Document o f The World Bank FOROFFICIALUSEONLY Report No: 41773-YE PROJECTAPPRAISAL DOCUMENT ON A PROPOSEDCREDIT INTHEAMOUNT OF SDR 12.76MILLION (US$20.0 MILLION EQUIVALENT) TO THE REPUBLIC OF YEMEN FOR A SECONDARY EDUCATIONDEVELOPMENT AND GIRLS ACCESS PROJECT February 19,2008 Human Development Sector Middle East andNorthAfrica Region This document has a restricted distribution and may be used by recipients only inthe performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUNALENTS (ExchangeRateEffectiveNovember 15,2007) Currency Unit = Yemeni Rial(YR) YR 1.0 = US$O.OOSOS YR 198.2 = US$l.O FISCALYEAR January 1 - December31 ABBREVIATIONSAND ACRONYMS AES AnnualEducationSurvey AWP Annual Work Plan BEEP Basic EducationExpansionProject BEDP Basic EducationDevelopment Project CAS CountryAssistance Strategy CCT ConditionalCashTransfer CGS Curriculumand Guidance Sector COME Center of Measurementand Evaluation DE0 DistrictEducationOffice DFID UnitedKingdom's Departmentfor InternationalDevelopment DG DirectorGeneral DPs DevelopmentalPartners EA EnvironmentalAssessment EAPC EducationalAids ProductionCentre EIRR Economic InternalRateofReturn EMIS EducationManagementInformationSystem EMP EnvironmentalManagementPlan ERDC EducationResourcesDevelopmentCentre FM FinancialManagement GDP Gross DomesticProduct GEO GovernorateEducationOffice GOY Government of Yemen GER Gross EnrollmentRate GSC GovernorateSteeringCommittee GNI GrossNationalIncome GPI Gender ParityIndex GTZ Germany's Gesellschaft fur TechnischeZusammenarbeit HIS Higher Institutes ICR ImplementationCompletionReport IDA InternationalDevelopmentAssociation ILO InternationalLabour Organisation IMSC InterMinisterialSteeringCommittee KfW GermanCredit Institutefor Reconstruction(KreditanstalFur Wiederaufbau) LAL Local AuthorityLaw MASTERY Mathematics and ScienceTeacher EducationReformProject MDGs MillenniumDevelopment Goals MDTF Multi-DonorTrust Fund MoCSI Ministry of Civil Service and Insurance .. 11 FOROFFICIAL USE ONLY MoE MinistryofEducation MoF MinistryofFinance MoHESR Ministryof Higher Educationand Scientific Research MoLA Ministryof Local Administration MoPIC Ministryof Planningand InternationalCooperation MoTEVT Ministryof Technical Education and Vocational Training MOU Memorandum of Understanding MS Monitoring Survey NER Net Enrollment Rate NGSES National General SecondaryEducation Strategy NPV Net PresentValue PAD Project Appraisal Document PAU Project Administration Unit PDO Project Development Objective PD Partnership Declaration PHRD Policy and Human Resource Development (Grant by the Government of Japan) PMU Project Management Unit PWP Public Works Project POM Project Operation Manual RNE Royal Netherlands Embassy sc School Council SEDGAP Secondary EducationDevelopment and Girls Access Project SCG School Community Grants SFD Social Fundfor Development TEVT Technical Education and Vocational Training TO Technical Office TQS Training and Qualification Sector TTIs Teacher Training Institutes USAID United States Agency for InternationalDevelopment WFP World Food Program WSIF Whole-School Improvement Fund Vice President: Daniela Gressani Country ManagerDirector: Emmanuel Mbi Sector Director Michal Rutkowski Sector Manager: Mourad Ezzine Task Team Leader: Ayesha Y. Vawda This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. 111 ... REPUBLICOFYEMEN SECONDARYEDUCATIONDEVELOPMENTAND GIRLS ACCESS PROJECT CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ....................................................................................... 1 A. Country and sector issues......................................................................................................................... 1 B. Rationalefor Bank involvement .............................................................................................................. 3 C. Higher levelobjectivesto which the project contributes ......................................................................... 4 I1. PROJECTDESCRIPTION .................................................................................................................. 5 A. Lending instrument.................................................................................................................................. 5 B. Projectdevelopment objective andkey indicators.................................................................................. - 5 C. Projectcomponents................................................................................................................................. - 5 D. Lessons learned andreflectedinthe projectdesign................................................................................. 8 E. Alternativesconsideredandreasonsfor rejection.................................................................................... 9 I11. IMPLEMENTATION ......................................................................................................................... 10 A. Partnership arrangements....................................................................................................................... 10 B. Institutionaland implementationarrangements..................................................................................... 11 C. Monitoring and evaluationof outcomes/results..................................................................................... 12 D. Sustainability.......................................................................................................................................... 12 E. Critical risks andpossiblecontroversialaspects.................................................................................... 13 F . Loadcredit conditionsand covenants.................................................................................................... 14 IV. APPRAISAL SUMMARY ................................................................................................................... 15 A. Economicand financial analyses ........................................................................................................... 15 B. Technical................................................................................................................................................ 15 C. Fiduciary................................................................................................................................................ 16 D. Social...................................................................................................................................................... 17 E. Environment........................................................................................................................................... 17 F. Safeguardpolicies.................................................................................................................................. 18 G. Policy exceptionsandreadiness............................................................................................................. 18 iv Annex 1: Country. Sector and ProjectBackground ...................................................................................... 19 Annex 2: Major RelatedProjectsFinancedby the Bankand/or other Agencies ........................................ 25 Annex 3: ResultsFramework and Monitoring ............................................................................................... 27 Annex 4: DetailedProjectDescription ............................................................................................................ 31 Annex 5: Project Costs ...................................................................................................................................... 37 Annex 6: ImplementationArrangements ....................................................................................................... 38 Annex 7: FinancialManagementand DisbursementArrangements .......................................................... -44 Annex 8: ProcurementArrangements ............................................................................................................ 53 Annex 9: Economic and FinancialAnalysis .................................................................................................... 62 Annex 10: Safeguard PolicyIssues .................................................................................................................. 67 Annex 11: ProjectPreparationand Supervision ............................................................................................ 71 Annex 12: Sector Policy Letter ....................................................................................................................... 72 Annex 13: Documentsin the ProjectFile ........................................................................................................ 75 Annex 14: Statement of Loans and Credits .................................................................................................... 77 Annex 15: Country at a Glance ........................................................................................................................ 78 Annex 16: Map .................................................................................................................................................. 80 V REPUBLIC OF YEMEN SECONDARY EDUCATION DEVELOPMENT AND GIRLS ACCESS PROJECT PROJECT APPRAISAL DOCUMENT Middle East andNorthAfrica Region MNSHD Date: February 19, 2008 Team Leader: Ayesha Vawda Country Director: EmmanuelMbi Sectors: Secondary education(100 %) Sector Director: MichalRutkowski Themes: Educationfor the knowledge economy (P); Gender (S). ProjectID: PO89761 Environmentalscreeningcategory: B LendingInstrument: Specific InvestmentLoan [ ] Loan [X ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing(US$m.): 20.00 Proposedterms: Standard, with 40 year maturity,including 10years of grace period. INTERNATIONAL DEVELOPMENTASSOCIATION 11.3 8.7 20.0 GERMANY:GESELLSCHAFTFURTECHNISCHE 0.4 2.6 3.O ZUSAMMENARBEIT(GTZ) GERMANY: GERMANCREDITINSTITUTEFOR 6.8 5.O 11.8 Borrower: Republicof Yemen ResponsibleAgency: Ministry of Education FY 2009 2010 2011 2012 2013 2014 2015 Annual 1.o 2.7 4.2 4.5 5.O 2.0 0.6 Cumulative 1 .o 3.7 7.9 12.4 17.4 19.4 20.0 vi Doesthe projectdepart from the CAS in content or other significantrespects?Ref: PAD A.3 [ ]Yes [XINO Doesthe projectrequireany exceptions from Bank policies? Ref: PAD D.7 [ ]Yes [XINO Havethese beenapprovedby Bank management? I s approvalfor any policy exceptionsought from the Board? [[ ]Yes [ IN0 ]Yes [XINO Does the project includeany critical risks rated"substantial" or "high"? Ref; PAD C.5 [XIYes [ ] N o Does the projectmeet the Regionalcriteria for readiness for implementation?Ref: PAD D.7 [XIYes [ ]No Projectdevelopment objectiveRef: PAD B.2, TechnicalAnnex 3 The objective ofthe project is to support the Government of Yemen's programfor improving gender equity, quality, andefficiency of secondary education inselecteddistrictswith aparticular focus on girls in ruralareas. ProjectdescriptionRef: PAD B.3.a, TechnicalAnnex 4. The projecthas four components: Component 1: Improving equity and reducing gender gaps through demand and supply-side interventionsby: (i) upgrading and furnishing school facilities; (ii)providing learning equipment and materials; (iii) developing the operating procedures and building capacity for managing the school community grants; and (iv) providing school community grants; Component 2: Enhancing the quality of service delivery through: (i)capacity building to improve teaching and learning practices in the classroom; (ii)strengthening the learning assessment system, and (iii) developingcapacity to improveplanning, programmingand data collectionand analysis; Component 3: Supporting Secondary Education Policy Development through the carrying out of tailor-made studies and/or related-activities;and Component4: Projectmanagementand monitoring. Which safeguardpoliciesare triggered, ifany? Ref: PAD 0.6, TechnicalAnnex 10 Environment:OP 4.10 Significant,non-standardconditions, ifany, for: Ref: PAD C.7 Loadcredit effectiveness: None Boardpresentation: None Covenants applicableto project implementation: 1. Preparation of project operation manual including a financial managementmanual, satisfactoryto IDA, by no later than August 31,2008, and 2. The MoE shall enter into a protocol of participation by no later than August 15, 2008 with the Governors, Minister of Planningand InternationalCooperation, the Minister of Finance, and the Minister o f Civil Services and Insurance. The purpose of the protocol shall be to cause the Governorates within the project area to comply with the educationreform policies in order for such Governorates to become eligible for participatinginthe project. vii I. STRATEGICCONTEXTANDRATIONALE A. Countryand sector issues 1. Socio economic background. Since unification in 1990, the Republic o f Yemen has made significant progress in economic and social development. Nevertheless, Yemen is unlikely to meet the Millennium Development Goals (MDGs). The country ranked 150 out o f 177 countries in the 2006 Human Development Index and 121 out o f 140 countries in the Gender Development Index (2006). Poverty reduction remains a challenge for Yemen and it i s likely that the future decline in oil production will negatively affect Gross Domestic Product (GDP) growth and therefore poverty reduction and employment targets. 2. Educationsystem. Introduced in 1994, the structure o f Yemen's unified education system comprises 9 years of compulsory basic education followed by 3 years o f general secondary, with enrollment diversified into the science and literary tracks in Grades 11 and 12. General education is under the purview o f the Ministry of Education (MoE). Vocational schools and community colleges, managed by the Ministry o f Technical Education and Vocational Training (MoTEVT) offer 2 and 3-year post basic and post secondary programs. University education is regulated by the Ministry o f Higher Education and Scientific Research (MoHESR). The private sector is small, accounting for about 2% o f basic and secondary and 15% o f university enrollments (2004/05). 3. Public schooling i s subsidized at all levels. Although sub-sectoral allocations are increasingly being made in favor o f post secondary education, education expenditures continue to be prioritized in the national budget, ranging over the last decade from 14% to 21%. As a result, the education system has expanded tremendously. From 250,000 students in 1970, there are now 4.3 million students in basic education. Between 1996 and 2004, enrollment increased in secondary schools from 324,000 to 595,000 and in universities from 104,000 to 201,000. 4. Education Policies and Strategies. Over the last six years, Yemen has endorsed at least five different strategies to address challenges in basic, secondary, and higher education, technical education and vocational training, inclusive education and youth issues. The Government o f Yemen (GOY)has recently launched an exercise to steer dialogue between the three education ministries to support the development o f an integrated vision for education spanning all education sectors. 5. The National General Secondary Education Strategy (NGSES), approved by Cabinet in July 2007, was developed through a wide-ranging consultation process. The NGSES aims to provide high quality secondary education for transition to tertiary education and the labor market in an equitable and cost effective manner and prioritizes addressing the following challenges: gender and rural access inequity; inefficiency resulting from high repetition and dropout, ineffective teacher deployment, poor quality o f teaching and low teaching loads; lack o f availability o f well trained teachers, particularly females in rural areas; weak capacity o f principals and supervisors to support teaching and learning, non-availability o f modern teaching and learning technologies and processes to benefit learning; inadequacy o f the curriculum and its implementation, particularly as regards linkage with higher education; unreliable and weak assessment o f teaching and learning processes; and lack o f private financing to support secondary education delivery. 6. Other notable recent reforms o f the GOYthat are expected to have significant positive impacts on education service delivery include: (i)the use o f a school mapping database and technical criteria as a basis for school establishment and personnel deployment decisions to reduce inefficiencies resultingfrom non-objective school selection criteria, which have hampered the provision o f quality secondary education, and (ii)linking o f the teacher post to the school rather than to the individual to enable 1 sustainable provision o f teachers, particularly females in rural areas. Furthermore, in an effort to translate policy reforms into reality in the context o f the availability o f external resources through the Secondary Education Development and Girls Access Project (SEDGAP), and as articulated in the GOYSector Policy Letter, the M o E has undertaken to enter into a protocol o f participation with the Ministries o f Planning and International Cooperation (MOPIC), Finance (MOF), Civil service and Insurance (MOCSI) and each o f the governorates that would be targeted through the SEDGAP. This protocol o f participation declares the commitment o f the signatory parties to comply with reform policies in the target districts to ensure a minimum o f 15% female representation in new teaching posts for basic and secondary education; involving M o E representatives in the Governorates and Districts in the teacher recruitment process; planning and implementingteacher deployment; ensuring compliance o f the M o E decision to link the post o f the teacher to the school; and eradicating teacher absenteeism (details in Annex 1). 7. Relevant secondary education issues:' Gender and regional inequity. At 38.3%, the secondary Gross Enrollment Rate (GER) in Yemen i s low by international standards. Girls fare worse than boys particularly in rural areas. In 2004/05, the secondary GER stood at 59.8% for boys and 25.9% for girls (2004/05), with a 16 percentage point difference between urban and rural GERs for males and 40 percentage point difference for females. 8. The problem o f low female participation in secondary is rooted in girls' retention in basic education. Overall, out o f every 100 girls who join basic education in Grade 1, only 25% will complete Grade 9, thus limiting the possible intake into secondary education. Both supply-side (e.g., lack o f secondary school close to home, transportation to school, teachers, particularly female, and sanitary facilities in schools, etc.) and demand-side (e.g., attitudinal factors, poverty, early marriage, etc.) constraints play an important role in limiting secondary school participation. 9. Inefficiency. Inefficiencies in the secondary education system are generated principally from the high repetition and dropout rates and low pass rates, and inefficient school distribution and staff deployment in the system. Based on the national averages o f 9.2% dropout, 4.4% repetition and 82% pass rates, it takes boys 4.25 years and girls 3.92 years to graduate from the 3-year secondary education cycle. 10. Since secondary school establishment has been ad hoc at best, only 21% o f the schools have more than 180 students (13% o f rural and 47% o f urban schools), the minimum number o f students required to have a viable secondary school offering the two mandatory academic streams. Only 27% o f the schools offered two parallel streams in grades 11 and 12. There i s also a large variation in school and class sizes where urban schools are often overcrowded and rural schools underutilized.2 Although the private sector can play an important role in absorbing the excess demand in urban areas, excessive regulatory barriers limit private financing. 11. Teacher deployment i s uneven and inefficient. While some schools may have excess teachers in certain subjects, there may be shortages in the same subjects at other schools. And, even if all schools would have a minimum o f 180 students (6 classes), efficient workloads o f 22 teaching periods per week would allow only 10 teachers per school, whereas the number o f subjects in the school timetable is considerably larger than that (approximately 17), therefore promoting the need for more teachers. Currently, 7.5% o f the rural secondary teachers are female. ' A more thorough description o f education and management issues facing secondary education in Yemen at all levels o f decision making - national, governorate, district and schools is available inthe project files. 2 The long-term policy of the MoE is to phase out small secondary schools unviable to meet the minimum 180 enrollment norm or to merge those likely to meet these criteria collectively. 2 12. Inappropriate quality of education as manifested by low learning outcomes and unsuitable teaching practices. The current theoretical and overloaded secondary education curriculum does not contain sufficient life or employment related skills, information technology skills, or thinking skills to adequately prepare secondary graduates for entering the labor market or to be successful at post-secondary institutions. Employers do not consider secondary school graduates to be ade uately prepared for the workplace and the youth unemployment is estimated at more than 30 percent. The delivery o f the 9 curriculum in schools and classrooms is further hampered by inadequate, uneven or slow distribution o f virtually all learning inputs (teachers, adequate physical facilities and equipment, text- and resource books, etc.). The assessment structure suffers from the absence o f a standards framework and ongoing testing o f student achievement relative to those standards. 13. There is a misalignment between teacher quantity and quality requirements in secondary education and the pre-service teacher preparation provided by the universities. There i s no framework for professional teaching standards and there are no coordination mechanisms between the M o E and the MoHESR. Annually, the universities graduate over 15,000 teachers, but at present only around 6,000- 7,000 teachers are hired, mostly for basic education without necessarily having pedagogical skills. 14. Ineflciency in managing the education sector and lack of effective governance at all levels of decision making (National, Governorate, District, Schools and community). The education system in Yemen faces many functional and structural problems at the central and decentralized level that are affecting its performance and which have been recognized in the NGSES. The decentralization process has already advanced considerably in the wake o f the 2000 Local Authority Law (LAL) and is a reality to which the M o E must adapt. However: (i)there are still gaps between written laws and regulations and actual practices; (ii)there are contradictions and lack o f detail in the legal decentralization framework; (iii)decentralization is often ignored within the strong historical tradition of centralization and continuation of some centralized structures; (iv) there i s a lack o f training for administrative and supervisory cadres in the MoE, Governorate Education Offices (GEOs), District Education Offices (DEOs) and, especially for school principals to ensure what should be perceived as their critical functions for improving school performance; (v) there i s deficiency in administrative systems which results in unavailability o f transparent processes; (vi) there is a lack o f basic office equipment, materials and telecommunications system; and (vii) M o E has not yet been able to effectively change its implementer role to one responsible for setting policies, standards and outcome indicators, monitoring performance, quality and differences in service levels and carrying out an effective dialogue with the MoHESR for the urgent alignment o f the pre-service teacher training with teacher requirements inthe education sector. 