Argentina - Decentralization and Improvement of Secondary Education and Polymodal Education Development Project

Document of The World Bank Report No. 14559-AR STAFF APPRAISAL REPORT ARGENTINE REPUBLIC DECENTRALIZATION AND IMPROVEMENT OF SECONDARY EDUCATION AND POLYMODAL EDUCATION DEVELOPMENT PROJECT (DISEPED) DECEMBER 1, 1995 Human Resources Operations Division Country Department I Latin America and the Caribbean Region  CURRENCY EOUIVALENTS Currency Unit - Argentine Peso (A$) Official Rate: US$1 = A$1 WEIGHTS AND MEASURES Metric system 1 meter (m.) = 3.28 feet (ft.) 1 kilometer (km.) = 0.62 mile (mi.) I square kilometer (km2) = 0.386 square mile (sq. mi.) 1 metric ton (m. ton) = 1.1 US short ton (sh. ton) 1 liter (1.) = 0.264178 US gallon (gal.) FISCAL YEAR January 1 to December 31 SCHOOL YEAR March 15 to December 15  ABBREVIATIONS AND ACRONYMS AGN General National Audit (Auditoria General de la Nacion) CFCE Federal Council of Culture and Education (Consejo Federal de Cultura y Educaci6n) DISE Decentralization and Improvement of Secondary Education Project (Proyecto de Decentralizaci6n y Mejoramiento de la Educaci6n Secundaria) DISEPED Decentralization and Improvement of Secondary Education and Pilymodal Education Development Project (Proyecto de Decentralizaci6n y Mejoramiento de la Educaci6n Secundaria y de Desarrollo de la Educaci6n Polymodal) EQUES Education Quality Evaluation System (Sistema de Evaluaci6n de la Calidadd de la Educaci6n) FEL Federal Education Law (Ley Federal de Educaci6n) GP Provincial Government (Gobierno Provincial) ICB International Competitive Bidding (Licitaci6n Pu:blica Internacional) IDB Inter-American Development Bank (Banco Interamericano de Desarrollo) MCBA Municipalidad of Buenos Aires (Municipality de Buenos Aires) MIS Management Information System (Sistema de Informaci6n Gerencial) NCB National Competitive Bidding (Licitaci6n Publica Nacional) NEQUES National Education Quality Evaluation System (Sistema Nacional de Educaci6n de la Calidad de la Educacion) NGO Non-Governmental Organizations (Organizaciones no Gubernamentales) NMCE National Ministry of Culture and Education (Ministerio Nacional de Cultura y Educaci6n) NMIS National Management Information System (Sistema Nacional de Informaci6n Gerencial) NPCU National Project Coordination Unit (Unidad Nacional de Coordinaci6n del Proyecto) OAS Organization of American States (Organizaci6n de Estados Americanos) PCCE Provincial Council of Culture and Education (Consejo Provincial de Cultura y Educaci6n) PME Provincial Ministry of Education (Ministerio Provincial de Educaci6n) PPCU Provincial Project Coordination Unit (Unidad Provincial de Coordenaci6n del Projecto PPPU Provincial Project Preparation Unit (Unidad Provincial de Preparaci6n del Projecto) SMPS Sector Management Productivity Studies (Estudios de Gesti6n) SOEs Statement of Expenditures (Rendimiento de Cuentas) SSMTAL Social Sector Management Technical Assistant Loan (Pr6stamo de Assistencia Tecnica para la Administraci6n de los Sectores Sociales) SUPEM Subsecretariat of Educational Management and Programing (Subsecretaria de Gestion Educativa y Programacion) UNESCO United Nations, Educational, Scientific and Cultural Organization.   REPUBLIC OF ARGENTINA SECOND DECENTRALIZATION AND IMPROVEMENT OF SECONDARY EDUCATION PROJECT (Polymodal Education Implementation) Table of Contents Page No. LOAN AND PROJECT SUMMARY ................................. i-iii I. INTRODUCTION ........................ 1 II. SECTORAL BACKGROUND ................................. 2 A. Background ........................................ 2 B. Main Issues in Secondary Education ......................... 7 C. Government Sectoral Objectives and Strategy .................... 10 D. Bank Role and Strategy ................................. 11 E. Lessons Learned ..................................... 13 III. THE PROJECT ....... .............. ..................... 15 A. Project Objectives ..................................... 15 B. Project Components .................................... 15 C. Project Description .................................... 16 IV. PROJECT COST AND FINANCING PLAN .......... .. ............ 22 A. Cost of the Project .................................... 22 B. Financing Plan ...................................... 23 C. Education Sector Budget for FY95 and Beyond .................. 25 D. Recurrent Expenditures Arising from the Project ................. 26 E. Project Sustainability ................................... 27 V. PROJECT IMPLEMENTATION AND MANAGEMENT . .28 A. Status of Preparation .28 B. Implementation Schedule .28 C. Project Management .28 D. Procurement .29 E. Accounts and Disbursements .34 F. Audits .36 G. Project Monitoring, Evaluation, and Supervision .36 VI. EXPECTED BENEFITS AND RISKS ............ .. .............. 37 A. Expected Benefits ..................................... 37 B. Risks ............... ............................ 38 VII. AGREEMENTS REACHED AND RECOMMENDATIONS . .38 A. Agreements Reached .38 B. Recommendation .40 This report is based on the findings of pre-appraisal and appraisal missions which visited Argentina in November 1994, and April 1995, respectively. The missions consisted of Messrs/Mmes. Guiomar de Mello (Education Specialist and Mission Leader), Luis Pisani (Principal Operations Officer), William Experton (Human Resources Economist), Alcyone Saliba (Education Specialist), Jorge Valenzuela (Human Resources Economist), Marta Ospina (Procurement Assistant) and Maria Fabiana Penas (Economist); and consultants Messrs./Mmes. Kate Hovde (Operations Officer), Luis Secco (Architect), Robert McMeeken (Human Resources Economist), and Anita Artaza (Operational Assistant). Peer reviewers for this operation are Messrs. Antonio Gomes Pereira (EA3PH) and Michael Potashnik (LA3HR). The Department Director, Projects Advisor, and Sector Division Chief are: Messrs. Gobind T. Nankani, Orville Grimes, and Alain Colliou. Ms. Joyce Banks (Staff Assistant) provided assistance in the travel arrangements of the pre-appraisal and appraisal missions, and Ms. Agda Colbert (Sr. Staff Assistant) provided assistance in the production of the report.  Page No. ANNEXES AND CHARTS ANNEX A: The Project Provinces ...................................... 41 Buenos Aires ..................................................... 42 Chaco ......................................................... 43 Corrientes ....................................................... 44 Entre Rios ...................................................... 44 Buenos Aires Municipality ............................................ 45 Salta . .......................................................... 46 Tucuman ....................................................... 48 ANNEX B: Secondary Education Efficiency ................................ 50 Table B. 1: Comparative Education Indicators .............................. 51 Table B.2: Evolution of Enrollments, by Educational Level, Selected years .... ........ 52 Table B.3: Average Annual Enrollment Growth Rate, in Percent .................. 52 Table B.4: Public and Private Enrollments, Teachers, and Schools Nationwide by Level, 1991 .......................................... 53 Table B.5: Enrollment, Teachers and Schools Project Provinces (1993) .... .......... 54 Table B.6: Percent of Children Enrolled in School in Project Provinces for Ages Corresponding to Pre-School, Primary, Secondary and Higher Education .54 Table B.7: Enrollments, Teachers, and Schools in Public and Private Systems Project Provinces, 1993 .55 Table B.8: Increase in Secondary Enrollments, Teachers and Schools in Project Provinces as Result of Decentralization .......................... 56 Table B.9: Average Number of Secondary Students Per Teacher in Project Provinces .... .. 57 Table B. 10: Average Attrition Rates in Secondary Education ...................... 57 Table B. 11: Average Rates of Transition from Primary to Secondary Education in Public Schools ......................................... 57 Table B. 12: Average Repetition Rates in Public Secondary Education, 1993 .... ........ 58 Table B. 13: Average Completion Rates in Public Secondary Education, 1993 .... ....... 58 ANNEX C: Organization and Structure of the Educational System .................. 59 Chart C. 1: Organizational Chart for the NMCE for the PMEs .................... 61 Table C.2A: Distribution of Financial, Technical and Administrative Responsabilities of the NMCE ............. ................................. 63 Table C.2B: Distribution of Financial, Technical and Administrative Responsabilities of the PMEs ............................................... 65 ANNEX D: Education Sector, Budget Financing, and Expenditures ................. 67 Table D. 1: Public Expenditure on Education, 1991-94, by Source of Spending .... ...... 68 Table D.2: Composition of Total Education Expenditure (TPE) All Jurisdictions, by Level, 1991-94 ......................................... 68 Chart D. 1: Composition of Expenditure by National Administration 1995 ............. 69 Chart D.2: Composition of Expenditure on Social Services by National Administration ... .. 70 Table D.3: Public Expenditure on Education, by Level, 1994 ..................... 71 Table D.4: National Administration Composition of Budgetary Expenditures by Institution ............................................ 72 Table D.5. 1: Fiscal Impact of Decentralization, Total Education Spending, Project Provinces, 1991-1993 ..................................... 73 Table D.5.2: Fiscal Impact of Decentralization, Total Revenues, Project Provinces, 1991-1993 ............ ............................... 73 Table D.6: Education as Percent of Total Public Spending, Project Provinces, 1990-1994 ............................................ 74  Pate-No. Table D.7. 1: Per-Student Expenditure in Public Education Project Provinces, 1993 (Current Pesos) ........................... ......... 75 Table D.7.2: Per-Student Expenditure on Public Secondary Education, Project Provinces 1993 (Current Pesos) ............ .. .. .. .. .. .. . .. .. .. .. .. . . 75 Table D.8: Private Education Subsidies ........... . .. .. . . .. . .. . .. . .. . .. . . 76 Table D.9: Sources and Uses of the Education Sector Budget, 1993 ...... . . . . . . . . . . . 77 Table D. 10: Personnel as Share of Total Education Expenditures ....... . . . . . . . . . . . . 78 Table D. 11: Total Sources of Funding, 1993 Project Provinces ....... . . . . . . . . . . . . . 79 Table D. 12: Federal Transfers to Provinces for Secondary Education, 1992-1993 ..... . . . . 80 Table D. 13: Province of Buenos Aires Forecasts of Sector Budget ...... . . . . . . . . . . . . 81 Table D. 14: Province of Chaco Forecasts of Sector Budgets ....... . . . . . . . . . . . . . . . 82 Table D. 15: Province of Corrientes Forecasts of Sector Budget ....... . . . . . . . . . . . . . 83 Table D. 16: Province of Entre Rios Rios Forecasts of Sector Budget ...... . . . . . . . . . . . 84 Table D. 17: Municipality of Buenos Aires Forecasts of Sector Budget ...... . . . . . . . . . . 85 Table D. 18: Province of Salta Forecasts of Sector Budget ........ . . . . . . . . . . . . . . . . 86 Table D. 19: Province of Santa Cruz Forecasts Sector Budget ....... . . . . . . . . . . . . . . . 87 Table D.20: Province of Tucuman Forecasts Sector Budget ....... . . . . . . . . . . . . . . . . 88 ANNEX E: Estimates of Benefits Arising from the Project ....... . . . . . . . . . . . . . . . 89 ANNEX F: Project Cost Tables ............. .. .. .. .. .. .. .. .. .. .. .. .. . 95 Table F. 1.1: Total Project Cost by Component and Main Categories ...... . . . . . . . . . . . 96 Table F. 1.2: Total Project Cost by Category of Expenditures ....... . . . . . . . . . . . . . . 97 Table F. 1.3: Total Project Cost by Category of Expenditures and Years of Implementation ................ ... .. ... ... .. ... ... .. ... . 98 Table F.2. 1: Buenos Aires Subproject Cost by Component and Main Categories ..... . . . . 99 Table F.2.2: Buenos Aires Subproject Cost by Category of Expenditures ...... . . . . . . . . 100 Table F.2.3: Buenos Aires Subproject Cost by Category of Expenditures and Years of Implementation ............... .. ... .. ... .. ... .. ... .. .. . 100 Table F.3. 1: Chaco Subproject Cost by Component and Main Categories ...... . . . . . . . . 101 Table F.3.2: Chaco Subproject Cost by Category of Expenditures ....... . . . . . . . . . . . 102 Table F.3.3: Chaco Subproject Cost by Category of Expenditures and Years of Implementation ............... ... .. ... .. .. ... .. ... .. .. . 102 Table F.4. 1: Corrientes Subproject Cost by Component and Main Categories ...... . . . . . 103 Table F.4.2: Corrientes Subproject Cost by Category of Expenditures ...... . . . . . . . . . . 104 Table F.4.3: Corrientes Subproject Cost by Category of Expenditures and Years of Implementation ............... .. ... .. ... .. ... .. ... .. .. . 104 Table F.5. 1: Entre Rios Subproject Cost by Component and Main Categories ...... . . . . . 105 Table F.5.2: Entre Rios Subproject Cost by Category of Expenditures ...... . . . . . . . . . . 106 Table F.5.3: Entre Rios Subproject Cost by Category of Expenditures and Years of Implementation ............... .. ... .. ... .. ... .. ... .. .. . 106 Table F.6. 1: Municipality of Buenos Aires Subproject Cost by Component and Main Categories ........................................... . 107 Table F.6.2: Municipality of Buenos Aires Subproject Cost by Category Expenditures ..... . 108 Table F.6.3: Municipality of Buenos Aires Subproject Cost by Category of Expenditures and Years of Implementation .......... .. . . . .. . . .. . . .. . . . .. . . 108 Table F.7. 1: Salta Subproject Cost by Component and Main Categories ...... . . . . . . . . . 109 Table F.7.2: Salta Subproject Cost by Category of Expenditures ....... . . . . . . . . . . . . 110 Table F.7.3: Salta Subproject Cost by Category of Expenditures and Years of Implementation ............... ... .. ... .. .. ... .. ... .. .. . 110 Table F.8. 1: Santa Cruz Subproject Cost by Component and Main Categories ...... . . . 111 Table F.8.2: Santa Cruz Subproject Cost by Category of Expenditures ...... . . . . . . . . . 112  Table F.8.3: Santa Cruz Subproject Cost by Category of Expenditures and Years of Implementation ................. ... .... ... ... ... ... .. . 112 Table F.9. 1: Tucuman Subproject Cost by Component and Main Categories ...... . . . . . 113 Table F.9.2: Tucuman Subproject Cost by Category of Expenditures ................. 114 Table F.9.3: Tucuman Subproject Cost by Category of Expenditures and Years of Implementation ........... ............................ 114 Table F. 10.1: National Project Coordination Unit Subproject Cost by Category of Expenditures . ........................................ 115 Table F. 10.2: National Project Coordination Unit Subproject Cost by Category of Expenditures and Years of Implementation ........................ 115 Table F. 11: Detailed Project Cost by Component, Sub-Component, Years of Implementations ........................................ 116 ANNEX G: Project Implementation Schedule ............................ 117 ANNEX H: Project Management ...................................... 119 Table H. 1: Distribution of Responsibilities for Project Implementation ............... 126 Table H.2: Project Coordination Units (PCUs) Staffing Requirement by Function ... ..... 128 ANNEX I: Disbursement Schedule ..................................... 129 ANNEX J: Monitoring Indicators ..................................... 131 Table J. 1: Monitoring Indicators ..................................... 132 Table J.2. 1: Province of Buenos Aires, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 133 Table J.2.2: Province of Chaco, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 134 Table J.2.3: Province of Corrientes, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 136 Table J.2.4. Province of Entre Rios, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 138 Table J.2.5: Province of Salta, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 140 Table J.2.6: Province of Santa Cruz, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 143 Table J.2.7: Province of Tucuman, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule .................................. 144 Table J.2.8: Municipality of Buenos Aires, Monitoring Indicators, Yearly Project Physical Targets and Implementation Schedule ............................... 147 Table J.2.9: Overall Yearly Project Physical Targets and Implementation Schedule ........ 149 ANNEX K: Selected Documents and Data Available in Project Files ................ 153 MAP: IBRD 27198  ARGENTINE REPUBLIC DECENTRALIZATION AND IMPROVEMENT OF SECONDARY EDUCATION AND POLYMODAL EDUCATION DEVELOPMENT PROJECT (DISEPED) LOAN AND PROJECT SUlIMARY Borrower: Argentine Republic lmplementing Agency: The National Ministry of Culture and Education (NMCE) and selected Provincial Ministries of Education (PMEs), i.e. the Provinces of Buenos Aires, Chaco, Corrientes, Entre Rios, Salta, Santa Cruz, and Tucuman, and the Municipality of Buenos Aires '. Beneficiaries: Selected Provincial Governments Poverty: Not applicable Amount: US$115.5 million equivalent Terms: Repayable in 15-years, including a grace period of five years, at the Bank's standard variable interest rate Commitment Fees: 0.75 percent per year on undisbursed loan balances, beginning 60 days after signing, less any waiver Relending Terms: Subsidiary loans to the Provinces will be made under the same terms and conditions as those of the Loan. Financing Plan: See Para. 4.4 Net Present Value: Not applicable Staff Appraisal Report: No. 14559-AR Map: IBRD No. 27198 Project Identification Number: AR-PA-6057 1. In Argentina therm are a total of 23 provinces plus the Municipality of Buenos Aires. In this report al of _e jurisdictions are referred to as provinces.  -ii- ARGENTINE REPUBLIC DECENTRALIZATION AND IMPROVEMENT OF SECONDARY EDUCATION AND POLYMODAL EDUCATION DEVELOPMENT PROJECT (DISEPED) BASIC DATA SHEET (Circa 1993) A. General Country Data GNP Per Capita U$ (1992) $6,109.4 Area (Million km2) 2.8 Population Estimate (Millions) 32.3 Density (inhabitants/kmn2) 11.0 Urban Population (% of Total) 87.0 B. Basic Social Indicators Crude Death Rate (per 1,000) 7.9 Annual Rate of Population Growth (%) 1.4 Total Fertility Rate 2.8 Infant Mortality Rate (per 1,000) 25.7 Life Expectancy at Birth (years) Men 67.0 Women 74.0 Adult Illiteracy Rate (% of persons 18 and over) 5.0 Average Schooling of Adults (years) 8.5 C. Basic Education Data Enrollment Ratios (net): Preschool (Age 3-5) (%) 39.0 Primary (Age 6-13) (0) 90.0 Secondary (Age 13-18) (9%) 56.0 D. Education Expenditure Data Billions of Percentage o0, 1993 of GDP Total Federal Education Spending 1.68 0.65 Total Provincial Education Spending 6.36 2.47 Total Municipal Educacion Spending 0.25 0.10 Total Public Education Spending 8.29 3.22 Total Public Spending by Education Level (all jurisdictions) 1993 Primary: 4.55 billion pesos or 54.9% of totad Secondary: 2.06 billion pesos or 24.9 % of total Higher: 1.67 billion pesos or 20.2% of total Education Spending as % of total Federal Budget, 1995: 5.7% Source: World Bank, Social Indicators of Development, 1990; World Bank, World Development Report, 1993; Situaci6n Educativa de America Latina y El Caribe 1980-89, UNESCO - OREALC, and Government of Argentina, Ministry of Economy, Works and Public Services, Secretariat of Economic Programming.  -iii- DEFIN1TIONS Adult flhiteracy Rate: Percent of individuals over the age of 18 who do not know how to read or write. Average Schooling of Adtults: Average years of formal schooling completed among individuals over the age of 18. Cohort: A group of individuals having a statistical factor (such as age, class, or year) in common. Completion Rate: Number of students completing primary school as a percentage of those entering in a given year, regardless of the number of years it takes them to complete. Gross EnroHlment Ratio: The ratio of the total number of children enrolled -regardless of age- to the number of school-aged children in a given country, indicates the capacity of the education system. Internal Efficency: Ratio of learning (a non-monetary outcome of education) to the costs of educational input. Intemal efficiency addresses the question of how fimds within the education sector are allocated. The objective is obtain the greatest educational output for any given level of spending. Net Enrollment Ratio: Percentage of children of a given age group enrolled in schools at a particular level of education. Rate of Pbpulation Growth: Rate at which a population is increasing (or decreasing) in a given year due to a surplus (or deficit) of births over deaths, expressed as a percentage of the total population. Totel Education Spending: Federal and provincial education spending at all levels of education plus private resources for all levels. Total Federal Education Spending: The yearly disbursement of resources to the NMCE and PMEs, its centralized and decentralized sectoral institutions, as well as the subsidies for private and higher level institutions. It also includes spending on special education, adult education, and culture. Transition Rate: Percentage of students who after finishing the last year of basic education enroll in the first year of the secondary cycle.   I. INTRODUCTION 1.1 The Decentralization and Improvement of Secondary Education and Polymodal Education Development Project (DISEPED), presented in this Staff Appraisal Report, is a companion to the Argentina Decentralization and Improvement of Secondary Education Project (DISE) which was approved by the Board of Directors on September 12, 1994 (Ln.3794-AR). In most aspects the projects are similar in their design, the major differences being: (i) the provinces participating in the project; (ii) the fact that the DISE project incorporates a national-level component while the DISEPED does not; (iii) the DISE does not includes a specific curriculum reform subcomponent as the DISEPED which was prepared when the new polymodal curriculum design for the secondary education had already been developed by the national govemment. The DISE project covers seven provinces, while the proposed DISEPED project covers seven additional provinces as well as the Municipality of Buenos Aires ' A brief characterization of the eight participating provinces, as well as a comparison between the provinces proposed under the proposed DISEPE and the DISE projects, can be found in Annex A. 1.2 Drawing from the lessons learned from the implementation of the DISE, the proposed DISEPED project will be more flexible regarding the participating provinces. Project preparation was carried out with the eight provinces listed below. However, the DISEPED design would allow for the reallocation of resources among provinces. A currently non- participating province could present its own subproject, fulfill the same conditions agreed between the Bank and the Borrower, and thereby become a participant in the project . 1.3 Each participating province corresponds to a proposed subproject. The preparation of the provincial subprojects followed the same general framework, which included three broad components. Nevertheless, within the guidelines established for the components, each province proposed sub-components and activities tailored to their specific educational needs and implementation capacity 2. 1.4 The proposed project has benefitted from much of the analytical work previously carried out on Argentina. The sector study, Argentina: Reallocating Resources for the Improvement of Education 3 defined many of the issues later elaborated upon in the SAR for the first secondary education project. Rather than repeat a wealth of information that is already available in other places, this SAR attempts to provide a brief synthesis of the major issues in the subsector, updating earlier information where appropriate. I. For the purposes of this SAR, 'provinces' is understood to include the 23 provinces and the Municipality of buenos Aires. Provinces included under the first project are: C6rdoba, La Pampa, Mendonza, Missiones, Neuquen, Rio Negro, and Santa Fe. Provinces to be included under the proposed project are: buenos aires, Chaco, Corriventes, Entre Rios, Salta, Santa Cruz, Tucuman, and the Municipality of Buenos Aires. 2. The only exception is the province of Buenos Aires subproject which follows a simplified design. This province's education sysem was considered too large to be fully addressed by a project of this magnitude. Thus, the Buenos Aires subproject would have only two subcomponents to support the province's short term participation in the national education reform, as well as a set of studies to assist the province in fully analyzing its secondary education sector and developing a more comprehensive future project of its own, that could be financed by the Bank. 3 The World Bank. Report No.12993-AR. Washington D.C., 1991.  -2- 1.5 Another substantial contribution to the project preparation process and this appraisal report was the presentation, by the federal Ministry of Education, of a comprehensive and high-quality Borrower Appraisal Report. In addition to providing an updated analysis of sectoral issues from the Borrower's perspective, this document (available in Spanish in the project files), contains a full description of the sub-project proposals submitted by each of the seven provinces. II. SECTORAL BACKGROUND A. Background Macroeconomic and Social Context 2.1 Argentina has made great progress in recent years towards stabilizing its economy after a long period of economic decline. Inflation, which exceeded 1300 percent annually in 1990, stood at less than 4 percent for 1994. Economic growth has been strong: GDP grew by 6 percent in 1993, and by 7.1 percent in 1994. Fiscal performance at the federal level has also improved, thanks in part to an increased tax effort, privatization of state-owned industries, and reductions in federal employment. These measures have also been accompanied by substantial reform and reorganization in the human resource sectors, which has had as a primary strategy the decentralization of service provision to the provincial governments. In education, two crucial initiatives were taken: the transfer of secondary schools to the Provincial Ministries of Education (PMEs) in 1992, and the passage of a comprehensive Federal Education Law in 1993. 2.2 The Government still faces a number of important challenges in the consolidation of these gains, particularly with regard to poverty reduction, unemployment, and the fragile fiscal and administrative capacity of many of the provinces. While poverty levels have been improving since 1990, poverty nonetheless remains a widespread problem. Poverty is mainly an urban phenomenon, since about 85 percent of the population lives in urban areas. Economic restructuring in both the public and private sectors has fueled unemployment, which was estimated at over 12 percent of the labor force in 1994 and 18 percent in mid- 1995, up from 10 percent in 1993. Unemployment has been particularly severe among youth, women, and unskilled workers, and in the northern provinces, which have suffered from long-term economic structural problems as well as external migration. 2.3 The provision of effective and efficient social services at the provincial level is an important precondition for overcoming these social problems. Many provinces, however, are currently characterized by fragile administrative capacity and poor financial management practices. Fiscal difficulties at the provincial level threaten the federal government's ability to predict and control deficit spending, and have generated political opposition to the overall reform program.4 In the education sector, although the transfer of secondary schools to the provincial level has been an important incentive for the provinces to overhaul current management practices, the sheer magnitude of the increase in responsibilities represents an 4. Fiscal difficulties in everal provinces led to violent demonstrations during recent years, which caused the federal authorities to intervene in one province to restore order.  - 3 - enormous challenge. Strengthening administrative, financial, and technical capacity at the provincial level is essential for the consolidation of education reforms. Educational Indicators 2.4 Argentina's population is highly schooled relative to that of other countries in the region. Nonetheless, it is ill-prepared in comparison with countries with a similar income level and with which it competes in world markets. In 1985, for example, the average years of schooling in Argentina (among the population aged 25 years and older) was 6.6 years, the highest in Latin America. When the regional distribution of educational services are taken into account, however, years of schooling vary significantly, especially among some provinces. Average schooling in the City of Buenos Aires is above 8.0 years, while among the poorest provinces it resembles the LAC average of 4.4. Korea and Taiwan, for comparison, averaged 7.9 and 7.0 years, respectively, more than Argentina and far above the LAC average.5 Low levels of education in Argentina are also associated with higher levels of poverty; poverty rates progressively decrease as the education of the household head increases. 2.5 Access to education is generally good, although there are important regional differences particularly at the secondary level. There is no discernible gender bias in school enrollment. Net enrollment rates for school-age children averaged 90 percent for primary and 56 percent for secondary schools in 1991 (Annex B, Table Bi), giving Argentina one of the highest coverage ratios for secondary education in Latin America. Nationally, coverage for secondary education has expanded by almost 50 percent since 1980. According to the 1991 census, within project provinces, enrollment rates for primary school age children all stood above 90 percent in 1991, with the exception of Chaco (89 percent). For the same year, coverage of the secondary school age group ranged from a low of 38 percent in Chaco to a high of 72 percent in the Municipality of Buenos Aires. 2.6 Despite relatively high coverage rates, the quality and productivity of the educational system is poor. Problems at the secondary level, generally the last stage before students enter the labor market, are especially acute. Although transition rates from primary to secondary schools are fairly high nationally, only half (50 percent) of the students entering secondary school graduate. Available student achievement data further indicate that secondary students lack basic skills: in the first national assessment of secondary education students' achievement, the national average for correct answers was about 55 percent for Spanish and about 49 percent for mathematics. Annex B provides more detailed data on Agentina's secondary education and efficiency, and specifically, for the seven project provinces. Education and the Labor Market 2.7 Over the next decade, two major trends will affect employment: (i) a strong expansion of the labor force (over 2 percent growth per year) due to the growth of the working-age population and an increasing participation of women; and (ii) shifts in employment opportunities as a consequence of economic modernization and restructuring. 5. R. Barro and J. Lee. 'International Comnparisons of Educational Attainmnent,' The World Bank, Waahington, 1993.  - 4 - The latter has been particularly hard on the poorly educated: for example, in October of 1993 in Greater Buenos Aires, the general unemployment rate was 9.7 percent, but was 22.1 percent for people without instruction, compared to 11.4 percent for those having completed the primary level, 8.1 percent for those with secondary education, and 3.5 percent for those with higher education. Wage gaps and labor segmentation have increased significantly as evidenced by the sharp increase in returns to tertiary education, reaching historically high levels of 25 percent, and by the continuous real wage increases for skilled positions. The current government has recognized that if it is to achieve broad-based growth with lower unemployment, it will need to invest in improving the skills of the population at large. Secondary education needs to be more effective if this is to happen. Structure and Management of the Sector 2.8 The structure of the education sector has undergone a radical transformation in the last four years as a result of the transfer of national secondary schools to the provinces in 1992, and the enactment of a comprehensive new Federal Education Law (FEL) in 1993. Administratively, the FEL has redefined the roles of the central and provincial governments. Provinces through the Provincial Ministries of Education (PMEs), have the responsibility of financing and administering all public pre-university education and teacher pre-service training. The central government, through the National Ministry of Culture and Education (NMCE), provides policy guidance and technical assistance, establishes basic curricular content, monitors the quality of education and offers supplemental funding, mainly targeted to programs to promote greater equity.6 Strategic goals outlined by the FEL consist of: (i) raising compulsory education from 6 to 10 years, including one year of pre-school (starting at age 5) and 9 years of general basic education; (ii) reducing the secondary school cycle from 5 or 6 years to 3 and reorienting it to a polymodal structure7; and (iii) updating the curriculum of each cycle. Financial, managerial, and pedagogical responsibilities have been further outlined in a Federal Education Agreement (Pacto Federal Educativo), which was signed by the federal and provincial governments in 1994. 2.9 Formerly the main providers of educational services at the pre-school and primary levels, the provinces are now the principal providers of secondary education and pre-service teacher training as well. In terms of both enrollment and financing, municipalities play a very limited role, which is largely confined to the primary and preschool levels. The private sector is an important provider of educational services at the secondary level, accounting for 28 percent of secondary enrollment nationwide. The role of the private sector tends to be smaller in poorer provinces (e.g. 8 percent of secondary enrollment in Chaco) and larger in the more densely populated and higher income provinces, such as Buenos Aires (where it represents 29 percent of secondary enrollment). The quality of education varies both by province and according to the socioeconomic background of the students. 2.10 The impact of the transfer in terms of enrollment has been large. In its pre-FEL form, secondary education consisted of about 2.2 million students nationwide, of which about 6. The organization and structure chart of NMCE and the PMEs appears in Annex C. For a description of financial, technical, and administrative responsibilities of the national and provincial governments prior to and after the FEL, see Annex C, Table C.2. 7. Polymodal, meaning varioua modalities of learning, emphasizes integrated knowledge of four cluster areas - humanistic, social, scientific and techrical.  72 percent were enrolled in public schools and 28 percent in private schools (1991 data). Enrollments were also divided between curricular tracks as follows: 76 percent attended the baccalaureate and commercial academic track and 24 percent the technical-vocational (technical and agricultural) track. The transfer of secondary education services from the national to provincial governments affected about 1,100,000 students or 50 percent of total secondary students, attending both public (54 percent) and private (46 percent) schools. Including transferred students, the seven project provinces contain 1,380,840 secondary students -- approximately 64 percent of all secondary students. The percent increase in enrollment for the provincial systems as a result of the transfer varies from a low of 25 percent in Santa Cruz to a high of 3,251 percent in the Municipality of Buenos Aires. Education Finance and Expenditures 2.11 Structure and Trends in Education Spending. Total public spending on education as a percent of GDP declined precipitously during the economic crisis of the 1980s. Public spending on education fell to 2 percent of GDP in 1989, and was subject to severe fluctuations throughout the decade. There has been a concerted effort to direct more resources to the education sector over the last five years. As of 1994, total public spending on education had climbed to 3.7 percent of GDP (Annex D, Table D. 1). By comparison, the Latin American average for education spending as a percent of GDP is 4.1 percent. 2.12 In addition to the overall increase in spending, the most salient change in the pattem of public educational spending in recent years is the drop in the federal share from 31.8 percent of total spending in 1991 to 18.8 percent in 1994 as a result of the transfer of secondary schools to the provinces. The provinces' share rose from 65.9 percent to 78.9 percent of total public education expenditures during the same period (Table D.1). Municipal spending on education represented only about 2.2 percent of the total in 1994.8 With regard to total public spending on education by all three governmental levels in 1994, approximately 50 percent is devoted to primary education, 21 percent to secondary education and 18 percent to the post-secondary level, including universities, teacher training and non- university institutions and 11 percent to cultural and other programs (Table D.2). The Federal Government is by far the largest source of funds for higher education, accounting for 78 percent of public expenditures at that level (Table D.3). In terms of total public expenditure at the national level, education and culture accounted for 2.7 billion pesos or 9.9 percent of the total federal social budget for 1995, a slight increase from 1994 (2.3 billion pesos, or 8.7 percent). Of this total, the federal Ministry of Culture and Education budget for 1995 represents 2.4 billion pesos (Charts D. 1 and D.2, and Table D.4). 2.13 Total education expenditures in the seven project provinces have been steadily increasing since 1991, although there remain large disparities between provinces in regard to spending on a per-student basis. The percent increase in expenditures from 1991-1993 varied between provinces, with the largest increase in the Municipality of Buenos Aires (189 percent) and the smallest in the province of Buenos Aires (Table D.5. 1). The seven project provinces devoted between 22 percent and 32 percent of their total public spending to education in 1993 (Table D.6). On average, expenditures on secondary education at the provincial level appear to be increasing relative to primary, as would be expected given the S. 'Me Municipality of Buenos Aires is included with the provinces in this analysis, and is not included as part of municipal spending.  -6 - transfers in secondary education. Expenditures on primary education were about 46 percent of total expenditures for 1993, down from 52 percent in 1992, while those allocated to secondary increased from 17.5 percent in 1992 to 22 percent in 1993. 9 On a per-student basis, public expenditure in secondary education ranged from about US$324 in Buenos Aires to about US$1,958 in Santa Cruz in 1993 (Table D.7). The share of spending allocated to higher and university education is extremely low across all provinces. In all, the seven provinces spent about 3.5 billion pesos on education in 1993, or about 51 percent of total provincial spending, and 33 percent of total public expenditures on education for 1993. 2.14 Public Subsidies and Private Education Spending. Public educational spending in Argentina includes subsidies to private schools, mainly at the secondary level. Subsidies are for partial or total payment of teacher's salaries. A 1985 study indicated that 76 percent of all private secondary institutions received subsidies."0 Table D.8 shows total subsidies to the private sector in 1991, prior to the transfer. The subsidies totalled 532 million pesos, equivalent to 0.29 percent of GDP, with over half coming from the provincial governments even before the transfer. The subsidies were the source of approximately one third of the total private sector education spending of US$1.7 billion in 1991. Nearly half the subsidies (47.6 percent) were paid to schools in the Federal Capital of Buenos Aires and the Province of Buenos Aires. 2.15 Families contribute approximately 19 percent of total educational spending, or 0.73 percent of GDP (Table D.9). Most private spending is for school fees but a portion is paid to school "cooperadoras" operating in public schools that in turn pay minor expenses of the school such as maintenance and materials costs not otherwise provided. 2.16 Shares of Public Spending. Personnel expenditures, mainly teachers' salaries, represent the largest share of educational spending. In the seven provinces included in the project, teachers' salaries accounted for between 73.8 percent (Santa Cruz) and 98.7 percent (Corrientes) of total sector spending in 1993, with most provinces over 85 percent (Table D. 10). The high wage bill appears to be more a result of low teacher-student ratios than high teacher salaries: teacher salaries declined during the 1980s, and have only recently begun to show modest improvement. Nonetheless, high spending on salaries means that few resources are available for teaching materials, building maintenance and other important educational inputs. Capital spending has declined in real terms in recent years, and provinces have been unable to compensate for underinvestment in infrastructure during the economic crisis. Existing schools have operated on multiple shifts and demand for new school places has often been met by spaces not designed for use as schools. 2.17 Sources of Education Funding. By far the largest part of education expenditures are financed out of general provincial revenues, which are in turn heavily dependent on federal sources (Table D. 11). " Federal revenue-sharing was increased in 1991 in part to 9. The share of educational resources by subsector is difficult to assess precisely, given the high percentage of 'unspecified' expenditures in some provinces (43 % in the case of Buenos Aires). 10. Beccaria, Luis A. and Riquelme, G. 'El Gasto Social en Educaci6n y la Distribuci6n del Ingreso', Facultad Latinoamericana de Ciencias Sociales, 1985, in Analisis del Gasto Publico de Educaci6n, Ministerio de Educaci6n y Justicia, 1990. 11 The exceptions within the project provinces are the Province of Buenos Aires, which receives 53 % of current revenues from provincial sources, and the Municipality of Buenos Aires, which receives 93 %.  compensate for the transfer of social services to the provinces. The Federal Law of Education also requires that over the next five years, starting ip. 1993, the education budget be either doubled gradually with an annual increase of 20 percent, or be increased by 50 percent as a share of GDP--that is from 4 percent to 6 percent of GDP-- whichever results in a larger increase in the education budget. As a result of both, the decentralization of secondary schools and the increase of the education budget, federal transfers to the provinces of earmarked resources for education increased on average by 38 percent from 1992 to 1993 (Table D.12). 2.18 Financial Impact of Decentralization of Secondary Education. The financial impact of the decentralization of secondary education to the provinces has not been uniform. The cost of assuming the transferred services has varied according to the size of enrollment, teacher and personnel costs, and the number and physical condition of the infrastructure of the schools transferred (Table B.8). The capacity to meet these transfer costs, in turn, has varied among the provinces depending on the status of provincial finances before the transfer. 2.19 Transfers have taken place via negotiated agreements between the federal govemment and the provinces. The negotiated agreements, however, considered only the cost of federal govemment spending for services prior to the transfer. They did not include provisions to level the pay or compensate for quality differentials between the provincial and federally transferred teachers, to improve school buildings, or to provide other essential inputs. Moreover, while the federal govemment transfers funds to the provinces to cover the salaries of former federal teachers, these amounts are deducted from provincial co-participation revenues." While the overall growth of revenues appears to have kept up with the growth of education spending (Tables D.5.1 and D.5.2) on average, this is not true for all provinces. In order to finance the increase in educational spending, therefore, several provinces have had either to scramble to find additional savings, or risk running (or worsening) a deficit. B. Main Issues in Secondary Education 2.20 The main issues in secondary education can best be summarized as: (a) low intemal efficiency; (b) weak administrative, management, and planning capacity; (c) unsatisfactory educational quality; and (d) inadequate school infrastructure. Low Internal Efficiency 2.21 One of the most salient characteristics of the secondary education system is its low intemal efficiency, as manifested in high dropout and repetition rates and low student teacher ratios. These problems are in tum symptomatic of other underlying difficulties, including poor management practices and low educational quality. 2.22 High Attrition Rates The main efficiency issue in Argentine secondary education is the high number of students that do not complete the cycle in each cohort. This high 12. The law governing the transfer of education services (Law 24.049/92) states that this deduction will not take effect if the province's share of co-participation revenues does not exceed real average monthly levels for 1991, or if the increase in co-participation revenues is insufficient to cover the negotiated cost of the transferred schools. In these cases, the federal government is obligated to provide additional financing to cover all or part of the costs of transferred schools.  - 8 - attrition rates are the result of the cumulative effect of repetition and dropout. Average repetition rates in secondary education reaches 16 percent in Corrientes and 17 percent in Chaco (Table B. 12). There are no reliable data on dropouts rates. However, it can be assumed they are significantly higher than repetition, due the high attrition rates that range from 52 percent in Tucuman to 75 percent in Corrientes (Table B. 10). Although more work needs to be done on the determinants of repetition and high dropout in Argentina, inappropriate teaching practices, an outdated curriculum, and the general lack of books and materials are likely contributing factors. 2.23 Low Student-Teacher Ratios. The average number of secondary students per teacher is about 8.2 in the project provinces, ranging from 13.30 in Buenos Aires to 6.8 in Salta (Table B.9). In contrast, student-teacher ratios stand at 19 to one in Chile, and 22 to one in Spain. Low student-teacher ratios are due partly to the cumulative effect of repetition and dropout, but also to overstaffing and the poor management of human resources. While the low student-teacher ratios strain provincial financial capacity and reduce available funds for materials and facility maintenance, they have done little to improve the overall quality of education. Given the high absenteeism in the sector and a lack of available substitute teachers, student/teacher ratios in the classroom are much higher in practice. During project preparation, each province launched a comprehensive Sector Management Productivity Study (SMPS) which will pay particular attention to the issue of human resource management. The project will support the Action Plans resulting from these diagnostic studies, through technical assistance and training of PME staff (see also para 2.47). Weak Administrative, Management, and Planning Capacity 2.24 The enactment of the FEL and the transfer of secondary schools to the provinces have highlighted a number of weaknesses in the provinces' capacity to provide quality educational services efficiently. Problems include: (a) overcentralization and/or duplications in organizational structures; (b) ineffective planning and management procedures; and (c) lack of timely and reliable information. 2.25 Overcentralization/Duplication of Organizational Structures. Several provinces maintain essentially dual educational administrations, whereby the Provincial Ministries of Education are responsible for secondary education while provincial Councils of Culture and Education run the more extensive primary system. This division that has caused substantial duplication of responsibilities and staff was addressed by the FEL. As a result many provinces are beginning to implement a reorganization of the education administrative structures. Even in the absence of a dual system, administrative overstaffing at the central level, obsolete norms and administrative procedures, and the lack of a clear distribution of functions slow decision making and impede institutional capacity to respond to problems at the school level. 