China - Education Development in Poor Provinces Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 20553 IMPLEMENTATION COMPLETION REPORT CHINA EDUCATION DEVELOPMENT IN POOR PROVINCES (CREDIT 2339-CHA) June 5, 2000 Human Development Sector Unit East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Yuan (Y) 1992 $1 = Y5.53 1993 $1 = Y5.76 1994 $1 = Y8.62 1995 $1 = Y8.35 1996 $1 = Y8.31 1997 $1 = Y8.29 1998 $1 = Y8.28 1999 $1 = Y8.28 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS CEP - Chinese Experts Panel EMIC - Education Management Information Center FILO - Foreign Investment and Loan Office IAP - International Advisory Panel ICR - Implementation Completion Report MIS - Management Information System MOE - Ministry of Education SAR - Staff Appraisal Report Vice President Jemal-ud-din Kassum, EAPVP Sector Manager Alan Ruby, EASHD Country Director Yukon Huang, EACCF Task Manager Sandra Erb, EASHD  CONTENTS PREFACE .......................................................... III EVALUATION SUMMARY ...........................................................V PART I: PROJECT IMPLEMENTATION ASSESSMENT ..................................1 A. Statement/evaluation of objectives ........................................................... 1 B. Achievement of Project Objectives ........................................................... 2 C. Implementation Record and Major Factors Affecting the Project ................4 D. Project Sustainability ...........................................................6 E. Bank Performance ...........................................................6 F. Borrower Performance ...........................................................7 G. Assessment of Outcome ...........................................................8 H. Future Operation .......................................................... 10 I. Key Lessons Learned .......................................................... 11 PART II: STATISTICAL TABLES .......................................................... 12 Table 1: Summary of Assessments .......................................................... 12 Table 2: Related Bank Loans/Credits .......................................................... 13 Table 3: Project Timetable .......................................................... 16 Table 4: Loan/Credit Disbursement: Cumulative Estimate and Actual ........... 16 Table 5: Key Indicators for Project Implementation-Higher Education .......... 17 Table 5A: Key Indicators for Project Implementation-Guizhou Province ...... 18 Table 5B: Key Indicators for Project Implementation-Shanxi Province ......... 19 Table 5C: Key Indicators for Project Implementation-Hubei Province .......... 20 Table 5D: Key Indicators for Project Implementation-Hunan Province ......... 21 Table 5E: Key Indicators for Project Implementation-Shaanxi Province ........ 22 Table 5F: Key Indicators for Project Implementation-Yunnan Province ........ 23 Table 6: Key Indicators For Project Operations .............................................. 24 Table 7: Studies included in Project .......................................................... 25 Table 8a: Project Costs .......................................................... 26 Table 8b: Project Costs .......................................................... 27 Table 8c: Project Financing .......................................................... 28 Table 9: Status of Legal Covenants .......................................................... 29 Table 10: Compliance with Operational Manual Statements .......................... 30 Table 11: Bank Resources: Staff Inputs .......................................................... 30 Table 12: Bank Resources: Missions .......................................................... 31 ANNEX A: BORROWER'S CONTRIBUTION TO THE ICR ............................ 33 ANNEX B: ICR MISSION'S AIDE MEMOIRE .................................................... 37   - iii - IMPLEMENTATION COMPLETION REPORT CHINA EDUCATION DEVELOPMENT IN POOR PROVINCES PROJECT CREDIT 2339-CHA PREFACE This is the Implementation Completion Report (ICR) for the Education Development in Poor Provinces Project in China, for which Credit 2339-CHA in the amount of SDR 93.2 million (approximately US$134.6 million equivalent) was approved on March 10,1992 and made effective on July 6, 1992. The credit was closed on December 31, 1999. It was fully disbursed, and the last disbursement took place on April 4, 2000. The ICR was prepared by Kazuko Ogawa (Task Manager at the time of writing the ICR) and Leon H. Miller (consultant) in the Human Development Sector Unit, East Asia and Pacific Region and reviewed by Alan Ruby, Manager, Human Development Sector Unit and Yukon Huang, Country Director, China. Preparation of this ICR was begun during the IDA's supervision mission in October/November 1998 and is based on materials in the project file. The Borrower contributed to this ICR by producing its own completion reports project data and by providing detailed comments on IDA's draft ICR.   - v - CHINA EDUCATION DEVELOPMENT IN POOR PROVINCES PROJECT CREDIT 2339-CHA EVALUATION SUMMARY Introduction I . This project was developed in support of the government's education reform policy, "Decision to Reform the Education Structure" with major policy initiatives to universalize basic education (nine years), to expand vocational and technical education, to improve and restructure higher education, and to strengthen education management. In this regard, the Bank Group committed its efforts to support these policies and to improve and restructure higher education, and to strengthen education management. Earlier Bank Group projects for the education sector in China focused on enrollment expansion and improved quality of instruction and promoted greater management efficiency in order to alleviate manpower shortages which arose from the disruption of higher education during the Cultural Revolution. {Number macro activated; just press altI to get new numbers. Side headings are mandatory and must be completed} Project Objectives 2. The previous Bank Group projects in China were for post-secondary education, including universities, teacher training schools and vocational schools. This was the first project to address basic education, to improve and restructure higher education and to strengthen education management. This project aimed to support the development of education in six poor provinces through: a) improving literacy, school attendance ratios and school efficiency and quality by assisting the provincial governments to implement their nine-year compulsory education requirements; b) supporting ongoing efforts to carry out institutional reforms needed to improve the management of selected provincial universities, their quality and internal efficiency; and c) improving the overall planning and management of provincial and municipal educational services. 3. The six poor provinces included in this project were: Guizhou, Hubei, Hunan, Shaanxi, Shanxi and Yunnan. In total 114 project counties, and 19 higher education institutions were included under the project. 4. Project Components. There were three components in the project: a) Basic Education, b) Higher Education and c) Planning, Finance and Management Systems. Of the total project costs, US$205 million, 78 percent of the funds (US$130 million) were for the Basic Education component, 20 percent (US$33million) for the Higher Education component and the remaining 2 percent (about US$3 million) was for the Planning and Management component, which included the Management Information System (MIS), studies and the Chinese Expert Panel (CEP).  - vi - Implementation Experience and Results 5. The project was implemented in a timely and satisfactory manner and contributed substantially to the development of the Basic Education and smaller university developments in the six provinces. The Basic Education component succeeded in achieving -and generally surpassing- its quantitative targets for construction, equipment, desks and books; and the quality objectives of the project were met for each of the provinces as recorded in Table 5. Thus both the quantity and the quality objectives for the component were met. For the Higher Education component, the pilot schools selected improved both their internal and external efficiencies. This was the first education project that had the services of an all Chinese Expert Panel (CEP). Previous projects had an International Advisory Panel. The members of the panel were well chosen and were conscientious in carrying out their responsibilities to oversee and direct the project. 6. Basic Education. Increased number of books per student, standard sets of equipment per school, and percentage of qualified teachers all contributed to the improvement in the quality of education; and the decrease of repetition rates, increase in completion rates and the increase of student-teacher ratios all contributed to the increased efficiency in the basic education schools under the project. In addition, the learning environment was improved by the construction and rehabilitation of school buildings and reducing the percentage of schools with dangerous buildings or classrooms. 7. Higher Education. The quality of education was improved through the provision of equipment for the schools and additional training for the teachers. Although there were some improvements in the efficiency of the institutions, they were not of the magnitude expected due to government regulations pertaining to: teacher's salaries, number of students permitted, tuition charges permitted, release of excess staff, etc. However, were it not for the project, the impact of the government regulations may have been more severe on the institutions. 8. Planning and Management. A large number of courses were held in each of the provinces and counties for teachers, principals, administrators, and construction staff. While reports by and interviews with those who attended the courses indicate a positive reaction, it is impossible to truly assess the impact of the training upon the schools education bureaus and divisions at the different levels. In the training activities there was a reluctance to use outside trainers even from the local provincial universities and institutes; thus, the majority of the training was conducted by local education bureau staff. For the MIS component, the central Education Management Information Center (EMIC) under MOE prepared educational data systems under the project; however, some of the provinces prepared their own data systems. MOE will need to continue the development and administration of the data systems to be implemented by the provinces as a continuing program.  - vii - 9. Overseas training was not carried out entirely as scheduled. Of the 136 individuals selected for overseas training only 90 were actually cleared for overseas training due to the lack of foreign (mainly English) language skills of the individuals selected for the training. Thus part of the overseas training was converted to domestic training. For future projects, multiple candidates should be selected for each overseas training post and the individual who can pass the English language proficiency test first would be selected to fill the overseas training post. Another possibility for bringing foreign methodologies to China is to conduct workshops presented by combined foreign and domestic experts. The difficulty of finding an adequate number of English language qualified candidates for oversees training has continued in all of the Bank Group education projects in China. 10. Procurement and Disbursements. The provinces carried out the procurement of civil works, equipment and books with few difficulties, while the central MOE-FILO conducted the ICB for the equipment for the universities. The accounting required for the counties and provinces to reimbursement of funds from the MOF for payment from the project had difficulties. For any future projects, the time-bound procedures to submit requests for payment must be worked out as part of the project preparation activities. Summary of Findings, Future Operations, and Key Lessons Learned 11. Sustainability. The progress in education realized under this project has a high probability of being continued. The localities have a high regard for education and will therefore continue to support the activity. Since there is a very low birth rate in the country, the localities can give attention to the maintenance of the new facilities and not have to be concerned so much with the construction of additional facilities. One of the credit conditions was the yearly preparation of a maintenance plan for all school buildings in each county and province. These efforts are expected to continue at the conclusion of the project; however the unit cost factors to be used in the budgets will need additional refinement. For the teacher training activities, the provinces have indicated their desire to continue training activities at the rate of 20-30 percent of their teachers per year. Five of the six provinces under this project have been included in a later IDA basic education project. This further involvement in basic education projects by the provinces can be an assurance that the provinces give a high priority to their education sector. 12. Lessons Learned. The provinces are capable of implementing education projects of this nature with the overall advice of a CEP and the guidance and coordination of the MOE-FILO; however, institutional development in project management and supervision must be stressed in the project formulation. As in all past education projects, technical assistance and studies receive very little attention until the latter part of the project implementation period; consequently their impact during the project implementation period is minimal. In this project there were additional difficulties whereby each of the six provinces were to jointly approve TORs, contracts, etc., and to make payments to the research group conducting the three studies funded by the project. Development of  - viii - proper project indicators are essential for the monitoring of the project--both for the physical accomplishments as well as for the project benefits. 13. IDA should provide more supervision resources for such a geographically dispersed project as this and must ensure the proper implementation of all TA activities early in the project implementation through proper use of conditions and covenants.  - 1 - CHINA EDUCATION DEVELOPMENT IN POOR PROVINCES PROJECT CREDIT 2339-CHA PART I: PROJECT IMPLEMENTATION ASSESSMENT A. STATEMENT/EVALUATION OF OBJECTIVES 1. Background. This project was part of IDA's strategy of supporting human capital development and poverty alleviation in China. Extensive prior lending operations over the past several years of the Bank Group in China's education sector has been for the higher education by providing for equipment and teacher development. In 1986 the Government passed a "Compulsory Education Law" which instituted a nine-year basic education system. This was the first Bank Group education project to: a) deal with primary education; b) target education in remote and rural areas; c) finance civil works; d) have MOE/FILO take a coordinating role rather than implementing the project itself, with more provincial initiative, e.g., to carry out NCB and civil works; e) have an entirely Chinese Experts Panel (CEP) with no international representation; and f) study and Management Information Systems (MIS) components to be implemented through the cooperation of all provinces. 