15. Because the M o E has a limited mandate over the staff and resources allocated for the delivery o f education service^,^ it is difficult for the M o E to monitor and affect the quality o f education service delivery without the critical involvement o f other stakeholders. The LAL entrusted governorates and districts with responsibility for the delivery o f education services. Technical accountabilities o f the GEOs and DEOs are not linked to the MoE, which sets policies and standards, but to the Governors and District Directors (soon to be elected officials according to the proposed amendment to the current LAL). B. Rationalefor Bankinvolvement 16. The International Development Association (IDA) continues to be a major Development Partner (DP) in Yemen. Since 2003, IDA has administered the multi-donor Basic Education Development YemenAn Integrated Approach to Social Sectors: Towards a Social Protection Strategy -Phase IReport. World Bank Human DevelopmentDepartment, MiddleEast andNorth Africa Region, WashingtonD.C. June 2007. 4This has been a significant constraintin ensuring service delivery, since morethan 90% of the staff and the budget that is deployed for education service delivery is outside the responsibilityofthe MoE. 3 Project (BEDP), the Educationfor All Fast Track Initiative (EFA-FTI) Catalytic Fund grants' and the EducationProgram DevelopmentFund(EPDF) grant onbehalfofthe DP community. 17. This Project continues the tradition of IDA'Slongterm strategic support to all education sectors inthe country. The value added of IDA'Sinvolvement in education has been maintained by ensuring that its analytical and advisory support to the sector and projects that it finances are consistent and complementary: 0 IDA has historically supported the GOYin the articulation of a commonfiamework through the developmentof a sector strategy,followed by an investment based on the strategy. This, in turn, has helped pave the way for other DPs in the country to adopt the common strategic and investment framework. 0 IDA'Ssupport has built on past interventions. The BEDP was a natural extension of the Basic EducationExpansionProject(BEEP), which was focused in five governorates in the country and which set the stage for key education reforms that are beginning to be instituted through the BEDP on a nationalscale. 0 This project is a natural extension of the BEDP to ensure that more children graduating from basic education, especially girls, are now offered the opportunity to receive a good quality and relevant secondary education. At the same time, secondary education is considered to be pivotal in addressing critical bottlenecks that might hinder the reform efforts currently being supported by IDA in highereducationas well as intechnicaleducationhocationaltraining. 18. IDA already plays a lead role in Yemen in the areas of macroeconomic policy environment, public finance management and civil service aiming at: (i)helping to ensure that institutional change and capacity building supported by the proposed project draws on international best practices; and (ii) targeting the knowledge base of international and local expertise in the implementation of key project interventions. 19. IDA also brings to this project its international and country-specificexperience, in particular, with respect to: (i) demand-driven interventions,like the conditionalcash transfer schemes, as an incentiveto encourage enrollment of girls and the deployment of more qualified female teachers; and (ii) the allocation of financial resourcesto targeted schools throughschool councilsas a way to introducequality improvements in the schools and enhance the social control of the utilization of these resources by the school community. C. Higher levelobjectives to which the project contributes 20. The project is anchored in the current results-basedCountry Assistance Strategy (CAS).6 This CAS supports investments aimed at reducing poverty through social and economic development. The SEDGAP is also aligned with the GOY'Sthird five-year Socio-Economic Development Plan for Poverty Reduction (2006-20 10) and the corresponding Public Investment Program (2007-2010) which prioritize the achievement ofthe MDGs. SEDGAP is also fully alignedwith the NGSES. 5IDA has administeredthe two successive phases ofthe Catalytic Fundgrant since 2004, when Yemen was endorsedby the EFA FTI donor community in 2002. A third phase is expectedto become effective in the spring of 2008, which will also be administeredby IDA. 6The CAS is dated May 17,2006 discussed and agreedwith the GOYand with the Bank Boardon June 15,2006. 4 11. PROJECTDESCRIPTION A. Lendinginstrument 21. The lending instrument proposed is a specific sector investment loan for an estimated amount of SDR 12.76 million (US$20.0 million equivalent). B. Projectdevelopment objective and key indicators 22. Based on the prioritized secondary education development challenges, the strategic vision articulated through the development of the NGSES, the GOYhas designed an investment project, in partnership with DPs, to achieve the strategic objectives of the NGSES. The objective of the Secondary Education Developmentand Girls Access Project (SEDGAP) is to support the GOY'Sprogramfor improving gender equity, quality, and eficiency of secondary education in selected districts with aparticular focus on girls in rural areas. 23. The Governments of the Netherlands, Germany (through the KfW andthe GTZ), the UnitedKingdom (throughthe DFID) and the World Bank have come together with the GOYto finance the SEDGAP. All DPs financing the SEDGAP have agreed to pool their funds to contribute to the same DO, indicatorsand project design. In this context of donor harmonization, this document does not segregate what IDA'S portion of the financing will achieve in isolation from the remainder of the DP financing, as it cannot be measured reliably and is not in line with the spirit ofharmonization. 24. The projectdevelopmentalobjective(PDO) translates into the following key outcome indicatorsto be reachedin a periodof six years: 0 Gender parity index of secondary education access rates in the project districts increased from 0.42 to 0.66; Grade 10 to Grade 12 retentionrate in project districts improvedfrom 80.6% to 85.4% for males and from 84.2% to 89.1% for females and 0 Improved learning outcomes in Mathematics in G12 (to be obtained using independent curriculum-basedlearningassessment conducted in randomly selected schools inyears 2 and 5). C. Projectcomponents 25. Project Scope: The current scope of this projectreflects the commitments made by five Development Partners and the GOY, who have come together to support this program in a harmonized manner to achieve the objectives of the GOYprogramcollectively. As more GOYand external funds are available, the projectis expectedto expand inscope onthe basisofresults. 26. The proposed project will finance a series of interventions in 9 Governorates (Abyan, Aden City, Dhamar, Hadramout, Hodaidah, Ibb, Lahej, Sana'a city and Taiz). Approximately90 schools in about 30 districts have been selected for intervention in component 1. Implementationof Component 1 activities will begin in a phased manner, starting in 5 of the target governorates during the first 18 months. Expansion of SEDGAP to the 4 additional governorates on or about 18 to 24 months after the project launch would be made contingent upon evidence of results on the ground measured through the achievement of the outcome and output indicators(detailed inAnnex 3). 5 27. Selection of Target Districts, Target Governorates and Schools:' Target districts for intervention represent areas where the development impact of the project can be maximized. In order to minimize implementationrisks resulting from low capacity and the subsequent need to provide intensive capacity building and monitoring, the target Governorateswere selectedonthe basis of geographical concentration of target districts. Similarly, schools where there is a greater potentialof improvingefficiency, equity and quality have been selectedfor targeting. 28. The projectwill have four components as follows: Component 1: Improving equity and reducing gender gaps through demand and supply-side interventions(US$74.1milliontotal; IDA:US$15.O million, includingcontingencies) Sub- component 1.1: Upgrading andfurnishing school facilities (US$53.7 million total; IDA: US$11.O million, includingcontingencies) 29. This sub-component will finance: (i) the extension, rehabilitation, repair and upgrading of existing facilities to bringthem up to acceptable standards; (ii)civil works site supervisionduring the construction phase, and (iii) the provision of school furniture and basic equipment, includingdelivery, installationand testingof equipment and furniture. Sub- component 1.2: Providing learning equipment and materials (US$12.3 million total; IDA: US$2.4 million, includingcontingencies) 30. This sub-component will finance the provision of learning equipment (comprising science laboratories, computer laboratories, multi-purpose rooms, etc.) and learning materials to be acquired appropriate to the existingcurriculum. Sub-component 1.3: Developing the operating procedures and building capacity for managing school- community grants (US$l-1milliontotal; IDA: US$0.2million, includingcontingencies) 3 1. Under this sub-component, the project will finance: (i)technical assistance to develop the operational and training manual for implementingthe school community grant scheme; and (ii) intensive training to the community, inparticularthe mothers' and fathers' councils, as well as the schoolmanagement on the use of allocationsto the schools. Sub-component 1.4: Providing school-community grants (US$7.0 million total; IDA: US$1.4 million, includingcontingencies) 32. Under this sub-component, the project will finance: targeted incentives to students through school community allocations which include: (i)subsidies to arrange transportation to school; (ii) subsidies to contract female staff in co-educational schools; and (iii) conditional cash transfers (CCTs) to girls in grades 4-12 and to boys in grades 10-12 in the target districts where more than 50% of the population is belowthe national poverty line. Component 2: Enhancing the quality of service delivery (US$23.4million total; IDA: US$4.0 million, includingcontingencies) Sub-component 2.1: Capacity building to improve teaching and learning practices in the classroom (US$22.0 milliontotal; IDA: US$3.7 million, includingcontingencies) 'District,Governorate and Schoolselection criteria are detailedinAnnex 4. 6 33: This sub-component will support: (i) the identification and development of upgraded teaching and learningmaterials for the existingcurriculum basedon the findings of the current textbook revisionfrom Grades 1to 12 beingfinanced through the BEDP; (ii)the development and delivery of trainingto support teachers and school teams, includingthe connected training and professionaldevelopment of trainers and supervisors, (iii)strengthening of school principal's capacity to lead and manage the school, and (iv) strengthening of supervisors' capacity to monitor service delivery. Sub-component 2.2: Strengthening the learning assessment system (US$0.8 million total; IDA: US$0.2 million, includingcontingencies) 34. Activities under this sub-component will take place in the latter half of the project implementation period, after the Center of Measurement and Evaluation (COME), currently being established through BEDP and Social Fund for Development(SFD) support, is filly functionalto conduct major assessments and to manage the examination system. Activities to be financed include: (i)the introduction of new examinations in the school system; and (ii)the strengthening of capacity at school level to prepare and conduct assessments of student performance based on the existing syllabi, texts, and learningmaterials. This is consistent with the decision to review the current curriculum and texts before beginninga major revisionofthe curriculum. Sub-component 2.3: Developing capacity to improve planning, programming and data collection and analysis (US$0.6 million total; IDA: US$O. 1 million, includingcontingencies) 35. This sub-component will finance: (i)trainingof central level staff of the Department of Statistics and Planning, School Mapping, and InformationTechnology to assess the capacity of the staff at the project GEOs to produce projection reports for school expansion and establishment according to key variables (populationgrowth, enrollment growth from basic to secondary, school mapping, demand for and supply of teachers and administrative staff and facilities); (ii)training the governorates and districts staff responsible for planning, programming, school mapping, data collection and analysis in preparing projection reports; and (iii) providing technical assistance to backstop and supervise these staff throughoutthe preparationof the projectionreports to ensure report quality andreliability. Component 3. Supporting Secondary Education Policy Development (US$1.5 million total; IDA: US$0.3 million, includingcontingencies) 36. To support policy development and preparation for longer-term reform, the following key studies and/or related activities will be financed: (i)reviews of in-serviceand pre-servicetraining of teachers; (ii) the preparation of a curriculum framework policy document based on a comprehensive review of the current streams and curriculum; (iii) feasibility assessment for developing a regulatory framework that a would encourage the private sector to invest in secondary education; and (iv) carrying out tracer studies on secondary education graduates to assess the effectiveness of secondary education outcomes. Component 4. Project Management and Monitoring (US$4.4 million total; IDA: US$0.8 million, includingcontingencies) 37. This component will finance the support and strengthening of the ProjectAdministration Unit (PAU) to carry out the fiduciary responsibilityand reporting in a timely and effective fashion as requiredby the SEGDAP legal agreements entered into betweenthe DPs and the GOY. In addition, this component will finance the required activities to ensure that the outcome and output indicators agreed with the GOYand with the DPs and included in Annex 3 to the PAD (including teacher and student assessments) are updated and reportedto GOYand the DPs with the agreed frequency. 7 D. Lessonslearned and reflectedin the project design 38. The content and scope o f the design and the preparation process pursued to develop the SEDGAP have benefited from lessons learned through years o f implementing projects in Yemen and around the world, drawing particularly on the BEDP, the recently-closed Basic Education Expansion Project (BEEP), the Yemen Secondary Teacher Training Project8 and the Yemen Education Sector Investment Project.' These lessons include: 0 Ensuringownership by supportingthe counterpart team to take the lead in designingthe project from the early stages o f project design. The MoE-designated project preparation team has worked intensively with the IDA and the DP representatives to prepare this project and has noted the benefits o f the capacity buildingnature o f this process. This important shift inthe preparation process is likely to produce remarkable differences with respect to implementation; Emphasizing implementation readiness during the preparation phase to avoid unnecessary delays. By appraisal, the M o E has: (i)undertaken a baseline inventory o f the physical facilities in 120 potential secondary schools in the 9 governorates; (ii)identified and initiated required pre- launching activities"; (iii)drafted a Decree establishing the Project Steering Committee; and (iv) nominated a dedicated Coordinator for Secondary Education inthe MoE; 0 Prioritizing simplicity in the project design by limiting the number o f interventions to the most critical ones and by developing components based on the scope o f the proposed activities that could best address the main issues in secondary education effectively; Ensuring aphased approach whereby the project starts in few focused geographical areas and an increase in the scope o f implementation is based on needs and evidence o f results; 0 Prioritizing activities that have proved successful. Therefore, the project undertakes to: (i) balance supply-side with demand-side interventions that are determined by the needs and characteristics of targeted groups; (ii)support awareness raising programs, upgrading o f civil works in well-targeted regions and targeting CCTs, which have proved effective in enhancing enrollment o f disadvantaged groups; (iii)invest in teacher training which has been shown to improve the teaching and learning processes"; and (iv) build the capacity in the participating GEOs and DEOs in management and technical specialties to ensure sustainability o fthe project; Employing, to the extent possible, existing implementation arrangements. Lessons learned from the first phase of the FTICatalytic Fund grant and the recently-closed BEEP point to the fact that project implementation is likely to be smooth and timely if the implementation arrangements are simple and well understood by all the implementers. Because the target governorates o f the secondary project are already covered either by the BEEP, the FTI Catalytic Fund grants, or the BEDP, and because secondary education is under the purview o f the same staff o f the M o E as is 8 ICR for this project (P005835) datedDecember 31,2000 ICR for this project (PO05911) datedMarch 30, 2005 I OThese pre-launching activities include: (i)preparatory activities to implement sub-component 1.1; (ii) preparation of the SEDGAP Operation Manual and (iii)assessment of key institutional and organizational gaps in the 5 initial 7,roject governoratesand implementing a time-bound action plan to addressthem. Cooke, Brenda. Preliminary Monitoring Report for Mid-term Review of the Basic Education Development Project (BEDP; Cr. 3988-YEM). September 2007. 8 basic education, the implementers o f this project will be primarily the same people at the M o E center, governorate and district level as have been for the BEEP, the FTI and the BEDP.12 The knowledge and experience o f these staff have expanded through years o f experience in other projects. Therefore, the secondary project employs, to the extent possible, similar implementation arrangements; and Ensuring the alignment of interested DPs to maximize results on the ground and minimize transaction costs for the Government. The SEDGAP builds on the harmonization approach that was initiated under the BEDP. Key DPs have aligned their support with the SEDGAP's PDOs, technical design and indicators, and have agreed to pursue common procurement, financial management and monitoring requirements. The rules o f engagement based on principles of harmonization and shared responsibility for achieving the agreed PDOs will be articulated through an agreed Memorandum o f Understanding (MoU). E. Alternatives considered and reasonsfor rejection 39. A more comprehensive project design was considered including interventions: (i)at the Grade 7-9 level o f basic education (where some o f the most drastic issues in secondary education are generated); (ii) coordination with higher education (lack o f which has resulted in mismatches between teacher demand and supply and inappropriate teacher qualifications resulting in low quality o f secondary school teaching and learning practices), and (iii)systematic linkage with technical education and vocational training (where other learning streams at the secondary level, more attuned to the labor market needs, are being provided). Such a design was rejected because it would prove to be too complex, requiring systematic and consistent coordination across the three education ministries (at the national and decentralized levels) as implementing agencies, further aggravating the already weak implementation capacity. 40. A second alternative was to consider a comprehensive review o f the existing secondary education curriculum to make it more responsive to labor market needs and the requirements o f tertiary education in Yemen. This alternative was rejected because the last curriculum revision (of Mathematics and Science), completed in 2003/2004, has not yet been fully and appropriately implemented on the ground and some time i s required to resolve the question o f how to best implement additions o f `discovery learning' within the current texts and learningmaterials prior to launching another curriculum revision exercise. 41. A third alternative was to address more thoroughly the system-wide dysfunctional governance characteristics o f the education sector at all levels of decision making (national, governorate, districts and schools). It was decided that this would also prove extremely complicated to be addressed by the project as it requires the reform o f regulations and practices pertainingto a variety o f national Ministries (MoCSI, MoLA, M o F and MoE). In addition, the GOYis already implementing a Civil Service Modernization Project (under separate financing o f several DPs, including IDA), which will encompass the M o E as one o f the key Ministries to be benefited. 42. A fourth alternative was to consider a larger implementation scope for the project, involving more than the nine governorates already considered. This alternative was rejected due to the weak implementation capacity o f Governorates and Districts, and the increased difficulty in providing timely and effective supervision o f the project. 43. A fifth alternative was to consider investing in female secondary schools only in rural areas, because the availability o f such schools tends to be most successful in attracting female students, particularly in l2Except for sub-component 1.1 now to be entrusted to the Project Management Unit (PMU) of the Public Works Project (PWP), operating under the mandateofthe MoPIC. 9 rural areas (female students in urban areas are well represented in secondary education). This alterative was rejected because investing in female secondary schools in rural areas could: (i) be difficult to accomplish since it is difficult to get adequately qualified female teachers in remote rural areas, and (ii) result in massive inefficienciesbecausethe number of girls who could fillthe enhancedcapacity provided by more girls-only schools would be too limited in the foreseeable future (because 75 percent of girls enteringGrade 1 dropout before completingGrade 9). 44. The last alternative was to consider an adaptable program credit instead of a time-bound sector specific Credit as the lendinginstrument. Itwas decidedthat it was prematureto opt for this type of credit instrument given the moderately unsatisfactory implementation performance of other IDA-financed credits inYemen usingthe adaptable programcredit instrument. 111. IMPLEMENTATION A. Partnershiparrangements 45. A number of DPs active in the education sector in Yemen have signed a Partnership Declaration(PD) aiming at greater harmonization and alignment of sector support on the basis of the MoE's sector ~trategy.'~ As all the SEDGAP co-financiers are signatories to this PD, their involvement in the SEDGAP builds upon the principles of the PD. All the SEDGAP co-financiersare currently supporting the BEDP, which is a pre-swapoperation(see Annex 2). 