Sri Lanka - General Education Project

Documnt of The World Bank FOR OFFICIAL USE ONLY Rept No. P-5109-CE MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 38.5 MILLION TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR A GENEkC E1UGATIUN PROjEOT NOVEMBER 7, 1989 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 fank authorization.  CURRENCY SQUVALRM Currency Unit - Sri Lanka Rupee (Rs.) US$1.00 - Rs. 33.5 (May 1989) SLRSl - US $0.303 FISCAL YTR January 1 - December 31 (Government of Sri Lanka) LIST OF AURRVIAflONS =OSL - Government of Sri Lanka MECAI - Ministry of Education, Cultural Affairs, and information PPF - Project Preparation Facility  FOR OMCIAL USE ONLY SRI LANKA GENRAL EDUCATION PROJECT Credit and ProJect Summary Borrower: Democratic Socialist Republic of Sri Lanka Amount: SDR 38.5 million (US$49.0 million equivalent) Terms: Standard, with 40 years maturity Onlending Terms: Not applicable Financing Plan: (US$ million) Government 26.0 IDA 49.0 Total 75.0 Economic Rate of Returns Not Applicable Staff Appraisal Report: Report No. 7918-CE 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 Worlk Dank authorization.  ^ANDWK ND RECOMOENDATION OF TME PRESIDNT Or TRE INEIRMATIONAL DEVELOPKEWT ASSOCI&TION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO TEE DEDOCRTIC SOCIALIST REPUBLIC OF SRI LANUK FOR A GENERAL EDUCATION PROJECT 1. The following memorandum and recommendation on a proposed development credit to the Democratic Socialist Republic of Sri Lanka for SDR 38.5 million (US$49 million equivalent) is submitted for approval. The proposed credit, on standard IDA terms with 40 years' maturity, would help finance the upgrading of substandard schools, measures to strengthen school system management, and assistance in developing education sector policy. 2. Background. Over the past two/three decades, Sri Lanka has placed a high priority on the provision of basic education. The school system was expanded during the 19609 and '70s to provide almost universal access to primary education. The effect has been achievements well in excess of those attained by countries of similar income levels, with adult literacy and primary school enrollment rates both approaching 90X. The Government's overall policies and strategy in the sector are sound; however the rapid expansion of the system has resulted in declining quality and the emergence of strains on the management and service delivery systems. 3. At a broader level, the output of the educational system does not match the country's manpower requirements. An excessive emphasis on academic training rather than technical and vocational skills has contributed to many secondary and post-secondary graduates remaining unemployed. Although this is largely a consequence of slow growth in employment opportunities, and other labour market imbalances, there is a need to analyze education needs, reform curricula, and adjust the mix within academic streams and between formal and non-formal education, in order to reduce expenditure on redundant training. 4. At the primary and secondary levels, the school system falls under the control of the Ministry of Education, Cultural Affairs, and Information (MOECAI). To date the education system has been excessively centralized, resulting in weak local management. The Government is currently undertaking a major decentralization effort: (a) changing from a system of Districts (covering 300 schools each) to smaller units called Divisions (100 schools each) as the basic unit of school administration; and (b) devolving responsibility for education to Provincial Councils as part of a broader program of devolution. However, most Divisional offices have not been established, and the relative roles of Provincial Ministries of Education is still evolving. Supporting the decentralization process and strengthening the capacity for local level management will be key elements of the proposed project. 5. Apart from over-centralization, the system suffers from a number of other management weakenesses. Firstly, with the expansion of the system increased management responsibilities have fallen upon staff drawn from the teaching service, who have neither the requisite supervisory skills nor management experience. Secondly, the lack of frequent supervision is a major problem which contributes to poor performance and morale, and low  - 2 - levels of teacher utilization. This latter problem is due in part to weak local-level management, and in part to teachers' conditions of employment, which allow excessive casual leave. Thirdly, although teacher supply is adequate at the moment, there is an emerging problem of insufficient teacher training capacity for the future. The Government recognizes this and is currently considering its options. Finally, the system of educational planning and development needs strengthening, especially if MOECAI is to provide critical support to the Provinces. 6. The institutional weaknesses are exacerbated by the poor quality of school facilities and lack of supplies. Schools constructed during the expansion phase were often built to minimal standards, so that many are now badly overcrowded, and lack such basic facilities as toilets, water supplies, and furniture. At the same time, slow real growth in recurrent budgets has resulted in inadequate materials and maintenance, to the point where Sri Lanka now spends less than tne equivalent of US ten cents per student per year on classroom supplies and materials. The net effect of all of these considerations is that the productivity of good basic investments in education could be enhanced significantly by fairly modest additional expenditure for facilities, materials, and management improvements. 