Mexico - Second Primary Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 12529-ME STArF APPRAISAL REPORT MEXICO SECOND PRIMARY EDUCATION PROJECT MARCH 11, 1994 MICROGRAPHICS Report No: 12529 ME Type: SAR Country Department II HL'man Resources Operarions Division Latin America and the Cribbean Regional Office This document has a resicted disMtibution and may be used by recipients only in the performance of their offlcial duties. Its content may no otherwise be disclosed without Wodd Bank authoroizaon  CURRENCY EQUIVALENTS Currency Unit = New Peso (N$) USS1.00 = 3.12 New Pesos (Feb. 1993) FISCAL YEAR January 1 - December 31 ACADEMIC YEAR September 1 - June 30 ACRONYMS AND ABBREVIATIONS ANAM National Agreement for Basic Education Modernization (Acuerdo Nacional para la Modernizacion de la Educaci6n Bdsica) CAPFCE Federal School Construction Agency (Comite Administrador del Programa Federal de Construcci6n de Escuelas) CAS Country Assistance Strategy CONAFE National Council for Educationai Development (Consejo Nacional de Fomento Educativo) at SEP CONALITEG National Free Textbook Commission (Comisi6n Nacional del Libro de Texto Gratuito) CONAPO National Population Council (Consejo Nacional de Poblaci6n) COPLADE State Planning Council (Consejo de Planificaci6n del Estado) DGEI General Directorate for Indigenous Education (Direcci6n General de Eaucaci6n Indigena) at SEP DGEIR General Directorate for Evaluation (Direcci6n General de Evaiuaci6n, Incorporaci6n y Revalidaci6n) at SEP DGPPP General Directorate for Planning, Programming and Budgeting (Direcci6n General de Planeaci6n, Programaci6n, y Presupuesto) at SEP LGE General Education Law (Ley General de Educaci6n) MIS Management Information Systew NAFIN National Financing Agency (Nccional Financiera, S.N.C.) PAM Teacher Training Program (Programa de Actualizaci6n del Magisterio) at SEP PARE Bank's first Primary Education Project, Ln. 3407-ME, 1991 (Programa para Abatir el Rezago Educativo) PAREB Second Primary Education Project (Programa para Abatir el Rezago en Educaci6n Bdsica) PCU Project Coordinating Unit at the Federal level in CONAFE PME Education Modernization Program (Programa para la Modernizaci6n Educativa, 1989- 1994) PRODEI Bank's Initial Education Project, Ln. 3518-ME, 1992 (Proyecto para el Desarrollo de la Educaci6n Inicial) SCEP Servicios Coordinados de Educaci6n Pzdblica, former SEP delegation in the states essentially replaced by SEE SEB Undersecretariat of Basic Education (Subsecretaria de Educaci6n Bdsica) at SEP SEE State Education Entity (State Secretariat of Public Education or equivalent organization) SEP Federal Education Secretariat (Secretaria de Educaci6n P7blica) SHCP Federal Finance and Public Credit Secretariat (Secretaria de Hacienda y Credito Pablico) SNTE National Teachers Union (Sindicato Nacional de Trabajadores de la Educaci6n) SOLIDARIDAD National Solidarity Program (Programa Nacional de Solidaridad) SOPE State Secretariat of Public Works (Secretaria de Obras Pfiblicas del Estado) SPCU Project Coordinating Unit at the State level located in SEEs TAC Technical Advisory Committee TWP Teaching Career Program (Programa de la Carrera Magisterial) at SEP UPE Education Publications Unit (Unidad de Publicaci6n Educativa) at SEP  FOR OFFICIAL USE ONLY MEXICO SECOND PRPMARY EDUCATION PROJECT STAFF APPRAISAL REPORr TABLE OF CONTENS LOAN AND PROJECT SUMMARY ................................ I. THE ECONOMIC AND SOCIAL CONTEXT .1 H. THE PRIMARY EDUCATION SYSTEM . ............3............... 3 A. Overview. 3 R Issues in Primaiy Education. 4 Quality ..... 4 Efficiency. 9 EquitY .12 C. Goverment Strategy for the Education Sector .13 D. Bank Role and Experience in the Education Sector .15 E. Lessons Learned from Past Operations .16 m THE PROJECT .20 A. Project Concept and Objectives .20 B. Project Areas and Target Population .20 C. Project Components .21 D. Project Description .23 Component A. Human Resoumces Development .23 Component B. Educational Material Resources .25 Subcomponent B 1. Teaching Materials and Student Educational Packages .25 Subcomponent R2. Reading Corners .. ............... 25 Subcomponent B.3. Textbooks and Educational Materials for Indigenous Education .................. : ..... 26 Subcomponent B.4. Improvement of Physical Infrastnucture .27 Component C. Institutionl Strengthening .29 Subcomponent C. 1. Management Capacity .29 Subcomponent C.2. Teacher Incentives .32 Subcomponent C.3. Improvement of the Supervision System 32 Subcomponent C.4. Books and Materials Distnbution System 33 Subcomponent C.S. Project Administration .34 This report is based on the findings of the appraisal mission that visited Mexico in November, 1993. The ndssion was composed of Mmes./Messrs. Antonio Gomes Pereira (mission leader), Eduardo Wlez. Manuel Vra, John Innes, Rosaria Iroza, Robert Etheredge "LA2HR), Silvia Elena Arevalo, Carlos Heymans and Maria Elena Anderson (consultangs). Messrs/Mme. ithn Nguyen, Rosita V Esnuda, KWin Rost (L42HR), and Rebecca Cary (consultant) contributed to the report at headquarters. Peer reviewers are Mwchelle Riboud (EC4IIR) and Luis Pisani (LA4HR). Messrs. Edilberro L. Segura and Kye Rbo Lee are the Department Director and Division Chief respectively, for this operation. Ths document has a restricted distnbution and m be used by recdpients only in the perfornwn of icir official duties. its contnts maw not othevws be disclosedwithout Word Ba authoizadion.  - ii'- IV. PROJECT COST, PROCUREMENT, DISBURSEMENT, AND AUDITS . ....... 35 A. Project Costs and Finaning ............................... 35 B. Procurement ......................................... 37 C. Disbursements ....................................... 40 D. Accounts and Audits .................................... 41 V. PROJECT MANAGEMENT AND SUPERVISION ..................... 42 A. Project Implementation ............................ ..... 42 Project Preparation .............................. 42 Project Readiness and Implementation ........... ............ 42 Project Monitoring .............................. 43 Annual Implementation Reviews ........ ............. . 43 Mid-Term Review ................................. 44 B. Project Supervision ...................... 44 C. Project Launch Seminar ...... ........................ 44 VI. PROJECT BENEFITS AND RISKS .. 45 A. Project Benefits . ..................................... 45 B. Impact on Women ...................................... 45 C. Environmental Inpact ................................... 45 D. Project Risks ......................................... 46 E. Program Objective Category ......... ...................... 46 VII. AGREEMENTS REACHED AND RECOMMENDATION ................ 46 ANNEXES 1. Comparative Education Indicators 12. Strengthening of Planning and Policy 2. Primary Education Efficiency Analysis Indicators 13. Terms of Reference for Process 3. Educational Expenditures Evaluation & Information Systems 4. Government Policy Letter 14. Terms of Reference for Studies 5. Decentralization of Education Budget 15. Teacher Incentives by Project State 6. Marginality Ranking and Project 16. Project Management and Flow of Areas Funds 7. Indigenous Populations 17. Costs and Financing 8. Participating Municipalities and 18. Project Disbursements Beneficiaries by Project State 19. Monitoring Indicators 9. Financial Implications of Extension of 20. Amnnal and Mid-Term Reviews Basic Education 21. Supervision Plan 10. Teacher Training 22. Project Implementation Schedule 11. Physical Infrastructure and 23. List of Documents in Project File Distribution Network MAP - IBRD No. 25451  MEXICO SECOND PRIMARY EDUCATION PROJECT LAN AND PROJECT SUMMARY Borrower: Nacional Financiera, S.N. C (NAFIN) Gumrantor: United Mexican States Beneficiaries: The Federal Education Secretariat (SEP) through the National Council for Educational Development at SEP (CONAFE), and State Education Entities (SEEs) in ten Mexican states (Campeche, Durango, Guanajuato, Jalisco, Michoacan, Puebla, San Luis Potosi, Tabasco, Veracruz, and Yucathin). In addition, the four states (Chiapas, Oaxaca, Guerrero, and Hidalgo) assisted under the first Primary Education Project (Ln. 3407-ME, 1991) would also benefit from the management training program under the proposed project's Institutional Strengthening component. Amount: US$412.0 million equivalent. Terms: Repayment in 15 years, including 5 years of grace at the standard variable interest rate. Project The project would improve primary school students' academic Objectives: achievement levels and reduce the high repetition and dropout rates within ten of the country's poorest states, contribute to raising the human capital level, redressing some of the country's social and economic imbalances as part of the Government's social compensatory program. These objectives would be achieved through: (a) training teachers and administrators; (b) providing classroom-tested educational materials for both teachers and students, including specific materials for indigenous populations; and (c) strengthening the institutional capacity of the education system, particularly at the state level, to carry out its mandate within a decentralized system. The project would further benefit the four states being assisted under the first Primary Education Project by including their senior-level officials under the project's management training program. Project The project consists of three major components: the Human Description: Resources Development Component (17.5 percent of total project costs) would provide in-service training and assistance to upgrade the skills of primary school teachers, principals, and supervisors, emphasizing the role of principals and supervisors in providing pedagogical assistance to teachers in classroom teaching. The Educational M ial Resources Component (52.5 percent of total  - iv - project