46. While IDA is nominated as the lead agency among the SEDGAP DPs to support the GOYin the process of preparing this project, all SEDGAP co-financiers have agreed to support the project as developed, Le., adhering to the same development objectives, policies, criteria, design and outcome and output indicators. In the spirit of harmonization, and in order to minimize the requirements on the GOY, all funds provided (with the exception of GTZ in-kind support) will be fungible across the project and pooled into two joint Designated Accounts to be operated under IDA procurement and financial management guidelines. Common reporting, monitoring and auditing frameworks have been agreed upon. The details of the agreed rules of engagement will be presented in a MoU, to be entered into between all DPs andthe GOY. 47. Grant funds from the Government of the Netherlandswill be administeredthrough an Administration Agreement between IDA and the Government of the Netherlands, to be entered into prior to project effectiveness. KfW will administer its own funds and possibly those financed from the DFID. The GTZ will provide in-kind support to activities in sub-component 2.1 throughtechnicalassistance for developing training packages for mathematics, chemistry, biology, and physics, for school leadership and social workers, for district supervisors, for training of trainers, and for overall development of the training framework and planning, organizingand monitoringtrainingevents. I3TwelvePartners, includingthe Governmentsof Yemen (representedby the Ministry of Planningand International Cooperation(MOPIC) and the MoE), Germany, Kingdom of the Netherlands,UnitedKingdom, France, the Social Fund for Development, the Public Works Project, UNICEF, IDA, World Food Programme, and the International Labour Organization (ILO) signedthe Partnership Declarationin 2004. In 2007, all of these partners (excluding France and the ILO), signed the update to this Declaration and the United States Agency for International Developmentjoined as an additionalpartner. 10 B. Institutionaland implementationarrangements 48. The MoE is the GOY agency responsible for implementing the SEDGAP. The implementation arrangements for the proposedproject mirror those followed under the BEDP, with the exception of sub- component 1.1, which will be implementedby the Project Management Unit (PMU) of the Public Works Project (PWP), under the responsibility of the MoPIC.14 The Project Administration Unit (PAU) of the MoEwill be delegatedresponsibility for the fiduciary management of the remainder of the project. 49. Protocol of Participation: Prior to project launch, the MoE will enter into a protocol of participation with the Governors, Minister of Planningand InternationalCooperation, the Ministerof Finance, and the Ministerof Civil Services and Insurance. The purpose of the protocol shall be to cause the Governorates within the project area to comply with the education reform policies in order for such Governorates to become eligible to participateinthe project. Detailsofthe reformmeasures are providedinAnnex 6. 50. Project Oversight: The project will operate under the overall guidance and oversight of an Inter- ministerial Steering Committee(IMSC), chaired by the Minister of Educationand comprisingmembers of the Ministriesof: Education,Civil Service and Insurance, LocalAdministration, Finance andPlanningand International Cooperation, the PWP and the PAU. The IMSC will be responsible for: (i)policies as related to the achievement of the PDOs; (ii) approving project annual plans; (iii) ensuring compliance of the signed protocol; (iv) monitoringprojectprogress; and (v) steering resolutionof implementationissues. 5 1. Project Coordination and Implementation at the National Level: OverallNGSES coordinationwill be entrusted to a fully dedicated Secondary EducationCoordinator (SEC) within the MoE, who will therefore be the primary MoE focal point for the SEDGAP. The Technical Office (TO) of the MoE, through the SEC will be responsible for coordinatingall activities supportingthe NGSES in general, andthe SEDGAP in particular and implementedby the different units of the MoE at the central and the sub-nationallevels (governorates and districts). The SEC will share all related implementation progress reports that it receives from the project governorates and districts through the PAU and the PWP. The GOY shall maintain arrangements satisfactory to the Bank to be entered into between the MoE and the MoPIC to assignthe carryingout of sub-component 1.1to the PMU ofthe PWP. 52. Project Coordination and Implementation at the Governorate and District Levels: Project monitoring in each of the nine governorates will be carried out by a Governorate Steering Committee(GSC), chaired by the Governor. The Committee will ensure compliance with the terms and conditions stipulated in the protocol for participation. GSCs will: (i) facilitate project implementationat the governorate level; (ii) review and approve Governorate level consolidated school plans; (iii)ensure compliance with the agreed protocol; (iv) monitor progress under the project, and (v) prepare and submit progress reports to the IMSC through the PAUand be availableto make a presentation at the IMSC meetings as necessary. 53. Fiduciary Responsibility of the PAU: The PAU will be entrusted by the MoE with the responsibility to administer the project activities (except for sub-component 1,l). The PAU will facilitate implementation through Financial Management (FM), procurement of goods and services and technical assistance in accordance with IDA regulations and procedures, as agreed among all DPs. PAU will also provide guidance, support and capacity building where required to the MoE's Directors, and project related staff in the Governorates and the Districts. The PAU will also be responsible for communicating with IDA and DPs on all implementationmatters. PAU will requireadditional staff in order to undertake l4Eligibleactivities will be implementedaccordingto the overall Project OperationManual(POM) agreedwith GOYandthe DPs, priorto effectiveness. All eligibleactivities under the SchoolCommunity Grant (SCG) will be implementedaccordingto the SCG OperationalandTrainingManuals. 11 these tasks for the SEDGAP, including a full time administrator for SEDGAP as well as staff to support FM, procurement and monitoring. C. Monitoring and evaluation of outcomedresults 54. The PDO indicators are monitored through government official data and intermediate outcome indicatorsare measuredthroughthe PAUexcept for the assessmentsof learningachievement andteaching practices, which require separateassessments. 55. Learning outcomes in Mathematics, Science and Language for Grade 12 students would be a better measure of education quality. However, these measures can begin to be generated in Yemen systematically only once the COMEis fully functional, at the earliest in 2013. In the meantime and to initiate this important exercise, the project will finance a focused learning assessment test to assess student performance in secondary education. Mathematicswas agreed upon to be the curriculum subject to be assessed because it is common to the two streams and is the first one among the 17 secondary education subjects included in the existing curriculum where a training module will be developed and a training delivery scheme will be carriedout financedby this project. 56. The MoE is aware that the collection, recording, management and use of data is a crucial input for policy development, priority setting, resource allocation and annual planning at the central, governorate, district, and school levels. The project aims to build capacity of targeted governorates and districts to produce adequate planningfor school expansionand establishment accordingto key variables(population growth, enrollment growth from basic to secondary, school mapping, demand and supply for teachers and administrativestaffand facilities). D. Sustainability 57. Project preparationhas attempted to build technical sustainabilityby emphasizing and supportingthe preparationof the project by the MoE team. This has paid off and the SEDGAP is owned by the MoE team. Community, Governorate, District and School surveys have also enabled the MoE center team to design a project on the basis of the needs expressed by these stakeholders. A joint MoE-IDA team also visited one of the project Governorates to undertake a thorough institutional capacity assessment at the various decentralized level^.'^ This team plansto undertakevisits to all phase one governorates, including a sample of their project districts before Credit effectiveness, to familiarize them with the PDOs and the proposedprojectdesign. 58. One of the main challenges for this project, particularly as regards maintaining technical and institutional sustainability, is to work hand-in-handwith the participating GEOs and DEOs in clarifying roles and responsibilities, in capacity building, in planning, implementation and monitoring of project activities in the target areas. Continued involvement of the GEOs and DEOs in these core activities are expected to contributetowards building sustainable teams. The SEDGAP launch inparticular will needto set in motionthe process of building capacity in other Ministries, GEOs, DEOs, schools and Fathers' and Mothers' councils in order to ensure that the programs supported by the project continue after the project closes. 59. The SEDGAP is expected to have minimal recurrent cost implications on the MoE budget.I6 The recurrent costs resulting from the project are expected to be: (i)US$1.2 million each year for the last 3 Reportofthe visit to HodeidaGovernorateavailable inProjectfiles. l6 Unit cost per student is assumed to be unchanged because the increased cost due to project intervention will be offset by the reducednumber o f years investedper graduate (detailedinAnnex 9). 12 years for the project (Le., years 4-6), l7and (ii)US$2.7 million average each year upon project closing. As a proportion of the MoE secondary education budget, this represents additional recurrent costs equivalent to 0.8% for years 4-6 of the project and 1.7% inyear 7 upon project closing." E. Critical risks and possible controversial aspects 60. The overall risk for this project has been assessed as Substantial. Critical risks and mitigation measures include: Risk Risk Mitigation Measures RiskRating with Mitigation Political Signedprotocol for continuingparticipationinthe projectby Substantial interference in governorates and districts enforcedby IMSC; project implementationat Pre-identificationof proposedinterventionsites followed by engineering all levels surveysto confirm site electionandconsultation with GEO and DE0 staffprior to effectiveness. Lack of sufficient Projectdesignedon the basis of communitysurveys andgroundedin Moderate projectownership NGSES, which also involvedwide-rangingstakeholder participation; by target GEOs, DEOs and schools Protocolfor continuingparticipationinthe project signedby target governorates; IMSC responsible for monitoringcompliance onprotocol and taking remedialactions incase ofnon-compliance; Centralteam to undertake visits to all phase 1governorates, including a sample of their projectdistrictsbefore Credit effectiveness, to induce their ownership ofthe PDOs andthe proposedproject design. Possibledelays in Commit timely release of GOYcontributionto the projectthroughthe Substantial counterpart funding MoU; Ensure adequate budget provisionfor the following GOYfinancial year by supporting such dialogue. Possibledelays in Ensure co-financingagreement is signedbetweenGOYand each DP Low donor funding individually, by the date specifiedinthe FinancingAgreement. Weak technicaland Centralteam to undertake visits to all phase 1governorates, including a Moderate institutional sample oftheir project districts before Credit effectiveness, to inducetheir sustainability ownership o fthe PDOs andthe proposedprojectdesign; Implementationto be complementedwith intensive training and capacity buildingby the PAU, particularly at the governorate and district level. Insufficientintake BEDP is addressingthe low completionrates from Grade 9, especially of Moderate o f students, girls inrural areas; Especiallygirls, to 1Oth grade Finetune the SEDGAP's incentivetargetingmechanismsunder the SCG, including more appropriate dissemination campaigns and more active involvement of the Fathers' and Mothers' Councils. 17 Additional recurrent cost during 4'h-6'h year of project is incurred from maintenance cost of civil works, equipment, and materials. Iffinanced by the program, these do not affect the government recurrent budget. 18 The figure for year 7 is based on the MoE secondary education budget for 2014. Between years 8-20, the recurrent cost implication,as a proportionof the secondary budget is expectedto be lower. 13 The geographic Phasingthe expansionofthe project scope based on evidence of results on Substantial scope of the project the ground; may hinder timely and effective Strengtheningofthe social auditingprocesses to be providedby the implementation, Fathers' and Mothers' Councils. supervision and oversight, especially with respectto the allocation and utilization of schools funds Implementation Project overall Operational Manual and SCG Operational and Training Substantial arrangementsnot Manuals developed early and disseminatedwidely; clearly understood by GEOs, DEOs Project will finance training in procurement, financial managementand and project schools monitoringproject-relatedtasks for MoE staff already working in the responsible for project and staff at GEOs and DEOs. implementing certain project activities Assessments of Assessments to be contractedout to external firms. Moderate learning achievementsand teachingpractices not conducted on time and properly due to lack of capacity Weak financial Using existing PAU which has skilled staffing and enhancing it with Substantial management additional staffing with planningand reportingexperience; capacity for financialplanning, Adjustment of existing BEDP software to enhance PAU ability to record recordingand and report SEDGAP transactions; reportingwhich Providingtargeted planningand budget training to PAUstaff; could increasethe risk of ineligible External reviews by external auditor for quarterly Interim Finance Reports expenditures and are part o f auditor TOR to be approvedby IDA and DPs on an annual basis; misappropriations and Ex ante reviewsby MoF personnel F. Loadcredit conditionsand covenants 61. There will be no conditions of effectiveness. Loan covenants: 62. Covenants include: Preparation of project operation manual including a financial management manual, satisfactory to IDA, by no later than August 31,2008, and 14 0 The MoE shall enter into a protocol of participation by no later than August 15, 2008 with the Governors, Minister of Planning and InternationalCooperation, the Minister of Finance, and the Minister of Civil Services and Insurance. The purpose of the protocol shall be to cause the Governorates within the project area to comply with the education reform policies in order for such Governoratesto become eligible for participatinginthe project. IV. APPRAISAL SUMMARY A. Economic and financial analyses 63. The benefits of the project are projectedto far exceed the costs, with an Economic InternalRate of Return (EIRR) of 13.7%, indicating economic viability of this project. ERR for the SEDGAP design was found to be larger than that of a projectwith an alternative design that has either: (i)all investments focusingon civil works and school communitygrants or (ii)all investmentsfocusingon education quality enhancing initiatives. 64. The estimated EIRR was found to be most sensitive to the improvementinthe retentionrate inproject districts. Ifthe achievement in retentionrate is 1.O percentagepoint less than the targets (Le. 84.4 for boys and 88.1 for girls instead of 85.4 and 89.1 respectively) by the time of project end, there is a high risk that the Net Present Value (NPV) will be zero (at a discount rate of 10%) unless the retentionrate catches up significantly after the projectends. 65. Although not quantified as economic benefits in the cost-benefit analysis, there are several positive externalities associated with the project, especially as regards to promulgating girls' education. These include: improvedhealth indicators such as reduced child and maternalmortality, improved child health and nutrition, reduced fertility rates, and improvedimmunizationof children, and girls' role model effects on the schoolingof their younger siblings. 66. The secondary education strategy identifies a total resource gap of US$265 million between 2008 and 2013 in order to achieve the GOY'Snational targets. Over the six-year SEDGAP implementationperiod, the proposed external resources (US$91.4 million) will account for 10.2 percent of the projected secondary education resources (Le., 896 million). The contributionof the proposed project will therefore finance 35% of the resource gap during the same period(Le., 91.4 millionof resource gap of 265 million). This implies that the resource gap to achieve the NGSES will remain large despite the project and that government commitment to implement its strategy from its own resources as well as through seeking additionalexternalfinancing is still largely required. B. Technical 67. The SEDGAP builds on recent analyticalwork most particularlythe IDA financedIssues and Options for Secondary Education in Yemen paper, which was also one of the underpinningdocuments for the GOY to preparethe NGSES. 68. With the support of the Japanese Policy and Human Resource Development(PHRD) grant, local and international consultants were recruited to share with the national project preparationteam international practices and lessons learnt to ensure that cost effective and high quality components were designed. These studies include: (i)incentives to enhance girls' participation in secondary education; (ii)quality enhancement of the secondary education program; (iii)teacher professionalism;(iv) secondary school and community survey; (v) secondary education implementationstructure and capacity building arrangements; (vi) physical inputs to improve access to secondary education; and (vii) private investment in secondary 15 education. A tracer study of graduates of 12th grade of general and technical secondary schools will be undertaken in March2008 and findings disclosed by mid 2008. C. Fiduciary Financial Management: 69. As required by OP.BP. 10.02, an assessment of the proposed Financial Management (FM) arrangements for the SEDGAP was carried out in line with the FinancialManagement Practices in World BanWIDA-Financed Investment Operations.l9 Certain weaknesses were noted as regards the financial management arrangements at both the PAU and the PWP. These include: (i)inadequate staffing at both entities; (ii) non-availability of FM manual covering SEDGAP-specific activities at the PAU; (iii) non- availability of additions to existing software accordingto SEDGAP monitoring, recording and reporting requirements; and (iii) vacant internal audit function at the PAU. Accordingly, an action planto enhance the current FM arrangements was discussed and agreed upon with both the PAU and PWP (detailed in Annex 7 of this PAD). 70. Based on the Financial Management (FM) assessment conducted for this project, the overall FM risk was originally rated as High. However, since close to 60% of overall project financing is for civil works, which is a relatively low risk activity, and becauseappropriate fiduciary measures have been incorporated (e.g., expandedscope of audit and a reinforcedinternalcontrol framework) to mitigate their fiduciary risk, the overall ratingis considered Substantial. 71, FM risk assessed for the PMU of the PWP and the PAU of the MoE is Moderate and Substantial, respectively. Maintaining the existing FM arrangements in addition to other mitigating measures which will be closely monitored during project life is expected to bring the residual FM risk for each entity to Low and Moderate, respectively. Procurement: 72. As part of the Procurement Capacity Assessment recommendations to remedy the current staffing deficit at the PAU, recruitment of new procurement staff on the basis of the revised PMU Guidelines salary matrix (2007) will be initiated in two phases for better calibration with PAU needs. To ensure smooth andtimely implementationof procurement activities,the PAUwill initially be assisted by a short- term Procurement Advisor financed from GTZ grant funds in support of: (i)quality control in the project pre-effectiveness phase for procurement documents, processes, and contract management, for the sizeable amount of technical services contracts to be financed under the proposed SEDGAP; and (ii)on-the-job capacity building for newly recruited procurement officers, including advisory services to PAU management. 73. The capacity assessment aspects of the proposed SEDGAP also covered the PWP in view of the recent policy decisionto entrust the PWP with sub-component 1.1. The PWP has an ongoingrelationship with the MOE, since about halfof the investments managedby the PWP are involved in providing school facilities (including constructionof secondary schools) in various Governorates for eventual handover to the MoE. 19Document issued by the FM Sector Boardon November3,2005. 16 D. Social 74. The project context is highly favorable as it is being designed following the release of Yemen's NGSES, which highlights the importance of reducinggender disparities inaccess to education, improving the quality of education, and enhancing efficiency of education delivery. The preparationof the NGSES was participatory as it benefited from extensive feedback throughout the country from a host of stakeholders. Background studies, including a community survey, were prepared in consultation with numerous stakeholders, from parents' councils, to students and social workers, government officials, and donors. 75. The SEDGAP addresses boththe supply and demand side factors affecting girls' education in Yemen. A combination of cultural, economic, social, and infrastructure factors come together in the decision of families to pull out, or for girls, to drop out of the education system. These include early marriage, poverty and the lack of girl-friendly facilities, transportation to secondary schools and female teachers. The project seeks to tackle such constraints through: (i)financing transportation subsidies, female presence in schools and scholarships to retain girls and boys who may drop out principally for economic reasonsthrough School CommunityGrants (SCG), and (ii)providingappropriate infrastructure. 76. Community participation is key to the project s' success. Taking into account that community participation remains a relatively new concept in the country and that many mothers in particular are illiterate, the project will endeavor to provide appropriate training to mothers' and fathers' councils. Awareness-raising campaigns will not only target social norms inhibiting girls's participationin secondary education, but will also focus on information disseminationas regards the modus operandi of the SCG scheme, so as to enhance communityaccountability. E. Environment 77. This project is rated in environmentalcategory B as regards OP4.01 because the majority of activities includedin SEDGAP are expectedto be associatedwith minor, ifany, environmentalimpacts. 78. The GOYhas prepared and publishedan EnvironmentalManagement Plan (EMP) for the SEDGAP on the basis of lessons learnt in applying the EMP procedures and institutional arrangements under the on- going BEDP. The SEDGAP EMP includesenvironmental criteria for: the upgrade of existing sanitation with new facilities andor improvementof sewage systems and the procurement of laboratoryequipments (including chemical materials) for secondary level students. The EMP also contains a set of activities that would contributeto improvedmitigation measures, focusingon building more capacity at the community, DE0 and GEO levelthroughtrainings, workshops, andawareness campaigns. 