Jordan - Human Resources Development Sector Investment Loan

Document of The World Bank FOR OFFICIAL USE ONLY 6-A.. 3/Qb_ D Report No. 7641-JO STAFF APPRAISAL REPORT THE HASHEMITE KINGDOM OF JORDAN HUMAN RESOURCES DEVELOPMENT SECTOR INVESTMENT LOAN MAY 22, 1989 Country Department III Europe, Middle East and North Africa Region 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 Currency Unit = Jordanian Dinar (JD) US$1.00 = JD .540 (February 1989) Abbreviations and Acron5!s ETD : Educational Technology Directorate GCC : Gulf Cooperation Council GDCET : General Directorate of Curriculum and Educazional Technology GDPSB : General Directorate of Frojects and School Buildings GDRP : General Directorate of Research and Planning HCC : Higher Certification College HCST : Higher Counnil for Science and Technology MOE : Ministry of Education MOHE : Ministry of Higher Education NCERD : National Center for Educational Research and Development ODA : United Kingdom Overseas Development Administration OECF : Japan Overseas Economic Cooperation Fund SIL : Sector Investment Loan VTC : Vocational Training Corporation Government of the Hashemite Kingdom of Jordan Fiscal Year January 1 - December 31  FOR OFFICIAL USE ONLY THE HASHEMITE KINGDOM OF JORDAN HUMAN RESOURCES DEVELOPMENT SECTOR INVESTMENT LOAN STAFF APPRAISAL REPORT TABLE OF CONTENTS Page LOAN AND PROGRAM SUMMARY .................................. (iv) I. INTRODUCTION . I H. SECTOR .............................................. 2 A. Growth, Employment and Education .. 2 1. Macroeconomic Background. 2 2. Labor Market Issues. 3 B. Strengths and Weaknesses of the Sector . . 4 1. Sector Strlucture. 4 2. Past and Projected Enrollments. 5 3. Education Expenditures. 6 4. Systemic Weaknesses ...................................... 7 C. Main Issues... 7 1. Curriculum and Tixtbooks. 7 2. Teaching and Teacher Trair.ing. 8 3. School Facilities .................................... 10 4. Vocational Education .10 5. Educational Research and Development .11 D. Experience with Bank Lending for Education . . 11 E. Government and Bank Strategy .. 12 III. THE SECTOR REFORM PROGRAM .13 A. Reform Program Policy and Institutional Measures ...13 1. Policy Framework ..13 2. Institutional Framework ..15 This report is based on the findings of an appraisal mission that visited Jordan in December 1988. Mission members comprised Ms. Kolan (mission leader/sr. economist); Messrs. Go (sr. architect); and Za'rour (sr. educator). Participating consultants were Messrs. Bocock (operations analyst); Martinez (economist); Read (textbook specialist); Ruiz-Esparza (educator); and Simkims (education planner). Mr. Verspoor (sr. implementation advisor) participated in the missions preceding appraisal. The report was prepared by Ms. Kolan and M4r. Bocock, with production assistance from Ms. Cast4llo. This docume-nt 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.  (ii) TABLE OF CONTENTS (cont'd) Page B. Reform Program Implementation Strategy ..................... 15 C. National Programs .......................................... 16 1. Curriculum Development . ................................1 ]6 2. Textbook Development ....... ............................. 18 3. Teacher and Supervisory Staff Training ............................................... 21 4. Educational Technology ...... ............................ 25 5. Educational Facility Improvement ... 26 b. Vocational Training ........ ............................. 27 7. Educational Research and Development ................ .... 28 IV. PROGRAM MANAGEMENT, IMPLEMENTATION, COSTS AND FINANCING PLAN ...... .......................................... 30 A. Program Management . ..... 30 1. The Sector Approach ..... 30 2. Management Structure ....30 B. Program Implementation .....32 1. Preparation, Appraisal and Approval of Subprojects ........................................... 32 (a) Criteria for Appraisal and Approval of Subprojects ........ ............................ 33 (b) Guidelines for the Allocation of Funds ........... 35 2. Subproject Implementation . . ............................. 35 (a) Implementation Responsibilities ............... ... 35 (b) Implementation Schedule ........ 36 (c) Supervision ...................................... 37 C. Program Costs and Financing ...... ......................... 38 D. Program Affordability .................. ................... 44 E. Procurement ............................................... 46 F. Disbursements .... . . . . ....... 48 V. BENEFITS AND RLSKS ............................................. 49 VI. AGREEMENTS REACHED AND RECOMMENDATION .................. 51  (i i) LABLE OF CONTENTS (cont'd) Page ANNEXES I.1 Sector Development Policy Statement .... ................... 54 I.2 Action Program on Policy Measures, Institutional Changes and Quality Improvements .... ................... 57 II.1 Comparative Education Indicators ..... ..................... 65 II.2 Enrollment Trends, and Enrollment Projections and Cost Estimates .............. ........................ 67 II.3 Student/Teacher Ratios ................ .. .................. 69 II.4 Ministry of Education Current and Capital Expenditures (1983-87 in current prices) .. ............. 70 II.5 Ministry of Education Current and CapitrA Expenditures (1983-87 in constant prices) .............. 71 11.6 Ministry of Education Recurrent Budget by Type of Expenditure (1983-87) .. ....................... . ........ 72 11.7 Breakdown of Ministry of Education Recurrent Budget (1987) ................ 73 II.8 Flow Chart of Educational Inputs and Outputs .............. 74 -II.1 Basic Education Teacher Certification Program Model ......................... ......................... 75 III.2 Action Plan for In-Service Training Program .............. . 79 III.3 National Center for Education Research and Development (NCERD) ........................ ........................ 81 IV.1 Program Implementation Responsibilities ................... 84 IV.2 Composition of the Intermediary ..... ...................... 85 IV.3 Sample Formats for Preparing Subprojects and for Subproject Appraisal Reports . .. . 86 IV.4 General Criteria for Subproject Preparation, Appraisal and Approval ............. .................... 90 IV.5 Specific Appraisal Criteria ...... ......................... 93 IV.6 Summary of Foreign and Local Specialist Services ......... . 119 IV.7 In-Country Training and Overseas Fellowships .. ............ 125 IV.8 Documents Available in the Project File ......... .......... 128  (iv) THE HASHEMITE KINGDOM OF JORDAN HUMAN RESOURCES DEVELOPMENT SECTOR INVESTMENT LOAN Loan and Progmrm Supimary Borrower The Hashemite Kingdom of Jordan Benericiaries: Ministry of Education Ministry of Higher Education Higher Council for Science and Technology Universities of Jordan, Yarmouk and Mutah Vocational Training Corporation Loan Amount: US$73.0 million equivalent Tetms: 17 years, including 5 years grace, at the standard variable interest rate. Program Description: Human resources play a critical role in Jordan's economy. Lacking natuiral endowments and relying heavily on imports, the country s prosperity depends on human catital earnings in the form of remittances from Jordanians working in the regional labor market and exports of services. Since the mid-1980s, Jordan has been losing its comparative advantage in these two areas owing to changing macroeconomic conditions and the qualitative shortcomings of its education system. The Government recognizes the need to raise the quality of basic and secondary education so as to give Jordan the skill- and knowledge-intensive manpower base it requires to (a) develop its domestic technological capacity, and (b) maintain its regional comparative advantage in terms of labor services. It has therefore formulated an Education Reform Program, to be implemented in three phases over a ;Cen-year period, which translates the above objectives into a set of policy interventions, institutional changes and quality improvements. The proposed sector investment loan would help the Government implement the fifst four-year phase of this program which aims at: (a) Restructuring the school system by: (i) Extending basic (compulsory) education from nine to ten years to provide students with a more solid grounding in basic knowledge and skills, and reducing secondary education from three to two years; (ii) Restructuring "streaming" in the secondary cycle to address the diversified interests and abilities of individual students, and to provide opportunities for early specialization;  (v) (iii) Accelerating the transfer of apprenticeship-oriented vocational training from the formal secondary cycle to the Vocational Training Corporation, and restructuring the existing industrial arts secondary stream into a technical/technology stream; and (iv) Recrganizing the promotion/examination system to better assess student performance. (b) Improving the quality of teaching and learcing by: (i) Redefining curriculum objectives to promote higher cognitive skills, modernizing curriculum content, and making curricula more responsive to individual differences; (ii) Providing a full set of new or substantially revised textbooks that support