2. Objectives. The main objectives of the project were to assist the Govermnent in initiating institutional and policy reforms needed to improve coverage, efficiency, and quality in primary and lower secondary schools in order to gradually achieve nine-year compulsory education; to assist the process of economic development and restructuring of higher education in order to improve efficiency and utilization of resources in universities and colleges; and to improve the provincial education planning, financing and management systems. The project covered six poor provinces: Guizhou, Hubei, IIunan, Shaanxi, Shanxi, and Yunnan; with each province having 15-20 poor counties (an average of 16-17 percent of the total counties in a province), for a total of 114 project counties, under the project. 3. Project Components: The project included three main components: (a) Basic Education. The Basic Education Component has two parts: the first one is the policy action plans prepared by each county to disseminate among all county education and finance officials the package of actions that will be implemented simultaneously to achieve universal basic education. The second part is specific investments to be financed under the project, complementing the action plans and including investments in school construction and rehabilitation, teaching aids, and training of teachers.  (b) Higher Education. The goal was to assist the small and inefficient provincial universities facing problems of external and internal efficiency to design and implement reforms that will result in improved resource utilization, higher quality of education and to provide a better match with labor market requirements. (c) Planning and Management. To improve the provincial education planning, financing and management systems, the project was to develop: a management information system (MIS), improve the examination system in order to make use of exam results for improving education methodologies and classroom practices; strengthen the capacity of one of the six Education Bureaus to develop a comprehensive proposal of reforms of the Higher Education system; and to train provincial and county level staff in project implementation management and computerized management information systems. 4. Evaluation of Objectives. Although IDA has had substantial lending activities in the education sector in China over a number of years, this was the first project to address basic education in poor provinces and to address the inefficiencies in the smaller university level education institutions in these provinces. The project development was supported by a Bank sector study: China. Provincial Education Planning and Finance which provided invaluable insights in the preparation of the project. As a result the project concepts and objectives were appropriate and timely in addressing the nine-year compulsory education program that the country had embarked upon. Also the need to address the inefficiencies of the smaller universities in the provinces was greatly needed. Therefore, the overall assessment is that the project objectives were correctly identified as stated in the project documents. In addition, the Basic Education component of this project has been as a model for three additional projects in China 5. Covenants. The credit covenants were well conceived and reasonable for this project with the exception of the covenants pertaining to MIS, CEP and study components. It still remains difficult to promptly obtain from all six provinces, the necessary cooperation and financing of project components to be carried out by the central MIS organization, studies and the funding for the project CEP as required under the project covenants. B. ACHIEVEMENT OF PROJECT OBJECTIVES Basic Education 6. General. The Basic Education component, the major component of the project, absorbed about 80 percent of the project funds through the financing of school construction, equipment and teacher and principal training. In all six provinces, the project made significant contributions to popularizing nine-year compulsory basic education as measured by the project monitoring indicators given in Table 5.  - 3 - 7. Infrastructure, Equipment and Books. By the end of the project about 10.2 million square meters of classrooms had been either constructed or rehabilitated under the project. This amounted to approximately 50 percent above the project planned area (6.75 million m2) to be developed for the 114 counties represented under the project. Thus, the amount of dangerous and dilapidated school buildings have been substantially reduced in the project counties. Continuing maintenance required for the structures with the associated financial requirements, during and after the project, was emphasized under the project implementation activities. About 30 million books and 4.7 million sets of equipment were provided under the project. These numbers met the planned book purchases, but were double the amount of equipment planned under the project. 8. Qualitative Improvement A fundamental goal of the project, while supporting the physical structures of the schools, was to improve the quality of teaching, and management (school principles) through training and to provide books and equipment for the schools. These quality improvement goals were measured by the project monitoring indicators: increased overall and girls enrollment rates, reducing repetition rates, increasing number of books per student, increasing standard equipment sets, etc. All of these goals were greatly increased under the project. A complete listing of the project indicators is given in Table 5. Higher Education Component 9. General. The main objective of this component was to demonstrate how efficiencies of small universities might be obtained through internal reorganizations and mergers of 19 institutions in the six provinces. The objective was to restructure departments in order to reduce narrow fields of specialization by providing broader fields of study. Civil works was completed through local financing and the funds from the IDA contributions were for the procurement of equipment and staff training. One province, Shanxi, was selected to carry out a comprehensive plan for the reform of Higher Education as a model for all provinces. 