17 F. Safeguard policies ~ Safeguard PoliciesTriggered by the Project Yes N O Environmental Assessment (OPBP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) 11 [XI Pest Management (OP 4.09) [ I [XI Physical Cultural Resources (OP/BP 4.11) [ I [XI Involuntary Resettlement (OP/BP 4.12) [ I [XI Indigenous Peoples (OP/BP 4.10) [ I [XI Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) [I [XI Projects inDisputedAreas (OP/BP 7.60)* [I [XI Projects on International Waterways (OPBP 7.50) [ I [XI G. Policy exceptionsand readiness 79. No policy exceptions are sought. 80. The MoE is presently undertaking a set of activities to prepare for launching implementation of sub- component 1.1, including engineering surveys and analysis of the information to select the final sites for intervention. 81. It is expected that prior to effectiveness, the Project Operations Manual, the arrangement agreement between the MoPIC-PWP and the MoE-PAU and the governorate specific institutional and organization capacity gap analysis and action plan to fill those gaps will be available. Based on this, the team does not foresee any delays in implementation. * By supporting theproposedprogram, the Bank does not intend toprejudice thefinal determinationofthe parties' claims on the disputed areas 18 Annex 1: Country, Sector and ProjectBackground 82. Socio economic background. Since unification in 1990, the Republic of Yemen has made significant development progress. Inthe period 1975-2004:20(i) life expectancy increasedfrom about 40 to 63 years; (ii)adult literacy jumped from 10 to 49%; (iii)female illiteracy dropped from 95 to 69%; (iv) primary school enrolment rates increased from 57 to 91%; and (v) fertility rates declined from 7.9 to 6.3 births per woman. Nevertheless, the country ranked 150 out o f 177 countries in the 2006 Human Development Index and 121 out of 140 countries in the Gender Development Index (2006). The pace of improvements has slowed down recently and Yemen is unlikely to meet the Millennium Development Goals (MDGs). 83. Poverty reduction remains a challenge for Yemen with 35% of the population of 19.2 million (2004) living in poverty, with a higher concentration in rural areas where 73% of Yemenis live. 10% of the population lives on less than US$1a day; 46% of children under-five are under weight; under-five child mortality stands at a very high rate of 94 per 1,000 live births; maternal mortality rates stand at 351 per 100,000 live births, and 64% of the population does not have sustainableaccess to safe drinking waters2' 84. Gross national income per capita is about US$600 (2005), one fourth of the average of US$2,390 for the Middle East and North African Region. Real gross domestic product (GDP) growth (3.3% in 2006) has been lower than expected, with declining oil production22being offset by favorable developments in world oil prices. Owing in part to a relatively high rate of population growth o f about 3.0% annually (2004), there has been only marginal improvement in per capita income. It is likely that the future decline in oil productionwill inturn negatively affect non-oil GDP growth and therefore adversely affect poverty reduction and employment targets. 85. Education system. Introduced in 1994, the structure o f Yemen's unified education system comprises: 9 years of compulsory basic education (Grades 1-9, approximate age group 6-14 years); followed by 3 years o f general secondary (Grades 10-12, approximate age group 15-17 years), with enrollment diversified into the science and literary tracks in Grades 11 and 12. Access to general secondary school is open to all pupils who pass the Grade 9 examination. Basic and secondary education are under the mandate of the MoE. Basic school completers may also join 2 or 3-year programs in vocational schools operating under the authority of the MoTEVT.~~ Access to university education, under the authority ofthe MoHESR depends on performance inthe national secondary examination. 86. Public schooling is subsidized at all levels with no tuition fees for basic or secondary educati01-1.~~The private sector is small, accounting for an estimated 2% of students in basic and secondary education and 15% in universities in 2004/05. 20 1975 data obtained from Republic of Yemen Country Social Analysis. World Bank: Water, Environment, Social and RuralDevelopment Department, Middle East andNorthAfrican Region, ReportNo. 34008-YE. April 15,2007. 2004 data are obtained from the Annual Educational Survey 2004 conducted by the MoE and the 2004 Census conductedby the Central Statistical Organization, GOY. 2'Republicof YemenCountry Social Analysis. World Bank: Water, Environment, Social andRuralDevelopment Department,Middle East andNorthAfrican Region, ReportNo. 34008-YE. April 15, 2007. 22A sharp loss exceeding 8% was reported in oil productionbetween2005 and2006. 23In2003104, 1.6%of secondary education enrollments were reportedinTEVT institutions. 24Although locally leviedparticipation fees, uniform costs and indirectcosts of school attendancecan be prohibitive for poor families. 19 87. Public expenditures continue to prioritize education, ranging over the last decade from 5.2 to 6.8% o f the GDP and from 14 to 21% o f total public expenditures. However, sub-sectoral allocations are increasingly being made in favor o f post secondary education, a trend that is inconsistent with the priority accorded to basic education in the Poverty Reduction Strategy. Between 1997 and 2005, expenditures on higher education and on TEVT rose from 10 to 15% and from 1.2 to 1.7% respectively and declined on general education (basic and secondary combined) from 85 to 81%.*j 88. As a result o f the significant and consistent investments in education in Yemen, the education system has expanded tremendously and gross enrolment rates (GERs) for basic, secondary and tertiary education, survival rates o f the school-age cohort and the share o f girls in total enrollments at all levels have improved despite the greater than 3% population growth rate. From 250,000 students in 1970, the basic education system now comprises 4.3 million students. Between 1996 and 2004, secondary enrollment increased from 324,000 to 595,000 and university enrollment increased from 104,000 to 201,000. 89. Education Policies and Strategies. Over the last six years, the country has endorsed at least five strategies that aim to address educational development challenges, including the Basic Education Development Strategy (2002), the National General Secondary Education Strategy (2007), the Technical Education and Vocational Training Strategy (2004), the Higher Education Development Strategy (2006), and the Children and Youth Strategy (2007). In recognition o f the absence o f a national vision that looks at education and training in an integrated manner, and the existence o f disconnects between the strategies and investments o f the various sub-sectors, the GOYhas launched an exercise to steer dialogue between the three education ministries in Yemen (MoE, MoTEVT and MoHESR) and to support the development o f an integrated education vision for Yemen spanning all education sectors. 90. The National General Secondary Education Strategy (NGSES) was developed through a wide-ranging consultation process involving education officials, school management personnel, supervisors, teachers, NGOs, local authorities, students and parents, participants from the MoE, education leaders, agricultural unions, and higher education beneficiaries. The vision o f the NGSES is to inculcate "possession o f a general secondary education characterized by equity and justice in the provision o f education opportunities, goodness in quality, diversification in streams, and enabling the graduates to either pursue their higher education efficiently or join the life o f work." The strategy prioritizes the following challenges to be tackled by the GOY:gender and rural inequity in access; inefficiency o f resource use resulting from high repetition and dropout rates, ineffective teacher deployment, poor quality o f teaching and low teaching loads; lack o f availability o f well trained teachers, particularly females in rural areas; weak capacity o f principals and supervisors to support teaching and learning, non-availability o f modern teaching and learningtechnologies and processes to benefit learning; inadequacy o f the curriculum and its implementation, particularly as regards linkage with higher education; unreliable assessment o f teaching and learning processes and lack o f capacity to undertake assessments (in school and at national level), and the lack o f financing from the private sector to support secondary education delivery. 91. While the GOYhas embarked on a large number o f reforms to address the issues constraining quality education service delivery, some notable recent reforms include: (i)Cabinet Decree No. 167 (2006) linkingthe post o fthe teacher to the school rather than to the individual, which is expected to counter one o f the significant challenges o f providing teachers in rural areas on a sustainable basis, aggravated for female teachers and therefore affecting girls' education significantly; (ii)Cabinet Decree No. 29 (2007) *'Approximately 59% of the total education budget is allocated to basic education and 22% to secondary. This estimationassumes differential teacher costs at the secondary level. Inreality, it is difficult to separate expenditures between basic and secondary education because: (i)the MoE budget is provided for general education and not segregated for the two levels, and (ii)many schools offer basic and secondary grades together, using the same premises and inmany case, the same teachers. 20 linking the job nature allowance o f teachers, principals, supervisors, assistants etc. to the post, and cancellation o f these allowances in the case o f transfer to another position, aiming to support incentives based on the post with the condition o f losing such benefits in the case o f transfer to another post ; (iii) Cabinet Decree No. 209 (2005) basing school establishment and school personnel deployment decisions on school mapping data and technical criteria. Application o f this Decree is expected to significantly reduce the inefficiencies resulting from non-objective criteria for school selection, which have hampered the provision o f quality secondary education in Yemen (details inthe following section). 92. In an effort to translate the above-mentioned policy reforms into reality in the context o f the availability o f external resources through the SEDGAP, the M o E has undertaken to enter into a protocol o f participation with each o f the governorates and districts that would be targeted through the SEDGAP. This protocol aims at the signatories (MoE, MOPIC, MOF, MOCSIand the Governorates) to declare their commitment to comply with the following policies in the target districts: a) At least 15 percent o f all new teaching posts (basic and secondary level) created and approved in each fiscal year in Project Districts will have been filled by female teachers; b) The Heads o f the Education offices (or their representatives) o f the Project Governorates and Project Districts will be part o f the selection process for all new (basic and secondary level) teacher recruitments; c) The Project Governorates will initiate the process o f planning teachers redeployment within the Governorate, starting with the Project Districts and will update the said plan on an annual basis for M o E approval; d) The Project Districts will apply and continue to apply Cabinet Decree no. 167 for the Year 2006 allocating new teaching posts to the schools and not to the individual teachers. As such, all transfers requested by the Project Districts will require the prior approval o f the General Department o f Human Resources o f the Project Governorates; e) Teacher absenteeism will be verified by the Project Districts' supervisors as part o f their regular visits by verifying teachers' attendance sheets. The said supervisors will inform the Project Districts o f teacher absenteeism (in writing) in order to enact the transfer o f the teacher's salary equivalent to the number o f unjustified missingdays to the Local Councils. Relevantsecondaryeducation issues addressed by SEDGAP26 93. Gender and regional inequity. Although low overall by international comparison, the secondary education GERs in Yemen are particularly low for female and rural populations. The overall secondary education GER is 38.3% in Yemen as compared to 43% average for low-income countries and 68.7% average for MENA countries (2004/05 school year).27 Girls' enrollment in secondary increased by 162% between 1996/7 and 2004/5, from 67,900 to 185,000 (as compared to a 60% increase in enrollment o f boys), and the Gender Parity Index (GPI) increased from 0.27 to 0.43 duringthe same time. Nevertheless, the secondary GER stood at 59.8% for boys and 25.9% for girls (2004/05). Bothmale andfemale GERsin rural areas are well below the rates inurbanareas, with a 16 percentagepoint difference for males (urban 65.8% and rural 49.4%) and 40 percentagepoint difference for females (urban53.7% andrural 13.6%) in2005. 94. The low level o f female participation in secondary education is rooted in girls' retention in basic education. Overall, out o f every 100 girls that join basic education in Grade 1, 40% will drop out by Grade 4 and only 25% will complete Grade 9. Since there is not enough o f a potential intake o f girls who 26A more thorough description of education and management issues facing secondary education in Yemen at all *'MoE levels o f decision making - national, governorate, district and schools i s available in the project files. Annual Educational Survey for 2004105; UNESCO in Edstats Database for school year 2004105; CSO. 21 could transit into secondary education, any attempt to enhance girls' enrollment in secondary education will have to target their retention inbasic education. 95. While poverty plays a major role in family decisions to send their children to secondary education, both supply anddemand side constraints play an important role inconstraining secondary school participation. More than 35% o f boys and about 50% o f girls inrural areas do not attend school for supply-side factors (e.g., lack o f secondary school close to home, transportation to school, teachers, particularly female ( for girls' enrollment and retention), and sanitary facilities in schools, etc.).** With 14% o f the secondary-only schools and 9.8% o f the basic and secondary combined schools being girls-only and only 7.5% o f the rural secondary education teachers being female, parents do not feel confident in sending their girls to school, particularly in rural areas. 96. Ineficiency. Inefficiencies in the secondary education system are generated principally from the high repetition and dropout rates and low pass rates, inefficient school distribution and staff deployment. 97. Nationally, 9.2% o f the students enrolled in secondary education dropout before completing Grade 12. Repetition rates average 4.4% and 82% o f the students pass the secondary school examination results (2004/05). Therefore, while the secondary education cycle lasts three years in Yemen, the number o f years invested per secondary graduate in 2004 was estimated to be 4.25 for boys and 3.92 for girls. It is worth noting that the retention o f girls is higher in secondary education as opposed to that o f boys (86 against 82% in 2004). 98. Many secondary schools have mushroomed as extensions o f basic education schools lacking minimumappropriate facilities to ensure the teaching o f the full existing secondary education curriculum against the existing criteria set forth in Cabinet Decree No. 209 (2005) (Ministerial Decree 88 o f 2004) indicating the minimum enrollment o f 180 students in 6 classes to be approved by MoE as a viable secondary school. In 2005/06 only 21% o f schools had more than 180 students at the secondary level (13% o f rural and 47% o f urban schools). Only 27% o f the schools offered two parallel streams in grades 11 and 12, and about half o f the schools only offer science stream to their students. Graduates from the scientific stream exceed those from the literary stream by 34.2 percentage points. There is also a large variation in school and class sizes where urban schools are often overcrowded and rural schools ~nderutilized.~~ The average number o f students per section was 46 in urban and 29.4 in rural secondary schools (2004/05), while the national average was 35.4. 99. The private sector can play an important role in absorbing the excess demand in the secondary education sector, especially in urban areas. There are a number o f barriers, especially o f regulatory nature, preventing further investments in secondary education. These include: (i) excessive requirements to obtain and maintain a license to operate, which needs to be renewed annually; (ii)requiring dual approvals from the M o E and the local authority; and (iii)a hightax rate o f 35 percent o f the income. 100. Although 87% o f teaching is done by teachers with a minimum degree-level qualification (which i s considered the minimally acceptable qualification to teach in secondary schools), there is a large distribution problem whereas some schools may have excess teachers in certain subjects and others shortages in the same subjects. Furthermore, about 10% o f the degree-level teachers have no teaching qualification, but only a subject degree. Finally, even if schools would have a minimum o f 180 students (6 classes), efficient workloads o f 22 teaching periods per week would allow only 10 teachers, whereas 28 Yemen Poverty Assessment, World Bank, Social and Economic Development Group, Middle East and North Africa Region, Washington D.C. June 2007. 29 The long-term policy of the MoE is to phase out small secondary schools unviable to meet the minimum 180 enrollment norm or to mergethose likely to meet these criteria. 22 the number o f subjects in the school timetable is considerably larger than that (approximately 17). Teachers need to teach more than one subject, whilst the pre-service teacher education curriculum only prepares them for one subject. Therefore, many teachers have to teach subjects for which they are insufficiently prepared. 101. Inappropriate quality of education as manifested by low learning outcomes and unsuitable teaching practices. The current theoretical and overloaded secondary education curriculum does not contain sufficient life or employment related skills, information technology skills, or thinking skills to adequately prepare secondary graduates for entering the labor market or to be successful at post- secondary institutions. Employers do not consider secondary school graduates to be adequately prepared for the workplace and the youth unemployment is estimated at more than 30 percent3'. The delivery o f the curriculum in schools and classrooms is further hampered by inadequate, uneven or slow distribution of virtually all learning inputs (teachers, adequate physical facilities and equipment, text- and resource books, etc.) 102. The assessment structure suffers from the absence o f a standards framework and ongoing testing o f student achievement relative to those standards. Teachers and supervisors receive little training in assessment and the current curriculum is not produced in a common format conducive to setting standards, with a variation in use o f assessment tools and techniques. For the examinations, the tables o f specifications are set by selected supervisors who gather questions from across the country or governorate rather than by trained groups o f examiners drawing from a data bank o f field-tested questions. 103. There is a misalignment between teacher quantity and quality requirements in secondary education and the pre-service teacher preparation provided by the universities through their satellite Colleges o f Education in all governorates. N o framework for professional teaching standards exists with articulated general teacher competencies and subject-specific knowledge and skills requirements that would guide different providers. There are no coordination mechanisms between the M o E and the MoHESR with the Faculties and satellite Colleges o f Education in the different universities. Annually, the universities now graduate over 15,000 teachers, but at present only around 6,000-7,000 teachers are hired directly through allocation by the M o F and MoCSI, mostly for basic education, resulting in an accumulated unemployed teaching work force which currently amounts to about 45,000 people queuing for a teaching position. University pre-service programs tend to be theoretical in nature and provide students with little or no practical instructionand assessment competencies. 104. A number o f reforms will be initiated or are currently being implemented under BEDP in basic education where a nation-wide delivery system for short training o f teachers has already been developed. These BEDP-financed reforms, laying the foundation for the pedagogical and quality-related interventions o f SEDGAP, include, inter-alia: (i)textbook revision for Grades 1-12, production and distribution system; (ii)improvements in the learning assessment system through the implementation o f the Center o f Measurement and Evaluation (COME), and (iii)capacity analysis and strategic planning process concerning the role of the Higher Institutes in qualification programs for unqualified and under- qualified teachers. 105. Inefficiency in managing the education sector and lack of effective governance at all levels of decision making (National, Governorate, District, Schools and community). The education system in Yemen faces many functional and structural problems at the central and decentralized level that are affecting its performance and which have been recognized in the NGSES. The decentralization process 30YemenAn Integrated Approach to Social Sectors: Towards a Social Protection Strategy -PhaseI Report. World Bank Human Development Department,MiddleEast and NorthAfrica Region, Washington D.C. June 2007. 23 has already advanced considerably in the wake o f the 2000 Local Authority Law (LAL) and is a reality to which the M o E has to necessarily adapt. However: (i)there are still gaps between written laws and regulations and actual practices, for example, in the selection and appointment processes o f new teachers and deployment o f existing teachers which are carried out to a large extent by personal standards, seniority, and political affiliation and or pressure; (ii)there are contradictions and lack o f detail in the legal decentralization framework; (iii)decentralization is often ignored in the strong historical tradition o f centralization and continuation o f some centralized structures; (iv) there is a lack o f training for administrative and supervisory cadres in the MoE, GEOs, DEOs and, especially for school principals to ensure what should be perceived as their critical functions for improving school performance; (v) there is deficiency in administrative systems which results in unavailability o f transparent processes; (vi) there is a lack o f basic office equipment, materials and telecommunications system; and (vii) M o E has not yet been able to effectively change its implementer role to one responsible for setting policies, standards and outcome indicators, monitoring performance, quality and differences in service levels and carrying out an effective dialogue with the MoHESR for the urgent alignment o f the pre-service teacher training with teacher requirements inthe education sector. 