from abroad find themselves handicapped because of the deficiencies or even complete lack of skill formation systems. In fact, it appears that the vast majority of the labor force at the lower level in all sectors of economic activity acquires its skills on the job, by means of informal apprentice- ship schemes. This system tends to perpetuate inappropriate practices while at the same time it keeps the productivity of labor at relatively low levels. Therefore, the need for introducing improved methods of skill formation for the labor force extends beyond manufacturing to most other sectors of economic activity, although it is clearly more urgent in those branches that face the prospect of increased foreign competition in the near future.  -3- Human Resource Requirements for Development 1.09 In the context of the basic parameters of economic growth and the principal economic policies of the government affecting the rate and pattern of growth, discussed in paras. 1.01-1.08, this section proceeds to estimate the implications for human resource development and utilization, with special emphasis on low-level skilled industrial workers and auxiliary technicians. 1.10 Since the government has not published an economic development plan, no consistent framework exists for planning human resource development. The following exposition should consequently be seen as reflecting general tendencies rather than specific plans for action. 1.11 The slow growth of Argentina's population implies a correspondingly slow increase in the labor force. It has been projected that between 1980 and 1990 the labor force will increase by about 10 percent. With regard to the distribution of the labor force among major sectors of economic activity, on the other hand, the following developments are likely. 1.12 In the agricultural sector, the slow increase in population, combined with high nutritional standards already attained, will result in slowly grow- ing domestic demand for agricultural products that can, even when taking into account higher expected foreign demand, be accommodated by increasing labor productivity (as a consequence of increasing mechanization, higher yielding seeds, etc.). The net outcome of these developments will likely be a reduction in the absolute size of the agricultural labor force. 1.13 In the manufacturing and utilities sectors, existing data indicate that the size of the economically active population declined between 1960 and 1970, both in absolute terms and as a percentage of the total labor force. Although statistical errors may have played a hand in this phenomenon, the biggest factor was probably the modernization of Argentina's manufacturing sector throdgn t'ie introduction of labor-saving techniques. Although no similar infor- mation exists about developments between 1970 and 1980, indications from the household surveys are that manufacturing and utilities employment increased in absolute terms, but at a slow rate, paralleling that of population in- crease in urban areas. On the basis of these developments, and government plans to expose Argentine industry to foreign competition, it is estimated that employment will increase in response to increased demand for manufac- turing production and public utilities, as a function of increasing popula- tion and incomes per capita, but at a slow pace to accommodate increased productivity implied by the need to face foreign competition. 1.14 Construction activities can be expected to expand during the next decade, beyond the growth rate implied by population increase and the de- mand for housing resulting from increasing incomes. The priacipal factors  - 4 - supporting this expectation are the ongoing effort to build up the productive and social infrastructure of the country (highways, modern factories, ports, schools, etc.) and, also, the planned transfer of spending authority from the central to provincial governments, which, it is hoped, will speed up capital formation at the national level through the incentive provided by integrating the decision makers and the beneficiaries of these decisions in the same entity, i.e., the provinces and their governments. As a result of the operation of these forces, it is expected that employment in the construction sector will keep rising more rapidly than in other sectors, as it has also done in the past. A dampening influence on rapid employment increases will be the ongoing modernization of the sector by means of introducing to an ever greater extent labor saving processes and equipment (cement mixers, materials elevators, cranes, prefabricated parts, etc.). 1.15 Finally, the services sector can be expected to absorb, as in the past, the contingents of rural area workers emigrating to the cities and the new workers appearing in the labor market as a result of increases in the labor force, who cannot be accommodated in manufacturing and construction. At present, Argentina's labor market is very tight and unemployment rates are at record lows. Given the country's low population growth, its capacity to produce domestically a very large part of its oil requirements, and its low dependence on foreign trade, there are no serious "structural" obstacles to continuing this favorable situation, and therefore practically the totality of the labor force can be expected to have a job. In such a full-employment mar- ket, it can be projected that the employment-elastic service sectors will grow at a faster pace than the rest of the economy. 1.16 Beyond their effect on the sectoral distribution of the labor force the preceding considerations have also implications for the occupational distribution of employment and unemployment. In general, it can be expected that the "Professional, Technical, and Related Personnel" category will in- crease faster than average to cover the needs for modernization and intro- duction of new technology, and also to accommodate the rapidly increasing numbers of university graduates and dropouts; "Farm Workers" and "Administra- tive and Related Personnel" will diminish their participation in the total, the first reflecting the projected decline of employment in agriculture and the second the consolidation of many small establishments into larger productive units; and "Service Workers" and "Other Workers" (Mining, Transport, Manufacturing and Construction Workers) will approximately maintain their share in total labor force. A summary of these expected developments is presented in Annex 1, Table T-2. 1.17 The implications of the expected changes in the structure of the labor force by sector and occupational categories for annual requirements of qualified workers during the next decade in the manufacturing, utilities and construction sectors which (together with skilled workers critical to the mechanization of agriculture) are the focus of the project under appraisal, are presented in the first part of Annex 1, Table T-3. It is estimated that annual requirements for skill formation of new entrants are on the order of 45 thousand, and for upgrading of existing workers an additional 30 thousand. Some preliminary estimates of the output of existing facilities in these skill areas are provided in para. 2.25.  