curriculum objectives and are instructionally effective (initially covering over 400,000 students in six basic education grades); (iii) Raising teacher and supervisory staff qualification requirements: for basic education teachers from two to four years of post-secondary education, and for secondary school teachers and school principalr from four to five years of post-secondary work; setting up a new system of university-based pre-service teacher training; and expanding pre-service training capacity by an additional 2,000 students per year; (iv) Upgrading 4,000 of the existing community college graduate teachers to a BA equivalency and 1,500 secondary teachers and 360 principals and supervisors to a BA-plus-pedagogical-diploma through a certification program, and providing in-service training to 12,000 basic education teachers and 5,500 supervisory and support staff, to enhance their capacity to carry out reform objectives; and (v) Improving the quality of classrooms by replacing existing rented facilities with 180 purpose-built schools, 90 of which would be completed during Phase I to accommodate about 52,000 students currently in rented facilities and create about 36,000 new student places; and providing libraries, labs, and other facilities. (c) Using sector resources more efficiently and increasing cost recovery levels by conducting a study of further cost savings and cost recovery opportunities, and implementing recommendations of the study. (d) Institutionalizing the capacity to sustain sectoral reform by: (i) Strengthening the capacity of the Tech:iical Unit established within the Higher Council tor Science and technology to appraise subprojects and coordinate a:id monitor their implementation;  (vi) (ii) Establishing a National Center for Educationial Research and Development to help maintain the momentum of the reform through sectoral research and the evaluation of the reform program; (iii) Institutionalizing curriculum reform by strengthening the capacity of the Directorate of Curriculum in MOE to manage curriculum preparation and revision on the basis of user feedback; and (iv) Complementing the curriculum reform process by institutionalizing textbook development and distribution through the establishment of a new Textbook Publishiing Unit in MOE and a new textbook storage and delivery system. Estimated Cost of the Sector Program a/ Local Foreign Total ------ US$ million 1. Curriculum Development 0.0 0.1 0.1 2. Textbook Development 3.8 4.0 7.8 3. Teacher/Supervisory Staff Training L1.9 12.0 33.9 4. Educational Technology 3.7 5.2 8.9 5 Educational Facility Improvement 82.2 57.7 140.0 6. Vocational Training 3.3 4.6 7.9 7. Education Research and Development 1.2 1.0 2.2 8. Program Management 0.5 0.3 0.8 Total Base Costs b/ 116.5 85.1 201.6 Physical Contingencies 8.0 8.3 16.3 Price Contingencies 23.9 10.7 34.7 Total Program Costs 148.4 104.1 252.5 Financing Plan Local Foreign Total ------ US$ million ------ Bank 25.1 47.9 73.0 ODA .4 1.0 1.4 OECF c/ 17.8 55.2 73.0 Government 105.1 -0- 105.1 (of which taxes and duties) (23.1) -0- (23.1) Total 148.4 104.1 252.5 a/ Inclusive of taxes and duties. b/ Totals do not add up due to rounding. cl The Japanese Government is considering cofinancing in an equivalent amount to the Bank loan, i.e., US$73.0 million. Although no final response has been received, Japan is expected to provide this amount. An observer from the Japan OECF participated in the Bank's appraisal mission and we expect the OECF appraisal to take place shortly. The signing of the loan agreement between OECF and the Borrower is a condition of effectiveness of the Bank's loan agreement. Should the amount of the OECF loan be less than the amount applied for, the school construction under the program will be adjusted in light of the financing available.  (vii) Estimated Disbursements Bank Fiscal Year 1990 1991 1992 1993 1994 - ----- US$ million --------------------- Annual 12.0 12.5 14.0 16.5 18.0 Cumulative 12.0 24.5 38.5 55.0 73.0 Ecmomic Rate of Return: Not applicable Benefits and Risks: Beriefits. The prime benefit of the project would be the upgrading of Jordan's human resources base into an increasingly knowledge-intensive, skills-adaptable work force, capable of responding flexibly to changing employment opportunities and needs. This in turn would give Jordan the manpower it needs to promote high value-added, technology-based, export-oriented manufacturing and service activities, as well as helping to revive Jordan's competitiveness as a regionwide source of skilled labor. Specific benefits would include the following: basic education quality would be strengthened, specialization at the secondary level enhanced, and ,echnical/vocational education made more relevant to modern technology and market needs; teacher quality would be upgraded, and other educational inputs/resources would be substantially improved and used more cost-effectively. The capacity of the education system would be qualitatively enriched and the basis would be laid for long-term, ongoing reform through the 1990s and beyond. The delegation of subproject ..ppraisal and supervision responsibility to the Government would help enhance its planning and management capacity and support the application of objective criteria to other investments in the sector. Risks. The operation has two potential risks. The first concerns external and domestic financing. Should OECF cofinancing not materialize in the full amount, or should domestic financial constraints reduce the amount of counterpart funding available to the operation, the Government has agreed to reduce total program costs by extending the implementation period of the school construction program to cover the amount of the shortfall. The second risk is related to implementation capacity. The complexity of the program and the Large number of subprojects (over 30), many of which are  (viii) interlinked within and across program components, could overstretch the Government's implementation capacity. This risk is mitigated by the following factors: the beneficiary institutions and the Intermediary have been instrumental in planning and designing the reform and its components (and are therefore fully knowledgeable about its objectives and implementation requiremer.ts', the SIL incorporates a large technical assistance component (about 107 manyears of in-country training and overseas fellowships and 30 manyears of specialist services, a portion of which has already started) to supplement indigenous technical and managerial capacity; the program is incremental and can be adjusted over time to take account of implementation delays; and there are extensive bui't-in opportunities for Government/Bank reviews of progress against the detailed targets and performance indicato-s set forth in the mutually agreed Action Program. EM3PH May 1989  THE HASHEMITE KINGDOIM OF JORDAN HUMAN RESOURCES DEVELOPMENT SECTOR INVESTMENT LOAN 1. ENTRODUCTION 1.1 The Government of Jordan has requested Bank assistance in financing its education reform program, aimed at substantially upgrading the quality of basic and secondary general and vocational education. The program would be implemented over a ten-year period (1989-98), with a total investment cost estimated at US$948.4 million equivalent. To facilitate implementation, the program would be carried out ir three phases (para 3.4); the proposed Sector Investment Loan (SIL) would help the Government to implement the Phase I (1989-92) program, estimated at US$252.5 million, withi a foreign exchange component of US$104.1 million (412). The Government would contribute about US$105.1 million equivalent. Of the remaining US$147.4 million, US$73.0 million would be financed by the Bank, and cofinancing in the amount of US$1.4 million equivalent would be provided by the UK ODA. The Japanese Government is considering cofinancing in an equivalent amount to the Bank loan, i.e., US$73.0 million. Although no final response has been received, Japan is expected to provide this amount. An observer from the Japan 3ECF participated in the Bank's appraisal mission an4 we expect the OECF appraisal to take place shortly. The signing of the loan agreements between the cofinanciers (ODA and OECF) and the Borrower is a condition of effectiveness of the Bank's loan agreement. Should the amount of the OECF loan be less than the amount applied for, the school construction under the program will be adjusted in light of the financing available (para 4.26). 1.2 The education reform program is the latest initiative in the Jordanian Government's long-term strategy to develop human capital capacity--a strategy dictated by the economy's limited natural resources. Previous governments have allocated a high proportion of public expenditure to the education system, and these investments have over the years contributed substantially to economic growth. Because Jordan has to import most of its raw materials and food, efforts to expand human capital "exports" have in the past been seen as critical in maintaining macroeconomic balances. Inflows of net factor income from abroad--consisting mainly of remittances from Jordanians working elsewhere in the Middle East--equalled nearly half the value of goods imported during 1984-87. 