2.26 Ineffective Planning and Management Procedures. Current weaknesses in planning capacity do not allow PMEs to anticipate the changing demands within their systems, nor to design appropriate strategies to meet challenges such as the increase in enrollment, change in demand for teachers or subject specialties, or the need to alter resource allocation to balance social and educational disparities. In the absence of reliable information, planning and budgeting are generally done according to the "incremental" approach of adding extra resources to past patterns of expenditure (whether effective or not). Lack of hardware,  - 9 - software and trained administrative staff further contribute to long delays in processing information important to both planning and management. The gulf between information, action, and levels of authority has eroded overall accountability within the system, and allowed certain common practices, such as teacher absenteeism, to go essentially unchecked. 2.27 Lack of Timely and Reliable Information. The lack of essential information needed for educational decision-making is not confined to the provincial level. Education statistics were developed without national coordination; hence, they do not necessarily conform to each other or to the national system, which is currently being improved. The absence of reliable information about school outputs (as indicated by student learning and completion rates), school staff, student costs and administrative costs, makes it impossible for the PMEs to monitor school system performance, or to design programs to compensate for educational or social inequities. Unsatisfactory Educational Quality 2.28 The available evidence on the low quality of student learning includes the generally poor performance on the first national assessment test. Low learning levels, in turn, are related to the poor quality of educational inputs, including: (a) shortages of educational materials; (e) inadequate teacher training; (e) irrelevance of curricular content; and (e) poor school management and lack of school-based initiatives. 2.29 Shortage of Educational Materials. Many of Argentina's public secondary schools students have very limited access to textbooks, libraries, laboratories, computers and other complementary educational materials such as maps, globes and dictionaries. In most of the project provinces, students have had to rely largely on photocopied handouts and lessons copied from the blackboard. Existing laboratories for basic science are poorly equipped and outdated. Where available, computers are generally donated by parents' associations, and hence are much more likely to be available in middle class schools. Furthermore, when equipment and materials were provided in the past, they were rarely supported by adequate training of teachers in how effectively to use or maintain them. 2.30 Inadequate Teacher Training. Secondary Education Teachers are poorly prepared. Over the last twenty years large budget allocations for salaries have led to scarcity of resources or investments in teacher in-service training. What training did take place was heterogenous, and before the FEL there were no national norms or evaluation of the teacher education institutions. Training at the provincial level tended to be poorly designed, with limited use of new technologies or innovative strategies. 2.31 Lack of Relevance of Curriculum Content. In both the general secondary and technical-vocational areas, the curriculum is obsolete. Curriculum changes in the last twenty years have occurred by adding new programs rather than reexamining the content of existing programs. Too many disciplines and a fragmented presentation of knowledge limit the learning time spent on basic content. The curricular changes mandated by the FEL has already started in a context of a long term strategy. 2.32 Poor School Management and Lack of School-Based Initiatives. Under current administrative and management practices, schools have virtually no control over their human  - 10 - and financial resources nor incentives to improve quality. In general the PMEs consist of a centralized and top-down hierarchy which removes decision-making authority from schools. School directors play more of a bureaucratic than a pedagogical leadership role, and there are no means to encourage on-site participation to detect school problems and implement solutions. Inadequate School Infrastructure 2.33 The expansion of secondary education over the past decade has not been supported by investments in improving school infrastructure. Weak management capacity has led to inefficient use of existing facilities and a lack of resources for maintenance. In areas of high population growth and immigration, secondary schools are overcrowded, sharing buildings with primary schools or located in semi-converted buildings. In other areas, existing infrastructure is underused. Meanwhile, the expansion of compulsory education mandated by the Federal Law of Education (FEL) is likely to drive up the demand for school places and put additional pressure on existing infrastructure. C. Government Sectoral Objectives and Strategy 2.34 With the transfer of secondary schools to the provinces in 1992, and the enactment of a comprehensive Federal Education Law (FEL) in 1993, the Government of Argentina has defined a broad strategy for the education sector within an overall strategy of reform of the state. Downsizing the bureaucracy, decentralizing sector management to the provinces, strengthening provincial capacity to deliver educational services, and improving the quality, equity, and efficiency of education are crucial components of this strategy. 2.35 The FEL has served as a mandate and impetus for a wide range of reforms. It defines the objectives for education at all levels, sets out the new structure and funding mechanisms for the educational system, expands compulsory education from 6 to 10 years, clarifies the respective roles of public and private educational authorities in the new decentralized system, emphasizes and gives special priority to the provision of high quality education and its measurement, and indicates the direction of the transition toward a new educational system. 2.36 Government efforts to implement the FEL include a wide range of measures and accomplishments thus far. At the national level, the National Ministry of Culture and Education (NMCE) has streamlined and redesigned its organizational structure, and redefined its functions to include strategic planning, education quality evaluation, national coordination and technical assistance to the provinces, and correction of educational inequities. A new National Education Quality Evaluation System was developed and began operating in 1993. A nationwide educational census was carried out in 1994, as part of a strategy to update out- of-date and unreliable educational statistics. New curricula for grades 1-9 were issued in 1994, and the basic description of the new polymodal secondary curriculum is forthcoming by the end of 1995. In support of a greater decentralization of management authority to the school level, the NMCE has also developed a school-based management program, which is training educational supervisors to give technical support for school management initiatives. The NMCE is also developing a permanent in-service teacher training program through the Federal Network of Continuous Teacher Training.  - 11 - 2.37 Additional sectoral goals outlined in the NMCE's Five Year Plan for 1995-1999 include: (a) implementing a National Network of Educational Information, which will both consolidate provincial information at the national level and provide technical assistance and training to provinces in the use of the system; and (b) undertaking "social compensation" measures to improve equity in the educational system. In secondary education, two measures are foreseen: (i) provision of educational materials in low-income areas; and (ii) helping students to obtain their first jobs. 2.38 Of particular concern throughout Argentina's educational reform process has been the assurance of sufficient financial resources for the sector. Additional resources are required not only to compensate for the low levels of spending on education during the 1980s, but also as an incentive for reform, particularly at the provincial level. The FEL requires that the education budgets be either doubled gradually, with an annual increase of 20 percent starting in 1993, or be increased by 50 percent as a share of GDP--that is from 4 percent to 6 percent of GDP-- whichever results in a larger increase in the education budget. In upholding its part of this mandate, the Federal government in 1994 signed a National Education Agreement with the provinces, whereby it pledged to allocate an additional 3 billion pesos to the sector over the 1995-1999 time period, largely for investments in infrastructure, equipment, and teacher training. 2.39 While the measures taken so far are important steps in advancing educational reform and decentralization, enormous challenges lie ahead to improve the access, quality, efficiency and equity of secondary education. The Government has requested Bank support in accomplishing these tasks. The Government is also seeking other sources of financing and technical support, including the Inter-American Development Bank (IDB) and the World Bank for improvements in primary and higher education, respectively. D. Bank Role and Strategy 2.40 To date, the Bank has supported two projects in Argentina's education sector: (a) the Vocational Training and Technical Education Project (1980, Ln. 1905-AR, US$58 million) aimed at improving CONET's (Consejo Nacional de Educaci6n Tecnica) institutional capacity and expanding the quality of Argentina's vocational training system; and (b) the (First) Decentralization and Improvement of Secondary Education Project (1994, Ln. 3794-AR, US$190 million), which will assist the Government in increasing the quality of secondary education in the provinces of Cordoba, La Pampa, Mendonza, Misiones, Neuquen, Rio Negro, and Santa Fe. 2.41 The Vocational Training and Technical Education Project was canceled seven years after approval, disbursing less than 2 percent of project funds, because of changes in project administration, project complexity, deteriorating economic conditions and political turmoil. 2.42 The Decentralization and Improvement of Secondary Education Project (DISE) companion project to the one presently proposed, is effective. This project is financing improvements in the quality and efficiency of secondary education; increase/improve physical capacity to serve the secondary school-aged population more effectively, and strengthen institutional capacity in these Provincial Ministries of Education under a decentralized framework. The project also aims to strengthen the capacity of the National Ministry of  - 12 - Culture and Education to provide policy guidance and supervision, as defined by the Federal Education Law. 2.43 The Bank is also supporting the Government's efforts in higher education. Bank strategy in higher education involves establishing a competitive environment for the improvement of higher education and providing, through a transparent funding mechanism, the appropriate incentives for continuous educational efficiency gains and quality enhancement. A Higher Education Improvement loan of US$165 million (Ln.3794-AR) to support the implementation of legal, management and administrative reforms initiated by NMCE was approved by the Board in July 1995. 2.44 In addition to these education projects, the Bank has assisted the Government during the last five years with 13 projects, amounting to approximately US$2.3 billion, in the following sectors: infrastructure (four), health (one), public sector reform (five), capital markets (two), and agriculture (one). 2.45 The proposed project supports an integral part of the Bank assistance strategy of encouraging the consolidation of education reforms, promoting institutional capacity of subnational governments, and improving the coverage, quality and efficiency of educational services at the secondary level. As such, the project is fully consistent with the Country Assistance Strategy (CAS), which was discussed at the Board on May 4, 1995. The CAS defines as one critical role for the Bank Group to support provincial reform, seeking to improve the efficiency of delivering public goods and services. In this sense the proposed project is consistent with the objectives of the Provincial Reform Project (Loan No.3836-AR) as well as with the Provinces I and II projects (Loan Nos. 3280, 1991, and 3877, 1994 respectively). Regarding the education sector, the CAS analyses the deterioration of public education quality as a result of weak sector management, stressing the need to support the decentralization of secondary schools by strengthening province's capacity for delivering quality, cost-effective education. 2.46 The proposed project would also reduce poverty in certain provinces by improving access of the poor to secondary education. Women's education and development would be addressed by the project through the support of curriculum development activities in the seven provinces. These activities would be carried out following guidelines which the Government is developing to introduce women's issues into the basic curriculum contents, in an integrated approach to curriculum development. 2.47 In order to ensure reliable information about the internal efficiency of secondary education in the project, the provincial governments are carrying out a series of Sector Management Productivity Studies (SMPS). The SMPSs would: (a) identify inefficiencies in the use of human and physical resources at the provincial level; (b) recommend corrective actions; and (c) propose alternative designs to decentralize sector management and improve internal efficiency. In each province the SMPS would draw on the experience of the up-front actions already in place to improve sector management and efficiency. Furthermore, the SMPS would take into account the action plans already developed by the PMEs to improve efficiency in areas such as administrative structures, norms and procedures, and planning capacity. The Terms of Reference and Letter of Invitation for the contracting of the SMPS have already received the Bank's no objection, and the bidding process was launched in March, 1995. According to this schedule the SMPS were contracted in June, 1995 and prior  - 13 - to negotiations the diagnosis phase of the studies would be completed. During appraisal the Bank reviewed the preliminaries proposals and action plans to improve internal efficiency, the up-front actions that the provincial governments are taking, as well as the indicators to evaluate the project's impact on efficiency improvement (Table J. 1). During negotiations a revised version of the targets to be monitored by the project's impact indicators has been agreed (Annex J - Table J. 1. 1). This version was based on the early findings of the SMPS. It was also agreed that these impact indicators would be adjusted during the first annual review of the project, taking into account the recommendation of the SMPS and the implementation of the corresponding action plans. Action Plans based on the recommendations of the SMPS, and satisfactory to the Bank, would be presented by at least one province as a condition of project effectiveness. Action Plans based on the recommendations of the respective SMPS, and satisfactory to the Bank, would be presented, within eight months of project effectiveness, as a condition for subproject disbursement in each remaining province. 2.48 Other multilateral agencies and donors are supporting or planning to support the education sector in Argentina. The IDB and the Government negotiated a Educational Reform and Investment Program (US$600 million) to improve the coverage, quality and efficiency of pre-school and primary education in the country's 23 provinces and Municipality of Buenos Aires. This project will support: (i) strengthening the decentralization process by enabling and empowering the school as an educational management unit; (ii) improving the efficiency of financial allocation mechanisms to target financial resources to the schools; (iii) strengthening teacher pre-service training and rationalizing norms governing teachers' service and promotion; (iv) providing technical assistance to update curriculum in order to adapt curriculum planning and implementation to the guidelines of the new FEL; and (v) renovating schools and providing educational equipment. UNESCO is providing technical assistance to the NMCE in the development of a school-based management program. This program is being implemented in selected provinces, and aims to strengthen school management and autonomy, train school directors, and develop educational materials. In addition, the Organization of American States (OAS) is providing assistance to the NMCE and provinces in the areas of educational management, budgeting and financing, and in the implementation of an infrastructure survey in primary, technical and higher education. E. Lessons Learned 2.49 The lessons presented below draw on the experience of the two education projects to date, as well as on Bank's more recent lending experiences in Argetina's social sectors. This has occurred particularly through the Social Sector Management Technical Assistance Loan -SSMTAL- (Loan No. 2984-AR, 1989) and the Maternal and Child Health and Nutrition Project (Loan No.3643, 1993); the Bank's lending experience to subnational governments in Argentina, particularly through the Provincial Development I (Loan No. 3280, 1991), the Provincial Development II (Loan No. 3877, 1994), the Municipal Development I (Loan No. 2920, 1988), and the Provincial Reform (Loan No. 3836, 1994);  - 14 - worldwide Bank lending for secondary education; Bank studies on decentralized educational systems in Latin America"3. 2.50 Project Design. To the extent possible, project design should be simple and flexible despite the inevitable complexities inherent in social sector projects. Project scope should concentrate on a few well-defined objectives and tasks.14 These lessons have been incorporated into the proposed project, as follows: the project to be implemented by each province includes three main components in addition to well-defined subcomponents for institutional strengthening, quality improvements and infrastructure improvements. The provincial governments have been fully involved in defining the scope and content of the project and ensuring that the objectives and the corresponding tasks correspond with provincial needs and are not overly complex. 2.51 Project Implementation. The location and structure of the project coordination unit must balance the advantages and disadvantages of using existing structures or new project coordination units to manage projects. Experience indicates that, if the legal and administrative framework permits sufficient management autonomy and flexibility, strengthening existing agencies is the preferred option. These lessons have been incorporated into the proposed project, as follows: Provincial Project Coordination Units (PPCUs), for each provincial subproject, will be located in the respective ministries of education, while the executing agencies (e.g. for construction) will be located or would report to existing ministerial departments. To strengthen PPCUs and ministerial departments involved in project coordination or implementation, the project will finance technical assistance and short-term training needed to establish management units and a system for monitoring and supervising project activities. The PPCUs will be small but staffed by highly qualified and experienced personnel within each provincial ministry. 2.52 Implementation Delays. Delays caused by unfamiliarity with Bank procedures are common in the social sectors, in which investment projects are relatively new. Especially important is the need to standardized bidding documents and establish procedures that are tailored to the needs of each project prior to initiation, to avoid implementation delays. These lessons have been incorporated into the proposed project, as follows: this project will benefit from the experience acquired by. the National Project Coordination Unit (NPCU) from implementing the (First) Decentralization and Improvement of Secondary Education Project. Training of the Provincial Ministries of Education (PMEs) staff on procedures will be carried out by NPCU as well as Bank staff. Also, procurement document models for ICB, NCB and a letter of invitation for consultants have already been agreed upon with the Government. 13. The Desien and Administration of IntergovernrentalTransfers. Report No. 29, Regional Studies Program, Latin America and the Caribbean Technical Department, The World Bank, 1993, and Educational Decentralization in Latin America: Lessona Learned. Human Resources Division, Technical Department, Latin America and the Caribbean Region, The World Bank, 1993. 14. Effective Imnlementation: Key to Development Impact. Report of the World Bank's Portfolio Management Task Force. The World Bank. Washineton. D.C.. 1992. One of the principal recommendations of this report to improve Bank's portfolio performance management is to 'concentrate selectively on critical performance variables' and 'avoid project complexity that mnay prevent BorrowerB from effectively implementing the projects."  - 15 - 2.53 Project Sustainability. To ensure that Bank financed education projects will continue to produce benefits beyond their completion, countries need to develop or maintain a sense of ownership. Involving policy-makers and technical staff from the early stages of project identification and design is one of the best strategies to achieve this goal. In the proposed DISEPED project the participation of the PMEs, as well as the coordination with the NMCE, has been crucial for project ownership. During project preparation provincial education administrators and technical staff took an active role in defining their subprojects with the technical assistance of the NPCU, which also provided coordination between provinces and the NMCE. Other elements of project sustainability are: (i) defining both long and short term project objectives so as to facilitate implementation, monitoring, and evaluation; (ii) addressing the issue of institutional strengthening for project implementation and evaluation; and (iii) addressing from the very beginning the issue of counterpart funding. The proposed DISEPED project includes a set of Project Impact Indicators and Project Monitoring Indicators (Annex J), agreed between the Federal and provincial levels, and the Bank. The institutional strengthening activities to be financed under the project would provide technical support for effective project monitoring. The availability of counterpart funds will be ensured by the co-financing mechanisms in place between the Federal and provincial governments. Furthermore, to avoid delays in subprojects implementation, as well as to promote competition among the participating provinces, it was agreed to give a time limit to the provinces to: (i) comply with the conditions for project effectiveness; and (ii) start to disburse from their subloans. After this time limit, a non-complying or non-disbursing province could be dropped in favor of another province, with a reallocation of resources. 2.54 Interventions Specific to Secondary Education. A number of areas that have been demonstrated to have particular impact, and that have been taken into account in the project design, include: (i) improving general education, especially in basic studies such as math, science, and language, given that worker flexibility is thereby increasing; (ii) promoting better access to secondary education, especially among the poor and rural population, to improve their chances for future training and their ability to earn higher incomes; (iii) supporting teacher training, especially in general subject matter knowledge and improvement of teaching skills, with the use of textbooks and other educational resources; and (iv) providing technical assistance to help governments implement curriculum reform proposals and improve institutional capacity. m. THE PROJECT A. Project Objectives 3.1 The objectives of the project are to: (a) strengthen institutional capacity in the Provincial Ministries of Education (PMEs) under a decentralized framework; (b) increase the quality and efficiency of secondary education in the selected PMEs; and (c) increase/improve physical capacity to serve the secondary school-aged population more effectively. B. Project Components 3.2 The project would consist of seven subprojects including three components: (i) institutional strengthening; (ii) education quality improvement; and (iii) infrastructure  - 16 - improvement"5. Within this general framework, each province has developed a proposal tailored to its own identified needs. Despite having subcomponents with the same name in different subprojects, these vary in design, orientation, and content among provinces on the basis of local conditions and requirements. The following is a general description of the project components. A detailed description of each subproject is contained in the Borrower Appraisal Report found in the project files. C. Project Description"6 Institutional Strengthening (US$32.3 million including contingencies, or 20 percent of total project cost). 