106. Because the M o E has limited mandate over the staff and resources allocated for the delivery o f education service^,^] it is in a difficult position to monitor and affect the quality o f education service delivery without the critical involvement o f other stakeholders. The LAL entrusted governorates and districts the responsibilities for the delivery o f education services to the local authorities. Technical accountabilities o f the GEOs and DEOs are not linked to the MoE, which sets policies and standards, but to the Governors' and District Directors' soon to be elected officials according to the proposed amendment to the current LAL to be effective by end o f the 2007. Furthermore, while the M o E submits to the MoCSI its staffing needs (number and qualifications o f teachers, supervisors and school principals), it does not participate in the selection process o f candidates to fill in vacant posts, nor in the deployment o f these new and existing teachers, which is done by the Local Councils at the district level. It is therefore difficult to implement a performance-based evaluation system that would make decentralized education staff accountable to the MoE. 107. While the M o E is capable o f producing a wealth o f information on the education sector, the education management information system (EMIS) draws its information from different directorates, o f which two are under the Technical Office (office o f Director General (DG) o f Statistics and Planning and office o f DG o f Information Systems) and one under the Project and Supplies Sector (office o f DG o f School Mapping). There is little coordination and sharing o f information, both horizontally between the offices o f DGs located under different departments, as well as vertical, between the M o E and the GEOs/DEOs. This seriously hampers the efficient utilization o f the data through a comprehensive approach to data analysis for timely decision making by high level management. 3 'This has been a significant constraint inensuring service delivery, since more than 90% of the staff andthe budget that is deployed for education service delivery is outside the responsibility ofthe MoE. 24 Annex 2: Major RelatedProjectsFinancedby the Bank and/or other Agencies Sector Issue Project Latest Supervision (ISR) ICR Ratings Outcome (Bank-financed Projects Rating (if only) (OED Rating) Implement Develop ation ment Progress Objective UP) (DO) Bank-financededucation projects: Yemen - SecondaryTeacher Improvestudent learning Training Project(PO05832) NA NA S outcomes, with special emphasis on science and (US$19.4m- 1991-1998 mathematicseducation, by Yemen: EducationSector improvingteacher training, Investment Project(PO05911) MS MS MS increasinggirls' access to basic educationwith (SDR23.9m - 1994 2004) - increasedcommunity Yemen: Basic Education participation; establishing ExpansionProject(P043255) MS S NA labor market-oriented,two- year, secondary education (SDR 42.4m (IDA) -2000 - programs coveringbusiness, 2007) commerce and industry. Yemen: Basic Education MS MS NA Increase access to education DevelopmentProject services in rural areas and (PO76185) strengtheningof capacities at (SDR 44.3m (IDA), 47.0m the sub-national level. (The Netherlands, DfID-UK) Increasequality of higher 2004-2010) education output and Yemen: SecondVocational rationalizespendingon Training Project(P086308) MU MU NA higher education (SDR 15m-2007-2012) Expansionand improvement of school buildingsand Yemen: Child Development MU Mu U facilities for basic education Project (P050483) (SDR 21.2m.2000-2005) Yemen: Higher Education S S NA Project(PO76183) (US$5m -2002 -2008) Yemen: SocialFundfor S S NA DevelopmentI11(P082498) (SDR41.7m (IDA); US$300.0 (Foreignmultilateral institutions)) 2004- 2008 25 Other major development agencies Area-basedprograms:Community NIA NIA UNICEF schoolprojects Germany: GTZ Basic EducationImprovement Project NIA NIA USA Literacy Expandbasic educationand NIA NIA decentralizedmanagement NIA NIA Raisingthe Secondary School NIA N/A Social Fundfor Development enrollment of 15-17 years olds; narrowingthe gap of enrolled boys andgirls in Secondary and Basic Education, andcreationof model schools 26 Annex 3: ResultsFrameworkand Monitoring ResultsFramework PDO ProjectOutcomeIndicators Use of ProjectOutcome Information To support the GOYfor 1) Gender parity index o f These indicators will be used to improving gender equity, secondary education access rates monitor the overall progress quality, and efficiency o f inthe project districts increased towards project goals in equity, secondary education in from 0.42 to 0.66. efficiency, and quality. selected districts with a particular focus on girls in 2) Grade 10 to Grade 12 rural areas retention rate in project districts improved from 80.6 to 85.4% for males and from 84.2 to 89.1% for females. 3) Improved learning outcomes This indicator will provide, for inMathematicsinG12 (to be the first time, a reliable learning obtained usingindependent achievement indicator for curriculum-based learning secondary education. Because assessment conducted in there is no experience in randomly selected schools, in measuring this indicator at years 2 and 5). present, and implementation o f the survey is expected to take a substantial amount o f time, the baseline can only be realistically determined by Year 3 (assuming that the assessment would be conducted in Year 2). The follow-up assessment is to be conducted in year 5 to be able to generate update to baseline by year 6. IntermediateOutcome by Outcomeindicators Use of IntermediateOutcome Component Monitoring Component 1:Improving 1) Civil works programs Indicator (1) monitors progress equity and reducing gender (including civil works, furniture inthe civil works, furniture and gaps through demand and and equipments) completed in 90 equipments financed through supply-side interventions schools. this project. 2) 6,800 students attendingthe Indicators (2) and (3) will project schools usingthe monitor activities supported transportation scheme provided under the school community by the school community grant. grant scheme. These will be linked to the outcomes o f 3) 108 female staff financed retention and girls' access. through the school community grant. 27 Component2: Enhancingthe 1) 30,000 teachers trained Monitoringthe improvement in quality o f service delivery (cumulative) teaching and learning practices will determine the value o f 2) 60% o f trained teachers using investments and suggest at least 60% o f teaching skills refinements inthe directions for taught through training as teacher training and curriculum measured by an independent improvement. assessment in a selected number o f randomly chosen schools. Assessment to be conducted in year 2 to be able to generate a baseline by year 3; follow-up assessment to be conducted in year 5 to be able to generate update to baseline by year 6 in the same subjects, taught by the same teachers in the same grades o fthe same schools. Component3: Supporting 1) Curriculum framework policy Monitoringthe progress in the Secondary Education Policy document prepared development o f policy Development frameworks 2) Feasibility assessment for developing private sector regulatory framework undertaken Arrangements for resultsmonitoring 108. The PDO indicators are monitored through government official data and intermediate outcome indicators are measured through the P A U except for the assessments o f learning achievement and teaching practices, which require separate assessments. Key issues include: Low data quality and consequencefor calculating retention rate: Unreliable and inconsistent data are major obstacles to effective monitoring. The M o E has changed the data collection instrument from the paper-based Annual Education Survey (AES) to a Web-based annual educational survey in 2006, which allows the MoE to compile and present annual enrollment and teacher statistics much faster than through former methods. However, the last AES was conducted in 2004. In 2005, a Comprehensive School Survey was conducted which employed a data collection methodology that is not consistent with either the AES or the web-based instrument o f 2006. Due to these changes, data for school years 2005/06 and 2006/07 are unsuitable for calculating retention rate. It is therefore suggested that G10 enrollment in 2006/07 and G12 enrollment in 2008109 be used to calculate the retention rates for the first year o f project implementation. Risk to Outcome Indicator #I:The target value for Gender Parity Index of secondary intake is determined on the basis o f enrollment growth trends up to 2004 (Grade 9 enrollment increases at an annual rate o f 6.8% for females and 0.9% for males in project districts). One o f the risks that could limit the achievement o f the first PDO indicator is slower than expected female enrollment growth rate at basic education level. Such a case is not expected to happen under the current expansion pattern o f the basic education system; yet, this risk needs to be pointed out as enrollment intake in secondary education system depends on the basic education system. 28 0 Outcome Indicator #3: Learning outcomes in Mathematics, Science and Language for Grade 12 students would be a better measure o f education quality. However, these measures can begin to be generated in Yemen systematically once the COMEis fully functional, at the earliest in 2013. Inthe meantime and to initiate this important exercise, the project will finance a focused learning assessment test to assess student performance in secondary education. Mathematics was agreed upon to be the curriculum subject to be assessed because it is common to the two streams and is the first one among the 17 secondary education subjects included in the existing curriculum where a training module will be developed and a training delivery scheme will be carried out financed by this project. Capacity: The MoE is aware that the collection, recording, management and use o f data is a crucial input for policy development, priority setting, resource allocation and annual planning at the central, governorate, district, and school levels. The project aims to build capacity o f targeted governorates and districts to produce adequate planning for school expansion and establishment according to key variables (population growth, enrollment growth from basic to secondary, school mapping, demand and supply for teachers and administrative staff and facilities). 29 $ $ 0 m 2 2 C E : .-E: vi - - N r n - N N N Annex 4: DetailedProjectDescription 109. Consistent with the GOY'Svision to reform secondary education attuned to the recently adopted National General Secondary Education Strategy (NGSES), the proposed project seeks to support the GOYprogram for improving gender equity, quality, and eflciency of secondaty education in selected districts with aparticular focus on girls in rural areas. 110. These objectives would be achieved through four components: Component 1: Improving equity and reducing gender gaps through demand and supply-side interventions; Component 2: Enhancing the quality o f service delivery; Component 3: Supporting secondary education policy development through the carrying out o f tailor-made studies and/or related-activities, and Component 4: Project management and monitoring. 111. Project Scope: The proposed project will finance a series o f interventions in 9 Governorates (Abyan, Aden City, Dhamar, Hadramout, Hodaidah, Ibb, Lahej, Sana'a city and Taiz). Approximately 90 schools in approximately 30 districts have been selected for intervention in component 1. During the first phase o f project implementation (to last about 18 months after the project launching expected early in the second semester o f 2008), a maximum o f 5 o f the target governorates would benefit from project interventions, in addition to the system-wide interventions. 112. Selection of Target Districts and Target Governorates: Target districts for intervention represent low performing districts in secondary education where the development impact o f the project can be maximized. As is presented intable A.4.1, in comparison to the non-target districts in the target governorates and in comparison to the national average, these districts register, for both male and female students, where relevant: (i)higher levels o f inefficiency in terms of repetition and dropout rates (or lower retention rates); (ii)lower gender parity index; (iii)lower secondary GER, and (iv) poorer Gr. 9 to 10 transition rates. In order to minimize implementation risks resulting from low capacity and the subsequent need to provide intensive capacity building and monitoring, the target Governorates were selected on the basis o f geographical concentration of target districts. Indicators (2004) Source: World Bank staff calculations based on MoE's Annual Educational Survey for school-year 2004/05 and CSO Population Census 2004 113, Selection of Target Schools; Consistent with the district selection criteria, schools that have lower than average retention, enrollment, and GPI, and where there is a greater potential of improving efficiency, equity and quality have been selected for targeting through the project. In particular there are two criteria: (i)physical condition and (ii)enrollment. The first criteria help identify schools where civil works can be meaningfully employed and therefore consider: (a) if there i s space for extension at the site, (b) water and electricity are available near the site, and (c) school site does not require complete replacement o f existing buildings. The second criteria pertain to gender equity. Because transition rates from Gr.9 to Gr.10 are not available at the 31 catchment area level, the following preferred list o f characteristics has been determined to select schools for intervention: at least 60 girls at Gr. 9 in the catchment area, (b) mixed (c) rural schools and urban schools with relatively small size and requiring increased capacity, based on the potential pool o f (current and future) student population inthe catchment area. Component 1: Improving equity and reducing gender gaps through demand and supply-side interventions - US$74.1 million total (IDA: US$15.0 million, including contingencies) will finance a series o f interventions in about 90 public secondary schools selected in target Governorates and districts. 114. Sub- component I.I: Upgrading andfurnishing schoolfacilities - (US53.7 million total; IDA: US$11.0million, including contingencies) will finance the extension o f existing facilities through new classrooms and/or the provision o f new utilities (water and electricity supply, sanitation, sewage, rain water drainage, telephone, etc.); (ii)rehabilitation and repair o f existing facilities including buildings, utilities and external spaces (fences, access road, recreation areas, etc.); (iii)replacement o f unsuitable buildings in the existing schools (poor physical conditions, shelters, or buildings not initially designed for schools); and (iv) upgrading o f existingfacilities to bring them up to acceptable standards. 115. This sub-component will also finance the civil works site supervision during the construction phase, including: (i)verification and review o f contractors' documents; (ii) supervision o f works to ensure compliance with required specifications, quantities and quality o f work; (iii)attending regular site meetings; (iv) preparation o f supervision reports; (v) checking and issuing interim payment certificates for the contractor; (vi) reviewing and issuingo f variation orders; and (vii) inspection o f completed works including provisional acceptance and handing over. 116. Finally, this sub-component will finance the provision o f school furniture including delivery, installation and testing o f equipments and furniture. 117. Sub- component 1.2: Providing learning equipments and materials - US12.3 million (IDA: US2.4 million, including contingencies) will finance the provision o f learning equipments (for science laboratories, computer laboratories, multi-purpose rooms, etc.) and learning material to be acquired under technical specification attuned to the existing curriculum and including delivery and installation (ifrequired) and testing o f equipments. 118. Sub-component 1.3: Developing the operating procedures and building capacity for managing school-community grants - US$I.I million total (IDA: US$0.2 million, including contingencies) comprises of: (i)technical assistance to develop the detailed operating procedures and training manuals o f the School-Community Grant (SCG) and preparation o f the SCG Operational and Training Manuals; and (ii)intensive training to the community, in particular the mothers' and fathers' councils as well as the school management on the use o f allocations to the schools. 119. The smooth operation o fthe proposed SCG requires intensive training o fthe mothers' and fathers' councils who will have to act as the monitoring groups to ensure that the school allocations are being used properly. It also requires development o f clear accountability measures and a specific chapter in the project's POM. In addition, all the incentives provided will be properly advertised and awareness campaigns will be supported to ensure that the community as a 32Basedon an analysis ofthe available school mappingdata, it was evident that ifthere is an all girls secondary school inthe catchment area it usuallyhas a larger enrollment of girls; it is inthe areas where there is only a mixedsecondary school availablethat the female enrollment at secondary level is very low. Therefore, the project is more relevant to such schools than to single sex schools. 32 whole knows about the allocations that are flowing to their school and make sure that it is being utilized in the best possible way. For this, the community participation department in the Girls' Education Sector will hold intensive training workshops and awareness campaigns. In addition, the training sector will provide specific basic accounting and budgeting training courses for the actual members of the school committee, since the school committee will be accountable to periodic audits and record keeping to ensure due diligence in the disbursement of funds. 120. Inputs to be financed by this sub-component are: training, short-term international and national technical assistance, workshops, awareness campaigns (town-hall meetings), office equipment and operating costs. 121. Sub-component I.4: Providing school-community grants - US$7.0 million total (IDA: US$I.4 million, including contingencies) comprises of specific incentives targeted towards the school communities in the target schools. The SCG will finance incentives to bring more girls into secondary education and reduce the dropout rates, especially for boys. The envisaged allocation mechanism involves the establishment of a committee at the school level comprising the head teacher, the social worker, a member of the fathers' council, a member of the mothers' council and a community member to monitor the utilization of financial resources allocated to the school by the SEDGAP. 122. This subcomponent will provide targeted incentives to students through the school community allocations which include school transportation subsidies, contracting a senior female in co-educational schools and conditional cash transfers (CCTs) to girls in grades 4-12 and to boys in grades 10-12 inthe target districts where more than 50% of the population is below the national poverty line. 123. A CCT scheme has been piloted and implemented since February 2006 under the BEDP for girls in grades 4-9. The CCT under the SEDGAP aims to increase retention o f boys and girls from Grade 10 to 12, especially in poor districts where poverty is the main reason for dropout. It also aims to increase access to secondary education by targeting girls in grades 4-9 in the basic- secondary schools as well. The detailed mechanisms o f the SCG will be described in the School- Community Grant Operational and Training Manuals. 124. The findings of the community survey (conducted by the government for the preparation of the SEDGAP) as well as other background studies and research conducted by the government, suggest that the presence of a female staff in co-educational schools creates a positive incentive for girls to enroll as the parents are more confident about their security. Therefore, under the SCG, if the community as a whole takes the responsibility to maintain at least 15 girls in the secondary level in project schools, the school committee working with the SCG will get an allocation of US$IOO per month to hire a female teaching assistant. The teaching assistant will be at least a secondary graduate, well respected female from the community. Ifthere are more than 25 girls enrolled in grades 10-12, the school will get resource allocation for two female teaching assistants, up to a maximum of 3 teaching assistants per school. The female teaching assistants will be trained under the SEDGAP according to the requirements of the community. The type of home economics taught will be flexible and the community will be responsible to decide on the appropriate skills needed according to the need in the locality. This could include basic gardening, sewing and embroidery, cooking and preservingfood for business purposes. 125. The transportation scholarships included inthe SCG will also be provided on the basis of the number of girls enrolled in the Ifthere are only 0-5 girls enrolled inthe secondary 33The transportation subsidy amount has beenestimatedby determiningthe per-roundtrip-cost of traveling approximately20 kilometersor more in a remote area. This amountsto approximatelyUS$2 per traveler per day. 33 school who require transportation, the school committee will get US$50 per month for their transportation, and US$lOO per month for 5-10 girls enrolled inthe secondary school. The school committee will get a maximum o f US$500 for 60 girls or more. A similar mechanism will be introduced for all boys in secondary schools who have to walk more than 5 kilometers to get to school in plain areas and 3 kilometers in mountainous areas. The transportation allowance will be to a maximum o f US$250 per school per month. 126. The CCT poverty targeted (at the level o f the districts) scholarships will be in the amount of US$lOO per student per year for girls and boys in secondary school and given to all students in the districts that have a population o f more than 50% below the national poverty line. The eligible districts will be identified using the national poverty map. For girls, if the school is a basic- secondary combined school in these poorest districts, the conditional cash transfer will be given to the girls from grades 4-9 as well to generate effective demand and ensure greater retention inthese grades. The stipulated amount is smaller for the lower grades at US$40 per student per year. 127. Inputs to be financed by this sub-component are: transportation scholarships, teaching assistants and conditional cash transfers. Component 2: Enhancing the quality of service delivery -US$23.4million total (IDA: US$4.0 million, including contingencies)will finance a series o f system-side interventions in the 9 target governorates. 128. Sub- component 2.1: Capacity building to improve teaching and learningpractices in the classroom - US$22.0million total (IDA: US$3.7 million, including contingencies) will support: (i) the identification and development o f upgraded teaching and learning materials for the existing curriculum based on the findings o f the current textbook revision from grades 1 to 12 being financed through the BEDP, through technical assistance; and (ii)provision o f regular training and support to teachers and school teams, including the connected training and professional development of trainers and supervisors at district and governorate levels. The provision of teaching and learning materials will take place mostly through sub-component 1.1, except a small package o f teaching and learning materials that is not dependent on infrastructure requirements to be provided to participating teachers in the training programs delivered in the project governorates in order to enable them to implement more effective teaching intheir classrooms. The training to be provided under this sub-component would be for all secondary teachers in the project governorates. 