1.3 Jordan's economy grew rapidly during the regional boom of the late 1970s and early 1980s, but subsequently lost momentum in the wake of the regional recession in the GCC (Gulf Cooperation Council) State:s. With the concomitant reduction of new employment opportunities in the GCC states, the share of external factor income in GNP fell from nearly 25% in 1982 to under 15b in 1987.  - 2 - 1.4 The Government of Jordan has responded to this slowdown by focusing on a human resources strategy that aims to increase employment opportunities by expanding both the quality of the labor supply and the quantity and quality of skilled labor demand in the domestic economy. The strategy includes a comprehensive ten-year, three-phase reform of basic and secondary education, together with institutional and poiicy development initiatives for scientific/technological capacity building. This approach is designed to help Jordan to develop into a skilled human resources entrepot along the lines pioneered by Hong Kong and Singapore, with which Jordar, shares attributes such as limited natural resources, a hard-working and increasirngly educated population, a stable government and institutions, a relatively open trade and foreign exchange regime, an advantageous geographical location, and a dedicated leadership. 1.5 The education reform component of the wider strategy is designed to ensure that the system produces graduates with a high-quality general education that emphasizes problem solving, critical thinking, analytical skills, and the ability to apply information in creative, productive ways. This process is in turn intended to provide domestic industry with the high quality manpower base that it needs to develop indigenous technological capacity in high value-added, export oriented production (while also enabling Jordanians seeking employment overseas to find good jobs in competitive markets). To achieve these objectives, the Government has prepared, with Bank assistance, a comprehensive .ong-term program to improve all aspects of Jordan's basic and secondary education system. The background, rationale and broad structure of the reform as a whole are outlined in the Government's Sector Development Policy Statement, provided in Annex I.1; a detailed Action Program that defines Phase I reform activities, target dates and performance indicators is given in Annex T.2. II. SECTOR BACKGROUND A. Growth, Employment and Education 1. Macroeconomic Background 2.1 In 1987 Jordan's population was estimated at 3 million and its GDP at US$4,930 million equivalent, nearly 60% of which was accounted for by services. The economy has a very narrow productive base and few natural endowments; apart from its educated and hard-working people, Jordan's only indigenous resources are phosphate, potash and l4mestone. Virtually all of its oil has to be 4mported less than 5% of its agricultural l.nd is arable, and water is an increasingly scarce resource, subject to the corneting demands of irrigation, urbanization and industrialization. 2.2 A critically important factor contributing to Jordan's prosperity in the late 1970s was the expanding employment of Jordan's educated labor force in GCC States. Nearly all of Jordan's goods exports also went to GCC States. Since the mid-1980s, however, falling oil prices have substantially eroded these sources of overseas earnings; they have also resulted in a 30X reduction in the third main component of external income, namely, grants from other Arab countries. These developme ts were partly offset during 1984-87 by falling  imports and Government mobilization of additional resources. Overseas borrowings were increased from the very low levels of the early 1980s, and Jordan's relatively high foreign exchange reserves were drawn down. The situation deteriorated sharply in 1988, however. Remittances fell by nearly 6% in nominal terms from their 1987 levels, and external debt service payments (refl Pting heavy borrowings to finance past deficits) rose by 15%; meanwhile, official reserves were reduced to only half a month's worth of imports. Finally, GDP fell by nearly 3.5% in real terms in 1988 (having previously slowed from an annual growth rate of 10% during 1979-82 to just over 5% in 1982-84 and to less than 1% during 1984-87). 2.3 The Government's policy measures to deal with these difficulties have included an approximately 23% depreciation of the Jordanian dinar vis-a-vis the US dollar in real terms; interest rate deregul.ltion and financial market liberalization; measures to deregulate industry; and an austerity budget for 1989 that includes spending cuts that are the equivalent of a 58% reduction in spending for development projects and a 33% cut in total expenditures, along with a freeze on wages. The Government is also working with, the Bank on the preparation of a trade and industry adjustment loan. 2. Labor Market Issues 2.4 The initiatives outlined in para 2.3 have been designed to shift incentives away from imports towards exports and to encourage efficient import substitution. A preliminary Bank analysis suggests that there is already some evidence of a positive short-term industrial response. It remains to be seen, however, how effective these measures will be in improving long-standing conditions in the domestic labor market or in reviving GDP. Officially registered unemployment has been rising rapidly on an annual basis since 1981, reaching nearly 10% by 1986. Dealing with unemployment is essential for restoring economic growth but is complicated by a number of factors. Jordan's population growth rate is extretiely high (about 3.8% p.a.); female labor force participation has been rising sharply (from 8% to 14% between 1979 and 1986); and the labor market is heavily segmented. Despite rising domestic unemployment, 30% of the labor fcrce are unskilled guest workers. One of the measures taken in response to the recent macroeconomic difficulties has been to raise the permit fees for foreign labor in order to encourage local employment. 2.5 Finally, the economy's substantial dependence on the earnings remitted home by Jordanians working abroad has already been noted (paras 1.2 and 2.2). If Jordan is to diversify the thrust of its human resource development strategy and eventually supplant earnings from overseas employment with domestic job opportunities (para 1.4), even skilled workers will require training in, e.g., the creative application of knowledge in problem-solving or decision-making contexts. 2.6 The above factors suggest that increasing numbers of Jordanians must become better educated in order to compete for skilled jobs. While the regional market for the kinds of skilled occupations in which Jordanians excel should revive with the recent depreciation of the dinar, it may become harder for Jordan to maintain its regional comparative advantage in future years, as GCC states set up training programs for the skilled occupations currently filled by Jordanians. It thus becomes essential to broaden and upgrade Jordan's labor force to qualify it for new technical and professional occupations at home.  - 4- 2.7 This diagnosis in turn implies the need to: (a) improve the education system so that new Jordanian labor market entrants can provide the domestic economy with the high quality human resources needed; and (b) reduce Jordan's dependence on the health of GCC States' economies by broadening the skills mix demanded in domestic labor markets. The Government is currently exploring ways to expand technical/professional employment in the domestic economy, preferably in skill-intensive, high value-added activities. Studies, which are to be undertaken with Bank assistance, will assess the opportunities for scientific and technological capacity-building in the economy (para 1.4). 2.8 The Government considers its basic and secondary education reform program (para 1.5 and paras 3.1 et seq.) to be the critical foundation of _ wider strategy for economic growth. Nevertheless, the substantial expenditures required to implement the full reform program (nearly US$1 billion over 10 years) raise legitimate questions as to whether additional investment in education should be Jordan's top priority. This issue has been addressed in detail in the Bank's recent staff analysis of Jordan's economy: after reviewing recent macroeconomic developments and likely prospects, the analysis identifies the reduction of uremployment as being critical to economic recovery, and enhancing the quality of Jordan's education system as being critical to reducing unemployment. 2.9 The emphasis on qualitative improvement is of central importance. The education system's impressive quantitative coverage in terms of enrollments (paras 2.13-2.15) conceals a number of qualitative deficiencies (para 2.18 et seq.). The priority objectives of the reform (curriculum/textbook/instructional materials improvement; enhanced teacher effectiveness; improved physical facilities; and increased capacity for technical/vocational training) are designed to improve the quality of the system's output (well-prepared labor market entrants). However, no quantitative expansion of general education enrollments, beyond that dictated by the natural increase in the school-age population (currently 4% p.a.), is included in the reform. 