3.3 To overcome management deficiencies and complexities, as well as to improve internal efficiency, the project would contain an institutional strengthening component. One of the main guidelines to implement this component would be the Action Plans based on the recommendations of the Sector Management Productivity Studies (SMPS). To address sector inefficiencies, a variety of activities have been grouped under the Improvement of Educational Administration subcomponent, such as institutional reorganization of the PMEs, improvement of administrative procedures and strengthening of planning capacity. During project preparation the PMEs, with the technical assistance of the NPCU, prepared a diagnosis of sector organization and management inefficiencies, and proposed the activities that should be implemented to improve efficiency. Based on these proposals the project was appraised and project costs were estimated. To refine the diagnosis already carried out by the PMEs and, in particular, to design an implementation strategy of these activities, a Sector Management Productivity Study (SMPS) will be carried out for each province from June to December 1995 (para. 2.47). The SMPS would refine the diagnoses of sector organization complexities and managerial inefficiencies carried out during project preparation. More specifically, the expected product of the SMPS is an action plan to implement the activities identified early by the PMEs during project preparation. To improve the PMEs planning and managerial capacity the institutional strengthening component would also include the implementation of a management information system and an education quality evaluation system as well as the training of administrative and management staff. 3.4 The institutional strengthening component would have four sub-components:(i) improvement of educational administration; (ii) development of a management information system (MIS); (iii) development of an education quality evaluation system (EQUES) and (iv) training of administrative and management staff. The subproject for Buenos Aires province would have only the MIS and EQUES sub-components and a sub-component of studies designed to set the basis for a more tailored institutional strengthening component in a possible future project. The following table summarizes the institutional strengthening component and sub-component for each for each province. 15. The Province of Buenos Aires subproject would only have a simplified component of institutional strengthening and a subcomponent of studies, both in the institutional strengthening and in the quality improvement components. 16. The sum of the components in percent will not add up to 100% since they do not include the Project Coordination Units, which represent 5 % of total project cost.  - 17 - Table 3.2: Institutional Strengthening Subcomponents by Subproject IWrovement Dev. of a Dev. of a Training of Subproject of Educational MIS EQUES Adm. and Adminidration Manag. staff Mun. of Buenos Aires X X X X Prov. of Buenos Aires - X X Corrientes X X X X Chaco X X X X Entre Rios X X X X Salta X X X X Santa Cruz X X X Tucuman X X X X 3.5 Improvement of Educational Administration Component. To ensure that the provinces have the necessary organizational structures to carry out responsibilities defined by the FEL, and to improve decision making and administrative procedures, the project would support: (a) the strengthening of the capacity of the PMEs in strategic planning and monitoring of the school system; (b) the modernization of key central units, in particular those responsible by planning, budgeting and monitoring; (c) the decentralization of some administrative units; and (d) the establishment of regulatory framework under which the new decentralized structures would function. Specifically, the project would finance technical assistance to support the implementation of the new structures, functions, and administrative and management procedures; modem office technology such as computers and software to promote more efficient administrative procedures; the preparation of manuals to guide the implementation of new procedures; and the design and implementation of new methodologies for budget and financial planning and for monitoring of management performance. The recommendations and action plans based on the SMPS for each province would provide the guidelines for the implementation of the activities proposed under this sub-component. Final versions of the terms of reference for consultant services to designed and implement the institutional and administrative reorganization activities were presented prior to negotiations. 3.6 Development of Management Information Systems (MIS). The project would support the development of a modern MIS system which is user-friendly and which emphasize the timeliness and the usefulness of information produced. The new MIS systems would be developed within each provincial government and would be extended to Regional Centers or schools, while also being linked to the National Education Information Network. The MIS would integrate modules for educational statistics, financial information, physical inventory, human resources management, and educational research. To design an MIS, the project would finance technical assistance; computers and software; and printed test taking material. The final version of TORs for consultant services to develop and implement a management information system at the provincial/local level were presented prior to negotiations.  - 18 - 3.7 Development of a Education Quality Evaluation Systems (EQUES). Development of the EQUES system would provide PMEs with data on school characteristics, on teaching and management staff, and on student achievement in basic disciplines such as mathematics, language, and science, which would permit national and subnational authorities to monitor progress towards academic goals. It would also permit these authorities to identify subnational governments or schools which need special assistance. The provincial EQUES would be articulated with the National Education Quality Evaluation System (NEQUES) in order to avoid duplication and to ensure interchange of technical information and assessment findings. To design and implement EQUES systems, the project would support: (i) national and foreign technical assistance; (ii) computer equipment; (iii) training materials and manuals; (iv) preparation of standardized tests; and (v) the operational activities needed to implement student assessments such as printing, storage and application of the tests, fares and per diems. The final version of the TORs for consultant services to develop and implement a student assessment system were sent to the Bank prior to negotiations. 3.8 Training of Management and Administrative Staff. This subcomponent would include all of the training activities required for ensuring the successful implementation of the project's institutional strengthening activities. For each sub-component training would be targeted to central and regional management and administrative staff as well as school personnel. Training in the management information and student assessment system would be aimed at system operators, directors, teachers, as well as policy analysts, planners and managers. Specifically, the project would support the training of administrative staff; central and regional level management staff; and supervisors, school principals and teachers. agreed on the preliminary contents. The final version of the TORs for consultant services to implement the training activities for management and administrative staff were sent to the Bank prior to negotiations. 3.9 Province of Buenos Aires Studies Sub-Component. During the first two years of project execution, the project would finance, in-depth studies in the Province of Buenos Aires to analyze existing sector management problems and prepare a project proposal which could be financed by the Bank or other sources. The project would support three diagnostic studies with action plans in the following areas: (i) management of the secondary subsystem and adaptation to the multimodal curricular model; (ii) educational planning; and (iii) structures and functions of the supervision system. The final versions of the TORs for consultant services to carry out the studies sent to the Bank prior to negotiations. Educational Quality Improvement (US$56.3 million, including contingencies, or 34 percent of total project cost). 3.10 A major objective of the project is to increase the quality of public secondary education as reflected by students' cognitive learning and indicators such as repetition, drop- out and completion rates. This goal would be achieved by the provision of an array of inputs through a variety of activities. These activities can be grouped under six main subcomponents --not all of which are included in every subproject.  - 19 - 3.11 There are five main subcomponents comprising the bulk of project financing. These subcomponents are: (i) textbooks and teaching materials; (ii) staff training in education quality improvement; (iii) curriculum development; (iv) school management; and (v) school- based grants. The Buenos Aires province would have only a studies sub-component. The sub-component by province are shown in Table 3.3 below. Table 3.3: Educational Quality Improvement Activities by Subproject Subproject Textbooks and Teaching Staff Training on Secondary School School- Materials Education Quality Education Management Based Improvement Curriculum Grants Development Mun. of Buenos X X X X Aires Prov. of Buenos Aires Corrientes X X X X Chaco X X X X X Entre Rios X X X X X Salta X X X X X Santa Cnrz X v X X Tucuman X X X X 3.12 Textbooks and Teaching Materials. Research worldwide has shown that the availability and proper use of educational resources significantly enhance teaching and student learning. Given that availability of educational resources varies widely among schools in any given PME, subproject proposals reflect considerable heterogeneity. The project would finance: textbooks, libraries, basic science laboratories; learning modules in basic areas such as biology, physics, multimedia, information and others; teacher guides; sets of supplementary learning materials such as maps, charts and dictionaries; and lastly, multimedia equipment such as sets of televisions, videorecorders and cassettes. Textbooks and reading books are key inputs in the educational process. Textbooks will be selected among those available in the market through a two-stage ICB procedure. First, bidding documents will be issued, requesting technical proposals only. The schools will participate in the evaluation of the proposals and in making recommendations. Second, the PMEs will prepare a short list of qualifying bidders who will be invited to submit new technical and economic proposals, revised according to the PMEs' and schools' evaluations and recommendations. The final evaluation and selection process will continued as outlined in the Standard Bidding Documents. The final list of educational resources to be financed during the first year of the project was agreed prior to negotiations. 3.13 Staff Training in Education Quality Improvement. The project would support training within and/or complementing the Federal Network of Continuous Teachers Training aimed at updating teacher's skills in basic subject disciplines; adequate use of education materials and new technologies such as computers; and preparation of teachers for the curriculum changes already underway. The project would also support the training of principals and supervisors in the areas of school management and pedagogical monitoring and supervision, and technical assistance to design and implement training activities. Different  - 20 - training strategies will be adopted, depending on the size of the provincial school system, and on its institutional organization. Teacher's training strategies include: (i) school-based workshops; (ii) distance education; and (iii) seminars and more conventional courses. Teacher training would generally be provided by local universities and other higher education institutions, because this is the arrangement recommended by the national permanent in- service teacher training program. Most provinces propose to have the supervisory team involved in the provision or monitoring of teachers training activities. Training for supervisors and school directors will be delivered through workshops organized by the Provincial Ministries of Education, with technical assistance supported by the project. Special training for school directors and teachers will be developed for the school based- grants component. Taking advantage of the Bank's experience in others countries like Chile, the project will support international technical assistance for this specific training activity. During appraisal the mission reviewed the training plans for teachers, principals, and supervisors for the first two years of the project. 3.14 Secondary Education Curriculum Development. In response to the FEL mandate, the provincial governments are undergoing a process of curriculum reform and/or adaptation to the new guidelines. To assist the provinces in this process, the project would support: studies to evaluate the impact of prior, and more limited, curricula reforms already undertaken by some subnational governments; studies that take stock ("estudios de situaci6n") of the curricula presently taught in schools, especially among technical schools in which there is very large variance. The project would also support technical assistance for curriculum planning and development, especially from specialists in different subject areas. The final version of the terms of reference for technical assistance in curriculum planning and development, as well for consultant services to carry out the studies were sent to the Bank prior to negotiations. 3.15 School Management. This subcomponent would support the design and implementation of school-based institutional development proposals. Such proposals would pay special attention to a school's mission statement, division of responsibilities between the principal and teachers, and links with the community (especially parents' associations). The project would support technical assistance to develop a model institutional development proposal. Subsequently, this subcomponent's implementation would be closely linked with the staff training and school-based grant subcomponents. The final version of the terms of reference for consultant services to implement activities related to the strengthening of school management were presented prior to negotiations. 3.16 School-Based Grants. In addition, the project would support special school-based projects designed as a mechanism to encourage school initiatives through competition for extra financial resources. Through this grant program, to be implemented from the third project year, the project would respond to local teaching conditions and support the improvement of learning conditions within the school. The grants will be allocated on a competitive basis and each school project would have a duration of one year. The grants would be used for funding non-personnel, non-recurrent expenditure activities such as: (a) acquiring or developing teaching and learning materials for schools; and (b) implementing complementary curricular activities with the participation of parents, teachers and students. The project will finance: grants; training of teachers, principals, and supervisors in identification of school quality needs and formulation of grant proposals; production of dissemination and training materials; and technical assistance- to the planning and  - 21 - implementation of the sub-component. The final version of the TORs for consultant services to assist in the planning and implementation of the sub-component activities, and the implementation plans for the school-based grants were sent to the Bank prior to negotiations. 3.17 Province of Buenos Aires Studies Sub-Component. During the first two years of project execution, the project would finance in-depth studies in the Province of Buenos Aires to analyze existing deficiencies in educational quality. The project would support four diagnostic studies with action plans in the following areas: (i) curriculum development; (ii) improvement of internal efficiency; (iii) analysis of external efficiency; and (iv) educational innovations linked with the labor market. The final version of the TORs for consultant services to carry out the studies on educational quality was presented prior to negotiations. Infrastructure Improvement (U$67.0 million including contingencies, or 41 percent of total project cost) 3.18 Under this component the project would support improvements in internal efficiency and educational quality, through the adaptation of the infrastructure to the new school management model and curriculum. High priority was given to the rehabilitation and maintenance of the infrastructure (85 percent of included construction areas). Extensions, substitutions of deteriorated existing buildings and new constructions have only been considered in well justified-in cases. The infrastructure component has the following sub- components: (i) rehabilitation/maintenance; (ii) substitutions and extensions; and (iii) new constructions. The subcomponents proposed for each province are shown bellow: Table 3.4: Infrastructure Improvement Subcomponents by Subproject School Subnational Substitution Construction Expansion Rehabilitation governuents Maintenance Mun. of Buenos X Aires Corrientes X X X Chaco X X Entre Rios X X X Salta X X X Santa Cruz X X Tucurmn X X X 3.19 A breakdown of constructions areas and costs by sub-component shows that new construction represents 2.1 percent of the total component cost, compared with 57 percent that would be spent on rehabilitation and maintenance.  - 22 - Table 3.5: Inrastructure Improvement Costs and Areas Cost (USS million) Areas (m2 .000) Sub-Component Amount percent Amount % Rehabilitations and 38.2 57.0 309.5 88.4 Maintenance Substitutions and 26.3 39.2 29.9 8.5 Extensions New Buildings 1.4 2.1 10.9 3.1 Component Adm. 1.1 1.7 - - Totals 67.0 100.0 350.3 100.0 3.20 The project would support the construction of one new school. Additionally, the project would finance the rehabilitation of about 80 disadvantaged urban and rural secondary schools to be adapted to the new polymodal education, many of which were recently transferred from the national government. School renovation projects would be selected on the basis of their cost-effectiveness and provincial commitment to their sustained maintenance. Furthermore, some 30 schools would undergo expansion and approximately 10 schools would be rebuilt on the same site or region. A final version of the contracts of the technical plans, preliminary architectural designs, construction specification and preparation of sites for all civil works to be included during the first and second year of the project has been presented at negotiations. 3.21 The project would also support improvements in physical planning capacity and the establishment or strengthening of ongoing maintenance programs. These activities, however, will be financed under the institutional strengthening component. The technical, financial, disbursement, managerial and logistical learning experience achieved in school remodeling in many provincial governments through the Bank's Provinces I Project (Loan N. 3280, 1991), would also be expected to benefit this project. IV. PROJECT COST AND FINANCING PLAN A. Cost of the Project 4.1 The total cost of the project is estimated at US$164.4 million based on prices of April 1995. The total foreign exchange cost is estimated at US$18.3 million, or about 11 percent of the total cost. Table 4.1 summarizes the estimated project costs by component and subcomponents. Detailed project costs for the provincial subprojects are shown in Annex F, Tables F. 1-1l l. Contingency Allowances 4.2 Physical contingencies amount to 12 percent of base costs for civil works and maintenance of infrastructure, 5 percent of base costs for goods and equipment, and 3 percent of base costs for operating expenditures. No physical contingencies have been  - 23 - included for consulting services and training. Price contingencies for foreign costs are based on Bank calculations of international inflation. Local cost price contingencies are based on local inflation for the 1996-2000 period. Duties and Taxes 4.3 Locally procured and imported goods necessary for the project are subject to a 21 percent value-added tax. Imported goods will be exempt from customs tax. Taxes associated with the project amount to about US$12.3 million. B. Financing Plan 4.4 The proposed project would be financed by a Bank loan of US$115.5 million or 70 percent of total project cost. The loan would cover 100 percent of foreign exchange expenditures and about 84 percent of estimated local costs (excluding taxes). Given the social nature of the project, the bulk of project costs consists of local expenditures, mainly comprising technical assistance for the implementation of Action Plans based on the recommendations of the Sector Management Productivity Studies; a management information system and a student assessment system; curriculum development; teacher training, and activities related with quality improvement of secondary education; and maintenance of school facilities. The Government of Argentina would finance the remaining US$48 million (including duties and taxes). The proposed project cost sharing is in line with current Bank guidelines given the social character of the project and its future impact on children in outlying urban and rural areas who will benefit from increased social and economic opportunities. Tables 4.2 and 4.3 show the project financing plan with a breakdown by expenditures categories, for the total cost and for each province, respectively.  - 24 - Table 4.1: Summary Cost Table (USS'000) LOCAL FOREIGN TOTAL BASE FOREIGN Buenas Aires Subproject Institutional Strengthening 3.4 0.7 4.1 3% 17% Educational Quality Improvement 1.1 0.1 1.2 1% 10% Project Coordination Unit 0.6 0.0 0.6 0% 3% Subtotal 5.1 0.8 5.9 4% 14% Chaco Subproject Institutional Strengthening 2.0 0.2 2.2 2% 10% Educational Quality Improvement 5.8 1.3 7.2 5% 19% Infrasructure Improvement 6.7 0.5 7.2 5% 7% Project Coordination Unit 0.8 0.0 0.9 1% 2% Subtotal 15.3 21 17.4 12% 12% Corfientas Subproject Institutonal Strengthening 3.0 0.4 3.4 2% 11% Educatonal Quality Improvement 5.9 1.4 7.3 5% 19% Infrastructure Improvemrent 6.0 0.4 6.4 4% 6% Project Coordination Unit 0.5 0.0 0.5 0% 1 % Subtotal 15.5 21 17.6 12% 12% Entre RJos Subproject Institutoa Strenghening Z7 1.8 4.5 3% 40% Educational Quality Improvement 3.9 0.7 4.6 3% 15% Infrastructure Improvement 6.8 0.6 7.3 5% 8% Project Coordinatin Unit 0.6 0.0 0.6 0% 2% Subtotal 14.0 3.0 17.0 12% 18% M.C.B3A Subproject Instibonal Strngthening 7.7 1.0 8.7 6% 12% Educabonal Quality Improvement 16.7 26 19.3 14% 14% InfrastructurIlmprovenent 13.8 1.1 14.9 11% 7% Project Coordinahon Unit 1.0 0.0 1.0 1 % 1% Subtotal 39.1 4.8 43.9 31% 11% Satta Subproject Instttiona Strengtening 2.5 0.4 2.9 2% 14% Educational Quality Improvement 4.7 0.8 5.5 4% 15% Infrastructurn Improvement 6.5 0.5 7.0 5% 7% Project Coordinaton Unit 0.8 0.0 0.9 1% 2% Subtotal 14.6 1.7 16.3 11% 11% Santa Cruz Subproject Institutonal Strengthening 0.3 0.1 0.4 0% 22% Educatonal Quality Improvement 1.6 0.3 1.9 1% 1S% Infrastructure Improvement 5.8 0.5 6.3 4% 8% Project Coordinaton Uni 0.4 0.0 0.4 0% 2% Subtotal 8.1 0.9 9.0 6% 10% Tucurnin Subproject Institutional Strgthening 2.8 0.2 3.0 2% 7% Educational Quality Improvement Z8 0.3 3.1 2% 10% Infrastructun, Improvement 5.4 0.3 5.7 4% S% Project Coordinaton Unit 0.7 C.0 0.8 1% 2% Subtotal 11 7 0.8 125 9% 6% National Project Coordination Unit 2.2 0.5 0.5 2% 3% Total BaselLne Cost 125.7 16.4 142.0 100% 12% Physical contingencies 5.9 0.8 6.6 5% Price Contingencies 14.6 1.1 15.8 11% Total Cost 146.2 18.3 164A4  - 25 - Table 4.2: Financing Plan (USSS Million) % Financing Provinces IBRD Provinces IBRD TOTAL a/ Loan Loan Civil Works 49.3 17.2 32.0 35 65 Land 0.4 0.4 0.0 100 0 Informatics and Communication, Equipment, Vehicles, Furniture, Training Materials, Teaching Materials & Services a/ 38.9 7.8 31.1 20 80 Consultant Services b/ 37.3 3.7 33.5 10 90 Scholarships 2.1 0.0 2.1 0.0 100 Grants 2.5 0.0 2.5 0.0 100 Incremental Recurrent Expenditures 13.0 6.5 6.5 50 50 Project Implementation Costs 8.7 0.9 7.8 10 90 Taxes 12.3 12.3 0.0 100 0 TOTAL e/ 164.5 48.9 115.5 30 70 Taxes are not included in totals and are listed On a separate line Includes among othera: Studies, US$5.8 million; .Uing consultants. US$6.3 million; technical assistance, US$13.8 million; project implementation unit personnel, USSo69 million '/ Includes: building and equipment maintenance, office rentals, insurance, utilities, publications, and office materials. d Includes: Fares and per diems for trabing and project coordination, office rentals and materials, utilities, publications, public relations, and bidding expense needed for project implementation. Totals may not add due to rounding. C. Education Sector Budget for FY95 and Beyond 4.5 The Budget Law for 1995 provides 2.7 billion pesos for expenditures on education and culture for the national administration'7, which includes educational expenditures of entities other than the NMCE. The NMCE budget itself is 2.446.9 billion pesos, which represents an increase of 21 percent over 1994 (Annex D, Charts 1 and 2 and Table D. 10). The budget for education and culture amounts to 5.7 percent of the total national administration budget and 9.8 percent of the national social sector budget. The mandate of the Federal Education Law to provide the necessary resources for revitalizing the sector (para. 2.17), is an ambitious goal that so far is being achieved. 