129. Teaching and learning materials. The upgrading o f teaching and learning materials would be based on a review and assessment o f the existing materials in use, and the identification o f additional requirements based on the existing curriculum and textbooks. The provision o f teaching and learning materials would include: audiovisual aids, teacher reference books, and library and laboratory materials to support the existing curriculum for grades 10-12. The sub-component will also finance the training o f teachers and the Educational Aids Production Centre (EAPC staff) in usingand producing educational aids based on locally and readily available material. 130. Teacher training. Sub-component 2.1 will also finance the development and delivery o f training to support teachers and school teams, including the connected training and professional development o f trainers and supervisors. The training will be based on subject modules for all secondary curriculum subjects (currently 18 in total), plus additional modules for school support staff (technicians, social workers). Training modules will be developed centrally, initially (for the first 18 months o f project implementation) for a limited number o f subjects34,and be delivered by 34The first phase comprising the initial 18monthsof project implementation will include the developmentof training modules and delivery of training for: Mathematics, science (biology, physics and chemistry), foreign language (English), a general pedagogy module for all subjects, leadership-managerial skills for 34 training teams at governorate level, first to teachers from selected project districts, subsequently, and upon proven effectiveness to all districts in the target governorates. Delivery o f training will involve the role o f supervisors at district level who will follow through on training in the school with support from governorate level teams and monitored from the national level. 131. This sub-component will finance: (i)the strengthening o f school principal's capacity to lead and manage the school, develop school plans usingdata and statistics, coacWmentor teachers, and liaise with social workers (male and female), fathers and mothers councils to reach the communities; and (ii)the strengthening of supervisors' capacity to monitor service delivery against basic functional standards and to provide formative support to schools' managerial, administrative and teaching staff. Similar training modules as for teachers will be developed for school principals and district supervisors. They will also be developed centrally and implemented at governorate level. 132. GTZ will support this sub-component through technical assistance for developingtraining packages for mathematics, chemistry, biology, and physics, for school leadership and social workers, for district supervisors, for training o f trainers, and for overall development o f the training framework and planning, organizing and monitoring training events. 133. Sub-component 2.2: Strengthening the learning assessment system - US$0.8million total (IDA: US$0.2 million, including contingencies) will finance activities leading to: (i)the introduction o f new examinations in the school system, and (ii) the strengthening of capacity at school level to prepare and conduct assessments o f student performance based on the existing syllabi, texts, and learning materials. This is consistent with the decision to review the current curriculum and texts before beginning a major revision o f curriculum. Activities under this sub- component will particularly take place after the mid-term review given that BEDP is currently financing the Center o f Measurement and Evaluation (CoME) to become fully functional to conduct major assessments and to manage the examination system. 134. After the CoME has been in operation for a number o f years, examination systems have been reviewed and revised, item banks, tables o f specifications and tests have been developed, and the financing o f BEDP has come to an end, the project will finance the actual implementation of reforms in the examinations through training and other support for wide-scale introduction. 135. Simultaneously and parallel to the implementation o f the new learning examinations scheme, this sub-component will also finance the building o f capacity in the secondary education schools to prepare and conduct assessments o f student performance based on the existing syllabi, texts, and learning materials at school level. Reference manuals for continuous assessment, exemplary tests and test items, and training material for managers and teachers will be developed for implementation through the training system. Inputs to be financed are: technical assistance, trainings, workshops, seminars, edition and production o f documents, provision o f materials and equipment. 136. Sub-component 2.3: Developing capacity building to improve planning, programming and data collection and analysis - USO.6 million total (IDA: US$O.l million, including contingencies) will finance capacity building interventions for the staff at the central, governorates, and districts levels responsible for planning, programming, school mapping, statistics, data collection and analysis. Specifically, the component will: (i) train central level staff school headmasters and supervisory skills for district supervisors. The entire training program will be phased in, both in scope (number of modules) and scale (number of districts and governorates) of delivery. Increase in scope and scale of delivery will be based on evaluation of quality and effectiveness. After successhl implementation, an additional maximum of 10 subject modules for teachers can be developed in the first half of the project period. 35 o f the Department o f Statistics and Planning, School Mapping, and Information Technology to assess the capacity of the staff at the project GEOs to produce projections reports for school expansion and establishment according to key variables (population growth, enrollment growth from basic to secondary, school mapping, demand and supply for teachers and administrativestaff and facilities); (ii)train the governorates and districts staffresponsible for planning,programming, school mapping, data collection and analysis in preparing projection reports; and (iii) backstop and supervise these staff throughout the preparation of the projection reports to ensure report quality and reliability. Inputs to be financed under this sub-component include: technical assistance, training, workshops, edition and production of documents, provision of materials and equipment, and operationalbudget. 137. Component 3. Supporting Secondary Education Policy Development - US$I.5million total (IDA: USS0.3 million, including contingencies)will finance the carryingout of tailor-made studies and/or related-activities to support policy development and preparation for longer-term reform in key areas: (i) reviews of in-service and pre-service training of teachers, as well as the alignment between teachers needed and teachers formed by the faculties of education; (ii)the preparationof a curriculumframework policy document- basedon a comprehensive review of the current streams and curriculum and start-up activities for the development of a new and/or revised curriculum based on a general framework for curriculum and assessment; (iii) a feasibility assessment for developing a regulatory framework that would encourage the private sector to invest in secondary education, pave a way for innovativeschemes of public-privatepartnerships in education, and build the governance structures needed to effectively monitor the quality of teaching and learning in the private sector; and (iv) carrying out tracer studies on secondary education graduatesto assess the effectiveness of secondary education outcomes. 138. Component 4. Project Management and Monitoring - USS4.4 million total (IDA: US$0.8million, including contingencies) will finance the support and strengthening of the PAU to carry out the fiduciary responsibility and reportingin a timely and effective fashion as required by the SEGDAP related legal and binding agreement entered into between the DPs and GOY. In addition, this component will also finance the required activities to ensure that the outcome and output indicators agreed with the GOYand with the DPs and included in Annex 3 to the PAD (including teacher and student assessments)are updatedand reportedto GOYandthe DPs with the agreed frequency. 36 Annex 5: ProjectCosts Local Foreign Total Project Cost by Component and/or Activity US$ US$ US$ million million million Component 1: IMPROVINGEQUITY AND REDUCINGGENDER GAP 33.5 28.7 62.3 Sub-Comp. 1.1. Upgrading andFurnishing SchoolFacilities 24.4 18.8 43.2 Sub-Comp. 1.2. ProvidingLearning Equipmentand Material 1.7 9.5 11.1 Sub-Comp. 1.3. Developing Capacity for SchoolGrants 0.7 0.3 0.9 Sub-Comp. 1.4. School Community Grants 6.8 0.2 7.0 Component2: ENHANCINGTHE QUALITY OF SERVICE DELIVERY 10.9 7.6 18.4 Sub-Comp.2.1. Teaching and Learning Practices 10.1 7.0 17.1 Sub-Comp.2.2. Conducting Assessments 0.5 0.2 0.7 Sub-Comp.2.3. Capacity Building for Planning, Data Collection, Analysis 0.2 I 0.3 I 0.5 Component3: SUPPORTINGSECONDARY POLICY DEVELOPMENT 0.8 0.6 1.4 Sub-Comp. 3.1. Tracer Study 0.1 0.2 0.3 Sub-Comp. 3.2. Teachers' Competencies 0.3 0.1 0.5 Sub-Comp.3.3. RevisedCurriculum Framework 0.3 0.2 0.5 Sub-Comp. 3.4. Private Sector Regulatory Framework 0.1 0.1 0.2 Component4: PROJECTMANAGEMENT 2.5 0.8 3.3 Sub-Comp.4.1. Project Management 2.5 0.8 3.3 Total BASELINECOSTS 47.7 37.7 85.4 Physical Contingencies 1.5 1.6 3.1 Price Contingencies 13.2 1.8 15.0 TotalPROJECTCOSTS 62.4 I 41.0 I 103.4 37 Annex 6: ImplementationArrangements ProtocolofParticipation 139. In an effort to translate the recent policy reforms into reality in the context of the availability of external resources through the SEDGAP, the MoE has undertaken to enter into a protocol of participationwith each ofthe governorates and districtsthat would be targeted through the SEDGAP. This protocol aims at the signatories (MoE, MOPIC, MOF, MOCSI and the Governorates) to deciare their commitment to comply with the following policies in the target districts: At least 15 percent of all new teaching posts (basic and secondary level) created and approved in each fiscal year in ProjectDistrictswill have been filled by female teachers; The Heads of the Education offices (or their representatives) of the,Project Governorates and Project Districts will be part of the selection process for all new (basic and secondary level) teacher recruitments; The Project Governorates will initiate the process of planning teachers redeployment within the Governorate, starting with the ProjectDistricts and will update the said plan on an annual basis for MoE approval; The Project Districtswill apply and continue to apply Cabinet Decree no. 167 for the Year 2006 allocating new teaching posts to the schools and not to the individual teachers. As such, all transfers requested by the Project Districts will requirethe prior approval of the General Department of HumanResourcesofthe ProjectGovernorates; Teacher absenteeism will be verified by the Project Districts' supervisors as part of their regular visits by verifying teachers' attendance sheets. The said supervisors will inform the ProjectDistricts ofteacher absenteeism(in writing) inorder to enact the transfer ofthe teacher's salary equivalent to the number of unjustified missing days to the Local Councils. Project Oversightthrough the Inter-ministerialSteering Committee 140. While the MoE is the mainGOYagency responsible for implementingthe NGSES, and in particular the SEDGAP, the project will operate under the overall guidance and oversight of an Inter-ministerial Steering Committee (IMSC), as is practice under the BEDP. This Committee will comprise of members of all the key ministries responsible for effective implementationand achievement of the development objectives of the SEDGAP. These representativesare high level officials from the signatoryagencies, entrustedwith decisionmakingpowers intheir own entities. Representation in the IMSC will include: the Ministries of Education (MoE), Civil Service and Insurance (MoCSI), Local Administration (MoLA), Finance (MoF) and Planning and InternationalCooperation(MoPIC) and the PMUof the PWP of the MoPIC as well as the Project Administration Unit (PAU) of the MoE. Governors (or their representatives) are expected to be invited to attend discussions on the annual work plan and for any other meeting as may be required. The IMSC is expected to be established by Decree, once the Yemeni Parliament has approvedthe IDA Credit. 141. The IMSC will meet at least once every four months. At each meeting, during the first 18 months of project implementation, it will focus in depth on the implementation of the five initial project Governorates and project Districts. Once new Governorates and Districts are beingrolled into the project thereafter, each meetingwill focus in-depthon the implementationof a subset of the incomingand ongoing participants.The IMSC will be chaired by the Minister of Educationor his designate as applicable and is responsible for: (i)reviewing and agreeing upon policies as related to the achievement of the PDOs; (ii)reviewing and approving the project annual plans (included in the MoE's Annual Work Plan); (iii)monitoringto ensure compliance of the signed 38 protocol of participation with participating Governorates and agreeing upon remedial actions in the case of non-compliance;(iv) monitoringprogress under the project; and (v) steering resolution of implementationissues arisingduringthe implementationof the project. The PAUDirector will be the Secretaryto the IMSC. OperationalManuals 142. All eligible activities included in the SEDGAP will be implemented according to the overall Project OperationManual (POM) agreed with GOYandthe DPs. The POM is expectedto be finalized and approved by the MoE by August 31, 2008. In addition, all eligible activities under sub-component 1.4 (School-Community Grants) will be implemented according to the School-Grant Operationaland TrainingManuals. ProjectCoordinationand Implementationat the NationalLevel 143. Overall NGSES coordinationwill be entrusted to a fully dedicated Secondary Education Coordinator (SEC) within the MoE, who will therefore be the primary MoE focal point for the SEDGAP. This Coordinator has been nominated through a MoE Decree indicating hidher attributions and responsibilities. The SEC's job description agreed with IDA and other DPs are found inthe projectfiles. 144. The Technical Office (TO), through the SEC will be responsible for coordinating all activities supporting the NGSES in general, and the SEDGAP in particular and implementedby the different units of the MoE at the central and the sub-national levels (governorates and districts). Since the TO is responsible for consolidatingthe Annual Work Plan (AWP) of the MoE, the SEC will be responsible for ensuring that the secondary educationsector activities ofthe AWP are consistent with the overall goals o f the NGSES. The SEC will share all related implementation progress reports that it receives from the project governorates and districts throughthe PAU andthe PWP. 145. The SEC will, in addition, ensure the following in accordance with the regulationsof the MoE: a. SchoolMappingteam within the Project Sector of the MoE and the Departments of Statistics and Planningand of InformationTechnology and Communication in the TO of the MoE gather all the required information concerningthe scope and phasing of all activities to be targeted through the SEDGAP in project governorates, districts and schools. In particular, that the School Mapping team participates in sub-component 2.3 o f the SEDGAP aimingto support the capacity building for the staff at the central, governorates, and district levels responsible for planning, programming, school mapping, statistics, data collection and analysis to produce project reports for school expansion and establishment according to key variables (population growth, enrollment growth from basic to secondary, school mapping, demand and supply for teachers and administrative staff and facilities). These projectreports will be included in the AWP exercise of the MoE; b. Girls Education Sector coordinates the SCG (component 1.4) in the project schools through the corresponding project GEOs and DEOs and reports on the implementationprogress of this sub-component. Annex 6.1 includes a summary of the implementationarrangements for the SCG; c. Curriculum and Guidance Sector (CGS) of the MoE coordinates the implementation of the capacity building activities to improve teaching and 39 learning practices in the classroom (sub-component 2.1) with respect to the review of the list of additional learning materials (other than textbooks and teachers guides outside the scope of SEDGAP and currently being financed by BEDP) and the setting of technical and pedagogical specifications of other learning materials to be procured through the SEDGAP. In addition, once these learning materials have been procured, ensure that they are timely distributed to the project schools and if applicable, to other non- project schools, through the corresponding GEOs and DEOs as seem appropriate. 35 Finally, CGS reports on the implementationprogress of learningmaterials activities of this sub-component based on field reports from GEOs and DEOs; d. Educational Aids Center under the Curriculum and Guidance Sector of the MoE coordinates the implementation of the capacity building to improve teaching and learning practices in the classroom (sub-component 2.1) with respect to its own capacity buildingthrough technical assistance to be provided by the SEDGAP to produce new learningmaterials for the SEDGAP duringimplementation. Finally, to report on the implementationprogress of this sub-component; e. Training and Qualifications Sector (TQS) of the MoE coordinates the implementation of the capacity building activities to improve teaching and learning practices in the classroom (sub-component 2.1) with respect to the development and delivery of training modules to project schools and other non- project schools in selected governorates, through the corresponding GEOs and DEOs as appropriate. 36 For selection of developers and trainers and the development and delivery of training manuals and materials, TQS will draw upon relevant expertise in other sectors o f the MoE (e.g. CGS, Education Resource Development Center, Girls' Education, General Education) and institutions (e.g. universities and Higher Institutes) in close coordination with the management level of these other sectors and institutions. Finally, TQS reports on the implementation progress of the training activities in this project sub-component based on field reports from GEOs and DEOs with district supervisors. TQS will work closely with CGS to align the content of training with school-based issues identified in supervisor reports and for selection of training participants in governorates and districts and, reversely, CGS will align the work o f supervisors with training (to be) provided and follow through on this training at the school level. Finally, to report on the implementation progress of this sub-component; J: TQS coordinates also the implementation of the on-site support to be provided to project school teachers by the cadre of supervisors at the project GEOs and DEOs 35 Learning materials that require fully functional laboratories, computer laboratories or multi-purpose rooms will be only provided to project schools for which the corresponding physical facility has been '' completed and handed over and the learning equipment procured and installed in the schools. Light packages of learning materials not requiring learning equipment will be distributed in all schools in the roject Governorates. Technical assistance for this activity will be financed and supported through the funding of GTZ for the development of training modules in mathematics and science and supplementedby other DPs for foreign language (English), leadershipimanagement training of school headmasters and training of supervisors during the first 18 months of the project. All the training activities will be developed within an overall framework as developedby the MOE at the beginningof the project. Ifthis training approachproves to be effective in changing teaching and learning practices in the classroom of project and non- project schools, then the training will be expanded to new subjects and the new governorates and districts after the second year ofproject implementation. 40 to facilitate teaching and learning practices in the classroom attuned to the objectives set in the training modules financed by the SEDGAP's through sub- component 2.1 (capacity building to improve teaching and learning practices in the classroom). In addition, during the on-site support visits, GEO and DE0 supervisor will also verify teachers' attendance and report back to the GEO in linewith the covenants includedinthe protocolfor participation; g. The CGS is responsible for policy development and implementation of a new curriculum framework, and together with the TQS, for the articulation with the higher education system for the establishment of teaching and teacher education program standards in pre- and in-servicetraining of teachers. Both sectors report on implementationprogress ofthese activities. h. Center for Measurement and Evaluation (COME),currently being financed by BEDP and SFD, upon being fully functional, to continue the strengthening of learning assessments through sub-component 2.2 (strengthening the learning assessment); and i. ProjectAdministrationUnit (PAU) carry on its entrusted fiduciary responsibilities and timely reports on the progress of project implementation according to the requirementsset for inthe bilateralagreementswith the DPs, except GTZ. 146. Given the recent GOYpolicy decision to delegate implementation of all civil works financed by external funds to the PWP, the implementation of sub-component 1.1 will be entrustedto: a. the Project Management Unit (PMU) of the Public Works Project (PWP) of the MoPIC for the school rehabilitation,up grading and extensions to be financed by SEDGAP including the selection of private consulting firms to undertake the detailed survey and inventory of project sites, the rehabilitationand extension designs, the civil works procurement,the civil works implementationand the site supervision, as well as preparation of tender documents for the acquisition of school furniture and general equipment, but not including teaching and learning materials. Accordingly, the PWP will be responsible for monitoring and undertaking quality control of the full procurement process up to awarding of contracts and later for the clearance of paymentsto contractors. The PWPwill be responsible for monitoringthe implementationof these civil works contracts and reportingon their progress to the SEC, through the PAU in accordance with IDA procurementandFMguidelines; and b. the MoEthroughthe PAU(thatwill administer project funds and ensure fiduciary responsibility),the Project Sector and the CGS of the MoE for the preparationof school standard designs, the setting of the standard lists, drawings and technical specificationsfor the school furniture and equipment, the procurement of learning materials and equipment, the science laboratory, multi-purpose and computer roomequipment as well as the monitoringof all activitiesimplementedby PWP. 147. SEDGAP eligible activities to be implemented by the PWP will be financed by project funds allocated to the PWP. An arrangement agreement betweenthe MoE and the MoPIC-PWP, agreeable to all the DPs, will haveto be enteredinto betweenthe MoPIC-PWPand MoEto set the terms and conditionsfor the coordination, utilizationand reportingon the use of project proceeds to finance eligibleactivitiesunder sub-component 1.1. 