2.10 Jordan will undoubtedly have to rely on its human capital resources for reviving domestic growth and maintaining external balances over the long term--whether those resources are directly exported as in the past, or whether, as a result of scientific and technological capacity building (paras 1.4 and 2.7), they are used for domestic production and export of high value-added goods and services. The Government's human resources strategy is designed to cover both eventualities by enhancing the quality of the education system and hence improving the capacity of school leavers to compete in any (reasonably configured) labor market, at home or abroad. B. Strengths and Weaknesses of the Sector 1. Sector Structure 2.11 Jordan's formal pre-tertiary education system currently comprises a compulsory basic cycle of six years of primary and three years of preparatory schooling; this is followed by an optional three years of general secondary and two or three years of vocational education. "Public" education is sponsored by the Ministry of Education (MOE); policies for basic and secondary education are established by the National Board of Education. In 1987-88, MOE schools accounted for about 74% of total general education (i.e., primary/preparatory/secondary) and vocational enrollments, amounting to about  - 5 - 687,000 and 29,500 students respectively, out of a grand total of about 963,000. The remaining 262 of enrollments are sponsored by the private sector (il%), United Nations Relief Agency (14%), and other Government agencies (1%). Outside the pre-tertiary formal education system, the Vocational Training Corporation (VTC), an autono:.ouq agency under the Ministry of Labor, provides three-year apprenticeship training programs for skilled workers at the post-basic education level. 2.12 The Ministry of Higher Education (MOHE) is responsible for tertiary education, i.e. universities, polytecbnics, and community colleges. Policies for higher education are established by the Higher Education Council (HEC), which approves the establishment of institutions for higher education, determines fields oS specialization and tuition fees, and identifies financial resources and approves budgets. The universities are governed by their own boards, which are responsible for establishing general policy guidelines and determining the annual number of students ' be admitted to different programs. Both private and public organizati..as also provide their own upg..ading programs. Management training is provided primarily by the Jordan Institute of Public Administration and the Jordan Institute of Management. 2. Past and Proiected EnroHments 2.13 Jordan has one of the highest rates of coverage of school-age population among middle-income countries. Gross enrollment rates in 1985/86 were: i13% in primary (yrades 1-6); 97% in preparatory (grades 7-9); 65% in secondary (grades 10-12); and 242 in higher education. Jordan's primary enrollment rate exceeds that of comparable countries in the region (e.g., Algeria, Egypt, Morocco), and seconidary enrollments are the highest in the Middle East. (Annex II.1 provides comparative education indicators.) Approximately 71% of students completing secondary school enter higher education institutions; 1985-86 enrollments in higher education totaled 53,753. The four universities in Jordan accountee for 491 of these enrollments; the remainder attended Jordan's 52 puolic and private community colleges (in addition, 57,000 Jordanians were studying abroad). Female education grew at an average annual rate of about 4.71 between 1976-77 and 1987-88; female enrollments in 1987-88 represented 481 of total enrollments. 2.14 The aggregate annual growth rate for primary and secondary pupils (4.0% p.a. for all school categories over the 1983-87 period: Annex II.2, p.1) marginally exceeds Jordan's population growth rate (3.8% p.a.). Bank staff projections of the primary, preparatory and general secondary school population into the 1990s (using a 41 annual growth rate) suggest that this subgroup (comprising 571,000 primary, 221,000 preparatory, and 103,000 general secondary pupils in 1987/88) would rise to 1.1 million halfway through the reform program, and to 1.3 million by 1997/98 (Annex II.2, p.2). The cost implications of such an expansion are substantial: on the basis of an estimated cost of US$815 per student place, the incremental cost to the schooling system of natural increase alone (i.e., with no allowance for quality upgrading) would be about US$157 million by 1992/93 and US$350 million by 1997/98. This suggests that top priority needs to be given to further cost reduction and cost recovery efforts within the education sector (para 3.5). It also suggests that policies that directly add~ress Jordan's extremely high birth rate must become a wider national priority in the 1990s (para 2.38).  - 6 - 2.15 Teacher numbers have also grown substantially. In only four years (between 1983-84 and 1987-88) the number of MOE teachers alone expanded from approximately 23,500 to 33,400--an annual growth rate of over 9X. The most rapid percentage increase in teaching staff by level of schooling was in secondary education--an annual rate of 16.9b over the same four-year period. Overall, while both student and teacher numbers grew substantially, the s .dent/teacher ratio decreased. Thus, for MOE schools and between the 1983/84 and 1987/88 school years, the ratio for primary schooling fell from 32 to 29, while that for general secondary schooling fell from 21 tr 12, and for vocational education from 19 to 14 (Annex II.3). The main reason for the decrease at the primary level has been the system's growing reliance on rented facilities with small rooms that 'Limit the number of students chat can be accommodated. At the secondary level, the decrease is primarily due to the increasing use of specialized teachers with relatively low course loads. 3. Education Expenditures 2.16 Despite its stress on educational attainments, Jordan has found it hard to maintain the spending levels necessitated by rising enrollments. In current prices in 1987, MOE's sbare of current government expenditures was 11.6b and its share or total government expenditures was 8.1b, (down from 12.3% and 8.Z, respectively, in 1983: Annex II.4). Although current expenditures by MOE have risen consistently in recent years (by 4.3b p.a. between 1983 and 1987 at constant prices: Annex II.5), this rise has been slower than that of current government expenditures (5.8b), total government expenditures (5.9X), or government domestic revenues (6.6%). Given that new enrollments increase at about 4t p.a. (in 1987, new enrollments stood at 28,000), the MOE budget has barely kept up with the increasing demand for schooling. This has led to two major deficiencies: increasingly limited budgets for non-personnel expenditures and widespread use of rented facilities. Despite the 5.3b increase in capital expenditures in real terms over the 1983-87 -eriod, nearly 50b of all students were accommodated in rented facilities in 1987, adversely affecting the quality of learning (paras 2.30 and 2.31). 2.17 The average annual increase in the recurrent budget has been 3.9% in real terms since 1983 (Annex II.6); within this overall rate, personnel costs (estimated at 87% of the recurrent budget in 1987) have risen at an annual rate in real terms of 5.7b since 1983, while all other items is*rvices and supplies), accounting for llb of the recurrent budget in 1987, have fallen at an average annual rate of over 2.5b. This pattern indicates that the Government, in trying to provide teachers for the growing population, has spent less on other inputs essential to high-quality education. Meanwhile, almost no funds have been available for upgrading the teacher corps. In 1987, while the MOE recurrent budget for general education allocated over JD 57 million for personnel costs alone, total recurrent expenditures for in-service training were only JD 370,000 (Annex II.7).  -7- 4. Systemic Weaknesses 2.18 Although Jordan's general education system is quantitatively impressive in terms of enrollment rates, its quality is becoming inadequate in terms of Jordan's human capital development and deployment needs. Curricula have put too much stress on "knowing" and too little on "thinking." As a result, the core of many Jordanian students' educational experience can best be characterized as memorization of academic material. Students are trained to pass exams rather than to reason, and rote learning has been rewarded at the expense of analytical and conceptual skills or "learning by doing." The system does not impart the higher cognitive capacity to process and apply information creatively; in particular, it is seriously deficient in fostering skills such as rational inquiry, analytical thinking, and effective problem solving, all of which are essential to the successful application of past learning to new problems. Far greater emphasis also needs to be placed on the use of libraries, science and language labs, and practical experimentation. 