10. Qualitative Improvement. The Higher Education institutions all received improvements in both efficiency and quality as a result of the reforms implemented under the project. As a result of the institutional mergers brought about under the project, internal efficiencies were realized including: reductions in student/staff and student/teacher ratios; and increased utilization of equipment and classrooms. Increases in the quality of education were realized with the introduction of laboratory and audio- visual equipment, computers, and books procured under the project. The overseas and local training provided improved the qualifications of the staff and have thus raised the quality of both teaching and research. Also, under the project improvements for external efficiencies, increased responsiveness of the university teaching and research to the changing economic and technological needs of the community were attained. As a result of mergers and internal restructuring, institutions adjusted courses and programs to eliminate duplication, increase flexibility and introduce new specialties in response to  - 4 - emerging labor market demands. Although the internal efficiencies improved, the unit cost increased as a result of inflation during the project period, increased public salary scales and increased expenditures for equipment and the associated maintenance. The Comprehensive Program of Higher Education Reform as a pilot study was successfully prepared by Shanxi province. Planning and Management 11. This component was included for the improvement in the planning and management of county education bureaus by providing for Management Information Systems (MIS) software development and the procurement of computer equipment at the provincial and county levels; technical assistance for county-level staff; improvement of systems for the assessment of student achievements; and the provision of a panel of experts for the review and monitor of the project implementation. 12. The MIS development was completed by the Education Management Information Center (EMIC) of MOE along with the associated training activities. However, with no administrative control over the provincial EMICs there is no assurance that the MIS system developed at the MOE will be implemented nationwide. Meanwhile the provinces have continued to refine and implement their locally developed MIS. Following education projects have continued the development and implementation of the MIS throughout the country. Studies on student assessment, minban teachers and drop- out/repetition were completed under the project and the MOE, along with the Chinese Expert Panel, have been preparing for the dissemination of the study results. 13. As is the general practice in education projects there was no attempt to include a NPV nor an ERR in this project either during the project preparation or the ICR. C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT 14. Factors not generally subject to government control. With exception to the earthquakes in Yunnan province in October 1995 and February 1996, and the flooding incurred in Hunan and Hubei provinces in 1998, all the factors important to project success were subject to either the government or the implementing agency control. The October 1995 earthquake damaged about 28,000 m2 of schools and thus required some additional rebuilding and repairs of both schools that had been reconstructed and/or other schools not previously in the program. During the project implementation difficulties were encountered with the normal bidding procedures for both civil works since contractors were not willing to serve these remote areas. Thus more construction by force account than originally planned was required for Guizhou province as agreed by IDA. 15. Factors generally subject to government control. In 1992 there was a price reform in the country raising the unit price of inputs for construction. In order to not reduce the number of schools involved in the project, the provinces were able to resolve  - 5 - the issue by increasing the allocation of funds from the province, counties and prefectures. The government devaluation of the RMB in 1994 helped balance the increased construction costs. Since the largest component of the project was for civil works carried out by local contractors the devaluation actually provided additional local funds that were used to extend the project to additional schools and to help cover the increase in unit construction costs. 16. For the improved efficiencies expected under the project for the Higher Education component, the government increased public employee payment scales thus affecting the student unit cost more negatively than had been expected under the project. Also the institutions are subject to government regulations, such as the permissible enrollment levels and the tuition charges, along with the inability to readily reduce the number of non-teaching staff, which have a substantial negative effect upon the efficiencies of the institutions. 17. Factors generally subject to implementing agencies controL The Bank procedures for the procurement of equipment were not completely new to the provinces since they had all participated in other IDA projects for higher level training; however the civil works procurement procedures were new to the provinces. The provincial and county education bureaus quickly learned the Bank's requirements for competitive bidding and were able to implement the project in a timely manner. The project was expected to concentrate on construction quality as well as the quantity of construction. However, the education bureaus at both the provinces and counties were reluctant to carry out the necessary workshops for the counties and prefectures using the inputs from local engineering schools. Rather, the education bureaus relied on their own staff for such training which did not include new and advanced procedures to the project in the areas of civil construction. 18. It was only during the last year of the project implementation that the three studies were completed. This long completion time was due to number of factors: time to agree on TORs, time to select a proper institution to carry out each study, and for all of the provinces to sign the contract and the excessive times to carry out the studies. Consequently, the study results were of little use during this project in the development of the elementary school system. During the final project supervision mission, Shanxi province presented the results obtained from the Comprehensive Higher Education Reform study to the six provinces attending the project meeting. Under the auspices of the CEP and FILO, experiences from the restructuring and mergers or the higher education institutions and the three studies in the project would be disseminated to the relevant central and provincial government agencies. These experiences are important lessons in formulating reform plans.  - 6 - D. PROJECT SUSTAINABILITY 19. The provinces have recognized the need for continuing support of the project schools from the inception of the project by providing the yearly maintenance plans for civil works, equipment and teacher training as provided in the project agreement covenants. There is some difficulty in determining what yearly allowance should be established for the maintenance and teacher training for the schools. For the latter component, teacher training in the provinces have indicated their desire that 20-50 percent of the primary and junior secondary teachers receive training each year. Plans for the future are given in Annex C. 20. This project has demonstrated the usefulness of a planned approach for the implementation of the national nine-year compulsory education program and with the participation of five of the provinces in a later IDA project, there is a high assurance that they will continue to support the project schools in the coming years. In this regard, the MOE has adopted this planned approach for implementation and financing its own Compulsory Education Project (1998-2000) with all provinces participating in the program. Due to the low population growth in China there will not be a rapid increase in the school enrollments; therefore more attention can be given to maintenance of the system rather than expansion of the system. Throughout the project implementation the provinces and counties proved their commitment to the project by giving their financial support and management support to all the project activities. E. BANK PERFORMANCE 21. This project was preceded by a major piece of sector work: China. Provincial Education Planning and Finance Study. The project generation from the early stages of identification and preparation to appraisal was carried out satisfactorily by IDA in terms of development and processing of the project as well as completing these stages in a timely manner. IDA staff and consultants assigned to these tasks, in terms of numbers and skill mix, were also appropriate. 