7. Rationale for IDA Involvement. To date IDA has had limited involvement in the education sector with two construction industry training projects. The proposed project would represent the extension of a broader sector dialogue started under an Education Sector Review in 1985. IDA's strategy is to initially provide financial support for general education, while encouraging to the Government improve school system management, and to develop a longer term sector strategy. As a first step on this support IDA has already provided a US$250,000 Project Preparation Facility (PPF). In addition to the PPF. IDA's financial involvement will allow Government to accelerate the upgrading of substandard schools, and encourage support the provision of adequate recurrent funds to general education. 8. Other donors are supporting various initiatives in higher education and training; the Asian Development Bank is finalizing a sector review, and both ADB and IDA are consulting with each other on their proposed support. The Bank Group brings to the rroJect ite experi;ace Of general education policy in other developing countries, as well as its expertise in assisting management and institutional development in the education sector. 9. Proiect Obiectives. The proposed project would address a number of policy issues affecting the efficiency of the broader eduication sector, and would strengthen the school service delivery system. It would improve teaching conditions and reduce disparities between schools; and support an institutional development process aimed at: (a) improving school management systems; (b) facilitating the transition to Provincial administration; (c) strengthening the institutional capacity of MOECAI to undertake sector analysis and planning; and (d) assessing the linkages between job-market demands and education and training needs, in order to start the process of adjusting the mix of education and training programs.  - 3 - 10. Project Description. The project will consist of (a) upgrading substandard schools by providing classrooms, water supplies and toilets, and the rehabilitation of buildings (including those damaged in recent flooding); (b) management strengthening, including development of Divisional and local management structures, intensification of school supervision, development of administrative and personnel procedures, and management training for principals and supervisors; (c) increased provision for maintenance and material inputs (furniture, equipment, supplies); (d) strengthening the planning unit in MOECAI; and te) a study of linkages between manpower requirements and education system outputs, and development of a plan to adjust the scope and types of post-school training. 11. The total project cost is estimated at US$75 million equivalent, with a foreign exchange component of US$10.3 million (14Z). Cost details and the project financing plan are presented in Schedule A. Amounts and methods of procurement and disbursements are shown in Schedule B. The timetable of key project processing events and the status of Bank Group operations in Sri Lanka are attached as Schedules C and D respectively. Staff Appraisal Report No. 7918-CE, dated October 27, 1989 is being distributed separately. 12. Agreed Actions. In line with the sectoral issues outlined above, the Government has agreed to: (a) complete a detailed analysis of its education strategy and its linkages with employment needs by June 30, 1991, and to review the findings with IDA and develop an action program by December 31, 1991 for implementing reforms; (b) complete a study of the causes of, and possible remedies for, sub-optimal teacher utilization by December 31, 1990, review the results with IDA, and prepare an action plan to improve teacher use satisfactory to the Association by June 30, 1991; (c) specific criteria for investments under the infrastructure component, which would involve directing expenditures to less-developed schools, and restricting them to high priority items; and, (d) by December 31, 1990, prepare and review with IDA a plan for increasing teacher training capacity to adequate levels by the mid 1990's. Agreement has also been reached that the Government will ensure the provision of sufficient local resources tot (a) increase the supply of classroom consumables to an agreed minimum level; (b) to sustain an on-going program of rehabilitation and maintenance; and, (c) to provide sufficient staff for Divisional offices and management training. 13. BenefitR. The principal benefit of the project will be better quality basic education tor dkLldren at primary and secondary schools through: (a) improved teacher attendance and perfo=sance due to increased supervision and better management; (b) better conditions for teaching and learning, due to relief of overcrowding, and provision of basic facilities; and (c) improved teacher morale and performance due to provision of adequate classroom supplies and teaching aids. In the medium term the project will also allow the Government to provide better educational opportunities with limited resources through improved management and planning. In the long run it will support a better match between educational outputs and job-market opportunities, thus limiting redundant training expenditures, and reducing time spent waiting in unemployment.  - 4 - 14. Rsks The principal risks are that the management development will not be effective, that the Government may fail to act on education strategy reforms, or that sufficient local financing may not be avaLlable. The first will be handled by including the establishment of a unit to support implementation of the management component; the second by sustained dialogue on education planning, and inclusion of legal agreements on the preparation of an action plant and the third by specific commitments on counterpart funding. At the country level there are risks associated with the security situation, and institutional disruption associated with the devolution of responsibility to Provincial Councils. It is judged that the project can be implemented effectively at the current level of civil unrest. The project has been designed to take account of, and facilitate, the transition to Provincial administration. 15. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Barber B. Conable President by Ernest Stern Attachments November 7, 1989 Washington D.C.  Schedule A SRI LAA GENRAL EDCACTION PROJECT Estimated Costs and Financing Plan Estimated Costs: Local Foreign Total