costs) would: (a) provide educational materials for both teachers and students; (b) supply classroom library and reference books and promote their use; (c) design and deliver bilingual textbooks and materials for indigenous schools; and (d) rehabilitate, replace, or build urgently needed educational facilities to replace inadequate schools and meet new enrollment demand. The Institutonal Strengthening Component (30.0 percent of total project costs) would: (a) strengthen education management capacity at both central and state levels by (i) providing management training for planning and policy analysis, (ii) installing project monitoring, evaluation, and information systems, (iii) conducting education studies to prepare future investments at the preschool and secondary education levels, and (iv) supporting project promotion and diffuision activities; (b) provide incentives for teachers to work in remote, indigenous, or hardship areas; (c) improve the supervision system; and (d) strengthen the textbooks and materials distribution system. The project would be coordinated by CONAFE at the central level and implemented by SEEs, which would be responsible for the delivery, operation, and management of educational services at the state level. Project By raising children's cognitive achievement as well as their Benefits: probability of completing the primary education cycle, the project benefits would consist of a higher rate of human capital accumulation, contributing to economic development. Due to the project's targeted nature within the Government's social compensatory program, project benefits would also include a more equal distribution of economic opportunities amOng Mexican children, especially for underserved indigenous populations. The project would improve the quality of primary education through in- service training of teachers and administrators and enhance the system's efficiency through investments in institutional strengthening, thus contributing to better allocation and increased productivity of human resources in the sector and helping meet the challenges of a recently decentralized education system. Altogether, benefits would accrue to approximately 1.5 million children, 53,000 teachers, and 1,140 administators. Because half of the students would be girls, secondary benefits would include lower ferdtlity and improved health status and educational attainment of their children. Project The main project risks are associated with possible delays in Risks: project execution due to the slow improvement of institutional capacity of implementing agents at the state and, where applicable, community levels. The risk of weak institutional capacities is addressed under the project through technical assistance in key areas of management such as planning, information, and evaluation. The project would benefit from CONAPE's experience at the central level, which is curny implementing the first Primaty Education  - v - Project as well as the Initial Education Project (Ln. 3518-ME, 1992) and would easily tasfer successfl operational expertise as well as familiarity with Bank processes and procedures to the proposed project. At the state level, SEEs would have had two years of operating a decentralized educational system, by the project's effectiveness. At the local level, participation of School Councils (formed under the 1993 General Education Law) would benefit from the experience of similar community organizations already operating in different sectors and other Bank-financed projects. The risks identified dunng early project preparation posed by the disparity in salaries for federal and state teachers (who would now all belong to the state system) have been practically eliminated: salanes have been leveled in all but three of the participating staves, and these three states are scheduled to complete this process in 1994. Pbverty Catgory: The project would support a program of targeted interventions. The project would support the national policy of compensation for regional disparities in education. Project interventions would be targeted not only to ten of the poorest states but also to the poorest regions and most indigenors areas therein. The proposed project and first Primary Education Project together would cover the 14 poorest states in the county (out of a total of 32 states). Major urban areas within the selected regions have been excluded.  - vi - Project Cost Summary Local Foreign Total ---US$ million- Human Resources Development 99.8 2.6 102.4 Educational Material Resources Teaching Materials & Student Packages 85.6 85.6 171.2 Reading Corners 4.8 2.1 6.9 Indigenous Education 3.9 2.0 5.9 Infrastructure Improvement 93.8 24.7 118.5 188.1 114.4 302.5 Institutional Strengthening Management Capacity 11.6 5.3 16.9 Teacher Incentives 97.5 0.0 97.5 Improvement of Supervision System 16.6 3.4 20.0 Books & Materials Distribution System 7.6 2.8 10.4 Project Administration 26.6 1.0 27.6 159.9 12.5 172.4 BASE COST 447.8 129.5 577.3 Physical Contingencies 5.0 1.4 6.4 Price Contingencies 26.3 6.7 33.0 TOTAL PROJECT COST' 479.1 616.7 Financing Plan LoAl Foreign Total -TS$ million- Federal Govenunent 204.7 0.0 204.7 IBRD 274.4 137.6 412.0 Total Estimated Disbursements Tlmetable IBRI) F1scal Year 1994 199S 1996 1997 1998 1999 Annual 30.0' 52.0 88.0 112.0 80.0 50.0 Cumulative 30.0 82.0 170.0 282.0 362.0 412.0 Economic Rate of Return: Not Applicable Y Includes taxes and duties estimated at about US$44.3 million. ' Includes Special Account deposit of US$25.0 million and retroactive financing of up to US$6.0 million for eligible expenditures incurred on or after Cctober 31, 1993.  - vii - BASIC DATA SHEET Mexico Year A. General Country Data GNP Per Capita (US$) 3,030 1991 Area (Thousand Square Kilometers) 1,958 1993 Population Estimate (Millions) 83.3 1991 Urban Population (% of Total) 73 1991 Population Projection, Year 2000 99.0 1992 B. Social Indicators Crude death rate 5.4 1990 Average Annual Rate of Population Growth (%) 1.9 1990 Total Ferility Pate 3.2 1991 Infant Mortality Rate (per 1,000 live births) 36.0 1991 Life Expectancy at Birth (years) 70.0 1991 Adult Illiteracy Rate (% of persons 15 and over) 11.8 1991 C Education Statisfics Primary (Net)(Grades 1-6)(%) 98.0 1991 Lower Secondary (Grades 7-9)(%) 58.0 1991 Total Primary Enrollment (millions) 14.4 1991 Federal (%) 71.i 1991 State (%) 22.5 1991 Private (%) 6.4 1991 Primary School and Efficiency Data Number of Teachers (thousands) 479.6 1991 Student/Teacher Ratio 30.0 1991 Incomplete Schools (% of all primary schools) 14.9 1991 Unitary Schools (% of all primary schools) 22.7 1991 Repetition Rate (%) 9.8 1992 Dropout Rate (%) 4.6 1991 Completion Rate (%) 58.1 1991 Education Expenditure Data Total Public Education Spending (% of GDP) 4.3 1991 Federal Education Spending (% of Total Public Education Expenditures) 82.8 1991 Federal Education Spending (% of Total Federal Exrenditures) 9.4 1991 Federal Pri- -,' Education Spending (% of Federal Education Expenditures Among Levels) 39.8 1991 Sources: Social Indicators of Development, 1991-92; INEGI Censo de 1990; World Development Report, 1993; SEP and Bank staff stimaes, 1993.  viii - ElUCATION GLOSSARY Completion rate For six-ye-r primary education, the ratio between the number of students r sJing grade 6 in a given year T and the number of students entering grade 1 in year T-6, as a close approximation of the percentage of students of a given cohort to complete six- year primary school. Dropout rate Percentage of students who abandon the system without completing the education cycle, e.g., primary school. Educational attainment Number of formal school years achieved by a student. Educational achievement Magnitude achievement in any subject area, generally measured on the basis of national curriculum learning objectives. Enrollment ratio Ratio of total enrollment in a given school cycle (e.g., primary) to the population in the corresponding age group. Incomplete school Primary school with fewer than the six official primary education grades. Net enrollment rate Percentage of children of a given age group enrolled in their corresponding grade level. Promotion rate Percentage of the students enrolled in a given grade who enroll in the next higher grade the following year. Repetition rate Percentage of the students enrolled in a certain grade who are not promoted to the next grade and who therefore enroll again in the same grade the following year. Transition rate Percentage of the students completing one school cycle (e.g., primary) who enroll in the first grade of the next upper cycle (e.g., secondary) the following year. Unitary school Multigrade school with a single teacher (see Incomplete School).  MEXICO SECOND PRIMARY EDUCATION PROJECT STAFF APPRAISAL REPORr I. THE ECONOMIC AND SOCIAL CONTE 1.1. Over the past seven years, Mexico has consistently implemented a highly successful economic reform program buttressed by macroeconomic stabilization policies which reduced inflation from over 105 percent in 1986 to less than 10 percent in November 1993, reversing the decline in economic growth from a negative 3.8 percent to a positive 2.6 percent over the same period, thereby restoring confidence and extnml creditworthiness in the Mexican economy. A far-reaching trade liberalization process has opened the economy to internatonal competition. The ongoing process of privatization, aiming to enhance domesuc economic efficiency, has resulted in the sale or closure of over two-thirds of state enterprises. More recently, reforms have been initiated in the agricultua sector, and even the communal farming ownership system, the ejido, is being restructured. Further liberalization of the Mexican economy through the North American Free Trade Agreement (NAFTA) with the United States and Canada will represent an unprecedented integration of large economies at very different stages of development. This rapid assimilation into the world marketplace has increased the competitive pressure on domestic industrial sectors, and Mexico appears determir- I to upgrde its labor force level as a prerequisite to take full advantage of these econo, dc opporuities for sustined growth. 