2.19 The proposed education reform (paras 1.5 and 3.1-5, and Annex I.1) recognizes that Jordanian students need a schooling system that trains them to (a) think flexibly and critically; (b) be intellectually open to, and capable of absorbing and processing, new information and concepts; and (c) apply what they have absorbed and processed in productive ways. The Government also recognizes that to achieve these ambitious objectives, key education system inputs, such as curricula, textbooks, teachers, supervisors, school buildings and facilities must all be viewed as parts of an integrated whole. The simple schematic shown in Annex II.3 illustrates the interactive nature of the various components and the importance of carrying out the reform program on the basis of a systems approach. C. Main Issues 1. Curriculum and Textbooks 2.20 Content and relevance. As an education system approaches universal basic level coverage, curricula need to become more flexible in order to accommodate students from varying socio-economic backgrounds with different intellectual atta.inments ai,d interests. This requires textbooks that cover core material for all students but permit "branching" or "skipping" to meet the needs of slow or advanced learners, and/or "streamed" curricula, each with its own set of course materials for different groups of students. Jordanian curricula lack this flexibility. They are also outdated in terms of content; the broad spectrum of course work needs to be expanded and updated to include environmental concerns and conservation needs, population and health issues, and contemporary social/political/economic realities. Deficiencies in content partly reflect the fact that there is no systematic basis for curriculum revision and that mandated periodic revisions are not done (some subjects have not been revised in two decades). 2.21 Developmental and institutional factors. Because curricula and textbooks currently used in Jordanian schools are an amalgam of various ad hoc initiatives, they lack coherent sequencing and logical linkages between different levals of the same subject; for example, secondary mathematics curricula were developed before those for elementary mathematics. In general, curricula have been introduced or changed (a) in reaction to a specific complaint or perceived need; (b) in response to an international development,  -8- e.g., modern mathematics; or (c) as a by-product of a political understanding, e.g., the Jordanian-Syrian elementary curricula developed in the mid-1970s. Instances where a single group, such as the national team for mathematics, takes responsibility for curriculum and textbook development are the exception rather than the rule. 2.22 Meanwhile, those responsible for curriculum developmen'; are not necessarily individuals at the cutting edge of the subject matter or with wide pedagogical skills and/or practical experience. Instead, curricula tend to be developed by committees whose membership is drawn from universities and MOE; any role played by classroom teachers is incidental and minor. Similarly, textbooks are developed independently by individual authors, teams or joint-venture operations; there is virtually no coordination with curriculum committees or revision process to ensure that textbooks reflect curriculum objectives. 2.23 Finally, curricula and textbooks are not subjected to systematic research, evaluation or field testing before or after adoption and dissemination, even if comments or reactions collected from the field are available. The General Directorate of Curriculum and Educational Technology (GDCET) has no research capacity, and Jordan has no autonomous education resea-ch institute or center for curriculum and textbook development. 2.24 Textbooks. The existing Textbook Unit of MOE's GDCET is seriously understaffed; more importantly, the staff lack training in oublishing techniques and the professional standing necessary to meet curriculum developers and authors on equal terms and provide the technical input to upgrade the quality of textbooks. The Directorate is largely concerned with the processing of reprints and the timely delivery of stocks to central and district warehouses. The production process is formalized via printing contracts so rigid that any creative endeavor to improve book appearance and quality is impossible; it is completely inadequate to handle the development of the 500 new titles required by the reform, or to publish the books in accordance with the necessary standards. In the case of storage, the appraisal mission estimated that as many as lOb of all textbooks were rendered unusable by careless storage (estimated cost: US$350,000 a year). In the case of distribution, shipments are frequently undertaken in very small trucks with still smaller payloads. Stock control systems are currently entirely manual and need substartial upgrading to handle the volume of materials likely to flow from the reform. 2. Teaching and Teacher Training 2.25 Four basic issues adversely affect the quality of classroom teaching: (a) inadequate teacher qualifications; (b) poor pre- and in-service training programs; (c) inappropriate classroom teaching methods; and (d) weaknesses in academic qualifications of school principals. 2.26 Teacher qualifications. Approximately 6,000 students a year graduate from Jordanian universities at the bachelor level. Of this total, about 50% are arts and sciences graduates who could, in principle, become teachers. Of the latter 3,000, about 700 have MOHE scholarships, about 1,000 have scholarships reserved for children of the military, and about 1,200-1500 pay their own way. Currently, most MOE scholars (about 600) and about half of the own-account students (700) become teachers. These numbers are far too low to  -9- provide the nearly 5,000 new teachers needed each year. As a result, up to 70X of basic and secondary education teachers have only a two-year community college degree or less. This situation reflects, inter alia, the low prestige of teaching in the eyes of students and society, and the relatively poor earnings teachers can expect. Until mid-1988, teachers did not benefit from Jordan's generous system of allowances to supplement basic salaries to the extent that engineers, physicians and several other occupations did. A university graduate teacher received only about one-third the starting pay of a newly graduated engineer; many male teachers were therefore forced to seek a second job, leaving them little or no time to prepare for their teaching duties. Meanwhile, precisely because of the low prestige and low pay, males were not readily attracted to teaching, especially at the basic education level. This, plus the fact that female teachers are not permitted to tea_h boys beyond fourth grade, results in a surplus of female teachers and overall inefficiency .i teacher utilization. To correct the salary differential, the Government increased allowances in mid-1988 and decreased those for technical professions, such as engineers. This move is expected to attract better qualified graduates into the teaching profession. 2.27 Teacher training. As in many other countries, teaching is often not treated as a profession for which top quality training is required. Many of those who enroll in pre-service teacher training programs at community colleges do so because their secondary school completion exam scores were too low to gain them admission into university. In turn, community college training programs have been weak in providing essential subject matter knowledge or pedagogical training--partly because teaching faculty at community colleges are often themselves insufficiently knowledgpable or pedagogically experienced to encourage inquiry-based learning by student teachers. As a result, programs have failed to encourage trainees to move away from rote learning and into analytical thinking, mastery of theoretical materials, or creative instruction techniques. Existing in-service teacher training programs are basically short refresher courses in pedagogy offered during summer vacations. 2.28 Teaching methods. Classroom teaching emphasizes inflexible coverage of prescribed material that makes little or no allowance for the differences between slow and advanced learners as groups--let alone the differing aptitudes and needs of individual students. This approach to instruction is abetted and perpetuated by the context and content of pre-service teacher training and in-service supervision. Finally, the system does not reward the teacher for his or her creativity. The criterion for success is adherence to the textbook and making sure that what is specified in the program is covered, rather than effective, high-quality instruction. 2.29 School principals. These weaknesses at the classroom level are compounded by the fact that school princi?als are under-qualified (602 of all principals have less than a university degree). They are over-burdened with administrative tasks, and lack the opportunity (and the capacity) to play a leadership role. Selected on the basis ef seniority, they are not specifically trained for their role--although a university degree and a minimum of three years' experience are required for secondary school principals, and a community college diploma and three years' experience (or a secondary school diploma and five years' experience) are required for basic education. Principals are expected to teach at both the basic and secondary levels.  