41 148. The PWP will be responsible for the procurement of civil works, goods and services required for the implementation of eligible SEDGAP activities under their responsibility following IDA procedures and for monitoringthe timely delivery of such civil works, goods and services. The PWP will be responsible for submission of regular progress reports - as well as supporting documents to IDA, in a timely manner as indicated in the bilateral agreements. The PWP will be subject to the same auditing arrangements as PAU and PAU auditor will issue one consolidated report for both entities. PWP will fully participate inthejoint supervisionmissions. Project Coordinationand Implementationat the Governorateand DistrictLevels 149. Project monitoring in each of the nine governorates will be carried out by a Governorate Steering Committee (GSC), chaired by the Governor. The Committee will ensure compliance with the terms and conditions stipulated inthe protocol for participation. The compositionof the GSC will be decided by the Minister of Education as specified in the protocol of participation. The TO will be represented by a Monitoring and Evaluation (M&E) officer nominated by the GEO to work primarily on the SEDGAP and will be entrustedas the Secretaryto the GSC. 150. The GSCs will meet at least every two months to: (i) facilitate project implementation at the governorate level; (ii) review and approve Governorate level consolidatedschool plans; (iii) ensure compliance with the agreed protocol; (iv) monitor progress under the project, and (v) prepare and submit progress reports to the IMSC through the PAU and be available to make a presentation at the IMSC meetings as necessary. 151. To ensure a timely and effective implementation of eligible activities through the GEOs, the project will finance the training in procurement, financial management and monitoring project-relatedtasks, to MoE's staffalready working inthe projectGEOs andDEOs. FiduciaryResponsibility of the ProjectAdministrationUnit (PAU) 152. The PAU will be entrusted by the MoE with the responsibilityto administer the project (except for sub-component 1.1). The PAU will facilitate project implementation by the MoE through financial management, procurement of goods and services and technical assistance in accordance with IDA regulations and procedures. PAU will also provide guidance, support and capacity building where required to the MoE's Directors, and project related staff in the Governorates and the Districts. The PAU will also be responsible for communicatingwith IDA and DPs on implementationmatters. 153. The PAU will recruit a fully dedicated administrator for the SEDGAP who will be responsible for ensuring that fiduciary requirements set by the IDA Financialand Administration Agreements as well as the KfW financial agreements are fully complied with. This administrator will coordinate the work of the PAU's staff in charge of procurement and financial management dedicated to the SEDGAP. 154. The PAU will be responsible for the procurement of goods (except goods procured by PWP) and services requiredfor the implementationof eligible SEDGAP activities following IDA procedures and for monitoring the timely delivery of such goods and services. The PAU will be responsible for obtaining IDA'Sno objection for the acquisition of such goods and services and for the documentation of all SEDGAP-related procurement, disbursement and financial management activities undertaken. The PAU will be also responsible for submission of regular progress reports as well as audit reports (including PW's part) to IDA and DPs in a timely manner as indicated in the bilateral agreements. The PAU will fully participate in the joint supervisionmissions. 42 155. Annexes 7 and 8 to the PADdescribe in more detailthe requirements to further strengthen the PAU to timely and effectively carry out its envisaged administrative and fiduciary control tasks posedby the SEDGAP. Annex 6.1: Summary of the ImplementationArrangements of the School-community Grant 1. The implementationarrangements of School Community Grant (SCG) will follow the arrangementsthat are developedfor the Whole School Improvement (WSI) fund under the BEDP, upon assessment and verificationof these procedures. The WSI pilot will be launched under the BEDP in February2008. The SEDGAPwill, inthe first six monthsof the project, assess the pilot and its implementationarrangements, make modificationsas necessary and then roll this pilot out intarget schools ofthe SEDGAP. Chair Community leaderwho is respectedandtrusted Deputy Chair Headteacher Treasurer Could be a teacher or someone from the community who has experienceof keepingfinancialrecord InternalAuditor Member of the school staff or communitvwho is trusted IFor schools with less that 500 students= 5 mothers, 5 fathers and 3 teachers For schoolwith morethan 500 students= 7 mothers7 fathers and 5 teachers 43 Annex 7: Financial Management and DisbursementArrangements 156. Based on the Financial Management (FM) assessment conducted for this project,37the overall FM risk was originally rated as High. Reasons included: presence of inherent weaknesses inthe accountingand auditingprofessions inYemen, as identifiedinthe various analytical studies conducted recently; and project specific factors, including implementation through several entities, pooled multiple donor financing, cash flow processes particularly as regards SCGs and maintenance of second generation accounts. The geographical distribution of beneficiaries increasesthe projects' complexity.However, since close to 60% of overallproject financing is for civil works, which is a relatively low risk activity, and because appropriate fiduciary measures have been incorporated (e.g., expanded scope of audit and a reinforced internal control framework) to mitigatetheir fiduciary risk, the overall ratingwould be considered Substantial. 157. FM risk assessed for the PMU of the PWP and the PAU of the MoE is Moderate and Substantial, respectively. The maintenance of the existing FM arrangements in addition to other mitigating measureswhich will be closely monitoredduring project life are expected to bring the residualFMrisk for each entity to Low and Moderate, respectively. 158. While the PAU will be responsible for procurement and FM of the SEDGAP overall on behalf of the MoE (all parts of the Project except for A.1 (a)), the PWP, through implementation ofthe civil works (CW) sub-componentinthe project(Part A.1 (a)), will needto also comply with IDA'Sprocurement and FM procedures and regulationsunder the project for the CW, goods and operatingcosts associatedwith the CW. FinancialManagementAssessment Outcome and Agreed Action Plan: 159. Both the PAU and the PWP have satisfactory experience in FM. PAU staff have experience in managing FM of IDA-financed projects (including the recently-closedBEEP and the on-going BEDP), as well as Trust Funds managed following IDA procurement and FM guidelines (including two phases of the Education For All Fast Track Initiative Catalytic Fund Grant and the Japanese PHRD Grant for the preparationof the SEDGAP). Similarly, the PWP staff has satisfactoryexperience in managing IDA and other donor funded projects. Current IDA financed projects managed by the PWP include the IDA-PWPIIIand the civil works component for the Health ReformSupport Project. 160. While the PAU has developed a proposal, agreed upon with IDA on FM staffing (Figure A.7.1), some shortcomings were noted as regards the FM arrangements in both agencies. These include: (i)inadequate staffing at both entities, (ii) non-availability of FM manual covering SEDGAP-specific activities at the PAU, (iii)non-availability of additions to existing software accordingto SEDGAP monitoring, recording and reportingrequirements, and (iii)vacant internal audit function at the PAU. A financial management action plan was therefore agreed upon to enhance the existing FM arrangements at both agencies and is presented in Table A.7.1. Table A.7.2 details the mainFMrisks and mitigating measures. 37This and following sections present key highlights ofthe FMassessment that was undertakenfor this program, available inprojectfiles. 44 Table A.7.1: Action Plan to Enhance Financial management of the SEDGAP Action Rationale Responsibility Timeline 1. Review and agree To clearly spell out PAU Draft submittedto IDA uponFMaspects implementationand management for review by March 1, presented in an coordinationobligationsof with respective 2008. arrangementto be each agency to ensure stakeholders of Satisfactory agreement entered into and signed effective implementation the PWP-PMU (to MoE, MoPIC and betweenthe MoE PAU through well articulated inconsultation DPs) to be signedto and the PWP PMU. division of responsibilities, with DPs enable disbursement. This is a disbursement and meansof consistent condition for part coordinationand cooperation. A.I(a) of the project. 2. Enhance current To ensure that the FMunit at PAU (1) ObtainIDA non- PAU FMcapacity by the PAU: (i)is adequately management objectionto TORS recruiting: staffedto performadditional before negotiations 1 chiefaccountant and FMtasks related to the new (accomplished). 1 accountant for the project, and (ii)has balancedthe School Community work loadof its staffby (2) Recruit staff as Grant. function since the PAU is early as possible and See also FigureA.7.1 currently managingmultiple latest by one month projects/TFs. after effectiveness. 3. Enhancecurrent To ensure FM unit at PWP is PWP (1) ObtainIDA non- PWP FMcapacity by adequatelystaffedto manage management objectionto TORS recruiting 1 accountant additionalFMtasks for before negotiations SEDGAP. (accomplished). (2) Recruit accountant as early as possible and latest bv one month after effectiveness. 4. UsingBEDP as an To ensure that the roles and PAUFM Aug 3 1,2008 (dated example, draft the accountabilitiesof the diverse (through covenant). SEDGAP FM manual stakeholders and the two private for incorporationinto implementingentities (MOE- consultant if the Project operation PAU and PWP-PMU) are needed) manual. clearly documentedandto provide details on the formally approvedFM arrangementsof the project. 5. (a) Introductiono f a To record, report and analyze PAUFM Beforenegotiations new module in the project's transactions as well (through (Done. Module existingaccounting as generatequarterlyrequired external introducedandchart of software of BEDP for software account completed). SEDGAP and (b) IFRs. provider) ensuringthat new module is hlly hnctional and is capable of generating IFRs in additionto creatingrespective SEDGAP chart of 3ccount 5. Revival o f the To conduct internalaudit PAUFM (1) ObtainIDA non- internal audit function reviews to detect and internally objectionto internal It the PAU through advise on correctionof audit managerTORS 45 Action Rationale Responsibility Timeline recruitmentof the transactions as needed, and before negotiations internal audit manager performfield visits to sample (accomplished). and at least 1 schools on a regular basisto accountant. ensure adequate performance of (2) Accountant hiring See also FigureA.7.1 school fund and flag issues as to be completedwithin they may arise to PAU 2 months after management. effectiveness. 7. Draft and finalize To havea single harmonized PAUFM and Beforenegotiations IFR formats that are report coveringtotal PAUand PWP FM (Done -Drafted, acceptable to all DPs PWF'activitiesrespectively on a subject to DP review to cover total project quarterlybasis and to allow for and finalization) activities and different regular financial monitoringby financingsources all DPs. among different DPs. 8. Contract with a To ensure that the auditor is PAUFM To be completed private external auditor appointedina timely manner within 1 monthafter to conduct quarterly andthat the requiredquarterly effectiveness. reviews of the IFRs IFR review andannual audit and annual audits for reports are made available on PAU and PWP according to TORS agreed amongall DPs annually (throughno objection). Table A.7.2: Main Project F M risks by component and mitigating measures Project Component IMajor associated FMrisks I I Mitigating measures and/or Activity A. Component 1: IMPROVING EQUITY AND REDUCING GENDER GAP 1.1 Adequate Efficient coordination Clarification of detaileddivision ofroles and School Facilities betweenPWF'andPAUin responsibilitiesof each entity I s to be spelledout specifics of Civil works insubsidiary agreementto be signedbetween activity MOE and MoPIC 1.2. School CommunityGrants and remote areas which wouldtake accountabilityof channeling Risk of funds transferred funds to intendedbeneficiaries ina risk controlled to ineligible beneficiaries environment. Funds will be transferred usingATM cards in specific time windows to minimize risks of ineligible use of funds. Basedon approvedlistsof beneficiaries approvedby MOE and PAUprior to transfer ofFunds. Auditor TOR specificallycovers sample of such activity on annul basis I B. Component2: EN 4NCING THE QUALITY OF SERVICE DELIVERY 2.1. Teachingand Risks o f non intended MOEtrainingdepartment is to select intended LearningPractices trainees beingtrained trainees against agreeduponcriteria to ensure projectobjectiveis met 2.2. Conducting Countryweak capacity Primary focus inselection is to local consultants Assessments might hinder the selection however ifneedarises international consultants of qualified consultants are allowed for financing under project 2.3. Capacity e Same as for 2.1 Same as for 2.1 Building for Planning, Data Collection, Analysis 3.1 Tracer Study I Same as for 2.2 Same as for 2.2 3.2. Teachers' Same as for 2.2 Same as for 2.2 Competencies 3.3. Revised Same as for 2.2 Same as for 2.2 Curriculum Framework 3.4. Private Sector e Same as for 2.2 Same as for 2.2 Regulatory Framework D.Component4: PROJECTMANAGEMENT 4.1. Project e PAU F M high staff e Recent agreementwith MoPIC in Sept 07 CPPR Management turnover to increase salary scale of PAU. Hiringof additional F M staffing to even out work load. External Audit and ReportingArrangements: 161. An annual audit o f SEDGAP financial statements for all transactions, covering both the PAU and the PWP activities, and including a field audit o f the SCGs will be undertaken by an independent private external auditor. This auditor, acceptable to IDA and DPs, will be contracted by the COCA on behalf o f the PAU. This auditor will review the use o f funds in the designated accounts managed by the P A U and the PWP, the respective second generation accounts, the allocation o f expenditures to each donor based on agreed percentages and variance between the planned versus actual expenditures. The audit will focus specifically on a limited sample (1-2%) o f field transactions under the SCGs. A consolidated annual audit report for both entities will be submitted to IDA within six (6) months after the end o f the fiscal year. 162. Based on the annul audit results, a special assignment audit to cover at least 5% o f the SCGs expenditures might be required at mid term review to ensure that this high risk activity is properly managed and funds are transferred to eligible beneficiaries. 163. The external auditor will also be required to review the IFRs - with specific focus on budget figures - prepared by each entity on a quarterly basis. Reviewed IFRs o f both entities would be submittedto IDA no later than 45 days after the end o f each calendar quarter. 164. The comprehensive audit would cover all aspects o f the project (i.e., all sources and uses of funds, and expenditures incurred by project for both the PWP and the PAU). The audit will be carried out in accordance with International Standards on Auditing. TOR for this task should cover an audit o f financial transaction, the SOEs, DAs, IFR, and an assessment o f the accounting financial management system, including review o f internal control mechanisms. The PAU and PWP would provide the auditors with access to project-related documents and records, and information required for the purposes o f the audit. The auditors would carry out an interim audit duringthe fiscal year, to bringto management's attention issues which need to be addressed. This would strengthen internal controls, and would also facilitate early completion o f the annual audit. 47 *5 .. s + 54 cd MI E L .. c d .-L Disbursement Arrangements: 165. It was agreed that eligible project activities will be financed from a pool of funds allocatedto the multi-donor Projectbasedonjoint PDO objectives, policies, criteria, design, and outcome and output indicatorsaddressing needs identified in the GOY'SNGSES. The details of the project are presented inother parts ofthis PAD. 166. There will be two pooled designated accounts: one for the PAUof the MoE, and one for the PMU of the PWP of the MoPIC. Disbursements will be made jointly by all DPs into the pooled designated accounts on an agreed disbursement schedule. The GOYhas also agreed, for the first time, to deposit its counterpart share in the designated accounts at the same time as the other DPs. Funds will initially be disbursed on a pro-rata basis accordingto the total financial commitment of each DP to the SEDGAP. However, recognizing that some DPs may have a delayed start, the pro-rata shares will be adjusted as necessary to reflect actual financing available. The DPs relative shares may need to be further adjusted to take account of increased levels of eligible expenditures, variations in funding availability, exchange rate fluctuations and the participation of additional DPs. Such adjustments should be discussed and agreed upon duringthe semi-annualjoint review missions 167. Disbursementsby the DPs will be regulatedas follows: Requestsfor disbursement will be presentedsemi-annuallyon the basis of approved work plans and cash flow projections for expenditures as presented in the relevant Interim Financial Report (IFR) consistent with the cash flow forecasts presented under the Annual Work and Procurement Plan. Disbursements will be made in a single currency (USD)intothe pooleddesignatedaccounts; 0 The initial deposit shall be determined on the basis of projected cash flow requirements for the initial 6 months of Projectimplementation; 0 DPs will disburse funds pro-rata according to the shares agreed upon. On a quarterly basis, the DPs may need to adjust these shares to take account of increased levels of eligible expenditures, variations in funding availability, exchange rate fluctuation and the participation of additional DPs. Such adjustments should be discussed and agreed upon duringthe semi-annual reviews; MOEIPWP will send the requests for disbursement and the IFRsto the contact DP. Upon receipt of this request the contact DP in consultation with the other DPs review the attached IFR and clarify with the MOEPWP any outstandingissues includingvalidity of cash forecasts for the following two quarters. Upon a satisfactory completion of the review, the contact DP will notify MOEPWP of the amounts approved by the DPs to be transferredinto the designated accounts; It was agreedthat IDA will act as the initial Contact DP. The IFRSwill be electronically disseminatedto all DPs for comments and determinationof amounts to be disbursed in accordancewith respective DPs shares agreed upon, and IfanyDPfailstomeetitscommitmenttomakepaymentsintothedesignatedaccounts, the DPs and the MOEPWP will consult on what action will be taken to ensure that the project remains fully funded. Flow of Funds 168. The flow of funds from the various DPs andthe GOYto the final beneficiariesis detailed in Figure A.7.2. The flow of funds assumes that all DP and GOYfunds will be pooled into 49 designated accounts for each entity (Le,, MoE PAU and MOPIC PMU of the PWP) and disbursements will be made on a pro ratabasis. FigureA.7.2: Flow of Fundsfor the SEDGAP Palt A.l(a) Other parts of pioject MOPIC-PWP-PhlU flow of flIlltlS MOE-PAU flow of funds IDA and Dutch US$ Designated funds US$ Designated IDA administered --)' Account at CBY Pooled prorata I Dutch r' Pooled prorata among dono:s;::kding funds) GOY 1 KFW r*DFlD and KFW donors(inc1uding funds --). GOYfunds) PwP-pruIu KFW M0E-PAU Managed {m I I L IDA and Dutch IDA administered 1 DFlD I F administered Managed I Gov 1 YR Second 7 -- Generation Pari A.l(a) Otliei Parrs 90 days advance Contractors/Suppliers/consultants Contractors/Suppliers/consultants dL account Consultancy I Education Grants I 7 Operating Costs contracts < $5000 [ Beneficiaries 1 Note: GTZ is not included in the above diagram as is only going to be in kind training at all levels of selected areas.(GEOIDEO/SchooIs) 169. The PAU has experience in IDA disbursement procedures. Disbursements are mainly centralizedat the PAU except for petty cash amounts managed by governorates for miscellaneous items. However, under the envisaged SCG, funds will be transferred from the PAU designated account to the Post Office/commercial bank which will, in turn, be responsible for giving funds directly to eligible beneficiaries. Similarly, PWP disbursements are centralizedinthe PWP PMU. 170. Second generation accounts will be held for each entity in which US$ funds from respective designated accounts are exchanged for Yemeni Riyals and used to finance local currencytransactions that are frequent and whose amounts are relatively low (examples depicted in Figure A.7.2). Reportingon such second generation accounts transfers is to be done within a period not exceeding 90 days from funds transfer date from the designated account and reconciliations and bank statements of such accounts are to be sent with Quarterly IFRs to monitor its use. 50 Education Grants: 171. The SEDGAP, in the first six months o f the project, will assess the pilots o f CCT and WSI under BEDP and their implementation arrangements and make modifications as necessary and then initiate the SCG scheme intarget schools o f the SEDGAP. However, as the BEDP pilot is at its early stages o f implementation, inclusion o f such an activity under SEDGAP is conditional on satisfactorily outcome results from the pilot activities under the BEDP. Agreement was reached with the GOYto phase in project implementation based on evidence o f successful implementation on the ground and full ownership and commitment o f new governorates and districts. 172. It was agreed that SCGs will be paid directly to eligible beneficiaries through the post office/commercial bank against approved lists provided by schools, reviewed by the M o E DE0 and GEO staff and by PAU. Beneficiaries will receive their funds from collection points (branches o f post office or bank or from bank point o f sale facilities against a personal ID or if through a commercial bank using an ATM card). Negotiations are currently ongoing between PAU, the Post office and interested commercial banks to agree upon the most optimal and cost effective solution. 51 Allocationof Credit Proceeds Category Amount of the Amount of the Percentageof Credit Allocated Credit Allocated Expendituresto be (expressed in (expressed in Financed(inclusive of US$)(*) SDR) (*) taxes) (1) Goods under: 20% or such percentage (a) Part A.1.(a) o f the 1,300,000 830,000 of Eligible Expenditure Project as the Association may (b) Other Parts o f the 2,470,000 1,576,000 determine from time to Project time (2) Works under part 8,500,000 5,423,000 20% or such percentage A.l.(a) of the Project of Eligible Expenditure as the Association may determine from time to time (3) Consultants' Services 20% or such percentage under: of Eligible Expenditure (a) Part A.1.(a) of the 425,000 271,000 as the Association may Project determinefrom time to (b) Other Parts 1,000,000 638,000 time of the Project (4) Training 2,955,000 1,885,000 20% or such percentage o f Eligible Expenditure as the Association may determine from time to time (5) Incremental Operating costs (a) PAU 500,000 319,000 12% or such percentage of Eligible Expenditure as the Association may determine from time to time 20% or such percentage (b)PMU 550,000 350,000 of Eligible Expenditure as the Association may determine from time to time (6) School Community 1,300,000 830,000 20% or such percentage Grants of EligibleExpenditure as the Association may determine from time to time (7) Unallocated 1,000,000 638,000 TOTAL AMOUNT 20,000,000 12,760,000 7ofSDRl=US$1.5( 727is applied. 