1.2. The stabilization program has highlighted issues in social development Despite its macroeconomic achievements, Mexico's potential growth is stdl constained by relatively low levels of human capital accumulation and widespread poverty. The illiteracy rate for the adult population is still at 12.4 percent, higher than the rates for Argentina, Costa Rica, Chile, and Venezuela. The average number of years of schooling for persons aged 25 and over is 6.5, which is lower than those of Chile (7.5) and Colombia (7.1). The average primary education repetition rate for Mexico is 9.1 percent (Annexes 1 & 2). The bulk of unemployment is composed of young individuals with a low level of education, and about 20 percent of unemployed males have not completed primary education. An analysis of the determinants of unemployment in Mexico reveals that the probability of being unemployed decreases significantly with age and with education level. The impact of education as an explanatory variable for workers' income is twice as high as that of any other examined variable. Consequently, Mexico's capacity to compete in the international market will hinge on its ability to harness an educated and skilled labor force, increase the productivity of its workers, adopt modern production processes and technologies, and develop new skldls as a more diversified structure of labor demand unfolds The economics of education have repeatedly suggested that primary education is the cornerstone for a modernized human capital stock.  -2 - 1.3. The continuing inadequacies in human resources are caused in part by poverty, and in turn they contribute to the perpetuation of poverty.Y' A 1991 Bank study summarizes the incidence of poverty in Mexico as follows: (a) 19.5 percent of the population live't in extreme poverty (i.e., with a per capita income below US$360 per annum in 1984 prices); (b) 76.6 percent of the extreme poor are located in rural areas; (c) 37 percent of the rural population in Mexico are classified as extremely poor; and (d) the extreme poor have large families, the highest dependency ratios, and the lowest educational levels.2' Real per capita incomes in the richer (mainly northern) states are more than twice those in the poorer (mainly southern) states. Given that labor is the principal asset of the poor, improvement in the provision and quality of education represents a key mechanism for reducing inequality and lowering the number of individuals living in absoiute poverty. The retums to schooling, however measured, have demonstrated that more and better schooling is an important policy tool for poverty alleviation, through increased productivity and income, and for non- economic success. Basic education, by conveying the skills of reasoning, communication, and numeracy, enables workers to interact more efficiently, follow instructions better, and complete increasingly complex tasks, which are crucial for job performance, workplace and community participation, and overall social advancement. 1.4. The severe curtailment of public investment in the 1980s and the recent liberalization process have created a need for investment in human resources to support continued economic growth. The Government has a clear perception of social needs and is assigning high priority to the development of human resources through investments in education, particularly at the primary level. Full success of the adjustment program requires policies L.at are effective in promoting a more equal distribution of gains and opportunities of macroeconomic reforms. Through improved basic schooling, a more capable labor force will be developed, which will contribute to offset regional imbalances and make more Mexicans active beneficiaries of development. In pursuit of this strategy, the Govermnent of Mexico asked for, and the Bank supported, a Primary Education Project (PRogmma para Abatir el Rezago Educativo, PARE, Ln. 3407-MIE, 1991) with a total investnent of US$352 million in four of the poorest states. In 1992, the Government sought and the Bank approved an Initial Education Project (PRODEI, Ln. 3518-ME, 1992) for the ten poorest states, including the four in PARE, with an investment of US$115 million. In 1993, the Government asked for a second major follow-up investment in primary education for the rnext ten poorest and educationally least developed states.3' The Bank started project preparation in February and appraised it in October/November. This report analyzes and supports the proposed Second Primary Education Project, Programa para Abatir el Rezago en Educaci6n Basica, PAREB. Behrman, J. The Action of Human Resources and Poverty on One Another. Washington, D.C.: The World Bank, 1990. 