3. School Facilities 2.30 The combination of a rapidly increasing school-age population and the Government's determination to provide universal access to basic education has forced the education system to resort to rented facilities, mainly private houses. In 1987, nearly 50% of all general education students were taught in rented premises and one-fourth of this group were in rented double-shift schools. Conditions in rented schools are unsatisfactory. The quality of teaching and learning is adversely affected by poor lighting, inadequate sanitary facilities and overcrowding; these shortcomings are exacerbated by the absence of library and/or multi-purpose rooms and storage facilities and by limited, if any, playground areas. Because of the small classrooms, rented facilities are also less cost-effective than purpose-built facilities since they make less efficient use of teaching staff (the student/teacher ratio in rented primary schools is 26:1, compared with 32:1 in the existing purpose-built schools). 2.31 Rental accommodations impose two other significant impediments to the equity and quality of education. Rented schools predominate in the three largest cities and are further concentrated in the lower-income districts. The reality of a physical environment that substantially and perhaps permanently reduces learning opportunities contradicts the principle of universal primary education and the equal opportunity goal that underlies it. Rented facilities are also concentrated at the primary school level. Schooling can become a chaotic, meaningless experience for young learners, at the most critical stage in their education--its beginning. Attentiveness and interest in school work, let alone the development of effective study habits, are likely to be permanently impaired. 4. Vocational Education 2.32 Vocational education plays a major role in preparing young Jordanians to be productive labor market entrants and, thereby, to contribute to sustained national economic growth. The official vocational education entity is the Vocational Training Corporation (VTC), which concentrates on providing young males and females with blue collar and commercial skills through three-year apprenticeship programs. VTC, which is operated cooperatively with private industry, also sponsors intensive short courses and upgrading programs for unemployed workers. The Corporation's programs have been supported by previous Bank lending (most recently in the FY86 Manpower Development Project), and its record is generally good; both enrollments and outp"t more than trebled in the mid-1980s. VTC estimates that its annual intake capacity in 1990 will be roughly 14,800 males and 8,700 females; Jordan's Board of Education has recently adopted a vocational preparation policy paper which proposes that vocational training be expanded to provide places for 50% of all male graduates of the compulsory education system and 30% of females. Meanwhile, some of the key components of the reform (notably the proposal to extend compulsory education to the end of the 10th grade and to introduce a new "technical" stream in grades 11 and 12: para 3.8) will have substantial direct consequences for labor markets generally and for non-academic (i.e. vocational) education in particular. Thus, the issue of vocational education planning becomes one of how best to frame a program for the 1990s '.iat provides adequate, but not excessive, capacity for training young labor market entrants. The Government has included both upgrading of existing VTC facilities and expansion of overall capacity in its reform.  - 11 - 5. Educational Research and Development 2.33 At present, MOE's General Directorate of Research and Planning is responsible for evaluative work on education. The Directorate is not equipped to carry out policy-based analysis to help implement the proposed reform, or to provide the impetus required to promote systemic innovation. It is also doubtful whether MOE could offer adequate compeu.sation to attract the caliber of staff needed to plan and implement an evaluation program of the magnitude and complexity required by the reform--or whether it would be organizationally feasible and/or appropriate for the Ministry to evaluate policies for which it is the executing agency. D. Experience with Bank Lending for Education 2.34 The proposed sector investment loan is the culmination of the Bank's relatively long experience with the Jordanian education sector. Since 1972, the Bank has financed two credits and six loans in the sector; these operations have closely paralleled the priority needs and level of sophistication of the Jordanian economy and education system. The early education projects focused primarily on the development of an institutional structure, especially with respect to staff development, for secondary and vocational schools and community colleges. The Project Performance Audit Report (No. 2492, Sec, M79-336) for the First Education Project, while noting its institutional impact, especially in educational planning, identified the need for improved TA coordination and more intensive training in management and administration, factors that were taken into account in the design of subsequent projects. The Project Completion Report for the Second Education Project (PCR No. 4261) highlighted its contribution to addressing skilled labor shortages. The Completion Report for the Third Education Project (PCR No. 6251) noted that, despite site acquisition and contractor delavs, physical implementation had progressed satisfactorily. On the "software" side, it suggested that fellowship training should be emphasized in preference to specialist services and that in-country English language training should be stressed to facilitate training overseas, as well as to communicate with specialists. These recommendations have been taken into account in the design of subsequent projects where a significantly large number of fellowships, financed by the UNDP, USAID and the European Economic Community, are being provided. 2.35 To support Government efforts to improve access to schooling for a rapidly growing population, Education IV, V and VI have focused on school construction. Education IV has also financed the construction of a paramedical training institute to address domestic and regional shortage of nurses and other paramedical staff. Civil works in Education IV (with the exception of the paramedical institute), in Education V, and in Education VI have consistently been completed on or ahead of schedule. The ongoing Manpower Development Project, which is ahead of schedule, supports the further expansion of vocational training capacity and the development of management training at the Jordan Institute of Management. As a result of Government efforts and Bank support, the sector is ahead of educational development in other middle-income countries. The apprenticeship training provided by the Vocational Training Corporation, which has received significant Bank support over the years, is regarded as a model for middle-income countries and is currently providing technical assistance to several countries in the EMENA region, including projects financed by the Bank. MOE's Directorate of School  - 12 - Buildiigs has developed into a highly effective entity which carries out all of the engineering, contracting and supervision work for donor- and Government-financed school construction. Starting with Education V, MOE has been managing the TA programs associated with Bank-financed projects. The Government's concern with the quality of basic and secondary education was reflected in Education VII, which became effective in 1988. This operation was initially envisaged as a sector investment loan; in order to provide adequate time for the Goverr1ment to develop its reform program, however, it was processed as a project with components designed to reflect the reform's objectives (e.g., establishing a capacity for the measurement and evalustion of education quality and for the training of teachers in the effective use of instructional materials). E. Government and nlank Strategy 2.36 As discussed in paras 1.4 and 1.5, a key element of the Government's macroeconomic strategy is to attack the problem of rising unemployment by improving the quality of both supply and demand in domestic labor markets, through coordinated action on education system reform and scientific and technological capacity building. In the case of education reform, the Government initiated (in 1985) a major effort to review the state of education in Jordan and propo3e changes to make the system and its outputs more relevant to national economic development needs. The review was carried out by a number of committees with membership from academia, government agencies, the private sector, teachers and parents. This effort culminated in the General Conference on Educational Development, held in September 1987, which formulated a set of recommendations which were in turn translated, with Bank assistance upon the request of the Government, into a ten-year program consisting of a phased series of measures to support improvements in the performance and management of basic and secondary education. These measures are outlined in paras 3.1-3.3. 