22. Recognizing that the project was in poor and remote areas, adequate amounts were not provided in the project documents for the amount of civil works to be performed by force account and for adequate supervision of the construction activities. The disbursement amounts under force account were adjusted during project implementation. There are special implementation difficulties in these remote areas that must be recognized in the preparation of future project in similar areas. 23. Project supervision by IDA was less than ideal due to the frequent changes of task managers and the fewer than desirable missions dictated by budgetary limitation and other pressing assignments of the task managers. The missions did provide a substantial amount of input to the project in the early stages of the project implementation and IDA  conducted a two-week staff training workshop in project management and construction quality control for representatives from the provinces at Headquarters. The project management training contributed to the implementation process of the project at the provincial level. F. BORROWER PERFORMANCE 24. Each of the six provinces had previously established a Project Office in the respective Education Bureaus for the implementation of other higher level projects financed by IDA. In other projects in the education sector, MOE had the overall responsibility for implementing the projects. However with this project the Provincial Education Bureaus had the primary responsibility of implementing the project including the procurement of civil works and NCB for equipment and books. The Foreign Investment and Loan Office (FILO) of MOE acted as the coordinating body at the central level and with the project provinces. FILO managed the ICB procurement for the higher education component, coordinated the CEP and other technical assistance and prepared the annual reports and audits to IDA. With the aid of the CEP, FILO effectively supervised and managed the overall project direction with the provinces doing an effective job in managing and implementing the project activities at the local level. 25. The project included on the average, 19 counties per province for a total of 114 counties. This amount of construction work taking place in a period of five years resulted in a severe strain on the supervision capacity of the provincial and county education bureaus. About 80 percent of the school construction took place in the first 3 years of the project. Consequently the quality of construction sometimes was not of the desired standard. In this regard, there was no attempt to involve the local engineering schools in the construction management, construction technology and finance training activities for the supervision staff. 26. During project implementation at the beginning of 1994 there was a devaluation of the RMB. This devaluation had a substantial effect on the project by increasing the availability of the local currency by about 35 percent. Also during the project implementation the county and prefecture governments increased their contribution by 5- 6 times, and the provincial governments doubled their planned contribution to the project. With these additional funds the provinces increased their construction by areas by 50 percent; equipment sets by 100 percent and teacher training numbers by up to 10 times the planned numbers. Thus, the additional funding in the project from the original planned amounts served to fund more components (school construction, equipment, books and training) as well as to finance the cost escalation due to price reform and inflation during the implementation period. These additional funds are also indicative of the public support the local communities gave the project. 27. Although annual reports were prepared regularly during the course of implementation in accordance with the Credit Agreement, information contained in these  - 8 - reports proved to be of less value due to their submission four months after the end of the reporting year. Also reporting on implementation by categories of the project with emphasis mainly on equipment, civil works contracts and disbursements gave a very limited view of the overall project implementation progress. For the future, annual reports should be more timely, and should provide a comprehensive review of the project, its activities, problems and adjustments, and most importantly, an assessment of meeting the overall project objectives. 28. Disbursements. Keeping the project accounts was a problem due to poor coordination between the education and finance branches in the provinces and counties and between MOF and the provincial Finance Bureaus. Even though construction expenditures were being made early in the project, the disbursements for the project were delayed. In the final year, this led to the problem of not knowing the exact amount of the outstanding payments to be made and the resulting credit balance for each province by category. However the difficulty was finally resolved with the intervention of IDA and the cooperation of MOF. Each province contributed to the payment of studies and the CEP, thus making the release of these individual payments a tedious process as not all the provinces paid in their portions promptly. The provinces and the counties were very supportive of the project and both supported the project funding; however for the increased local funding requirements due to inflation factors, the main burden fell on the counties and prefectures. G. ASSESSMENT OF OUTCOME 29. General. The project is rated generally satisfactory in that it initiated a process of quality and efficiency improvements in the basic education system and among the smaller university level institutions. Most of the project monitoring indicators in the project exceeded the target amounts as can be seen in Table 5. The most important indicators in determining the success of the project for the basic education component were the percentage increases in total school enrollments and the number of girls and minority children enrolled in each of the provinces as well as the reductions in repetition rates and increased rate of competition from primary schools. Contributing to this outcome were a number of important reforms of the education system: increasing the student/teacher ratio, increasing the teacher hours per week, improvement in the teacher qualified rate and the training for the principals. Also, there was some training and experience for the provincial and county level education bureau staff in the planning, including financial, construction, equipment and book procurement, and management of their school improvement program. These same approaches are being applied to new projects and the continuing development of education in the respective provinces. 30. The Higher Education component initiated substantial changes in curriculum to bring their training more in line with the changes required for a market oriented economy, improvements in training/qualifications of teachers and the development of new courses at the newly formed institutions brought about by the merger of the smaller institutions.  - 9 - Because of the external factor as mentioned above in paragraph 16, the improvements in financial measures for these schools were not as profound as desired; however, had it not been for this project the consequences may have been worse. With these exceptions the development objectives were relevant and achieved. 31. The TA program for basic teacher training exceeded the targets by 175 percent for the number of trainees and by 110 percent for the amount of time spent in teacher training. The teaching programs in the provinces covered many areas: qualification training, continuing education, multi-grade education, bilingual education, minority education and laboratory teaching. The training curriculums were based on subject knowledge and for the most part the continuation of current practices. This training would have benefited with inputs from trainers outside of the provinces to pedagogical strategies and curriculum development. Other weaknesses identified were related to the difficulty of measuring improvements in teaching and management effectiveness as a result of teacher and management training and for the absence of a more effective monitoring and evaluation system of the training programs. Even with these shortcomings in the training programs, the teacher training program showed a positive correlation with the performance indicators developed for the project. The indicators show an increase in the promotion rates for primary graduates to junior secondary education, a decrease in the repetition rate and a decrease in the drop-out rate in both primary and junior secondary levels. 32. For the overseas training program, staff were selected to participate in the training but many were unable to pass the required English proficiency examination. For future overseas training programs, multiple candidates should be selected to ensure that a candidate will be available with the required English or other necessary foreign language proficiency. Substitution of local training for overseas training negates the impact expected of bringing new ideas to China from the more advanced countries of the world. A better approach might be to invite foreign expert(s) to give a workshop in China where translation could be provided. 33. In retrospect as in many projects, the many components of the TA and training program were too elaborate to be undertaken in such a project. Future projects should concentrate on a few areas for training and studies with the necessary conditions and covenants to ensure that they will be carried out to fulfill the objectives and plan of the project. The many elements in the technical assistance including training for teachers and education bureau staff in planning, management, quality control; studies relating to education policies and decisions; development of an MIS and overseas training, were too much to administer during the course of such a dispersed project. Also, the situation was exacerbated by requiring that all six provinces participate in and agree on many of the decisions and the funding of the activities. 34. This was the first education lending operation in China to utilize the services of local experts to form a panel, Chinese Expert Panel (CEP), for supervising and advising on the project activities. The panel was selected from senior members of leading  - 10- education institutions China. These members made yearly field visits to the different provinces and advised the provinces on all aspects of the project and were particularly involved with the project studies. This panel was of great benefit to the project and was appreciated by the provinces; thus should be utilized in future education projects. There was difficulty in convincing the provinces of the need to promptly fund the CEP for their services. This same reluctance was true for all the TA activities. 35. Social Issues. Although the project objectives did not address the social issues per se of the project, the IDA project appraisal staff did recognize the importance and the impact on these issues in the project formulation. It was recognized that women have an important role in both the agriculture and industrial activities of the society. Before the project, fewer girls completed primary schools than boys. Before the project many of the localities did not have schools and the boys were sent away to boarding schools. Through the project local schools have been constructed making it easier for the girls to attend. 36. The need to improve the school enrollment rates for all categories was recognized as important benefits for the reduction of poverty in the provinces. Previously, statistics were not collected on the enrollment rates for the different categories of children. Under the project three of the main project performance indicators pertaining to the social issues were collected: a) Overall Enrollment Rate, b) Girls Enrollment Rate and c) Minority Children Enrollment Rate were collected. These statistics are given in Table 5. Under the project it can be seen that the enrollment rates have increased and now 99+ percent of a]l children are attending primary schools and there has been some improvement in the percentage of girls and minority children attending secondary schools, although it is not as great as in the primary school level. Perhaps as the number of students completing the primary education continues to increase, there will be further increases in the secondary education enrollment levels. H. FUTURE OPERATION 37. The Government prepared and submitted to IDA a draft Operation Plan in October 1998. Integrating the comments provided by IDA, the Government resubmitted the Operation Plan in April 1999, which is attached to this report as Annex C. This plan provides a government strategy with respect to the development and reform of basic education and provincial universities and its plans to sustain the project impact in project institutions and replicate to non-project institutions. The lessons learned from implementing this project are reflected and integrated in the design of the three subsequent Basic Education Projects, approved in 1994, 1995 and 1997, respectively, which capitalizes on the experience and strength provided by the present operation.  - 11 - I. KEY LESSONS LEARNED 38. The main lessons learned from the project are: * China has sufficient highly trained specialist in the field of education necessary to form an advisory group on education activities. * When there are a large number of civil works and equipment components in a project, implementing agencies do not have the additional staff required to properly supervise TA activities. Also, without the necessary covenants to enforce training in project management activities, the provinces are reluctant to spend project funds on these activities. Therefore the TA activities pertaining to project implementation must be carefully selected and adequate measures must be coupled with the physical components to ensure their proper and timely implementation. - When there are a small number of books and equipment to be procured for remote schools and the contracts for civil works are small, special considerations need to be taken into account when developing procurement procedures for these situations. * When multiple provinces or other entities are involved in cooperative efforts, for example, studies and a CEP, more expedient methods must be agreed upon during the project preparation on the approval of TORs, selection of institutions/firms, etc. and payments for the services. * Annual reports should be required earlier after the completed year to provide both the central government and IDA with the necessary information for making project decisions. * Proper financial arrangements among the concerned counties, provinces and MOF including development of proper forms, development of software and provisions for any equipment--must be in place at the beginning of the project. * The project design and management methods in this project have proven very effective. The central government has adopted the methodology in its own Compulsory Education Project (1998-2000) and the general approach has been used in subsequent IDA projects in China.  - 12 - PART II: STATISTICAL TABLES TABLE 1: SUMMARY OF ASSESSMENTS A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macroeconomic policies X Sector policies X Financial objectives X Institutional development X Physical objectives X Poverty reduction X Gender issues X Other social objectives x Environmental objectives X Public sector management x Private sector development X x B. Project Sustainability Likely Unlikely Uncertain x C. Bank Performance Highly Satisfactory Satisfactory Deficient Identification X Preparation assistance X Appraisal X Supervision x D. Borrower Performance Highly Satisfactory Satisfactory Deficient Preparation X Implementation X Covenant compliance X Operation (if applicable) E. Assessment of Outcome Highly Satisfactory Unsatisfactory Highly Satisfactory Unsatisfactory x  - 13 - TABLE 2: RELATED BANK LOANS/CREDITS Loan/Credit Purpose Year of Status Approval Preceding Operations University Development Project To strengthen science & engineering in 1981 Completed (Ln. 2021-CHA, Cr. 1167-CHA) 28 leading Chinese Universities. 1986 Objectives were to increase the quality & quantity of graduates & research, to strengthen the planning & management capabilities & to prepare investments in the education sector. Agriculture Education and To assist agriculture higher education and 1982 Completed Research Project (Cr. 1297-CHA) research in 11 agricultural colleges and 7 1989 institutions. Polytechnic/Television University To increase the number of students & to 1983 Completed Project (Cr. 141 1-CHA) improve the quality of instruction in 1992 China's 17 polytechnic institutions & 28 television universities. Rural Health Medical Education To educational component of this project 1984 Completed Project (Cr. 1472-CHA) was designed to enhance the quality of 1991 education, training & curriculum. Second Agricultural Education To improve & assist agriculture education 1984 Completed Project (Ln. 2444-CHA) in 23 agricultural colleges, 12 agricultural 1992 technical schools. Second University Development To increase technical & managerial 1985 Completed Project (Cr. 1551 -CHA) personnel through policy & institutional 1992 changes related to the engineering and economic/finance education subsector. Provincial University Project (Cr. To provide direct assistance to 60 1986 Completed 1671-CHA) provincial universities in 28 provinces 1992 and planning assistance for the higher education subsector. Gansu Provincial Development Part of comprehensive plan to attain 1987 Completed Project - (Ln. 2812-CHA) universal nine-year basic education and to 1995 Education Component (Cr. 1793- improve the quality of instruction in CHA) primary and lower secondary schools in Gansu Province. Teacher Training Project (Cr. To support the Government's efforts to 1988 Completed 1908-CHA) achieve UBE by expanding and 1993 upgrading in-service training of lower secondary school teachers with an emphasis on improvements in quality of teachers.  - 14 - Textbook Development Project To support the textbooks upgrading 1989 Completed (Cr. 2006-CHA) program by the Chinese government. 1995 Objectives are to improve the education quality of textbooks at all levels of schooling to increase the variety of available textbooks and to improve the efficiency of textbooks production. Vocational & Technical Education To improve the quality of technical & 1999 Completed Project (Cr. 2114-CHA) vocational training in China through 1996 support 59 secondary vocational/technical schools in 10 provinces and 3 municipalities. Medium-Sized Cities Development To assist Changzhou, Luoyang and 1991 Completed Project (Ln. 3286-CHA) Shashi cities to improve overall and 1997 sector planning and management, including education. Key Studies Development Project To support the government's plan to 1991 Completed (Cr. 221 0-CHA) reform the management of science and 1997 technology programs. It consists of support for research and graduate training in 133 State Key Laboratories and Special Labs affiliated with Universities and with the Chinese Academy of Sciences. Following Operations: Effective Teaching Services To contribute to improved learning at the 1993 Completed Project (Cr. 247 1-CHA) lower middle school level by providing 1998 teaching services, including instructional methodology, teacher training and management of teachers training and assignment. Basic Education in Poor and To support the attainment of universal 1994 To be Minority Areas (Cr. 2651 -CHA) primary education and expansion of completed coverage of lower secondary education in 2000 poor and minority areas in 6 provinces: Xinjiang, Sichuan, Inner Mongolia, Ningxia, Guangxi, and Jiangxi. Third Basic Education Project (Cr. To support the attainment of universal 1995 To be 2831 -CHA) primary education and expansion of completed coverage of lower secondary education in in 2001 poor and minority areas in seven provinces: Anhui, Fujian, Gansu, Hebei, Henan, Jilin and Qinghai  - 15- Southwest Poverty Alleviation The education component of the project 1995 To be Project (Cr. 3906-CHA) will address low educational attainment completed among those in project areas by 2001 enhancing the delivery of primary education to the poor through primary school renovation and construction, tuition assistance and nutritional supplements for poor students, provision of textbooks, instructional equipment and furniture and teacher and management training. Vocational Education Reform To improve and increase the supply of 1996 To be Project (Cr. 2063-CHA/Ln. 2898- skilled labor, raise the quality of completed CHA) efficiency of the VTE system and build 2002 up capacity for monitoring and evaluation in four high growth provinces and Tianjin municipality Fourth Basic Education Project To increase access/equity for the absolute 1997 To be (Cr. 2954-CHA) poor in primary and junior secondary completed education; to enhance the quality of 2002 primary andjunior secondary schooling, as well as teacher training education and training programs; to improve efficiency in the delivery of education through improving educational management at all levels. Higher Education Reform Project To improve the quality and relevance of 1999 To be (Ln. 4474/Cr. 3213-CHA) undergraduate basic science and completed engineering programs through integrated 2005 reform activities in curriculum and teaching methodology.  - 16 - TABLE 3: PROJECT TIMETABLE Steps in project cycle Date planned Date actual Identification 1990 Preappraisal 3/91 Appraisal 5/91 9/91 Negotiations 9/91 12/91 Board presentation 11/91 3/92 Signing 12/91 4/92 Effectiveness 2/91 7/92 Project completion 6/98 6/98 Loan closing 12/98 12/99 TABLE 4: LOAN/CREDIT DISBURSEMENT: CUMULATIVE ESTIMATE AND ACTUAL (US$ million) FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 Appraisal estimate 7.2 17.0 37.0 67.0 92.0 117.0 130.0 Actual 0.0 22.4 49.9 77.2 99.8 127.3 130.3 132.8 134.61 Actual as% ofadjustedestimate 132.0 135.0 115.0 109.0 109.0 100.2 Date of Final Disbursement April 4, 2000 I Difference in Appraisal disbursements and actual disbursements is due to change in US dollar value of SDRs  - 17- TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION-HIGHER EDUCATION Key implementation indicators in SAR Status at Start Actual at Completion 1. Pilot Project to Combine Small Universities Many small schools & Concept proven to be universities feasible and beneficial 2. Restructuring & rationalization of department Many small (often of date Some specialties combine specialties) others were eliminated or brought up-to-date 3. Better utilization of resources: staff, Low utilization of Teacher hours and classrooms and labs resources student/teacher ratio, classroom and lab hours increased per week; substantial enrollment increased 4. Dissemination of lessons/experiences n.a. Limited to among FILO and provincial FILOs 5. Upgrading staff qualifications Low teacher and Many teachers and staff administration from each university sent qualifications abroad and within China for training 6. Availability of lab equipment Low Availability Both availability and quality improved  - 18- TABLE 5A: KEY INDICATORS FOR PROJECT IMPLEMENTATION-GUIZHOU PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 85.7 96.0 98.0 Girls Enrollment Rate 74.4 92.0 96.0 Minority Children Enrollment Rate 76.6 92.9 96.0 Completion Rate 79.3 84.0 87.0 Dangerous Buildings (%) 10.6 3.0 2.2 Dilapidated Buildings (%) 24.1 18.0 4.3 2. Efficiency Repetition Grade I (%) 11.1 3.8 2.2 Repetition in Primary School (1-6) (%) 7.5 3.2 1.3 Promotion of Primary Graduates (%) 56.6 65.0 79.0 Completion Rate for Primary Education (%) 71.0 84.0 87.0 Teaching Hours per Week 24.0 26.0 29.0 Student/Teacher Ratio 22.9 23.0 24.0 3. Quality Average Number of Books per Student 1.3 7.0 6.8 Standard Equipment Sets (%) 6.6 100.0 100.0 Teacher Qualification Rate 67.6 95.0 95.0 SECONDARY EDUCATION 1. Access Overall Enrollment Rate* N/A N/A N/A Girls Enrollment Rate N/A N/A N/A Minority Children Enrollment Rate N/A N/A N/A Dangerous Buildings (%) N/A N/A N/A Dilapidated Buildings (%) N/A N/A N/A 2. Efficiency Student/Teacher Ratio N/A N/A N/A Teaching Hours per Week N/A N/A N/A 3. Quality Standard Equipment Sets (%/6) N/A N/A N/A Average Number of Books per Student N/A N/A N/A Teacher Qualification Rate N/A N/A N/A  - 19 - TABLE 5B: KEY INDICATORS FOR PROJECT IMPLEMENTATION-SHANXI PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 99.1 99.9 99.9 Girls Enrollment Rate 98.7 99.8 99.8 Minority Children Enrolhnent Rate -- -- - Completion Rate 82.0 97.0 99.0 Dangerous Buildings (%) 6.6 1.5 0.7 Dilapidated Buildings (%) 46.2 9.5 8.3 2. Efficiency Repetition Grade I (%) 8.3 3.2 2.1 Repetition in Primary School (1-6) (%) 5.1 2.2 1.8 Promotion of Primary Graduates (%) 50.3 65.3 78.3 Completion Rate for Primary Education (%/O) 98.5 99.5 99.9 Teaching Hours per Week 21.9 23.0 23.0 Student/Teacher Ratio 20.3 23.0 25.0 3. Quality Average Number of Books per Student 3.6 7.0 13.0 Standard Equipment Sets (%/6) 20.0 98.0 99.0 Teacher Qualification Rate 82.3 95.0 99.0 SECONDARY EDUCATION 1. Access Overall Enrollment Rate* 122 -- 255 Girls Enrollment Rate 47.2 -- 47.5 Minority Children Enrollment Rate -- -- Dangerous Buildings (%) 8.3 -- 1.2 Dilapidated Buildings (%) 40.2 -- 8.0 2. Efficiency Student/Teacher Ratio 15.1 -- 18.1 Teaching Hours per Week 12.7 -- 15.0 3. Quality Standard Equipment Sets (%) 24.1 -- 90.0 Average Number of Books per Student 9.6 -- 18.0 Teacher Qualification Rate 39.1 -- 91.0  - 20 - TABLE 5C: KEY INDICATORS FOR PROJECT IMPLEMENTATION-HUBEI PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 98.4 99.8 99.9 Girls Enrollment Rate 98.3 99.5 99.6 Minority Children Enrollment Rate 98.5 99.7 99.7 Completion Rate 84.1 93.0 95.0 Dangerous Buildings (%) 3.0 1.0 0.7 Dilapidated Buildings (%) 25.0 6.3 2.0 2. Efficiency Repetition Grade I (%) 12.0 3.8 1.5 Repetition in Primary School (1-6) (%) 3.9 3.2 1.5 Promotion of Primary Graduates (%) 60.9 65.0 99.9 Completion Rate for Primary Education (%) 80.0 84.0 99.8 Teaching Hours per Week 29.0 26.0 35.4 Student/Teacher Ratio 21.0 23.0 25.0 3. Quality Average Number of Books per Student 5.9 7.0 12.5 Standard Equipment Sets (%) 46.0 100.0 88.0 Teacher Qualification Rate 38.0 95.0 95.0 SECONDARY EDUCATION 1. Access Overall Enrollment Rate* 271 -- 318 Girls Enrollment Rate 48.0 -- 47.5 Minority Children Enrollment Rate 12.8 -- 14.0 Dangerous Buildings'(%) 3.5 -- 0.5 Dilapidated Buildings (%) 30.0 -- 2.0 2. Efficiency Student/Teacher Ratio 14.0 -- 20.0 Teaching Hours per Week 25.0 -- 33.0 3. Quality Standard Equipment Sets (%) 43.0 -- 90.0 Average Number of Books per Student 6.5 -- 18.0 Teacher Qualification Rate 40.0 -- 91.0  - 21 - TABLE 5D: KEY INDICATORS FOR PROJECT IMPLEMENTATION-HUNAN PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 70.0 99.9 99.9 Girls Enrollment Rate 95.6 99.0 98.9 Minority Children Enrollment Rate 96.5 98.0 99.0 Completion Rate 90.4 94.0 96.6 Dangerous Buildings (%) 4.0 1.0 0.4 Dilapidated Buildings (%) 7.2 13.2 10.7 2. Efficiency Repetition Grade I (C/) 5.1 2.7 1.6 Repetition in Primary School (1-6) (%) 3.7 2.2 1.3 Promotion of Primary Graduates (%/6) 74.0 90.0 94.7 Completion Rate for Primary Education (%) 94.5 98.0 99.0 Teaching Hours per Week 23.0 26.0 32.2 Student/Teacher Ratio 21.4 23.0 24.0 3. Quality Average Number of Books per Student 6.5 9.9 11.5 Standard Equipment Sets (%) 37.7 100.0 98.7 Teacher Qualification Rate 70.4 95.0 95.0 SECONDARY EDUCATION 1. Access Overall Enrollment Rate* 190.0 -- 270 Girls Enrollment Rate 42.5 -- 45.3 Minority Children Enrollment Rate 24.0 -- 35.3 Dangerous Buildings (%) 3.5 -- 0.5 Dilapidated Buildings (%) 24.0 -- 8.2 2. Efficiency Student/Teacher Ratio 4.5 -- 15.8 Teaching Hours per Week 13.0 -- 34.3 3. Quality Standard Equipment Sets (%/6) 45.0 -- 98.0 Average Number of Books per Student 9.3 -- 16.1 Teacher Qualification Rate 67.6 -- 91.0  - 22 - TABLE 5E: KEY INDICATORS FOR PROJECT IMPLEMENTATION-SHAANXI PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 99.1 98.0 99.8 Girls Enrollment Rate 98.7 98.0 99.3 Minority Children Enrollment Rate -- 95.0 97.5 Completion Rate 82.0 80.0 91.7 Dangerous Buildings (%) 6.6 1.5 1.0 Dilapidated Buildings (%) 46.2 8.6 5.5 2. Efficiency Repetition Grade I (%) 13.2 8.3 3.2 Repetition in Primary School (1-6) (%) 5.1 3.2 2.7 Promotion of Primary Graduates (%) 50.3 89.0 95.6 Completion Rate for Primary Education (%) 98.5 84.0 91.7 Teaching Hours per Week 21.9 26.0 25.0 Student/Teacher Ratio 20.3 23.0 25.0 3. Quality Average Number of Books per Student 3.6 9.0 15.0 Standard Equipment Sets (%/o) 20.0 100.0 100.0 Teacher Qualification Rate 82.3 95.0 95.0 SECONDARY EDUCATION 1. Access Overall Enrollment Rate* 108.0 -- 150.0 Girls Enrollment Rate 47.2 -- 48.2 Minority Children Enrollment Rate 3.6 4.0 4.1 Dangerous Buildings (%) 6.3 2.3 1.5 Dilapidated Buildings (%) 14.2 9.7 6.6 2. Efficiency Student/Teacher Ratio 15.1 16.0 10.0 Teaching Hours per Week 12.7 14.0 16.0 3. Quality Standard Equipment Sets (%) 24.1 45.0 73.0 Average Number of Books per Student 9.8 15.0 20.0 Teacher Qualification Rate 39.1 62.0 85.0  - 23 - TABLE 5F: KEY INDICATORS FOR PROJECT IMPLEMENTATION-YUNNAN PROVINCE Key implementation indicators in SAR 1992 Estimate Target Actual PRIMARY EDUCATION 1. Access Overall Enrollment Rate 92.4 95.0 98.0 Girls Enrollment Rate 90.7 92.0 97.0 Minority Children Enrollment Rate 92.5 93.0 97.0 Completion Rate 63.4 80.0 82.6 Dangerous Buildings (%) 3.3 2.5 2.5 Dilapidated Buildings (%) 13.6 9.0 8.0 2. Efficiency Repetition Grade I (