4.6 The 1996 budgets for the participating provinces are under preparation. While some provinces have already made provision for counterpart financing in their 1996 budget, other provinces would need to do so. During negotiations assurances were sought from the 17. National administration includes central government, decentralized agencies, and special accounts, that undertake expendituresl at the natioral level.  - 26 - provincial governments on the provision of counterpart funds for each year of project implementation. Table 4.3: Estimated Annual Counterpart Funds for the Provincial Subprojects (US$ Million) Subproject Total 1996 1997 1998 1999 2000 Buenos Aires 1.6 0.5 0.3 0.3 0.2 0.2 Chaco 6.0 0.4 2.2 2.3 0.9 0.2 Corrientes 6.5 0.2 2.2 1.7 1.5 0.8 Entre Rios 6.3 0.2 1.0 2.3 1.9 0.9 Municipality of Buenos-Aires 14.7 0.3 3.0 4.4 5.1 1.9 Salta 5.7 0.5 1.1 2.2 1.3 0.7 Santa Cruz 3.4 0.1 1.1 1.8 0.3 0.1 Tlucuman 4.5 0.5 1.0 1.1 1.2 0.7 N.P.C.U. 0.3 0.1 0.0 0.0 0.1 0.1 Total a/ 48.9 2.9 12.0 16.1 12.3 5.7 N.P.C.U. = National Project Coordination Unit *I Totals may not add due to rounding. D. Recurrent Expenditures Arising from the Project 4.7 The proposed project will give rise to some incremental operating costs that will continue after the project is completed, such as the costs of replenishment of educational resources, infrastructure and equipment maintenance, operating expenditures, and personnel for the provincial/municipal Management Information and Educational Quality Evaluation Systems. These are expected to total $4.6 million pesos in 2000, the last year of project implementation, and subsequent years (Table 4.4)  - 27 - Table 4.4: Estimated Annual Recurrent Expenditures arising from the Project (US$ Million) Subproject Total 1996 1997 1998 1999 2000 Buenos Aires 1.0 0.0 0.0 0.3 0.3 0.3 Chaco 0.6 0.0 0.0 0.2 0.3 0.3 Corrientes 3.6 0.0 0.6 1.0 1.0 1.1 Entre Rios 1.2 0.0 0.1 0.3 0.3 0.5 Municipality of Buenos Aires 1.7 0.0 0.2 0.4 0.4 0.7 Salta 1.8 0.1 0.2 0.5 0.5 0.6 Santa Cruz 0.3 0.0 0.0 0.0 0.0 0.2 Tucuman 2.9 0.1 0.4 0.8 0.8 0.97 N.P.C.U. 0.0 0.0 0.0 0.0 0.0 0.0 Total a/ 13.1 0.2 1.5 3.5 3.6 4.60 N.P.C.U. = National Project Coordination Unit '/ Totals may not add due to rounding. E. Project Sustainability 4.8 The effect of the proposed project on total sector costs and the ability of the participating provincial governments to sustain the expenditures that will result from project implementation are important questions. Annex D, Tables D. 13-D.20 show projected recurrent spending for education that would result from the project for the period 2000 through 2010. Recurrent expenditures during this period are expected to range from US$200,000 per year in the Province of Buenos Aires to US$6.4 million in the Province of Entre Rios. From the point of view of sustainability, these data show that additional recurrent expenditures would represent in most cases less than 1 percent of the estimated sector budget projected for the year, equivalent to less than 5 percent of the forecast secondary education budgets of provincial education ministries. This increase is within the financial capacity of the provinces, especially when considering the importance provincial governments attach to the education sector. 4.9 The project will also lead to several categories of savings and economic benefits that will help offset the increased recurrent costs. As presented in Annex E, under the assumptions stated, estimates of partial benefits that will accrue to the project provinces would be on the order of US$442 million per year around the year 2000 and beyond, once the project is in operation and its programs take effect. These estimated benefits include savings from reduced repetition (US$20.6 million), incremental earnings of students who otherwise would not complete the secondary level (US$17.2 million), an improvement in student/teacher ratio from 7:1 to 9:1 (US$350 million), and a five percent reduction in administrative costs of Provincial Ministries of Education (US$2.7 million).  - 28 - V. PROJECT IMPLEMENTATION AND MANAGEMENT A. Status of Preparation 5.1 Consultants hired for the preparation of various project components and to provide assistance to the Provincial Ministries of Education (PMEs) were financed by grant funds from the Japanese Government. Each project component and subcomponent is consistent with the Government and Bank's sector policies, objectives, and strategies. At the national level project preparation was coordinated by the National Project Coordination Unit (NPCU), already established for the (First) Decentralization and Improvement of Secondary Education Project, under the Subsecretariat of Programming and Education Management (SUPEM) which, in turn, reports to the Secretariat of Educational Programming and Evaluation of the National Ministry of Culture and Education (NMCE). At the provincial level, Provincial Project Preparation Units (PPPUs) were established in the PMEs, and prepared their respective provincial subprojects with the technical assistance of the NPCU. The Bank provided substantial technical assistance to project preparation at both the national and the provincial levels. B. Implementation Schedule 5.2 The project is expected to be implemented over a five-year period, from January 1996 to December 2000. The NPCU, the Provincial Project Coordination Units (PPCUs), and the Bank would update and review the implementation schedules during the annual reviews (see para. 5.20). The implementation schedule is shown in Annex I, while yearly implementation targets (including a monitoring indicators matrix) are shown in Annex J. C. Project Management 5.3 Project implementation would be carried out within the existing organizational structures of the NMCE and PMEs, supported by project coordination units at the national and provincial levels. At the national level, project implementation would be coordinated by the existing NPCU, which would be strengthened. As in the first project, the overall responsibility for project implementation will remain with the Secretariat of Educational Programming and Evaluation, while the SUPEM will be responsible for project execution and coordination. Provincial subproject implementation would be coordinated by the PPCUs, which will consist of a small management structure with programming and service functions. These functions will include: (a) planning, programming, monitoring, and evaluation of subproject activities; (b) procurement of civil works, goods and services; (c) hiring of technical assistance and personnel; (d) budgeting, financing, disbursement and accounting of the subprojects; and (e) hiring of independent auditors satisfactory to the Bank. The Project Coordinator will report to the provincial government's Minister of Education. The PPCU will be staffed by personnel from within the existing ministerial structures, and additional personnel will be financed by the project. Annex H describes the project structures as well as NPCU and PPCU functions, responsibilities and staffing. Chart H. 1 shows the organizational structure for project management and  - 29 - implementation. Table H. 1 is a provisional distribution of functions and responsibilities among the Bank, the national government, the provincial governments, the NPCU, and the PPCUs. During negotiations the government confirmed the distribution of responsibilities explained in Table I. 1. Agreement was reached that the Provincial Ministries of Education would maintain the PPCU staff or similar qualified professionals during subproject execution. The establishment and staffing of PPCUs organization in at least one province is a condition of project effectiveness. The remaining provinces also have to take similar action as a condition of disbursement of their respective subprojects, within eight months of the project effectiveness date. 5.4 The NMCE would be responsible for coordination with the Bank and other federal ministries. The NPCU would have responsibility for the following areas: (a) coordinating overall project implementation and providing technical assistance to the provinces; (b) serving as the technical, administrative, and operational liaison with the World Bank during the life of the project; (c) monitoring project execution according to the project monitoring matrix described in Annex J, Tables J.2. 1-J.2.9; (d) preparing administrative and technical guidelines and procedures required for project implementation; (e) submitting to the Bank disbursement applications for civil works, goods, and consulting services; (f) facilitating project supervision by the Bank; and (g) periodically reporting to the NMCE and the Bank on project implementation. PPCUs on the other hand would be responsible for: (a) coordinating and supervising implementation of their respective subprojects; (b) coordinating and administering the bidding procedures for civil works, goods, and services according to their subproject implementation schedule; (c) submitting to the NPCU disbursement applications for civil works, goods, and consulting services; (d) coordinating PPCU activities with PMEs, subprovincial offices, NGOs and other participating entities; and (e) periodically reporting to the provincial Ministers of Education and the NMCE on project implementation. Project coordinators would be assisted in policy and monitoring by a Project Consultative Council (PCC). The PCC would consist of the national Minister of Education or a representative, the Secretary of Educational Programming and Evaluation, and the provincial Ministers of Education from all project provinces. The main responsibility of the PCC would be to analyze policy and strategy, monitor project implementation targets, and resolve any implementation or organizational problems that may arise. Annex H, Table H.2 describes in more detail the staffing requirements of each PPCU. Salaries of staff employed by the different subprojects would be fully paid out of project funds. The resolution establishing the Project Consultative Council (Instancia de Consulta Institucional), will be promulgated prior to project effectiveness. 5.5 Loan Arrangements. The proceeds of the loan will be on-lent from the Ministry of Economy to the Provincial Governments who will have the obligation to repay to the Federal Government, under the same terms and conditions as the Bank loan. To this effect, a subsidiary loan agreement, satisfactory to the Bank, will be signed between the Ministry of Economy, NMCE, and each participating province. These subsidiary loan agreements will include a description of the provinces' financial and project obligations as well as provisions for withdrawals, conditionalities, remedies, and bearing of the foreign exchange risk. During negotiations the Bank reviewed the final draft subsidiary agreements between the Ministry of Economy, the  - 30 - NMCE and the PMEs. The subsidiary agreements will contain provisions regarding the possibility of using co-participaci6n funds to meet provincial counterpart funding obligations for the project, in cases when these are not readily made available. Signed subsidiary agreements approved by the legislature in at least one province is a condition of loan effectiveness. The remaining provinces will fulfill this condition for disbursement of their respective subprojects, within eight months of loan effectiveness. 5.6 To ensure a better implementation the loan agreement will include the possibility to reallocate unused funds which could become available if a participating province: (i) had not signed the subsidiary loan agreement within the eight months period following the loan effectiveness; (ii) requires the reduction of the amount of its subloan; or (iii) had disbursed less than 20 percent of its subloan after a period of 30 months after loan effectiveness. In either case the National Ministry of Education, in agreement with the Bank, could propose the use of the available funds to finance: (i) a subproject of a replacing province, under the same conditions as the present participating provinces; (ii) a third group of provinces, which were not yet covered neither by the Decentralization and Improvement of Secondary Education project (DISE), or the proposed Decentralization and Improvement of Secondary Education and Polymodal Education Development project (DISEPED). In this second alternative the borrower would: (i) execute the project on behalf of the selected third group of provinces; (ii) provide the counterpart funds with resources allocated in the NMCE's annual budget; (iii) submit to the Bank appraisal the subproject of the selected third group province; and (iv) sign a subsidiary loan agreement, satisfactory to the Bank, with the selected third group provinces specifying conditions for the repayment of the subloan. D. Procurement 5.7 The project would involve procurement of civil works, equipment, furniture, teaching materials and equipment, consulting services, and training. Procurement of goods, works and services, subject to Bank financing, would be carried out by the eight PPCUs. Although procurement would be implemented in a decentralized manner, all provinces would follow the same Bank guidelines and would be assisted by the NPCU, in order to assure that the same methods, procedures and criteria would be followed by each province. Five NPCU staff would be in charge of procurement activities, supervising the procurement units of the PPCUs, and assuring that the Bank specifications would be fully satisfied. At the provincial level, each PPCU would have at least three staff in charge of implementing procurement activities. Criteria to hire these specialists have been agreed between the NPCU and the Bank, and the NPCU would supervise the hiring of these specialists in order to ensure that they have the required skills. No recent assessment of procurement procedures in Argentina has been carried out. However, there is no significant inconsistency between Federal and Provincial procedures and Bank guidelines. Procurement methods would require documents and procedures as follows: (a) International competitive bidding (ICB) would require the use of Bank issued standard bidding documents, which are mandatory. Under ICB,  - 31 - domestic preference may be applied, in accordance with Bank guidelines for the procurement of goods; (b) Limited international bidding (LIB) would also require the use of Bank- issued standard bidding documents; (c) National competitive bidding (NCB) would be carried out using standard bidding documents acceptable to the Bank; (d) Local shopping would be carried out according to procedures acceptable to the Bank, and will require a minirmum of three price quotations; (e) Selection and appointment of consultants would be done in accordance with Bank guidelines for the use of consultants (August 1981). The Bank standard form of contract is mandatory for time-based and lumpsum based consulting services. Model letter of invitation would be also used for the selection of consulting firms. (f) During negotiations the Bank would seek an agreement on the use of the aforementioned standard procurement documents and inform the borrower that any proposed change to Bank standard procurement documentation should be kept to essential aspects and would require approval by the Bank. 5.8 Table 5.1 summarizes procurement methods for the proposed project. Procurement for the different categories to be financed with the Bank loan would comply with the procedures stated below. 5.9 Civil Works. The project would allocate US$53.2 million, or 32 percent of total project cost, mostly to rehabilitate and expand school facilities. Only about 10 percent of these resources would be assigned to rebuild schools and construct new facilities. Hence, no contracts greater than US$5 million are expected. Contracts for works expected to cost between US$300,000 and US$5 million, with an aggregate amount of about US$40.3 million, or approximately 25 percent of total project cost, would be procured through NCB procedures. Contracts for small works, expected to cost less than US$300,000 per contract and about US$12.9 million in aggregate, or around eight percent of total project cost, would be procured under lumpsum, fixed price contracts, awarded on the basis of quotations obtained from at least three qualified domestic contractors in response to a written invitation. 5.10 Goods. (a) Vehicles, Informatics (computers, peripheral equipment, computer software), and communications (fax and photocopying) equipment in packages of US$100,000 or more, will be procured on the basis of limited international bidding (LIB) procedures among firms that have established maintenance services in the country. The estimated amount for this bidding procedure would reach a total amount of US$7.5  - 32 - million, or 5 percent of total project cost. Packages to cost below US$100,000 would be procured through local or international shopping, in line with Bank requirements, and are expected to total US$3 million, or about 2 percent of total project cost. A total of 12 vehicles are expected to be procured during the life of the project. (For distribution by year and province see Annex J, Table J.2.1 to J.2.9). (b) Furniture, training materials, books, teaching materials/equipment in packages of US$250,000 or more would be procured following ICB procedures. Textbooks will be awarded on the basis of two-step ICB procedures in accordance with Bank guidelines for all contracts valued above US$250,000 each, following the procedures indicated in para. 3.12. The aggregate for these packages would be approximately US$13 million, or 8 percent of total project cost. Packages valued between US$100,000 and US$250,000, aggregating to US$17.2 million, or 10 percent of total project cost, would be procured through NCB procedures. Packages below US$100,000 in value would be procured through local shopping in line with Bank requirements. These packages would total about US$5.3 million, or approximately 3 percent of total project cost.  - 33 - Table 5.1: Procurement Methods by Category9/ (US$ million) Categories ICB NCB Other NBF Total Works - 40.3 12.9 b/ - 53.2 (24.2) (7.8) (32.0) Informatics & Communication Equipment, Vehicles, Furniture, Training Materials, and Didactic 13.0 17.2 15.8 c/ - 46.0 Materials/Equipment (8.8) (11.6) (10.7) (31.1) Consultant Services - - 38.3 - 38.3 (33.5) (33.5) Scholarships - - 2.1 - 2.1 (2.1) (2.1) School Based Grants - - 2.5 - 2.5 (2.5) (2.5) Project Implement. Expenditures d/ - - 8.8 e/ - 8.8 (8.7) (7.8) Land - - 0.4 0.4 (0.0) (0.0) Incremental Recurrent Expenditures f/ - - 13.1 g/ - 13.1 (6.5) (6.5) Total 13.0 57.5 93.5 0.4 164.4 (8.8) (35.9) (70.8) (0.0) (115.5) a/ Totals include taxes and contingencies. Amounts in parentheses show allocation of loan proceeds. b/ Small works procedures up to US$12.9 million c/ Limited international bidding (LIB) up to USS7.5 million, and shopping. d/ Includes expenditures required during project implementation such as: fares and perdiems for training and project coordination, office materials, office rentals, utilities, publications and promotion, and bidding expenditures. e/ Shopping f/ Includes incremental recurrent expenditures originated by the project such as salaries, building & equipment maintenance, insurance, rentals, utilities, publications, and office materials. g/ Incremental recurrent salaries amount to US$2.7 million. Shopping would apply to about US$6.2 million and direct contracting to about US$4.2 million. 5.11 Consultant Services. The project would allocate: (a) US$13.8 million for technical assistance and consultants services; (b) US$6.7 million for studies; (c) US$6.3 million for training consultants; (d) US$6.9 million for NPCU and PPCU personnel, and US$4.5 million for minor temporary assignments and support personnel. 5.12 The cost of land, where construction works will take place, will be entirely financed with Government counterpart funds. 5.13 Prior review. All prior review procedures would be undertaken by the Bank separately for each one of the eight provincial governments. Contracts would be subject to prior review by the Bank according to the following thresholds: (a) for all civil works, contracts valued above US$1 million; and for the first NCB civil work contract for each of the first three years of the project, for each province; (b) for vehicles, and informatics and  - 34 - communication equipment, all contracts valued US$100,000 equivalent or more; and (c) for furniture, training and teaching materials and/or equipment, all contracts valued above US$250,000. To the extent possible, consulting services will be awarded in the form of packages, with terms of reference always requiring prior review by the Bank. Furthermore, all documentation for the hiring of consulting firms for contracts valued at US$50,000 or more would be subject to prior review by the Bank. All documentation for the hiring of individual consultants for contracts valued at US$20,000 or more would also be subject to prior review by the Bank. It is expected that about 74 percent of the civil work contracts, representing approximately 45 percent of the total civil work costs will be subjected to Bank's prior review. For goods, prior review would apply to about 60 percent of the contracts, representing approximately 34 percent of the estimated costs for goods. All other contracts would be reviewed in the field by sampling on an ex-post basis, during Bank supervision missions. If it were determined that procurement was not carried out in accordance with agreed procedures, no expenditures for such items would be financed with proceeds from the loan and the Special Account would be reimbursed accordingly by the Borrower. Table 5.2 summarizes procurement review procedures. 5.14 Since Bank procurement procedures would be new for many of the Provincial Ministries of Education, the NPCU, with Bank support, would organize seminars and a support system to help the provinces execute procurement under their respective subprojects. The NPCU already has experience with Bank procurement procedures, acquired for the (First) Decentralization and Improvement of Secondary Education Project, and will provide guidance in accordance with the Bank guidelines, as well as the standard bidding documents and other documentation that will be necessary to implement procurement activities. At the provincial levels the PPCUs would seek advice and guidance with other Bank project implementation units, especially those of the Provincial Development I and II projects (Lns. 3280-AR 1991-AR, and 3877-AR, and 3994-AR). The final version of bidding documents for ICB and NCB and the letter of invitation for consultants has been agreed during negotiations.  - 35 - Table 5.2: Summary of Procurement Review Procedures Category Procedure Prior Bank Review Works More than US$5 million ICB All (if any) More than US$1 million-US$5 NCB All million US$300,000-US$1 million NCB First contract of the first three years for each province Less than US$300,000 Quotations None Goods Vehicles, Informatics & Communication Equipment US$100,000 or more LIB All less than US$100,000 Shopping None Furniture, training materials, and Teaching Materials/Equipment More than US$250,000 ICB All US$100,000 - US$250,000 NCB First contract of the first thrde years for each province. Less than US$100,000 Shopping None Consultant services Contracts with firms for US$50,000 or more All Less than US$50,000 TOR only Contracts with individuals for US$20,000 or more All Less than US$20,000 TOR only E. Accounts and Disbursements 5.15 The proceeds of the proposed loan are expected to be disbursed in accordance with the schedules shown in Table 5.3 and Annex I, over a period of five years. It has been assumed that the loan would become effective in January 1996, and that the project's estimated completion and closing dates would be December 31, 2000, and June 30, 2001 respectively. The disbursement period, shorter than the seven-year profile for Latin America, was determined after taking into account: a) the advanced status of project preparation; and b) strong national and provincial government commitment towards the project. The allocation of loan amounts and disbursement percentages are summarized in Table 5.3. Disbursements would be made on the basis of Statements of Expenditure (SOE) for all expenses except those covered by contracts requiring prior review by the Bank. Except for the first contract for each province for the first three years of the project for works, fumiture and teaching materials/equipment procured under NCB, SOEs will be used for contracts for: (a) civil works not exceeding US$1 million; (b) vehicles, informatics and communication equipment costing less than US$100,000; (c) fumiture and teaching materials/equipment not exceeding $250,000; and (d) consulting firms and individuals not exceeding $50,000 and $20,000 respectively. SOEs will be certified locally by the PPCU of  - 36 - the respective province. Disbursements for contracts requiring prior review would be fully documented. Relevant documentation in support of SOEs would not be submitted to the Bank, but would be retained by the NPCU. Copies of such documents would be supplied to the NPCU by the PPPUs and be made available to Bank supervision missions. The NPCU will develop a manual (using the World Bank's Disbursement Handbook as a guide) for use by the provinces explaining the procedures for reimbursement. This manual will indicate: (a) that at monthly intervals (the date to be determined between each PPCU and NPCU), each PPCU will submit a request for reimbursement of expenditures using a summary sheet (with evidence of payment) or statement of expenditure (in which case evidence of payment will be maintained by each PPCU); (b) how direct payment to suppliers and payment in foreign currencies will be effected; and (c) the procedures to be stipulated in the disbursement letter, and in accordance with technical assistance received during seminars mentioned below. The manual will also note that upon receipt of each request for reimbursement by the province, the NPCU will have two working days to request the transfer of funds or return the request with a detailed explanation of the reason for the return and changes needed to rectify the request. Since Bank disbursement procedures would be new for many of the Provincial Ministries of Education the NPCU, with Bank support, would organize seminars and a support system to help the provinces execute disbursement under their respective subprojects. The final version of flow of funds and replenishment schedules has been reviewed during negotiations. Retroactive financing is required to facilitate the timely start-up of the project, and to begin the gradual implementation of the information and student assessment systems, and the preparatory studies for curriculum development and school management. It was agreed that the Bank would finance, retroactively, up to US$5 million or about four percent of the loan amount, for expenditures incurred up to 12 months prior to loan signing and in accordance with Bank procurement guidelines. The mission agreed on a list of activities to be considered for retroactive financing, that would include: technical assistance, computer equipment and office equipment. Table 5.3: Allocation and Disbursement of IBRD Loan Amount of the Loan % of Allocated (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil Works 30,000,000 65% (2) Goods (Informatics and communication 30,000,000 80% equipment, vehicles, furniture, training materials, and didactic materials/equipment) (3) Consultants' services 26,000,000 90% (4) School-based grants and scholarships 4,000,000 100% (5) Incremental recurrent expenditures 5,000,000 50% (6) Project Implementation costs 6,800,000 90% (7) Unallocated 13,700,000 TOTAL 115,500,000  - 37 - Table 5.4: IBRD Loan Estimated Disbursement (US$ million) FY96 FY97 FY98 FY99 FY00 FY01 Annual 9.8 16.3 28.2 29.8 21.6 9.8 Cumulative 9.8 26.1 54.3 84.1 105.7 115.0 5.16 Special Account. To facilitate timely project implementation, the National Government would establish, maintain and operate, under terms and conditions satisfactory to the Bank, a special account in US dollars at a commercial bank acceptable to the Bank. To cover the average four-month loan allocation needed by each provincial subproject, the special account will have an authorized allocation of US$10 million. An initial deposit of US$5 million will be made available, and the full amount of the authorized allocation will be released when disbursed amounts reach a level of US$20 million. Subsequently, a specific project account with funds advanced by each respective government would be opened by each province at a branch of Banco de la Naci6n in the respective locality, or at another commercial bank acceptable to the Bank. This specific project account which will include counterpart funds will have an average flow of funds sufficient to cover expenditures for two months of operation. The NPCU would request the Bank to replenish the special account on the basis of standard disbursement procedures, and would replenish the provincial subsidiary accounts on a monthly basis upon PPCU's presentation of statement of expenditures or summary sheets. Withdrawals from the special account would be supported by sufficiently detailed documentation or SOEs in accordance with Bank disbursement procedures. F. Audits 5.17 Annual audits of the Special Account for the project (managed by the National Government), and each specific provincial project account, would be performed by the Auditorfa General de la Naci6n (AGN) which would be responsible for reviewing the audit plan, supervising the audit, ensuring timely reporting, and subcontracting, when necessary, independent auditors satisfactory to the Bank. The auditor will: (a) audit all Special Accounts, specific project accounts, SOEs, and summary sheets; (b) apply auditing standards and procedures satisfactory to the Bank that conform to generally accepted auditing practices; (c) carry out its auditing work in a timely manner (an annual report would be presented no later than six months after the end of each calendar year); and (d) render an audit opinion or provide reasons why such an opinion cannot be rendered. G. Project Monitoring, Evaluation, and Supervision 5.18 In line with project objectives, key efficiency and quality indicators (Impact Indicators, Annex J, Table J. 1) will be monitored to facilitate policy discussions and to track and support improvements in the overall efficiency and effectiveness of secondary education. To support spot-checking over the project's life in any of its subprojects and subcomponents, a detailed yearly implementation target matrix has been prepared (Monitoring indicators, Annex J, Tables J.2.1-J.2.9). Agreement has been reached on final impact indicators.  - 38 - 5.19 Overall monitoring and evaluation of the project would the responsibility of the NPCU. In order to increase project ownership and to supplement the Bank's scarce resources for supervision, the following arrangements have been agreed with the NPCU and provincial government's representatives: (a) the NPCU would play an active role in project supervision, including the review of TORs and other documentation necessary for project execution, prior to sending such documentation to the Bank for no objection; (b) adequate resources would be included in the project to allow the national government to conduct close supervision in each project province; and (c) the Bank would realize economies of scale by combining the supervision of this project with that of the (first) Decentralization and Improvement of Secondary Education Project. Supervision arrangements are expected to require a total of about 90 staff-weeks, approximately US$360.000 (Bank staff and consultants) during project execution. 5.20 Progress reports would be consolidated by the NPCU and sent to the Bank for review no later than five months after completion of each calendar year. These progress reports would include: (a) an annual progress report on project implementation; (b) a measure of the physical and impact objectives achieved against the monitoring and impact indicators shown in Annex J; and (c) an updated and revised project implementation schedule and action plans for the implementation of project components during the following year. An Implementation Completion Report would be prepared by NPCU and submitted to the Bank no later than six months after the closing date of the Loan. 5.21 The NPCU and the Bank would conduct joint annual implementation reviews no later than June 30th of each year to: (a) analyze the previous year's performance and budget execution; (b) analyze the proposed work plan and budget for the following year; and (c) discuss adjustments to be made in the project's implementation schedule. Agreement has been reached on the scope of the annual reviews of the subprojects. During negotiations it was agreed that project impact indicators would be reviewed and adjusted as necessary dring the first annual review of project implementation. This review would take into account the completion of the Sector Management Productivity Studies (SMPS) and the implementation of the corresponding action plan to address sector inefficiency. 5.22 No later than 30 months after loan effectiveness, and with prior approval of the terms of reference by the Bank, the NPCU, the PPCUs, and the Bank would conduct a Mid-Term Review to analyze project performance. Special attention would be paid to the implementation of the action plans, based on the recommendation of the Sector Management Productivity Studies (SMPS), to address sector inefficiencies. Progress in the implementation of these action plans will be assessed against the reviewed and adjusted project impact indicators (Annex J, Table J. 1). An action plan based on the results of the review would be implemented within three months of the review's completion. Agreement on the scope and content of the Mid-Term Review scope and content of the project Mid- Term Review has been reached. VI. EXPECTED BENEFITS AND RISKS A. Expected Benefits 6.1 The project is expected to lead to cost savings as a result of reducing the number of secondary education students repeating grades and/or dropping out of school. Other benefits  - 39 - include: (a) increased productivity as a result of a more educated and trainable labor force; (b) increased social mobility, especially for students living in deprived urban and less productive rural areas; and (c) enhanced sector efficiency, thus creating net savings for the education sector which could be reallocated to inputs which have a high impact on educational quality. A partial estimate of quantifiable benefits arising from the project is provided in Annex E. B. Risks 6.2 The risks associated with the project can be classified as direct and indirect. Direct risks are: (a) limited implementation capacity at both the national and provincial levels as well as limited sectoral experience with Bank-financed projects; and (b) slow implementation of new policy decisions arising from the FEL such as the new curriculum content. Indirect risks include macroeconomic difficulties that could burden the provinces' financial capacity to ensure the availability of counterparts funds. 6.3 Direct risks will be minimized by: (a) strengthening the NPCU established for the (First) Decentralization and Improvement of Secondary Education Project with additional technical staff to perform specific functions of monitoring and supervising the provincial subprojects in the field; (b) requiring coordination between the NPCU and the PPCUs, which would also have a small but highly qualified staff; (c) prior agreement with the NPCU and PPCUs on annual targets; and (d) prior agreement on technical assistance activities and training that will be supported by the project, including training in procurement, disbursements, and other topics related to project implementation. Indirect risks would be minimized by ensuring the availability of counterpart funds through the co-financing mechanisms in place between the Federal and provincial governments. These risks would be further mitigated by allowing for the reallocation of the project funds to a province not originally in the project, as explained in para.5.6. VII. AGREEMENTS REACHED AND RECOMMENDATIONS 7.1 During negotiations, agreement or assurances were reached with the Government of Argentina on the following: (a) Revised version of the impact indicators, on the basis of the Sector Management Productivity Studies (SMPS) for each province. (paras. 2.47, 5.17); (b) Revision and adjustment of the project impact indicators during the first annual project review, taking into account the recommendations of the SMPS and the implementation of the corresponding action plans (para. 5.21). (c) Final list of educational resources to be financed during the first year of the project (para. 3.12); (d) Final version of model bidding documents for ICB and NCB, and a letter of invitation for consultant services (para. 5.14);  - 40 - (e) Final version of flow of funds and replenishment schedules (para. 5.15); (f) Confirmation of annual auditing arrangements for the project (para. 5.17); and (g) Scope and content of the project Mid-Term Review, with special attention to the implementation of the action plans based on the recommendations of the Sector Management Productivity Studies, to address sector inefficiencies (para. 5.21). 7.2 During negotiations. agreement or assurances were reached with the Provincial Government of Argentina on the following: (a) Provision of counterpart funds each year during provincial subprojects implementation (para.4.6); (b) Agreement to maintain the PPCUs staff or similarly qualified professionals during project execution (para.5.3). 7.3 The following are conditions of effectiveness: (a) The resolution issued by the National Ministry of Education establishing the Project Consultative Council (Instancia de Consulta Institucional) (para. 5.4); (b) Action Plan based on the recommendations of the SMPS, of at least one province (para. 2.47); (c) Signed subsidiary loan agreement in the same province approved by the respective legislature (para.5.5). (d) The PPCU in the same province has been established to the satisfaction of the Bank (para. 5.3). 7.4 The following are conditions of disbursement to be met within eight months from loan effectiveness date: (a) Signed subsidiary loan agreements approved by provincial legislatures for the remaining provinces (para. 5.5). (b) Actions Plans, based on the recommendations of the SMPS, for these same provinces (para. 2.47). (c) The PPCUs for these same provinces have been established to the satisfaction of the Bank (para.5.3).  - 41 - B. Recommendation 7.5 Subject to the above assurance and conditions, the proposed project would constitute a suitable basis for a Bank loan of US$115.5 million for the Argentine Republic, repayable in 15 years with five years of grace using a level repayment of principal pattern.   - 42 - ANNEX A: THE PROJECT PROVINCES' I . Unless otherwise indicated, the data sununarized in this Annex is based on the tables presented in Annexes B and D.   - 43 - THE PROJECT PROVINCES INTRODUCTION 1. The eight provinces included in the proposed project are Buenos Aires Province, Corrientes, Chaco, Entre Rios, Salta, Santa Cruz, Tucuman, and the Municipality of Buenos Aires. As in the (First) Decentralization and Improvement of Secondary Education (Loan n. 3794-AR) approved by the Board of Directors of the World Bank in September 14, 1994, these provinces have been selected on the basis of criteria established jointly by the Bank and the National Minister of Culture and Education (NMCE). These criteria were to: (i) have signed a Transfer Agreement for secondary schools; (ii) indicate commitment to participate in National Management Information System (NMIS) and the National Student Assessment System (NSAS); (iii) have prepared a satisfactory diagnosis of the provincial education sector and a project proposal; (iv) demonstrate willingness to carry out reforms to improve productivity and efficiency in the sector and commitment to implement the Action Plan based on the recommendation of the Sector Management Productivity Study; and (v) have significant need to improve coverage and quality as reflected by educational indicators. Compared with those included in the first project2, the participating provinces of this proposed Second Decentralization and Improvement of Secondary Education Project, could be judged to have weaker institutional and financial capacity, and to require more preparation time. Nevertheless, this second group of participating provinces is also more heterogeneous, as it also includes the Province and the Municipality of Buenos Aires. 2. With regard to other characteristics, the provinces are also quite distinct. They are geographically disparate: Santa Cruz, for example, is in the extreme south, while Salta, and Tucuman are in the northwest. Population density and the overall size of the secondary school system also varies enormously, with the Province of Buenos Aires and the Municipality of Buenos Aires having by far the largest number of enrollments and schools. The Municipality of Buenos Aires is responsible for 203.407 secondary enrollments, for example, compared to Santa Cruz with only 14,564. The provinces also differ with respect to institutional capacity and poverty indicators. The Municipality of Buenos Aires and the Province of Buenos Aires are among the most advanced in terms of institutional capacity, but the Province of Buenos Aires, for example, also includes a large percentage of households with unsatisfied basic needs. The attached profiles included in this annex provide additional background information on each province. BUENOS AIRES PROVINCE 1. Buenos Aires is the largest province in Argentina with an area of 307,571 square kilometers and a population of 12,594,324 in 1991. The province can be divided into two areas: the metropolitan area ("Conurbano"), containing 63 percent of the population, and administratively divided into 19 Departments, and the countryside which includes several major municipalities. 2. Provinces included in the (First) Decentralization and Improvement of Secondary Education Project are: C6rdoba, La Pampa, Mendonza, Missiones, Neuquen, Rio Negro and Santa Fe.  44 - ANNEX A 2. Enrollment, Teachers and Schools. In 1991, 2,584,842 students were enrolled in the school system, of which 32.5 percent were at the secondary level. The public subsector accounted for 71 percent of total secondary education enrollment and 78 percent of total secondary teachers. Table A. 1 below provides additional information. Table A. 1 Buenos Aires: Enrollment, Teachers, and Schooh Secondary Education (Grades 8-12/13) - 1993 Enrolhment Teachers Schools Public 598,939 49,162 1,065 Private 240,102 13,925 792 Total 839,041 63,087 1,857 3. Quality and Efficiency Indicators. The transition rate from primary to secondary education was as low as 54 percent in 1992. Furthermore, less than 30 percent of students complete secondary school. Repetition and drop-out rates averaged 15 and 54 percent respectively in 1993. The cumulative effect of repetition and drop-outs account for an average loss of 69 percent of the students in every cohort. Repetition and drop-out rates are especially marked during the first two years of secondary education. The student/teacher ratio in public secondary education was 13.3 according to provincial data for 1993. 4. Education Financing. From 1991 to 1993 the province's total revenues increased by 90 percent. Meanwhile, education spending increased by 43 percent. In 1992, education spending was approximately 25 percent of total public spending. Lastly, in 1993, personnel as a share of total education expenditures was 85 percent and per-student expenditure was US$324. CHACO 1. Chaco, with an area of 99,633 square kilometers, had a population of 839,677 in 1991, highly concentrated in the urban areas. The province's economic crisis over the past several years, has resulted in a strong migration to the provincial Capital region and to neighboring provinces. 2. Enrollment, Teachers and Schools. In 1993, 255,836 students were enrolled in the school system, of which only 20 percent were at the secondary level. The public subsector accounted for 91 percent of total secondary education enrollments and 92 percent of total secondary teachers. Table A.2 below provides additional information. Table A.2 Chaco: Enrolhment, Teachers, and Schools Secondary Education (Grades 8-12/13) - 1993 Enrollment Teachers Schools Public 46,471 6,579 139 Private 4,426 576 23 Total 50,897 7,155 162  -45 - ANNEX A 3. Quality and Efficiency Indicators. The transition rate from primary to secondary education was 95 percent in 1992. Despite this very high transition rate from primary to secondary, less than 30 percent of students complete secondary school. Repetition and drop- out rates averaged 17 percent and 46 percent respectively in 1992. The cumulative effect of repetition and drop-out accounts for an average loss of 63 percent of the students in every cohort. Repetition and drop-out rates are especially marked during the first two years of secondary education. The student/teacher ratio in public secondary education was 7.1 percent according to provincial data for 1993. 4. Education Financing. From 1991 to 1993 total revenues of the province increased by 57 percent. Meanwhile, education spending increased 61 percent. In 1993, education spending was approximately 32 of total public spending. Lastly, personnel as a share of total education expenditures was 96 percent, and the per-student expenditure was almost US$1,189 in 1993. CORRIENTES 1. Corrientes, with 795,594 inhabitants in 1991, has been losing population due to migration to other provinces. With 88,886 square kilometers, Corrientes has its population concentrated in urban areas (82 percent in 1991). 2. Enrollment, Teachers and Schools. Education statistics broken down by public and private subsector are not available for secondary education. In 1991, 195,107 students were enrolled in the secondary school system, of which 48,749 (25 percent) were at the secondary level. The total number of teachers reached 6,870 in 1993. 3. Quality and Efficiency Indicators. The transition rate from primary to secondary education was approximately 65 percent in 1992, lower than in many others provinces under the project. Only about 22 percent of students complete secondary school. Repetition averaged 16 percent in 1993 and the cumulative effect of repetition and drop-out account for a loss of 75 percent of each student's cohort. Repetition and drop-outs are especially marked during the first two years of secondary education. The student/teacher ratio in public secondary education is 7.10, according to provincial data for 1993. 4. Education Financing. From 1991 to 1993 the provinces total revenues increased by 45 percent. Meanwhile, education spending increased by 47 percent. In 1993, education spending was nearly 24 percent of total public spending. Lastly, personnel as a share of total education expenditures was almost 99 percent and the per-student expenditure in public secondary education was US$718. ENTRE RIOS 1. Entre Rios, whose area is 78.781 square kilometers, is divided into 16 Departments. In 1991 the province's population was 1,020,257, of which 77 percent lived in urban areas. The population distribution is unequal, reaching 55 inhabitants per square kilometer in the Capital region, compared with a provincial average of 13.  - 46 - ANNEX A 2. Enrollment, Teachers and Schools. In 1991, 312,250 students were enrolled in the school system, of which 25 percent were at the secondary level. The public subsector accounted for 79 percent of total secondary education enrollments and for 73 percent of total secondary teachers. Table A.3 below provides additional information. Table A.3 Entre Rios: Enrollment, Teachers, and Schools Secondary Education (Grades 8-12/13) - 1993 Enrollment Teachers Schools Public 62,108 7,136 202 Private 16,389 2,463 76 Total 78,497 9,599 278 3. Quality and Efficiency Indicators. The transition rate from primary to secondary education was approximately 95 percent in 1992. Despite this very high transition rate from primary to secondary, only about 12 percent of students complete the secondary level. Repetition and drop-out rates averaged 9 and 47 percent respectively in 1993. The cumulative effect of repetition and drop-outs account for an average loss of almost 57 percent of the students in every cohort. Repetition and drop-out rates are especially marked during the first two years of secondary education. The student/teacher ratio in public secondary education is 7.9, according to provincial data for 1993. 4. Education Financing. From 1991 to 1993 total provincial revenues increased 74 percent. Meanwhile, education spending increased 69 percent. In 1993 education spending was nearly 29 percent of total public spending. Lastly, personnel as a share of total education expenditures was about 83 percent, and the per-student expenditure averaged US$1,418. BUENOS AIRES MUNICIPALITY 1. The Municipality of Buenos Aires (MCBA), with an area of 200 square kilometers, and a population of 2,958,829 in 1991 (9 percent of the total Argentine population), is the second largest concentration of urban population in Argentina. The Federal Capital has a relatively aged population, whose numbers have not increased since 1947. 2. Enrollment, Teachers and Schools. In 1993, 625,403 students were enrolled in the school system, of which 35 percent were at the secondary level. The city of Buenos Aires is the region in which the private sector has the most important role in the provision of secondary education. According to data from 1991, the public subsector accounted for 52 percent of total secondary education enrollment and less them a half of total secondary teachers (49 percent), as shown in Table A.4 bellow.  - 47 - ANNEX A Table A.4 MCBA: Enrollment, Teachers, and Schools Secondary Education (Grades 8-12/13) - 1993 Enrollment Teachers Schook Public 104,918 11,842 184 Private 96,497 12,512 363 Total 201,415 24,354 547 3. Quality and Efficiency Indicators. The completion rate in secondary education was 59 percent in 1991, one of the highest in the country, probably due to the weight of the private enrollments at this level. Provisional data for 1993 indicate a repetition and drop-out rates averaging 8 percent and 38 percent, respectively, for the whole level. The student/teacher ratio in the public secondary education is 6.9 according to municipal data for 19933. 4. Education Financing. From 1991 to 1993 the province's total revenues increased 81 percent. Meanwhile, education spending increased 189 percent. In 1993, education spending was nearly 26 percent of total public spending. Lastly, personnel as a share of total education expenditures was approximately 75 percent and the per-student expenditure in public secondary education was US$1,423. SALTA 1. Salta, with 155,488 square kilometers, is divided into 23 Departments. In 1991 the population was 866,771, most of which was concentrated in the urban areas. From 1980 to 1991 the province's population increased by 30.7 percent. 2. Enrollment, Teachers and Schools. In 1993, 303.449 students were enrolled in the school system, of which 27 percent were at the secondary level. The public subsector accounted for 78 percent of total secondary education enrollment and 74 percent of total secondary teachers. Table A.5 below provides additional information. Table A.5 Salta: Enrollment, Teachers, and Schools Secondary Education (Grades 8-12/13) - 1993 Enrollment Teachers Schools Public 58,615 7,530 190 Private 16,519 2,510 70 Total 75,134 10,040 260 3. The Municipality of Buenos Aires had a very small secondary system of its own before the transfer and, in 1992, received about 500 former national secondary schools. Given the magnitude of the transfer and the unreliability of the national information system at this time, the efficiency and financial data summarized in paras. 3 and 4, are based on a preliminary survey undertaken with a sample of the transferred secondary schools.  - 48 - ANNEX A 3. Quality and Efficiency Indicators. Data from 1992 indicate a transition rate from primary to secondary education of approximately 97 percent, one of the highest of the project provinces. However, only about 21 percent of students complete secondary school. Repetition and drop-out rates averaged 15 and 43 percent respectively in 1993. The cumulative effect of repetition and drop-out account for an average loss of almost 58 percent of the students in every cohort. Repetition and drop-out rates are especially marked during the first two years of secondary education. The student-teacher ratio is 6.8 in public secondary education, according to provincial data for 1993. 4. Education Financing. From 1991 to 1993, total provincial revenues increased by 80 percent. Meanwhile, education spending increased 69 percent. In 1993, education spending was nearly 22 percent of total public spending. Lastly, personnel as a share of total education expenditures was more than 88 percent, and the per-student expenditure averaged US$780.  -49- ANNEX A SANTA CRUZ 1. Santa Cruz is the country's most southerly province with the exception of Tierra del Fuego. With 243,943 square kilometers and a population of 159,839 in 1991, Santa Cruz is the second largest province in terms of size, and the most sparsely populated. More than 50 percent of the province's population is concentrated in the capital, hence the average for the rest of the province is as low as 0.1 inhabitant per square kilometer. Nevertheless, the population has increased significantly over the last several years (29.4 percent from 1980 to 1991), due mainly to immigration from Chile and other provinces. More than 42 percent of the Argentineans presently living in Santa Cruz were born elsewhere in the country. 2. Enrollment, Teachers and Schools. In 1993, 49,966 students were enrolled in the school system, of which 29 percent were at the secondary level. The public subsector accounted for 89 percent of total secondary enrollments and 89 percent of total secondary teachers. Table A.6 below provides additional information. Table A.6 Santa Cruz: Enrollment, Teachers, and Schools Seondary Education (Grades 8-12/13) - 1993 Earollment Teachers Schools Public 13,015 2,610 54 Private 1,549 325 8 Total 14,564 2,935 62 3. Quality and Efficiency Indicators. The transition rate from primary to secondary education was approximately 98 percent in 1992. Despite this very high transition rate from primary to secondary, only about 35 percent of students complete secondary school. This loss of 65 percent of students of each cohort is due to repetition and drop-outs which in 1993 averaged 16 percent and 75 percent, respectively, for the whole level. Repetition and drop- out rates are especially marked during the first two years of secondary education. The student/teacher ratio is 4.98 in the public school system as a whole, according to provincial data from 1993. There are no available data on student/teacher ratios for secondary education. 4. Education Fmancing. From 1991 to 1993 the province's total revenues increased by 101 percent. Meanwhile, education spending increased 70 percent. In 1993, education spending was 23 percent of total public spending. Lastly, personnel as a share of total education expenditures was approximately 74 percent and the per-student expenditure in public secondary education averaged US$1,958. TUCUMAN 1. Tucuman, with a population of 1,142,105 in 1991 and an area of 22,524 square kilometers, is one of the smallest Argentinean provinces. Tucuman also has one of the highest population densities of Argentina. The province is divided into 17 Departments.  -50- ANNEX A 2. Enrollment, Teachers and Schools. Education data broken down by private and public subsector are not available in this province. In 1993, a total of 360,141 students were enrolled in the school system, of which 58,486 (16 percent) were at the secondary level. The total number of schools and teachers at the secondary level were 183 and 7,366 respectively, in 1993. 3. Quality and Efficiency Indicators. Repetition and drop-out rates averaged 9 and 44 percent respectively in 1993. The cumulative effect of repetition and drop-outs account for an average loss of 53 percent of students in every cohort. Drop-out and repetition are especially significant during the first two years of secondary education. There are no data regarding the student/teacher ratio. 4. Education Fmancing. From 1991 to 1993 total revenues of the province increased 51 percent. Meanwhile, education spending increased 69 percent during the same period. In 1993, education spending was nearly 28 percent of total public spending. Lastly, personnel expenditures as a share of total education spending was almost 90 percent, and the per- student expenditure on public secondary education averaged US$376.  - 51 - ANNEX B: SECONDARY EDUCATION EFFICIENCY ' I. The very poor satistical tracking systems at both the national and provincial levels in Argentina have resulted in a dearth of reliable educational statistics. The provinces under consideration tend to be particularly weak in this respect. This annex presents available date from both national and provincial sources. In addition, the National Ministrq of Education haa recently completed a comprehensive educational census. New data from the census should be available by December 1995.   ANNEX B - 52 - Table B. 1: Comparative Education Indcators Educational Enrollment Ratios Illiterate Popul. Expenditures Pro-School as % of 15+ as Percent of Ed.n* Primary Ed. Secondary Ed. Higher Ed. Total Female GNP Gov. Exp. Net Gross Net Gross Net Gross ARGENTINA 1975 NA NA 2.5 9.5 N/A 106 96 54 42 27.2 1980 6.1 NA 3.6 15.1 28 106 90 56 38 21.6 1987* 4.5 5.0 4.0 8.9 39 115 90 74 56 40.8 BOLIVIA 1975 36.8 NA 3.5 NA NA 85 73 31 21 11.2 1980 NA NA 4.4 25.3 17 87 72 38 16 12.6 1987* 25.8 34.9 3.1 20.1 16 97 78 37 27 16.6 BRAZIL 1975 24.3 NA 3.0 NA NA 88 71 26 9 10.7 1980 25.5 NA 3.5 NA 14 99 81 34 14 11.9 1987' 22.3 23.5 4.5 17.7 27 95 84 38 15 10.9 CHILE 1975 NA NA 4.1 12.0 NA 112 94 48 34 15.6 1980 8.9 NA 4.6 11.9 24 112 98 53 13.2 1987* 5.6 NA 3.6 15.3 32 102 89 74 56 17.8 COLOMBIA 1975 NA NA 2.2 16.4 NA 118 39 8.0 1980 14.8 NA 1.9 14.3 10 128 75 44 10.6 1987' 11.9 12.9 2.7 22.4 14 122 73 56 13.6 ECUADOR 1975 NA NA 3.2 25.9 NA 101 78 39 28 26.9 1980 19.8 NA 5.6 33.3 6 113 51 36.5 1987* 17.6 20.2 2.8 21.3 12 114 56 29.3 PARAGUAY 1975 NA NA 1.6 14.0 NA 100 83 19 16 6.7 1980 12.5 NA 1.5 16.4 5 103 87 26 8.5 1987* 11.8 14.6 1.5 16.7 8 101 88 29 24 8.8 PERU 1975 27.5 38.2 3.5 17.5 NA 113 46 14.6 1980 18.1 26.1 3.2 12.8 25 114 86 59 19.4 1987* 13.0 20.1 2.4 16.4 29 118 87 64 25.5 URUGUAY 1975 6.1 NA 2.2 10.0 NA 107 60 16.0 1980 NA NA 2.6 9.3 26 106 60 17.3 1987* 4.6 4.1 3.1 15.1 23 109 91 77 47.8 VENEZUELA 1975 NA NA 4.5 NA NA 100 81 45 35 18.1 1980 15.3 NA 4.4 14.7 32 109 86 41 34 21.4 1987* 13.1 14.5 3.5 16.6 37 110 89 54 44 26.5 Sources: UNESCO Statistical Yearbook, 1990; World Bank, Social Indicators Data Base ( 1987 or latest (" ) Enrollment as a percentage of children aged 3-5. Argentina - 1991 Data.  - 53 - ANNEX B Table B.2: Evolution of Enrollments by Educational Level, Selected Years Enrollment Year Primary Secondary Higher/Non- University Total University 1970 3,632,000 975,000 38,000 237,000 4,882,000 1980 4,111,000 1,327,000 94,000 398,000 5,930,000 1991 5,866,701 2,160,410 260,324 816,888 9,104,323 Source: Ministry of Education Data. Table B.3: Average Annual Enrollment Growth Rate, in Percent 1970-1980 1980-1991 1970-1991 Primary 1.2 3.2 2.3 Secondary 3.1 4.4 3.8 Higher/Non-University 9.1 9.3 9.2 University 5.1 6.5 5.9 Total 1.9 3.9 3.0 Source: Ministry of Education Data.  Table B.4: Public and Private Enrollments, Teachers, and Schools Nationwide By Level, 1991 Enrollment Teachers Schools Level Public Private % Total Public Private % Total Public Private % Total Pre-School 630,832 283,854 31 914,686 33,851 14,969 31 48,820 6,907 2,786 29 9,683 Primary 4,795,245 1,071,456 18 5,866,701 253,911 52,461 17 306,372 21,791 2,720 11 24,511 Secondary 1,550,824 609,586 28 2,160,410 206,782 76,801 27 283,583 3,995 2,516 39 6,511 Sub-Total 6,976,451 1,964,896 22 8,941,797 494,544 144,230 23 638,775 32,693 8,022 20 40,705 Higher/Non-University 185,969 74,355 29 260,324 26,116 14,293 35 40,409 749 460 38 1,209 University 731,768 85,120 10 816,888 34,900 14,300 29 49,200 33 29 47 62 Sub-Total 917,737 159,475 14 1,077,212 61,016 28,593 32 89,609 782 489 38 1,271 t Total 7,894,638 2,124,371 21 10,019,009 555,560 172,824 24 728,384 33,475 8,511 20 41.986 Source: Ministry of Education Data, 1991. 2 m  Table B.5: Enrollments, Teachers and Schools Project Provinces, 1993 Enrollment Teachers Schools Province All Levels Secondary % Sec. All Levels Secondary % Sec. All Levels Secondary % Sec. Buenos Aires 2,584,842 839,041 32% N.A. 63,087 N.A. N.A. 1,857 N.A. Corrientes 195,107 48,749 25% 26,340 6,870 26% 1,316 129 10% Chaco 255,836 50,897 20% 20,864 7,155 34% 1,721 165 10% Entre Rios 308,363 75,824 25% 30,935 9,599 31% 2,816 203 7% M.C.B.A. 627,393 219,663 35% N.A. 31,520 N.A. N.A. 575 N.A. Salta 277,526 73,616 27% 22,636 10,873 48% 1,613 261 16% Santa Cruz 49,966 14,564 29% 5,050 N.A. N.A. 255 62 24% Tucuman 360,141 58,486 16% N.A. N.A. N.A. 1,285 183 14% Total 8 Provinces 4,659,174 1,380,840 30% Source: Ministry of Education, National and Provincial Data, 1993. N.A.: Information Not Available Table B.6: Percent of Children Enrolled in School in Project Provinces For Ages Corresponding to Pre-school, Primary, Secondary and Higher Education Province 5 Years 6-12 Years 13-18 Years 19-29 Years Buenos Aires 73.3 96.4 56.9 12.4 Chaco 50.9 88.5 38.4 10.7 Corrientes 60.4 94.2 41.1 14.4 Entre Rios' 74.8 96 52.2 10.3 Formosa 62.3 94.1 46.2 8.8 M.C.B.A. 84.4 96.9 71.8 29.2 Salta 70.4 94.5 55.5 13.1 San Juan 74.7 96.2 54.6 9.1 Santa Cruz 85.7 97.7 68.8 5.8 Tucuman 71.9 94.9 47.9 18.3 Argentina 72.6 95.6 53.7 14.4 z  Table B.7: Enrollments, Teachers, and Schools in Public and Private Systems Project Provinces, 1993 Total Total Tobl Enrollment Teachers Schools Province Public % Private % Total Public % Private % Total Public % Private % Total Buenos Aires 1,938,977 75% 645,865 25% 2,584,842 NA. NA. NA. N.A. NA. NA. NA. NA. NA. NA. Corrientes 179,297 92% 15,810 8% 195,107 NA. NA. NA. NA. 26.340 1,252 95% 64 4.9% 1,316 Chaco 236.441 92% 19,395 8% 255,836 19'775 95% 1,639 8% 20,864 1,612 94% 109 6.3% 1,721 EntreRios 246,801 79% 65,449 21% 312,250 NA. NA. NA. N.A. 30,935 2.460 86% 402 14.0% 2.862 M.C.B.A. 357,216 57% 268,187 43% 625,403 NA. NA. NA. N.A. NA. NA. NA. NA. NA. NA. Salta 260,070 86% 43,379 14% 303,449 17,559 84% 3,352 16% 20.911 NA. N.A. NA. NA. 1,613 Santa Cruz 43,647 87% 6,646 13% 50,293 5,039 88% 709 12% 5,748 220 82% 47 17.6% 267 Tucuman 261,106 73% 99,035 27% 360,141 NA. NA. N.A. N.A. N.A. NA. NA. N.A. N.A. 1,285 Secondary Secondary Secondary Enrollment Teachers Schools Province Public % Pdivate % Total Public % Private % Total Public % Private % Total Buenos Aires 598.939 71% 240,102 29% 839,041 49,162 78% 13,925 22% 63,087 1,065 57% 792 42.6% 1,857 Corrientes NA. NA. NA. NA. 48.749 NA. NA. NA. NA. 6,870 108 84% 20 15.6% 128 Chaco 46,471 91% 4,426 9% 50,897 6,579 92% 576 8% 7,155 139 86% 23 14.2% 162 EntreRios' 62,108 79% 16,389 21% 78,497 7,136 74% 2,463 26% 9,599 202 73% 76 27.3% 278 M.C.BA. 104,918 52% 96,497 48% 201,415 NA. NA. N.A. NA. 31,520 NA. NA. NA. NA. 575 Saha 58,615 78% 16,519 22% 75,134 7,530 74% 2,510 25% 10,140 190 73% 70 26.9% 260 SantaCruz 13,015 89% 1,549 11% 14,564 NA. NA. NA. NA. NA. 54 87% 8 12.9% 62 Tucuman NA. NA. NA. NA. 58,486 NA. NA. NA. NA. NA. NA. NA. NA. NA. 183 Source: National and Provincial Data, 1993 Notb: These data are not the most up to date, and in some cases there are difterencs with table C.5 (which has the best data available on enrollmerts). These are tw only avadiable data, however, which show the publicprinvte share of enrollments. NA.: irnomniaton not Available.  Table B.8: Increase in Secondary Enrollments, Teachers and Schools in Project Provinces as Resuft of Decentralization Enrollments Teachers Schools Province Provincial Transferred Total % increase Provincial Transferred Total % increase Provincial Transferred Total % increase Buenos Aires 306,820 532,221 839,041 173% 22,421 40,666 63,087 181% 626 1,231 1,857 197% Corrientes 23,469 25,280 48,749 108% 3,080 3,790 6,870 123% 81 48 129 59% Chaco 3,727 47,170 50,897 1266% 6,579 576 7,155 9% 141 24 165 17% Entre Rios N.A. N.A. 75,824 N.A. 3,650 5,949 9,599 163% N.A. N.A. 203 N.A. M.C.B.A. 6,556 213,107 219,663 3251% 1,042 30,478 31,520 2925% 20 555 575 2775% Salta 43,419 30,197 73,616 70% 6,827 4,046 10,873 59% 188 73 261 39% SantaCruz 11,652 2,912 14,564 25% N.A. 1,511 N.A. N.A. 49 13 62 27% Tucuman N.A. N.A. 58,486 N.A. N.A. N.A. N.A. N.A. 59 124 183 210% Source: Ministry of Education, National and Provincial Data, 1993. N.A.: Information not Available 2 l  ANNEX B - 58 - Table B.9: Average Number of Secondary Students Per Teacher in Project Provinces Province Students/Teacher Buenos Aires 13.3 Corrientes 7.1 Chaco 7.1 Entre Rios 7.9 M.C.B.A. N.A. Salta 6.8 Santa Cruz N.A. Tucuman N.A. Source: National and Provincial Data, 1993. Table B.10: Average Attrition Rates* in Secondary Education Province Drop-Out Rate % Buenos Aires 69.0 Corrientes 75.0 Chaco 63.0 Entre Rios 56.56 M.C.B.A. N.A. Salta 57.65 Santa Cruz 65.0 Tucuman 53.40 Source: National and Provincial Data, 1993 Table B. 1 1: Average Rates of Transition from Primary to Secondary Education in Public Schools Province Rate of Transition % Buenos Aires 54.0 Corrientes 65.0 Chaco 95.0 Entre Rios 94.8 M.C.B.A. N.A. Salta 96.8 Santa Cruz N.A. Tucuman N.A. Source: National and Provincial Data, 1 993 (*) Attrition Rates results from the cummulative effect of repetition and dropouts  ANNEX B - 59 - Table B.12: Average Repetition Rates in Public Secondary Education, 1993 Province Average Repetition Rate % Buenos Aires 15.0 Corrientes 16.1 Chaco 17.3 Entre Rios 9.4 M.C.B.A N.A. Salta 14.5 Santa Cruz 15.8 Tucuman 9.2 Source: National and Provincial Data, 1993. Table B.13: Average Completion Rates in Public Secondary Education Province Percent Completion Buenos Aires N.A. Corrientes 78% Chaco N.A. Entre Rios 12% M.C.B.A. N.A. Salta 21% Santa Cruz 35.0 Tucuman N.A. Source: National and Provincial Data, 1993  - 60 - ANNEX C ANNEX C: ORGANIZATION AND STRUCTURE OF THE EDUCATIONAL SYSTEM   - 61 - ANNEX C ORGANIZATION AND STRUCTURE OF THE EDUCATIONAL SYSTEM 1. The 24 Provincial Ministries of Education (PMEs) are the principal providers of secondary education in Argentina. The PMEs are accountable to each Provincial Governor, and control 61 % of all secondary schools with enrollments totalling 1,550,824. Provinces vary with regard to internal organizational structures, although at the highest level they have a minister, secretary, subsecretary and directors who are in charge of formulating and implementing provincial educational policy. Some provinces have an internal network of subprovincial administrative units, such as regional offices, while others are more centralized. Besides overseeing the day-to-day administration of schools, the PMEs have the following financial and administrative responsibilities: (a) program supervision; (b) planning and budgeting; (c) school maintenance and construction; (d) provision of educational materials; (e) hiring and dismissal of teachers; and (c) teacher training. Prior to the enactment of the Federal Education Law (FEL) in 1993, several provinces maintained essentially dual educational administrations, whereby the Provincial Ministries of Education were responsible for secondary education, while Provincial Councils of Culture and Education (PCCE) ran the more extensive primary system. The FEL redefined the roles of both the Federal and Provincial Councils of Culture and Education away from direct administrative responsibilities towards more advisory functions, while confirming the primary administrative responsibility of the PMEs. 2. The National Ministry of Culture and Education (NMCE) no longer has direct administrative responsibility for secondary schools, following their transfer to the provinces in 1992. NMCE's primary functions include evaluating and monitoring the educational system, confirming the consistency and quality of educational programs while ensuring adherence to national goals and policies, providing financial and technical assistance to ensure quality education among the neediest social groups, setting requirements and conditions for recognizing national and international degrees, and operating a federal management information system. NMCE's internal structure is divided into four main secretariats: (i) Operations and Technical Affairs; (ii) Cultural Affairs; (iii) University Affairs; and (iv) Educational Programming and Evaluation. This last will have the overall responsibility for implementation and supervision of the proposed project. Under the Secretariat of Educational Programming and Evaluation, there are three subsecretariats that will be more directly involved in implementing the project: (i) subsecretariat of Programming and Education Management (SUPEM), where the National Project Coordination Unit (NPCU) is established; (ii) the Subsecretariat of Education Quality Evaluation, responsible for the National Student Assessment System and the National Management Information System; and (iii) the Subsecretariat of Program Evaluation. 3. Coordination between NMCE and the PMEs is carried out by the Federal Council on Cultura and Education (CFCE). The CFCE's functions and responsibilities were defined by the Federal Education Law (1993). Among its most important functions is the establishment of national policies and programs to promote cultural and educational development, the setting of priorities for the sector, proposals for modifications to the legal framework regulating the sector's activities, and establishment of the minimum contents of each educational cycle. The Minister of NMCE presides over the CFCE.  Chart C.1: Organizational Chart for the NMCE and the PMEs |National Ministry of| Culture & Education (NMCE) Provincial Education Ministries L ~~~(PEMs) F Technical Secretariat of Secretariat of Educational Operation and Coordination Programming & Evaluation Sub-Secretariat of Programming and Education Management (SUPEM) rvincial Coordination Units National Sub-Project Project Coordination Project L :PCUS) Unit (NPCU) Consultantive ___________ Council (PEC) -Plann., Programm. Eval. -Procurement -Procurement -Financing and Accounting -Fin. Acctg., & Auditing -Administration -Institutional Develop. -Quality Improvement -Infrastructure [ General Coordination I z Technical Administration Unit Operations & m Assistance Unit Monitoring Unit X 0  - 63 - ANNEX C Structure of the Education Sector 4. In the pre-FEL education structure, pre-school education was mandatory only in some provinces. Primary education consisted of a 7-year obligatory cycle that began at the age of six. This was followed by a secondary cycle of five or six years, depending on the track chosen by the student: the baccalaureate track emphasized a general broad-based education; the commercial track, which had a professional orientation, lasted 5 years. The technical- vocational track prepared students for immediate employment in the labor market through studies in technical, agricultural, artistic, and other specializations lasted 6 years. Additionally, postsecondary education was divided into three subsystems: public and private universities; research institutions; and non-university tertiary institutions. Table C. 1 below delineates the old and new educational structures. Table C.1 Pre and Post 1993 Educational Structures Prior to Federal Education Law Years After Federal Education Law Years Pre-School Mandatory in Educ.inicial 3 some provinces Primary Education 7 General Basic 9 Secondary 5 or 6 Polymodal 3 Higher or Tertiary 2 or 3 Higher or Tertiary 2 or 3 University 5 University 5 5. The post-FEL educational structure represents a significant break with the old pattern. Pre-school education will be compulsory for one year starting at age five, in addition to a new 9- year General Basic Education cycle, which would begin immediately after pre-school, at age six. After completion of General Education, students will enter secondary education comprised of a polymodal cycle with a duration of 3 years and a curricular content that emphasizes integrated knowledge of four cluster areas (humanistic, social, scientific, and technical).  