2.37 The Bank's lending strategy for Jordan supports the Government's assignment of high priority to human resources development. In particular, it endorses the emphasis on new policies designed to produce a flexible, skilled and knowledge-intensive work force and to provide a critical input to science and technology capacity building. The Bank plans to support this latter effort with a science and technology sector study, which is expected to pave the way for a lending operation. Bank strategy also supports sector lending to Jordan to address broad policy and institutional issues. In this connection, an industry and trade adjustment loan is currently being prepared in support of the Government's macroeconomic adjustment effort. 2.38 Finally, the Bank's strategy includes pursuing a dialogue with the Government on the overriding importance of curbing Jordan's extremely high rate of population growth. If unchecked, the current rate of expansion (3.8% a year) could effectively undo the benefits of Government policies and Bank support for human resources development (close to 30% of the total cost of the operation described in this report will go to construction of new schools needed to accommodate natural increases in the student population--para 2.14). As has been the case with past economic and sector work and lending operations, the Bank would continue to pursue population issues; a health sector study is currently underway and is expected to lead to a sector lending operation.  - 13 - ml. THE SECTOR REFORM PROGRAM 3.1 The reform program aims at raising the quality of basic and secondary education to give Jordan the skill- and knowledge-intensive manpower base it needs to develop its domestic technological capacity and maintain its comparative advantage in regionwide labor markets. This goal has been translated into a set of policy interventions, institutional changes and qualitative improvements designed (i) to enhance student achievement levels by (a) restructuring the school system, (b) improving the quality of teaching and learning, and (c) using sector resources more efficiently; and (ii) to develop an institutional structure that will be responsive to the system's qualitative and quantitative needs over the long term. During negotiations, the Government gave assurances that it will implement the policies and institutional development measures articulated in the Sector Development Policy Statement (Annex I.1) and the actions, targets/indicators and target dates specified in the Action Program (Annex I.2); it also gave assurances that it will seek Bank agreement to any changes in these policies, measures and action items during the implementation period (para 6.2(a)). The policy framework, institutional changes, and quality improvement objectives and actions are summarized below. A. Reform Program Policy and Institutional Measures 3.2 The main components of the Government's proposed policy reform and institutional development strategy are as follows: 1. Policy Framework 3.3 To achieve the fundamental reform objective of enhancing student achievement levels, the Government plans to implement the following policy measures: (a) Restructuring the school system by: (i) Providing students with a more solid grounding in basic knowledge and skills through extension of basic (compulsory) education from 9 to 10 years; (ii) Addressing the diverse abilities and interests of individual students, and providing oppori nities for specialization in line with students' career or further education asprirations, through a restructured two-year secondary cycle with a unified core curriculum and three subject-based streams (math/science, arts/humanities and technology); (iii) Promoting a new emphasis on (and giving new stal:us to) technology and technicians through the establishment of a specialized technological secondary stream and the accelerated transfer of responsibility for specific industrial skill training to the VTC; and  - 14 - (iv) Implementing a promotion and examination system that conforms to the new structure through (a) promotion into secondary schooling based on grade point averages at the end of Grade 10; (b) the elimination of the former general examination at the end of Grade 9; and (c) the introduction of new specialized stream-specific examinations at the end of the secondary cycle. (b) Improving the quality of teaching and learning by: (i) Redefining curriculum objectives in terms of developing higher cognitive skills and abilities; modernizing curriculum content to reflect' both up-to-date pedagogy and contemporary issues; making curricula more flexible and responsive to individual learning abilities and interests; and establishing stronger integration between basic and secondary education curricula; (ii) Providing a full range of new or substantially revised textbooks that are explicitly designed to support curriculum objectives, and ensuring that textbooks and learning materials are instructionally more effective than hitherto; (iii) Raising teacher qualification requirements for basic education teachers from two to four years' post-secondary education, and for secondary school teachers from four to five years' post-secondary work; and setting up an expanded and revised system of university-based pre-service teacher training; (iv) Upgrading the existing community college graduate teachers' academic knowledge to a LA equivalency through a certification program, and providing ongoing in-service training to enable teachers to make effective use of new materials and diversified instructional methods; (v) Upgrading the academic qualifications of supervisors and school principals through a certification program; and (vi) Improving the quality of school facilities by providing libraries, labs, and audio-visual equipment and gradually eliminating rented classrooms. (c) Using sector resources more efficiently by: (i) conducting an education finance study (para 3.5) that H would identify and implement further measures for cost reduction and cost recovery; and (ii) implementing the recommendations of the study through an Action Program to be agreed between the Government and the Bank (para 6.2(b)).  - 15 - 2. Intitutional Fran.ework Enhancing the capacity to sustain sectoral reform by: (i) Strengthening the ability of the Technical Unit established withiiz the Higher Cou.ncil of Science and Technology (PCST), a new Jordanian entity, to appraise and allocate funds for subprojects of the reform program and monitor and coordinate their implementation; (ii) Establishing a National Center for Educational Research and Development (NCERD) to help maintain the momentum of the reform through policy-based and other large-scale sectoral resea.rch; to identify potentially useful and cost effective innovations; and to conduct a longitudinal evaluation of the reform program; (iii) Institutionalizing the process of ongoing curriculum reform by strengthening the capacity of MOE to manage the process of curriculum preparation and revision on the basis of feedoack from teachers, other expert referees, and student achievement levels; and (iv) Complementing the curriculum reform process by institutionalizing textbook development and dissemination through the establishment of a new Textbook Publishing Unit in MOE, together with new facilities and streamlined arrangements for textbook storage and distribution. B. Reform Program Implementation Strategy 3.4 The Government's implementation strategy for the reform as a whole has been designed against three criteria: feasibility, flexibility, and affordability. The reform's objectives have been subdivided into seven national programs, covering the following areas: Basic and Secondary School Curriculum Development; Textbook Development; Teacher and Supervisory Staff Training; Educational Technology; Educational Facility Improvement; Vocational Training Expansion; and Educational Research and Development. These programs would be carried out over a ten-year period (1989-98) in three phases: Phase I (1989-92) : Start-up and foundation Phase II (1993-95) : Implementation of core program Phase III (1996-98): Implementation of innovative programs 3.5 The overall program wo,.d bt: fa) cumulative over time, using a building block approach whereby later initiatives build oil foundations laid by earlier ones; and (b) programmatically interactive and synergistic, in that the outputs of individual programs are designed to support and enhance each other. In addition, implementation experience in each pha.e would be systematically monitored and evaluated and the results used as feedback for modifications. In the context of the affordability issue (paras 4.29-4.35), an education finance study will be carried out early in Phase I to examine opportunities for further cost savings and cost recovery in the sector. The study will examine the prospects for further cost savings and cost recovery through changes 4n policies and practices in the following three priority areas: current physical constraints, such as classroom size and catchment  - 16 - area, on teacher/class unit ratios; present teacher loads/numbers of contact hours; and textbook production standards in relation to useful book life, and textbook sale/loan schemes. During negotiations, the Government gave assurances that it will, by June 30, 1989, provide for Bank review, terms of reference of the study; by December 31, 1989, review its findings with the Bank; and by March 31, 1990, commence implementation of a mutually agreed program to achieve further cost savings and cost recovery in the education sector (para 6.2.