21 World Bank, Mexico in TIansition: Towards a New Role for the Public Setor, Washington, D.C.: The World Bank, 1991. 31 The first Primary Education Project, PARE, covered the states of Chiapas, Oaxaca, Guerrero, and Hidalgo. According to the composite index of marginality used for targeting purposes (Annex 6), Hidago is actually the I0th most disadvanaged state but was selected under PARE (1991) to maximize previous social sector imNestments in the same four states. The report will refer to the ten proposed proect states as the "next poorest" as a matter of convention.  -3 - H. THE PRIMARY EDUCATION SYSTEM A. Overview of Sectoral Organization and Achievements 2.1. Since 1950, Mexico has made great strides in increasing both the access to and the quality of public education: adult illiteracy has decreased from 40 percent to 12 percent; the number of schools has tripled, the number of teachers has quintupled, and school enrollments have increased sevenfold as the total population increased only threefold. By 1980, 25 percent of children aged 4-5 attended preschool, 91 percent of children aged 6-14 attended primary school, and the enrollment rate in lower secondary school reached 48 percent. By 1992, 68 percent of children aged 4-5 had access to preschool education and net enrollment rates at the primary and lower secondary levels reached 98 percent and 58 percent, respectively. In 1992, total primary school enrollment (grades 1-6) was 14.8 million children, attended to by a network of 88,918 primary schools and about 510,800 teachers (about half the 1.1 million teachers), or an average of 29 students per teacher (Table 1), a substantial improvement over the 45 students per teacher ratio in 1970. In July 1993, the length of the school year was increas,d from 187 to 200 days, to be enforced by all states as part of the General Education Law (LGE) (paras. 2.18 & 2.32-2.38). Ahble 1. Mexican School System - 1992/1993 Students Teachers No. (000s} | % (OOOs) Institutions IInitial _ r 117.9 0.5 3.3 _1,495 Preschool 1,858.9 11.2 114.3 51,554 Basic 19,031.3 74.7 748.5 108,950 Primary 14,828.2 58.2 510.8 88,918 Secondary 4,203.1 | _16.5 __237.7 20_032 Upper Secondary 2,177.2 8.5 151.0 6,833 Higher Education 1,306.7 5.1 138.8 2,239 btal 25,492.0 100.0 1,155.9 171,071 2.2. The formal education system in Mexico includes two-year preschool, nine years of mandatory basic education (recently established by integrating the six-year primary education and three-year lower secondary education cycles, para. 2.36), three or four additional years of secondary education, and undergraduate and graduate university programs. A well- designed and mainly non-formal initial education (ages 0 through 3) program precedes preschool. Of a total enrollment of 25.5 million students at all education levels in 1992/93, 57 percent were enrolled at the primary level (gades 1-6). Post-basic education starts at the upper secondary level, leading to either the liberal arts baccalaureate (80 percent of level enrollment) or the vocational track. Higher education lasts from three to six years, depending on the career pursued, and the universities have a semi-autonomous relationship with the Federal Education Secretariat (SEP). The public sector provides educational services for 90 percent of total enrollment.  -4 - 2.3. In May 1992, the Government tansferred the management and operation of all initial (ages 0-3), preschool (ages 4-5), primary (grades 1-6), special, and lower secondary education (grades 7-9) and of teacher training institutions to the states (para. 2.34). All the facilities along with technical and administrative staff were transferred to the states with a corresponding budget of N$20.3 billion (US$6.6 billion) for 1993. Currently, SEP maintains direct responsibility only for the education system in the Federal District and for upper secondary education nationwide. SEP's leadership role w}'l focus on: (a) preparation and enforcement of educational policy norms; (b) curriculum development and textbook production; (c) design and financing of compensatory and special programs for an equitable distribution of education services; (d) support of educational research; and (e) operation of the evaluation systems. The total SEP budget for 1993 was N$41.7 billion (US$13.4 billion) and, for 1994, is N$44.8 million (US$14.3 million). 24. Primary education is provided in three modalities (enrollment shares in parentheses): general primary education (92.9 percent); bilingual or indigenous education addressing the needs of 46 ethnic groups in 23 states (6.3 percent);-l and the CONAFE (National Council for Educational Development, Consejo Nacional de Fomento Educativol model, designed to overcome the problem of building and staffing schools in the most remot rural areas (0.8 percent).