II. THE EDUCATION AND TRAINING SYSTEMS A. The Education System Overview 2.01 The education system is depicted in Annex 1, C-1 and the pattern of schools and enrollments for 1977 in Annex 1, T-4. 2.02 An important deficiency of the system is that enrollments at the primary level exclude a significant part of school age population and dropouts are too high for a country with Argentina's socio-economic background. 2.03 The education system could also be made more relevant to the country's social and economic needs. The need to improve the relevance of the education system is especially strong in the areas of technology and science where greater technological competence and a strongly developed innovative ability would help to foster a virile and competitive industrial base. Equally important is the need to effect a better and broader bridge between education and employment so that the increased relevance can be brought to bear on industry. This in turn calls for a hard look at the science and mathematics teaching to ensure that a good base is being laid, especially at the secondary education stage where many of the curricula were worked out in the mid-sixties and some of which are already overdue for review with the object of improving the vocational orientation aspects of the system. 2.04 The establishment of linkages between the formal and informal systems of education is of particular importance in bridging the education- work gap since (a) the mobility provided either way introduces a desirable flexibility, (b) it allows for a fine tuning arrangement not easily possible in a school, for topping up skills, just prior to entry to industry, and (c) it allows standards to be inter-related. Administration 2.05 The Argentine education system is administered simultaneously by organs of the national government, the provincial governments, the municipal- ities and private school owners. At the national level the educational functions come under the Ministry of Culture and Education which has a number of Councils, departments and directorates-general upon which it devolves responsibility for the four levels of education (Annex 1, Chart C-2). 2.06 The overall administration and supervision is centralized in the Ministry under the National Directorates for Secondary and Higher Education, Agricultural Education, Artistic Education and the School Health Administra- tion, Conservation and Investigation. There is also a group of decentral- ized organizations: the National Council for Education (CNE), the National Council for Technical Education (CONET), and the National Universities. 2.07 The provincial governments carry out their educational functions through Ministries of Education, operating through Councils and Directorates. Current plans call for the gradual transfer of the administration of primary education to provincial governments. The implementation of this policy has encountered some problems due to the fact that the less prosperous provinces do not possess adequate financial and human resources to undertake this responsibility in a completely satisfactory manner.  -6- 2.08 The fragmentation of the administration of the education system, while promoting the objectives of decentralization and flexibility, creates some problems regarding equity considerations and the fulfilment of education's role as a unifying factor in terms of culture and national identity. An increase in the coordinating activities of the Ministry of Education might be the optimal response to this dilemma. The Different Levels of Education 2.09 Primary education is of seven years duration. Of the 24,986 schools available for primary education, some 40% are operated by the National Government, 50% by the Provincial Governments and Municipalities, and the remainder are privately run. The corresponding percentages for the enrollments show the provinces with 55%, the National Government with 29% and the private schools with 16%. Approximately 89% of the age group (6-12 years) was enrolled in 1977, with boys making up 51.5% and girls 48.5% of total enrollments. The overall picture at Annex 1, Table T-5 suggests that primary education is having a declining share in the total enrollments, the result of low population growth and faster expansion of secondary and post-secondary enrollments. An important problem in the primary education area, but existing at higher levels as well, is that many teachers have two or more jobs and as a consequence are not willing to work in rural areas where an urban post exists, nor do they give any kind of personal commitment to their schools. The government is making a new attempt to solve the problem through the organizing of full time teaching arrangements for teachers willing to do so; they will be paid at a special and higher rate than hitherto but will be expected to teach 25 hours a week in the same school. 2.10 Secondary education provides opportunities for the pupil to under- take further education within a range of diverse fields whilst at the same time preparing him or herself either for entry to tertiary education or for employment. It is not compulsory and is free in state schools. In 1977, 53% of the age group was enrolled. Girls are a majority in secondary schools with 52.8% of total enrollments. The course normally lasts five years and involves a 3-year 'basic cycle' and a 2-year 'senior cycle', but it extends over six years in the National Schools for Technical Education (ENETs) run by the National Council of Technical Education (CONET) and may reach seven years, according to the type of program followed: general, commercial, agricultural, technical, vocational, art and social welfare. Annex 1, Table T-6 indicates the number and distribution of establishments, courses and enrollments. Private schools make a strong contribution both to academic and commercial education institutions but less so to technical education where the operating costs are doubtless a ruling factor. 2.11 There are a total of 1,093 institutions of various kinds concerned with secondary technical education owned and run variously by the National Directorate of Adult Education (5), by CONET (318 ENETs + 92 others), by the National University (7), the Ministry of Social Welfare (2), the Provincial Governments (500), the Municipalities (2), private owners  167 of wbhich 1 _VY d nn ILL) spec '1 JaU (10)) They pro- vide a wide variety (2)-3 of' s-pacialtle5 altbough the more Important in terms of student numbers fall wi.thin the imechanical, electrical and construc- tion trade o-':s- Th Q