(bj). Progress on implementation of the overall program will be provided in semi-annual progress reports and discussed at annual review meetings (Action Program, Annex I.2, p. 1). Finally, the ten-year time frame for the reform program as a whole will provide financial flexibility to spread its costs over a sufficiently long period in order to keep its budgetary requirements, at any point in time, at manageable levels. C. National Progrms 1. Curriculum Development (Total outlay: US$0.2 million equivalent: Bank fimlancing US$0.1 million) (a) Program Summary 3.6 Curriculum reform has two main aspects: (i) changes in the structure of the system (involving extension of compulsory education, reform of secondary school streaming, and new procedures for promotions and examinations: paras 3.7-3.9); and (ii) improvements in the content of curricula to remedy the defects noted in paras 2.20-2.23 and enhance the relevance and utility of subject matter and the teaching approacbes used (para 3.10). (b) Program Components 3.7 Extension of compulsory education. Under the new Education Law, revised in 1988 to reflect the policy framework mandated under the reform, basic education has been extended by one year, effective 1988/89, to cover Grades 1-10 inclusive (instead of Grades 1-9 as at present). For those youths who do not plan to go on to secondary school, the new ten-grade compulsory cycle would offer one extra year of basic education and synchronize the average age for completion of the basic cycle with the labor market entry age (16); the extra year is expected to provide those who go on to VTC apprenticeship programs with more maturity and basic skills, thereby raising their learning curve. For students who plan to stay on in formal education, the new system is expected to provide a more solid foundation in basic skills prior to streaming them in the secondary cycle. 3.8 Secondary curricula and streams. New secondary curricula would be developed and introduced in Grades 11 and 12 in the 1990/91 school year, accompanying the introduction of the revised streaming system (to be finalized in the 1989/90 school year). The latter would permit greater specialization and thus respond to criticism from the universities about the inadequate subject matter knowledge of first-year students and the consequent need to review secondary cycle subjects in the first university year. The Government proposes to maintain the math/science .nd arts/humanities streams but to substantially upgrade the quality of teaching and learning. The new syster would also restructure the existing industrial arts stream in secondary schools into a new technical/technology stream. This would provide students with the technical knowledge and skills to switch with relative ease between  - 17 - techniciati/technologist positions in different industries in line with labor market signals. This restructuring would also have the effect of linking the social prestige attached to formal education with the needs of the economy for technicians/technologists, by encouraging students with abilities in this area to pursue higher education. Meanwhile, responsibility for vocational streams oriented to direct labor market entry would continue to be transferred to VTC's apprenticeship programs (para 2.32). 3.9 Finally, students who wish to enter secondary schooling would be streamed on the basis of their academic performance in Grades 8, 9 and 10. (This would replace the general national examination formerly given at the end of Grade 9.) Application of the new system would start with students who will be in the eighth grade durinr the 1989/90 school year, and the system would be fully operational by the 1991/92 school year. For the secondary cycle, the current General Secondary School Completion Examination would be replaced by specialized examinations based on students' streams. The new system would be implemented in June 1994 (Action Program, Annex I.2, p.2). 3.10 Curriculum development and review. The Government has established National Subject Teams to revise basic and secondary curricula. The teams have concentrated on developing curricula whose content and approach emphasize: (a) fostering student creative thinking by designing curricula that promote critical inquiry, practical problem-solving, and conceptual, analytical and information processing skills; (b) enhancing student achievement by building flexibility into the curriculum, specifically including possibilities for remedial instruction for slow learners and special assignments for advanced students; (c) modernizing curriculum content and making it relevant to current conditions and issues (such as political changes, environmeutal issues, health problems); (d) reorienting classroom instruction methods to emphasize activity-based experiences and applied learning; (e) providing teacher guidance to enhance creativity and flexibility in implementing the curricnlum; (f) enhancing the occupational/vocational orientation of students; and (g) designing continuity and integration into the curricula of different grades and subjects. 3.11 The current status of the basic education curricula and the timetable for their review are shown in Table III.1: Table III.1: Basic Education Curriculum Development Schedule (Data Refer to Months) Draft Review Approved for Subject Completion and Manuscript Revision Preparation Mathematics 11/88 11/88-01/89 02/89 English Language 12/88 01-03/89 03/89 Science 02/89 03-06/89 07/89 Islamic Education 12/88 01-08/89 09/89 Arabic Language 01/89 01-08/89 09/89 Social Studies 03/89 04-11/89 12/89 Arts and Music 04/89 04-11/89 12/89 Physical Education 12/88 01-08/89 09/89  - 18 - Draft curricula are circulated to the 21 district education directorates for review and comment by supervisors, principals and teachers. The revised versions are then submitted to the Board of Eddcation for approval. The approved curricula are to be passed on to MOE's Textbook Publishing Unit, which would then begin its cycle of manuscript preparation and editing (based on curriculum specifications), contracting with printers, supervision of publication, and book distribution (paras 3.15-3.19). (c) Staff Development 3.1.. To support curriculum development efforts, 37 man-months of specialist services would be provided for: science and math curriculum development; curriculum-based methods of promoting critical thinking and student inquiry, and methods for catering to individual differences; and curriculum evaluation methodology. In addition, 34 man-months of fellowships/observation visits would be provided for members of curriculum development teams and the Curriculum Directorate staff (Annexes IV.6 and IV.7). Progress towards implementation of the staff developmen. program and general work program for the Curriculum Directorate would be assessed at mid-term and annual review meetings (Action Program, Annex I.2, p.2). 2. Textbook Development (Total outlay: US$9.8 million equivalent Bn fisancirLa. UJS$5.1 million) (a) Program Summary 3.13 MOE has prepared a ten-year program (1988-98) for publishing about 500 new or substantially revised basic and secondary textbook titles to respond to requirements of the new curricula. Books for mathematics, science, social studies, Arabic language and Islamic education would be prepared for Grades 1-10; books for English would be prepared for Grades 5-10. During Phase I, the program would: (a) establish a Textbook Publishing Unit in MOE (para 3.15) to edit, design and supervise the production of books and other materials on a par with good international standards; (b) design, construct and equip a national warehousing and distribution system to handle the school districts' demand for textbooks (para 3.16); (c) introduce new textbooks for three high-priority, relatively fast-developing basic education subjects (expected to be math, science and English: para 3.17) into all but two basic education grades, and textbooks for three other subjects into all but four grades (Table III.2); (d) follow-up textbook introduction in every case with one-year user testing (trialling: para 3.18); and (e) take the necessary steps, including changing production specifications, for textbook cost recovery and production economies (para 3.19). 3.14 Table III.2 shows the schedule for basic education textbooks. The full introduction cycle covers a five-year period spanning the latter part of Phase I and the first part of Phase 1