Table C.2A: Distribution of Financial, Technical and Administrative Responsibilities between the NMCE and PMEs National Ministry of Culture and Education Prior National Ministry of Culture and Education (NMCE) After the New to New Federal Education Law Federal Education Law Technical and Administrative Financing of Recurrent Costs Expenditures on personnel and basic inputs for national The previously financed national schools no longer receive any schools comprise the bulk of recurrent costs, while financing. Likewise, private schools no longer receive any subsidies. other more specific costs receive earmarked subsidies. Special grants are transferred to provinces to compliment provincial Private schools receive transfers to cover a percentage targeting of high-risk populations. of operating costs. Provinces receive block grants to cover some recurrent costs in provincial schools. Financing of Capital Costs Finances capital expenditures such as infrastructure Does not finance capital expenditures directed towards provincially construction and rehabilitation and school equipment in administered schools. In some cases, earrnarked grants will be national schools, and in some instances provincial transferred to compliment provincial investments. schools through block grants. Technical and Administrative Curriculum Design and Establishes minimum curriculum contents for all Establishes minimum contents based on policies defined by the Consejo Content national schools and reviews their proposed curricula. Federal de Educaci6n. Textbooks and Educational Does not hold the function of approving the content or Does not approve the contents or standards of textbooks or other Materials standards of textbooks or other educational materials. educational materials. Provides textbooks and other didactic materials on a compensatory basis to provinces most in need. Training of Teachers Offers technical assistance to all requesting entities Provides technical assistance, support materials and financial resources through the Centro Nacional de Capacitaci6n Docente. for all provincial institutions involved in providing teacher training Beneficiaries can be national or provincial teachers and through the Programa de Formaci6n y Capacitaci6n Docente. Supervises schools. teacher training activities through the Red Federal de Capacitaci6n. Hiring and Remuneration of Hires and pays teachers wrking in national schools. Does not serve this function Teachers Student Assessment Conducts research in the areas of program planning and Evaluates the education system across all provinces through a National evaluation related to national schools. Student Assessment System (NSAS). z z x 0.  National Ministry of Culture and Education Prior National Ministry of Culture and Education (NMCE) After the New to New Federal Education Law Federal Education Law Technical and Administrative Supervises the pedagogical activities of all national Implements special programs to guarantee quality education in those Program Supervision schools. Orients policies based on the results of the provinces or regions that show poor results, based on the National supervision exercise. Student Assessment System. School Maintenance and Finances and provides technical assistance. Inspects, Only responsible for works begun prior to reform. Construction verifies and supervises school construction. Administrative and Financial Provides technical assistance to pertinent provincial Provides technical assistance to subprovincial institutions. Assistance institutions. Planning and Budget Plans budgets and expenditures for all national schools, Does not carry out budgeting or expenditure planning for any schools, as well as special earmarked transfers to the provinces. yet in special cases programs the earmarked transfer of funds to the provinces. 2 z m x C,  Table C.2B: Distribution of Financial, Technical and Administrative Responsibilities between the NMCE and PMEs Techinial and Administrative Provincial Ministries Prior to the New Federal Provinces After the New Federal Education Law Education Law Financing of Recurrent Costs Financing of personnel and other recurrent costs in Finances costs of all transferred schools plus provincial schools. provincial schools comprise the bulk of provincial Assumes discretion or responsibility over subsidies to the private expenditures, which are supplemented via global sector. national transfers. Private schools receive subsidies only in exceptional circumstances. Financing of Capital Costs Finances capital expenditures such as school Finances capital expenditures in transferred schools plus rehabilitation and construction and school equipment provincial schools. in all provincial schools. Techinical and Administrative Curriculum Design and Content Establishes curriculum content for all provincial Approves minimum contents established by FMCE and develops schools and reviews their proposed curriculum. supplementary provincal curriculum sensitive to province specific issues and contents. Reviews schools proposed curricula. Textbooks and Educational Materials Does not hold the function of approving the content Does not hold the function of approving the contents or standards or standards of textbooks or other educations of textbooks or other educational materials. Provinces decide materials. individually whether to provive textbooks and other educational materials. Training of Teachers Trains through its training institutions or through Develops own provincial training programs involving provincial Direcciones at different levels. or national institutions while also forming part of the Red Federal de Capacitacion. Hiring and Remuneration of Teachers Hires and pays teachers working in provincial Hires and pays salaries of all teachers, including those in recently schools. transferred schools. z 2 m x C,  Technical and Administrative Provincial Ministries Prior to the New Federal Provinces After the New Federal Education Law I Education Law I Student Assessessment Measures student achievement (*) Analyzes results of provincial student assessment tests and orients policies to improve future results. Program Supervision Supervises the pedagogical activities of all provincial Supervises the pedagogical activities of all provincial schools. schools. Orients policies based on the results of the Orients policies to improve quality based on the results of the supervision exercise. supervision exercise as well as provincial student assessment data. School Maintenance and Construction Controls and supervises school works. Finances, plans and provides technical assistance towards construction and rehabilitation of schools. Administrative and Financial Assistance Does not provice any form of technical assistance to Provides technical assistance to subprovincial institutions. the provinces. Planning and budget Plans budgets and expenditures for all provincial Pland budgets and expenditures for all schools as well as other schools, as well as other institutions operating under institutions oeprating under the provincial ministries. the provincial ministries. (*) Mendoza carries out these evaluations for primary and secondary education, while Rio Negro only does so for primary education. The remaining provinces do not have a student assessment system in place. z m   - 68 - ANNEX D: EDUCATION SECTOR, BUDGET FINANCING, AND EXPENDITURES   Table D.1 Public Expenditure on Education, 1991-1994 By Source of Spending In Millions of Current Pesos and Percent of GDP Year Total Public Expenditure (TPE) Federal Government Provincial Governments Municipal Governments Amount %GDP %TPE Amount %GDP %TPE Amount %GDP %TPE Amount %GDP %TPE 1991 5587 3.08 100 1781 0.98 31.88 3683 2.03 65.92 122 0.07 2.18 1992 7248 3.19 100 1349 0.59 18.61 5740 2.53 79.19 159 0.07 2.19 1993 8725 3.28 100 1632 0.61 18.70 6902 2.60 79.11 190 0.07 2.18 1994 10268 3.67 100 1931 0.69 18.80 8107 2.90 78.95 229 0.08 2.23 Source: Federal Ministry of Education Table D.2 0% Composition of Total Education Expenditure (TPE) All Jurisdictions, by Level, 1991-94 (Millions of Current Pesos and as Percent) 'ear TPE Primary Secondary Higher Culture and Unspecified Amount Amount % TPE Amount % TPE Amount % TPE Amount % TPE 1991 5587 2663 47.7% 1510 27.0% 390 15.9% 524 9.4% 992 7248 3404 47.0% 2034 28.1% 1265 17.5% 545 7.5% '993 3725 4303 49.3% 1759 20.2% 1612 18.5% <051 12.0% 1994 '0268 5135 50.0% 2109 20.5% :869 18.2% '154 11 2% Source: National Ministry of Education z z 1,  .70 - ANNEX D Chart D.1 Composition of Expenditure by National Administration 1995 (Millions of Pesos -- Budgeted) 5 1 2 3 Total % 1.Government Administration 4324.3 10.06 2. Defense & Security 3750.2 8.73 3. Social Services 27907.5 64.93 4. Economic 3334.5 7.76 5. Interest on Public Debt 3663.5 8.52 Total 42980.0 100 Source: Proyecto de Ley de Presupuesto General de Gastos y Calculo de Recursos de la Administracion Nacional, Mensaje, 1995, Argentina  - 71 ANNEX D Chart D.2 Composition of Expenditure on Social Services by National Administration 1995 56 7 8 1 2 4 3 Function 1994 % 1995 1. Health 984.8 3.8% 1112.7 4.0% 2. Social Assistance and Promotion 1131.1 4.3% 1370.7 4.9% 3. Social Security 19922.4 76.0% 20557.9 73.7% 4. Education and Culture 2293.6 8.7% 2751.3 9.9% 5. Science and Technology 575.8 2.2% 770.5 2.8% 6. Labor 79.7 0.3% 123.7 0.4% 7. Housing 1097.6 4.2% 997.7 3.6% 8. Water and Sewage 140.2 0.5% 223 0.8% Total 26225.2 100.0% 27907.5 100.0% Source: Proyecto de Ley de Presupuesto General de Gastos y Calculo de Recursos de a Administracion Nacional, Mensaje, 1995, Argentina  Table D.3 Public Expenditure on Education, by Level, 1994 (Millions of Current Pesos) Education Total Public Exp. (TPE) Federal Govt Provincial Gov`t* Municipal Govt Level Amount %TPE Amount %TPE Amount %TPE Amount %TPE Primary 5135 100 26 0.50 4880 95.0 229 4.5 Secondary 2109 100 1 0.04 2108 99.9 0 0 Tertiary 1869 100 1458 78.0 411 22.9 0 0 Culture 287 100 121 42.2 166 58.3 0 0 Unspecified 867 100 325 37.5 542 62.5 0 0 Total 10268 100 1931 18.8 8107 78.9 229 2.23 Source: Mlnistry of Education. *Includes Municipality of Buenos Aires z X  - 73 - ANNEX D Table D.4 National Administration Composition of Budgetary Fxpenditures by Institution (Millions of Current Pesos) Difference Institution 1993 1994 1995 Amount % Change National Congress 420.4 448.4 475.3 54.9 13% Judiciary 555.2 626.5 657.5 102.3 18% Presidency 1,659.0 1,839.5 1,426.5 (232.5) -14% Ministry of the Interior 1,995.5 1,805.4 1,901.0 (94.5) -5% Ministry of External Affairs 412.4 353.4 377.5 (34.9) -8% Ministry of Justice 280.6 280.6 285.6 5.0 2% Ministry of Defense 4,115.3 4,641.6 4,859.7 744.4 18% Ministry of Economy, Works and Public Services 3,090.3 3,681.0 3,576.2 485.9 16% Ministry of Culture and Education 1,716.2 2,015.3 2,446.9 730.7 43% Ministry of Labor and Social Security 16,937.0 22,527.0 15,445.3 (1,491.7) -9% Ministry of Health and Social Action 957.3 940.5 3,874.3 2,917.0 305% Servicing of Public Debt 3,245.6 3,104.6 3,606.9 361.3 11% Obligations Treasury 4,600.5 3,717.2 4,047.3 (553.2) -12% Total 39,985.3 45,981.0 42,980.0 2,994.7 7% Source: Proyecto de Ley de Presupuesto General de Gastos y Calculo de Recursos de la Administracion Naclonal, Menhaje, 1993-95, Argentina  74 - ANNEX D Table D.5.1: Fiscal Impact of Decentralization Total Education Spending, Project Provinces, 1991-1993 (Current Pesos) Total Provinces 1991 1992 1993 Dif. 1991-1993 % Change Buenos Aires 1,098,959,882 1,278,821,866 1,567,175,820 468,215,938 43% Corrientes 93,843,141 147,271,590 141,515,202 47,672,061 51% Chaco 129,004,149 182,088,685 205,343,073 76,338,924 59% Entre Rios 128,957,749 175,862,803 278,925,358 149,967,609 116% M.C.B.A. 288,711,109 581,862,544 835,230,861 546,519,752 189% Salta 96,025,192 141,571,240 166,542,072 70,516,880 73% Santa Cruz 58,881,528 79,253,364 100,001,328 41,119,800 70% Tucuman 111,791,000 126,977,000 189,382,000 77,591,000 69% Average 250,353,924 341,127,215 439,888,639 189,534,715 76% Total 2,256,527,674 3,054,836,307 3,929,004,353 1,667,481,679 74% Source: National Ministry of Education data Table D.5.2: Fiscal Impact of Decentralization Total Revenues, Project Provinces, 1991-1993 (Millions of Current Pesos) Total Provinces 1991 1992 1993 Dif. 1991-1993 % Change Buenos Aires 3,548 6,009 6,756 3,208 90% Corrientes 407 540 590 183 45% Chaco 489 648 767 278 57% Entre Rios 538 778 936 398 74% M.C.B.A. 1,484 2,119 2,684 1,200 81% Salta 463 638 835 372 80% Santa Cruz 272 412 548 276 101% Tucuman 523 709 791 268 51% Average 772 1,385 1,590 618 80% Total 7,724 11,853 13,907 6,183 80% Source: National Ministry of Education data  - 75 - ANNEX D Table D.6 Education as Percent of Total Public Spending Project Provinces, 1990-1994 (Percentage) Provinces 1990 1991 1992 1993 1994* Buenos Aires 29.10 28.02 24.97 N.A. 24.61 Corrientes 26.64 21.99 26.38 24.26 20.44 Chaco 24.97 26.16 29.85 31.83 31.63 Entre Rios 23.21 22.54 24.12 29.04 N.A. M.C.B.A.** 23.05 20.66 25.04 26.23 24.79 Salta 19.54 16.82 21.64 22.19 23.5 Santa Cruz 31.65 19.58 23.35 23.38 20.38 Tucuman 22.19 23.11 19.88 27.98 26.25 Source: Ministry of Education, National and Provincial Data. * Budgeted Information based on revised budgets N.A.: Information Not Available  - 76 - ANNEX D Table D.7.1: Per-Student Expenditure in Public Education Project Provinces, 1993 (Current Pesos) Total Total Per-Student Enrollments Expenditures Expenditure Province 1993 1993 1993 Buenos Aires 2,584,842 1,567,175,820 606.3 Corrientes 195,107 143,113,203 733.5 Chaco 255,836 208,198,471 813.8 Entre Rios 308,363 278,925,358 904.5 M.1C.B.A. 627,393 835,230,861 1,331.3 Salta 277,526 166,542,072 600.1 Santa Csuz 49,966 100,001,328 2,001.4 Tucumnan 360,141 219,922,000 610.7 Average 582,397 439,888,639 755.3 Source: Ministry of Education, National and Provincial Data, 1993. Table D.7.2: Per-Student Expenditure on Public Secondary Education Project Provinces, 1993 (Current Pesos) Secondary Secondary Per-Student Enrollments Expenditures Expenditure Provirice 1993 1993 1993 Buenos Aires 839,041 271,735,446 323.9 Corrientes 48,749 34,986,996 717.7 Chaco 50,897 60,506,391 1,188.8 Entre Rios 75,824 107,482,159 1,417.5 M.C. B.A. 201,415 213,726,368 1,061.1 Salta 73,616 57,395,201 779.7 Santa Cruz 14,564 28,512,948 1,957.8 Tucuman 58,486 22,012,000 376.4 Average 170,324 99,544,689 584.4 Source: Ministry of Education, National and Provincial Data, 1993.  - 77- ANNEX D Table D.8: Private Education Subsidies (in Millions of Current Pesos and in Percentages, 1991) Jurisdictions Provincial National TOTAL Budget $ %$ %$% Federal Capital - - 59.74 22.93 59.74 11.23 Buenos Aires 113.59 41.84 79.81 30.63 193.40 36.35 Catamarca - - 1.26 0.48 1.26 0.24 Cordoba 46.07 16.97 31.00 11.90 77.07 14.49 Corrientes - - 2.58 0.99 2.58 0.49 Chaco - - 4.99 1.92 4.99 0.94 Chubut - - 3.65 1.40 3.65 0.69 Entre Rios 14.91 5.49 7.86 3.02 22.77 4.28 Jujuy - - 1.43 0.55 1.43 0.27 La Pampa 0.40 0.15 3.34 1.28 3.73 0.70 La Rioja - - 1.05 0.40 1.05 0.20 Mendoza 8.44 3.11 8.16 3.13 16.60 3.12 Misiones 2.86 1.05 5.50 2.11 8.36 1.57 Neuquen 4.95 1.82 0.54 0.21 5.48 1.03 Rio Negro 2.30 0.85 3.37 1.29 5.67 1.07 Salta 2.02 0.75 4.12 1.58 6.14 1.15 San Juan 5.04 1.86 2.14 0.82 7.18 1.35 San Luis 1.96 0.72 1.32 0.51 3.28 0.62 Santa Cruz 4.57 1.68 0.85 0.33 5.42 1.02 Santa Fe 56.63 20.86 21.41 8.22 78.04 14.67 Sgo. del Estero - - 3.16 1.21 3.16 0.59 Tucuman 5.55 2.04 10.38 3.98 15.92 2.99 Tierra del - - 0.98 0.37 0.98 0.18 Fuego Total 271.51 100 260.54 100 532.05 100 Source: Ministry of Economy, Works and Public Service, Secretariat of Programming.  ANNEX D Table D.9: Sources and Uses of the Education Sector Budget, 1993 (As percentage of GDP) USES EDUCATION SECTOR TOTALS SOURCES National Provincial Municipal Sub-total Sub-total Establishments Establishments Establishments Cooperatives Public Private National Treasury 0.63 0.08 0.71 0.02 0.73 Provincial 2.31 2.31 0.17 2.48 Treasury Municipal 0.07 0.07 0.07 Treasuries Consolidated 0.63 2.39 0.07 3.09 0.29 3.28 Families 0.06 0.06 0.67 0.73 Total 0.63 2.39 0.07 0.06 3.15 0.96 4.01 Source: Ministry of Economy, Works and Public Services, Secretariat of Programming. Note: Data for families are from 1991. z .rn  - 79 - ANNEX D Table D.10 Personnel as Share of Total Education Expenditures Project Provinces, 1990-1994 (Percentage) 1990 1991 1992 1993 1994* Buenos Aires 81.27 82.62 81.80 84.91 78.09 Corrientes 96.13 98.07 98.74 98.75 96.19 Chaco 94.89 91.64 95.23 96.02 94.17 Entre Rios 77.43 79.54 80.72 83.16 N.A. M.C.B.A. N.A. 66.23 75.37 75.07 66.86 Salta 92.36 92.08 91.22 88.02 86.55 Santa Cruz 92.66 80.03 73.86 73.72 73.37 Tucuman 92.25 90.25 92.31 89.68 85.09 Source: Federal Ministry of Education, National and Provincial Data * Budgeted N.A.: Data not Available  Table 0. 11: Total Sources of Funding, 1993 Project Provinces (Millions of Current Pesos) Provinces Buenos Aires % Corrientes % Chaxo % Entre Rios % M.C.B.A. % Salta % SantaCruz % Tucuman % 1. Current Revenues 6521 100% 491 100% 591 100% 822 100% 2671 100% 635 100% 358 100% 710 100% Provincial 3451 53% 80 16% 80 14% 255 31% 2496 93% 177 28% 72 20% 168 24% Tax 3149 91% 70 88% 71 89% 205 80% 2324 93% 88 50% 44 61% 141 84% Non-Tax 302 9% 10 13% 9 11% 50 20% 172 7% 89 50% 28 39% 28 17% Federal 3070 47% 412 84% 511 86% 566 69% 174 7% 458 72% 286 80% 542 76% Coparticipation Fund 2381 78% 365 89% 469 92% 495 87% 145 83% 376 82% 146 51% 470 87% Highway Fund 62 2% 9 2% 9 2% 14 2% 0 0% 8 2% 7 2% 9 2% RoyaKies O 0% 4 1% 0 0% 6 1% 0 0% 16 3% 90 31% 1 0% Soci Security 53 2% a 1% 5 1% 8 1% 21 12% 6 1% 1 0% 10 2% Fiscal Compensation Fund 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% Impuesto sobre intereses de Plazorijo 00 % 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% Others 574 19% 28 7% 29 6% 44 8% 8 5% 52 11% 42 15% 52 10% I. Captal Revenues 8 100% 5 100% 101 100% 65 100% 3 100% 120 100% 34 100% 4 100% Ill. Budgetary Savings 100 100% 1 100% 0 0 0 3 100% 95 100% 0 1 IV. Dlscretionary Grants 126 100% 93 100% 75 100% 49 100% 10 100% 77 100% 62 100% 76 100% I Non Reimbursable 12 10% 51 55% 30 40% 16 33% 0 0% 41 53% 37 60% 38 50% TreasuryGrants(A.T.N.) 4 33% 45 88% 11 37% 10 63% 0 13 32% 4 11% 22 58% Electrcity Fund (FEDEI) 4 33% 4 8% 4 13% 4 25% 0 4 10% 7 19% 4 11% Regional Deelopment Fund (FDR) 4 33% 1 2% 5 17% 0 0% 0 23 56% 0 0% 0 0% Other 0 0% 2 4% 10 33% 3 19% 0 2 5% 25 68% 12 32% Reimbursable 115 91% 41 44% 45 60% 33 67% 10 100% 36 47% 25 40% 38 50% Housing Fund (FONAVI) 115 100% 41 100% 39 87% 32 97% 10 100% 34 94% 25 100% 38 100% Anticipated Taxes 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% Other 0 0% a 0% 6 13% 2 6% 0 0% 2 6% 0 0% 0 0% V. Total Revenues and Grants 6756 590 767 936 2684 835 548 791 VI. Total ExpendIturs 6928 597 731 922 2820 779 432 776 VII. SurpluslDflclt -172 -7 36 14 -136 56 116 15 z z  - 81 - ANNEX D Table D.12 Federal Transfers to Provinces for Secondary Education, 1992-1993 (Thousands of Current Pesos) Difference Provinces 1992 1993 1993-1992 % Change Buenos Aires 269,078 367,800 98,722 37% Corrientes 19,501 20,700 1,199 6% Chaco 12,501 18,600 6,099 49% Entre Rios 37,406 55,100 17,694 47% M.C.B.A. N.A. N.A. N.A. N.A. Salta 20,499 28,900 8,401 41% Santa Cruz 4,401 7,000 2,599 59% Tucuman 28,506 42,300 13,794 48% Average 43,544 60,044 16,501 38% Total 391,892 540,400 148,508 38% Source: Federal Ministry of Education - Earmarked Transfers N.A.: Information not Available  Table D. 13: Province of Buenos Aires Forecasts of Sector Budget 1 2 3 4 6 6 7 8 Education Secondary Budget % % of Impact of Sector Sub-Sector Budget Increase by Secondary Total Budget Project on Budget 1 No Project Project Project 1/ Budget IBRD Increase Education Budget (3) = (2) + (4) (5) = (4)/1(3) (7) = (6)1(4) (8) = (4)1(1) 1995 1,694,980,700 288,146,719 1996 1,762,779,928 299,672,588 302,072,588 2,400,000 0.79% 1,900,000 79.17% 0.1% 1997 1,833,291,125 311,659,491 313,159,491 1,500,000 0.48% 1,200,000 80.00% 0.1% 1998 1,906,622,770 324,125,871 325,125,871 1,000,000 0.31% 700,000 70.00% 0.1% 1999 1,982,887,681 337,090,906 337,890,906 800,000 0.24% 600,000 75.00% 0.0% 2000 2,062,203,188 350,574,542 351,374,542 800,000 0.23% 600,000 75.00% 0.0% 2001 2,144,691,316 364,597,524 364,897,524 300,000 0.08% 0.0% 2002 2,230,478,968 379,181,425 379,481,425 300,000 0.08% 0.0% 2003 2,319,698,127 394,348,682 394,648,682 300,000 0.08% 0.0% 2004 2,412,486.052 410,122,629 410,422,629 300,000 0.07% 0.0% 2005 2,508,985,494 426,627,534 426,827,534 300,000 0.07% 0.0% 2006 2,609,344,914 443,588,636 443,888,635 300,000 0.07% 0.0% 2007 2,713,718,711 461,332,181 461,632,181 300,000 0.06% 0.0% 2008 2,822,267,459 479,785,468 480,085,468 300,000 0.06% 0.0% 2009 2,935,158,157 498,976,887 499,276,887 300,000 0.06% 0.0% 2010 3,052,564,484 518,935,962 619,235,962 300,000 0.06% 0.0% Budget 1 assumes growth at 4.0% per annum Note 1/: Includes recurrent costs arising from project as of year 2,001. z m x 0  Table D.14: Province of Chaco Forecasts of Sector Budget 1 2 3 4 6 6 7 8 Education Secondary Budget % % of Impact of Sector Sub-Sector Budget Increase by Secondary Total Budget Project on Budget 1 No Project Project Project 1/ Budget IBRD Increase Education Budget (3) = (2) + (4) (5) = (4)l(3) (7) = (6)/(4) (8) = (4) ,(1) 1995 215,617,305 62,629,018 1996 224,241,997 65,030,179 66,630,179 1,600,000 2.4% 1,200,000 75.00% 0.71% 1997 233,211,677 67,631,386 74,631,386 7,000,000 9.4% 4,900,000 70.00% 3.00% 1998 242,540,144 70,336,642 77,336,642 7,000,000 9.1% 4,800,000 68.67% 2.89% 1999 262,241,750 73,150,107 76,350,107 3,200,000 4.2% 2,300,000 71.88% 1.27% 2000 262,331,420 76,076,112 77,276,112 1,200,000 1.6% 1,000,000 83.33% 0.46% 2001 272,824,677 79,119,156 79,419,156 300,000 0.4% 0.11% 2002 283,737,664 82,283,923 82,583,923 300,000 0.4% 0.11% 2003 295,087,170 86,575,279 85,875,279 300,000 0.3% 0.10% 2004 306,890,657 88,998,291 89,298,291 300,000 0.3% 0.10% 2006 319,166,283 92,658,222 92,868,222 300,000 0.3% 0.09% 2006 331,932,936 96,260,651 96,660,651 300,000 0.3% 0.09% 2007 345,210,262 100,110,973 100,410,973 300,000 0.3% 0.09% 00 2008 369,018,662 104,115,412 104,416,412 300,000 0.3% 0.08% 2009 373,379,409 108,280,029 108,580,029 300,000 0.3% 0.08% 2010 388,314,586 112,611,230 112,911,230 300,000 0.3% 0.08% Budget 1 assumes growth at 4.0% per annum Note 1/: Includes recurrent costs arising from project as of year 2,001 z z x  Table D.15: Province of Corrientes Forecasts of Sector Budget 1 2 3 4 6 6 7 8 Education Secondary Budget % % of Impact of Sector Sub-Sector Budget Increase by Secondary Total Budget Project on Budget 1 No Project Project Project 1/ Budget IBRD Increase Education Budget (3) = (2) + (4) (5) = (41/(3) (7) = (6)1(4) (8) = (4)1(1) 1995 169773938.7 33,954,788 1996 176564896.2 35,312,979 36,412,979 1,100,000 3.0% 900,000 81.82% 0.62% 1997 183627492.1 36,725,498 43,525,498 6,800,000 15.6% 4,600,000 67.65% 3.70% 1998 190972591.8 38,194,618 43,594,518 5,400,000 12.4% 3,700,000 68.62% 2.83% 1999 198611495.5 39,722,299 44,122,299 4,400,000 10.0% 3,000,000 68.18% 2.22% 2000 206556955.3 41,311,191 43,911,191 2,600,000 5.9% 1,800,000 69.23% 1.26% 2001 214818193.5 42,963,639 44,063,639 1,100,000 2.5% 1,100,000 0.51% 2002 223410921.2 44,682,184 45,782,184 1,100,000 2.4% 1,100,000 0.49% 2003 232347358.1 46,469,472 47,569,472 1,100,000 2.3% 1,100,000 0.47% 2004 241641252.4 48,328,250 49,428,250 1,100,000 2.2% 1,100,000 0.46% 2005 251306902.5 50,261,380 51,361,380 1,100,000 2.1% 1,100,000 0.44% 2006 261359178.6 52,271,836 53,371,836 1,100,000 2.1% 1,100,000 0.42% 2007 271813545.7 54,362,709 55,462,709 1,100,000 2.0% 1,100,000 0.40% 2008 282686087.6 56,537,218 57,637,218 1,100,000 1.9% 1,100,000 0.39% 2009 293993631.1 58,798,706 59,898,706 1,100,000 1.8% 1,100,000 0.37% 2010 305763272.3 61,150,654 62,250,664 1,100,000 1.8% 1,100,000 0.36% Budget 1 assumes growth at 4.0% per annum Note 1/: Includes recurrent costs arising from project as of year 2,000. z z m x  Table D.16: Province of Entre Rios Forecasts of Sector Budget 1 2 3 4 5 6 7 8 Education Secondary Budget % % Total Impact of Sector Sub-Sector Budget Increase by Secondary Total Project Project on Budget 1 No Project Project Project 1 Budget IBRD Cost Education Budget (3) = (2) + (4) (5) = (4M1(31 (7) = (6)/(4) (8) (4/(1) 1993 278,925,358 1994 290,082,372 1995 301,685,667 66,370,847 67,370,847 1,000,000 1.5% 900,000 90.0% 0.3% 1996 313,753,094 69,025,681 72,625,681 3,600,000 5.0% 2,600,000 72.2% 1.1% 1997 326,303,218 71,786,708 78,586,708 6,800,000 8.7% 4,600,000 67.6% 2.1% 1998 339,355,346 74,658,176 80,158,176 5,500,000 6.9% 3,700,000 67.3% 1.6% 1999 352,929,560 77,644,503 80,444,503 2,800,000 3.5% 1,900,000 67.9% 0.8% 2000 367,046,743 80,750,283 81,250,283 500,000 0.6% 0.1 % 2001 381,728,612 83,980,295 84,480,295 500,000 0.6% 0.1% 2002 396,997,757 87,339,507 87,839,507 500,000 0.6% 0.1 % 2003 412,877,667 90,833,087 91,333,087 500,000 0.5% 0.1 % 2004 429,392,774 94,466,410 94,966,410 500,000 0.5% 0.1