52 Annex 8: ProcurementArrangements A. Background 173. The 2000 Yemen Country Procurement Assessment Report (CPAR) showed that the procurement legi~lation,~~although an improvement over previous laws, was not up to acceptable international standards. As a transition strategy, the CPAR recommended the development of a set of comprehensive National Procurement Manuals (NPM) to support capacity building o f the GOY'Sprocurement at all levels with national Standard Bid Documents (SBDs)for goods, works and services. 174. The completed country procurement "tool kits" were endorsed by the Cabinet in April 2006 and preparation and capacity building efforts led by the Technical Committee of the High Tender Board have been underway for broad dissemination in seven pilot ministries and agencies including the MoE. IDA and other key DPs (Dutch, DBD, the KfW and GTZ) inthe sector have shown strong interest in moving toward the use of country systems in a phased manner, with education expected to be one of the leading sectors in this harmonization and alignment for aid effectiveness initiative. 175. In addition, as a core policy objective of the National Reform Agenda adopted by GOYin early 2006, a new reform-oriented good practice public procurement law has been prepared with DP support (IDA, USAIDand the Dutch), and ratified by Parliament as an Act on July 24`h, 2007. Drafting the procurement laws has already been initiated and a workshop with key stakeholders took place inFebruary 2008 and approval of the final documents by Cabinet planned for February 2008, Enforcement of the regulations would be the responsibility of the restructured institutions handling government contracts at national and local levels. 176. In mid-2007, Yemen agreedto participate as part of 21 pilot countries inthe OECD-DAC baseline assessment "of the performance, transparency, and accountability o f its country systems" with a view to enhancing use of mutually agreed frameworks for harmonization and alignment on use of common procurement procedures by donors and Governments. 177. Advertisement. A General Procurement Notice (GPN) will be issued in the UNDB and dgMarket for major consulting assignments, and for any InternationalCompetitive Bidding (ICB) for goods and works. The GPN will be issuednot less than eight weeks prior to the publication of the first Specific Procurement Notice (SPN), and be updated annually for all outstanding ICB for goods and all large consulting contracts. It would also be published in the national press or official gazette for purposes of informing potential bidders for contracts under national Competitive Bidding (NCB) and to obtain expressionsof interest from national consultants. 178. Procurement of Works: Civil works procured under the proposed SEDGAP would involve rehabilitation and extension in two phases of existing facilities in about 90 target secondary schools in 9 Governorates by: (i)rehabilitation of selected project schools through provision of standardized school facilities including toilets, hygienic washing, drinking water facilities, and boundary walls; and laboratories when appropriate; and (ii)classroom additions to existing schools with inadequate facilities. Civil works activities would be implemented using: (i)theprojects departmentdatabasedevelopedwith IDAtechnical assistance; (ii)cost-effective secondary school improvement designs for prevailing local conditions first developed under 38Law No. 3 of 1997 and corresponding Executive Regulationsintroduced by Decree No. 234 of 1997. 53 BEDP, but adapted and scaled-up; and (iii)actively participating community groups. Procurements under the proposed SEDGAP will be done using IDA's Standard Bidding Documents (SBD) for ICB and standarddocuments for NCB satisfactoryto IDA. 179. Procurement of Goods: Goods procured under the proposed SEDGAP would include office and target secondary school furniture, text books and equipment for school laboratories etc. For all goods procured under ICB and NCB procedures, IDA's SBDG would be used as in the ongoing BEDP project. In due course, as also for civil works, the "country procurement" SBDs for goods procurement accepted for their equivalency as NCB procedures could be utilized subsequent to approval by IDA for its part of SEDGAP financing as well as other co-financiers. For procurement of goods involving estimated contract values below US$50,000, shopping procedures with a minimum of three quotations would apply. It is also anticipated that other small quantities of off-the-shelfgoods would be procured from specified agencies of the United Nations. 180. Procurement of non-consulting services: The proposed project would utilize the procurement of non-consulting services under NCB procedures in support of capacity building activities the MoE would carry out in the target secondary schools. Based on an established budget for each training activity approved by IDA and DPs, the project would cover workshops and training costs to improve the quality of curriculum implementation, student assessment and overall professionalismof secondary school teachers e.g., production of teacher training module materials, transport and subsistence oftrainees. 181. Selection of Consultants: Consulting services under the SEDGAP to be provided by consultingfirms and individualswould include: detailed engineeringdesign studies based on the standard designs, and preparation of bidding documents, supervision of the civil works, curriculum review and preparation, training and advisory services. The selection of local and internationalconsultingfirms will be done usingIDA's standard Request for Proposals (RfP) and appropriate form of contract based on the scope of services to be procured. Shortlist of consultants for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely of national consultants although foreign *firms may express interest for consideration in accordance with the provisions of paragraph 2.7 of the Consultants Guidelines. For firms, all contracts would be procured using Quality- and Cost-Based Selection (QCBS) procedures except for small contracts for assignment of standard or routine nature and estimated to cost less than $100,000 equivalent which may be procured using selection based on Consultants' Qualifications (CQ) and Least-Cost Selection (LCS) methods. Single-source selection (SSS) proceduresmay be usedon an exceptionalbasis, with prior agreementof IDA, for hiring services that meet the requirements of paragraphs 3.10 of the Consultants'Guidelines, for assignments when only one firm is qualified or has experience of exceptional worth. All consultantsassignmentsestimated to cost more than US$200,000 will be advertisedinthe UNDB online and dgMarket. All individual consultingassignments would be on the basis of comparison of qualificationsin accordancewith section V of IDA'SGuidelinesfor selectionof consultants. 182. Operating Costs: Office supplies, utility charges, maintenance and insurance of vehicles, banking charges, communication services, and other implementation related expenses for the PAU which would be financed on a declining basis and would be procured using administrativeprocedures which were reviewedunder BEDPand found acceptable to IDA. 54 B. ProcurementCapacityand ImplementationArrangements 183, The assessment of procurement capacity reviewed organizational aspects of handling procurement at the PAU as well as at the PWP levels, procurement staff skills, quality and adequacy of supporting and control systems. In addition, the procurement cycle handling capabilities ofthe PAU andPWP includingpast experience inbid preparation, evaluationof bids, contract award, and contract managementwere reviewed.The PAUwas restructuredin late 2006 and a Procurement Unit led by a manager responsible for Planning and Procurement with three procurement officers and a Procurement Assistant to administer procurement activities for education projects(the BEEP ongoingat the time, BEDP andthe FTI) was established. However, by mid-2007 serious staffing issues with respect to the procurement function arose at the PAU as a result of the sudden departure of three of the core procurement function staff, for more competitivesalary offers from elsewhere inthe market. 184. In order to mitigatethe increasedrisk to proper handlingof procurement at the PAUwith the anticipatedaddition of the proposed SEDGAP to its fiduciary portfolio, pendingthe selection of a new manager for Planning and Procurement, donors have agreed to the appointment of an internationally recruitedProcurement Advisor for the PAU under GTZ financing. The advisor is expected to temporarily head the Planning Procurement Unit in the PAU for a period of six months, to provide procurement capacity building and quality control in line with the findings and recommendations of the PAU restructuringexercise. The consultant'smaintask would be to lead the strategically important procurement capacity building work for the severely stretched PAU procurement function staff until it is supplemented by the recruitment of additional procurement staff intwo distinct phases. 185. Procurement of goods, including learning materials, as well consultant services would be carried out by the PAU on behalf of the MoE. However, as per the September 2007 policy decision of the Government, the MoE is devolving responsibility for procurement of civil works and class room furniture to the PWP. With its demonstrated capacity for continuousmonitoring and evaluation of achievable project performance indicators, the PWP is successfully implementing its third project with IDA, in addition to its satisfactory experience with procurement and financial management.In 2007, over $116 million has already been committed to PWP and nearly $70 million appraised for allocation from the donor communitywith monthly disbursement levels reaching about $5 million. Moreover, nearly 50% of PWP investments for subprojects are directed at education sector projects including constructionof secondary schools for the MoE. PWP's performance with respect to procurement administration has also been greatly assisted by use of an Oracle based Management Information System (MIS) to keep track of the procurement process and in making timely payments during the contract management phase. Nonetheless, since the civil works component would be an additional and hefty responsibility for the PWP team (comprisedof Procurement Manager supported by one assistant), there is a clear risk to the PWP's ability to handle the additionalresponsibility of procurement. C. ProcurementImplementationRisks 186. The corrective measures proposed to mitigate the procurement risks identified in the capacity assessment are specifiedinthe Action Planbelow in additionto measuresto be specified inthe OperationalManualfor the SEDGAPto be prepared.Itwould includesimilarto the BEDP, complete procurement procedures for the PAU, including SBDs and evaluation forms to be utilized for each procurement method, modelcontract forms and the like. 55 187. Although the procurement risks are primarily capacity shortfalls in the pre-Effectiveness phase, and mitigation measures if implemented as proposed could potentially reduce the risk profile by post-Effectivenessby mid-2008, the overall project risk for procurement at the time of appraisal is still consideredHigh. ProcurementActionPlan IssueProblem RemedialAction Responsibility Insufficient incentivesand Phasedrecruitmentof required reductioninprocurement core procurement staffprior to MoE/MoPIC capacity. SEDGAP Effectiveness. Limited in-country market for Quality controland capacity staffwith experience in building of newly hired PAU procurement. staff. PAU/ProcurementAdviser Weak contract management Implement longagreedGEO and M&E capacity at GEO incentivesfor project MoE/PAU levels managementand supervision and scale-up on-the-job trainingdelivery. Records on claims and Improvefiles for all disputes procurement processes, PAU particularlyon complaints from contractors. basis, a dedicated Procurement & ContractManagement MoPIC/ PWP Officer reportingto the ProcurementManager D. ProcurementPlan 188. The PAU in collaborationwith the PWP has developed a draft detailedprocurement plan coveringthe first 18 months of project implementation.The ProcurementPlanwould be finalized and agreed by Negotiations and would be available on the website of the MoE. It will also be available in the project'sdatabase and publicly disclosed inthe Bank's externalwebsite. The plan would reflect the components under the PAU's responsibility, as well as the facilities rehabilitationand extension component the PWP would be implementing.It would be updated in agreement with the Project Team annually or as required to reflect the actual project implementationneeds and improvements in institutionalcapacity. E. FrequencyofProcurementSupervision 189. In addition to the prior review supervision to be carried out from IDA offices, the capacity assessment of the PAU and PWP has recommended two annual supervisionmissionsto visit the field to carry out post review of procurement actions. 56 F.Post Review 190. Monitoring and evaluation of the PAU's procurement performance under the proposed SEDGAP would be carried out under the prior review thresholds indicated in the Procurement Plan (Attachment 1 to this Annex) during joint DP supervision missions and through ex-post procurement reviews as deemed necessary during the project implementation. In view of the procurement function capacity shortfalls at the PAU notwithstandingefforts to address this issue in the shortest possible period, 2 out of 10 contracts under the proposed SEDGAP managed jointly by the PAU and the PWP will be subject to post review. Importantly, during implementation,post reviews of in country trainingwould also be conducted from time to time to review the selection of institutions, course contents, nominated trainees andjustifications thereof, and costs incurred. 57 Attachment 1:ProcurementPlan I.ProcurementPlan A. General 1.Agreed date of ProcurementPlan: a. Original: December 18,2007 b. Revised 1: January 23,2008 2. Date of General ProcurementNotice: 11.A. Prior ReviewThresholds 1. ProcurementDecisionssubject to PriorReviewby IDA as stated inAppendix 1to the Guidelines School grants IAll post review contracts Sundry items IAll postreview contracts 58 Annex 9: Economic and Financial Analysis I.EconomicandSensitivityAnalyses 1. CostBenefit Analysis 191. The benefits o f the project are projected to far exceed the costs, with an Economic Internal Rate o f Return (EIRR)o f 13.7%, indicating economic viability o f this project. Benefits 192. The various supply and demand side interventions and quality improvement measures o f the SEDGAP are expected to reduce repetition and dropout rates in secondary education and improve student learning performance, thereby reducing the number o f years required to produce secondary education graduates. The benefits stream is quantified by estimating: (i)reduced supply side/input cost o f producing secondary education graduates, and (ii)lower opportunity cost incurred by students due to fewer years invested in completing secondary education. 193. Although the secondary education cycle in Yemen lasts three years, due to high repetition and dropout rates and low pass rates in the secondary school examination results, the number o f years ' invested per secondary graduate in 2004 were estimated to be 4.44 for boys and 4.12 for girls in project districts and 4.16 and 3.82 years respectively in non- project districts.39By achieving the PDO targets as elaborated in Annex 3, the years invested per student are expected to improve to 3.98 (boys) and 3.71 (girls) in target districts by the end o f the 6 year implementation period o f the project, and to 3.86 and 3.60 respectively by the end o f 20thyear since project comrnen~ement.~~ 194. The annual per student cost incurred by the GOY on secondary education i s estimated as YR70,37 1 (US$368) in 2005/06.4' Assuming that this cost remains unchanged, the savings generated from reduced number o f years per graduate are estimated as USD 104.9 million over 20 years as indicated in Table A.9.1 (or present value equivalent o f US$34 million). Students' foregone earnings (annually averaging US$1,007 for boys and US$506 for girls42)will also be reduced by the reduction inthe number o f years invested per graduate. This will generate savings o f US$ 227.7 million over 20 years as indicated inTable 1(or presentvalue o fUS$74 million). 195. The cost stream is estimated on the basis o f (1) project investment cost, (2) recurrent costs incurred from the project, which include (i)maintenance cost for civil works, furniture, equipments, and 39Retention rate in 2004 was 81% for boys and 84% for girls in program districts and pass rate was noted as 82.8%, based on national average. 40 Reduction in the number of years to produce a secondary graduate is generated differently for program schools (which will receive demand and supply-side interventions through Component 1 in addition to the quality enhancement interventions of component 2) and other schools in the districts (which receive Component 2 interventions only). Inprogram schools, a more rapid improvement inretention rate was assumed, Le., 1% in years 1-3, 2% in years 4-6 and 0.1% in years 7-20, as opposed to O.O%, 1.0% and 0.1% respectively in non- program schools ofthe program districts. 41Due to unavailability of information on secondaryeducationexpenditure alone, assumptionsare made to separate basic and secondary expenditures. 42This is average income for secondary graduates aged 18-20 in 2005, taking into account the non-wage working population. The estimate has been calculatedby World Bank staff basedon the Household Budget Survey 2005. 62 learning materials, (ii)continuation of female staff recruited through the project43, (iii)continued incentives through school community grants, and (3) foregone earnings of newly enrolled students. 196. The estimated project cost is US$103.4 million, of which IDA proposes to invest US$20 million, the DPs propose to invest US$71.4 million, and the GOYproposes to invest US$12 million over 6 years between 2008 and 2014. The approximate average annual recurrent cost resulting from the project for 14 years after project end (untilYear 20 of the project) is US$2.76 million. EIRR Simulation Result 197. Table A.9.1 shows the summary of both cost and benefit streams. The EIRRo f the project will be 13.7%, and the Net Present Value will be US$18.7 million using a discount rate of 10%. Table A.9.1:Summaryof Cost and Benefit Streams and EIRR Years since projectstarted (real USD '000) Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year20 Program Total BENEFIT STREAM Total savingsgenerated 259 530 818 2,039 3,312 4,702 5,014 8,331 104,944 Total saved foregone earningfor all graduates 604 1,227 1,880 4,650 7,494 10,559 11,170 17,626 227.75 1 Total Benefits I 862 1,757 2,697 6,688 10,806 15,262 I 16,183 25,957 I 332,695 COST STREAM Project InvestmentCost 5,000 10,000 29,000 29,400 20,000 10,000 0 0 103,400 RecurrentCost 930 1,395 1,395 2,441 2,945 4 1,932 Students' omomnitv cost .. -64 67 105 467 505 816 387 200 5.386 Total Costs 5,064 10,067 29,105 30,797 21,900 12,211 2,829 3,146 150,717 NPV at discountrate of 10% 18,658 Assumptions Annual per student cost is USD368 (2004) Annual maintenancecost is calculatedas: (I) for civil works 0.5% during first 10 years and 1.5% during next I O years of total value of the building; - (2) furniture 5% of installment cost; (3) 10% of equipments; (4) 10% of learning materials - Salary includesthat of for female teachers hiredat intervention schools (assuming $1200 per year) School grants continuein transportationallowanceand cash transfer(approx. 5,000 students per year at secondarylevel) Total savedunit cost and foregone earningfor all graduates are calculatedbasedon the number of years investedper graduate Benefits are calculatedseparatelyfor project schools (Component 1 target schools) and other schools in the project districts (Comp. 2 only schools) 2. Sensitivity Analysis 198. Sensitivity analysis included simulation of alternative project designs. EIRR for the SEDGAP design was found to be larger than that o f a project that has either: (i)all investments focusing on Component 1 (civil works and school community grants) or (ii)all investments focusing on Component 2 (quality impr~vement).~~ 199. The estimated EIRR was found to be most sensitive to the improvement in the retention rate in target districts. The base scenario (which is presented in the M&E framework) assumes that retention rates will improve from 80.6% to 85.4% for boys and from 84.0% to 88.9% for girls during the six years of the project. It also assumes continuous improvement in retention annually by 0.1% until the 20thyear after project start. However, ifthe retention rate is as low as 84.4% (boys) and 88.1% (girls) by the time 43 It i sassumedthat female staff recruitedby the programwill continue to be financed after the programends. 44 The option (i)does not give enough improvement in retention because the quality of teaching and learning practices remains the same and option (ii)does not give solid impact because money i s spread in too many unsustainablysmall schools which incur high inefficiency of resourceuse. 63 o f project end, there i s a high risk that the NPV will be zero unless retention rate catches up significantly after the project ends. 3. Externalitiesof the Project Health Outcomes 200. Although not incorporated in the cost-benefit analysis due to lack o f confident information on the monetary value in the case o f Yemen, there are several compelling social benefits associated with girls' education as international research literature has proved. These include: reduced child and maternal mortality, improved child health and nutrition, reduced fertility rates, and improved immunization o f children. Nevertheless, as indicated in Table A.9.2, the health-related benefits incurred from educating girls inYemen are significant. 201. The fertility rate for mothers who have more than secondary education is only 2.8, which is significantly lower than that for illiterate mothers (6.7), or even mothers with basic education (4.3). This i s due to delayed age o f first marriage and higher likelihood o f using reliable family planning methods. Ratio o f non-immunized children is 26.5% among children o f mothers with more than secondary level education, compared to 70.5% among children o f illiterate mothers. As a result, the Infant Mortality Rate (IMR) and under-5 year old child mortality rates are much lower; IMR is 48.7 per 1,000 live births for women with more than secondary education while it is 87.4 for illiterate women; under-5 year old child mortality is 55.2 per 1,000 live births and 119.1 for the respective groups. Mother's education also results in better nutrition among children. Percentage o f malnourished children (as measured by low height-for- age) is recorded as 18.7% for the mothers who have at least secondary education, whereas it is as high as 54.3% among children o f illiterate mothers (CSO and MOPHP Family Health Survey 2003). When all these indicators are indexed, the largest improvement occurs between basic education level and secondary education level, where the index score is 30.3 percent higher.45 45 World Bank staff calculation based on CSO and MOPHP Family HealthSurvey 2003 64 Intergenerational Benefits to Basic Education 202. In Yemen, the lack o f availability o f adequate numbers o f secondary school graduates in rural areas has been a major obstacle to female teacher deployment, which i s one o f the principal factors constraining girls' enrollment in rural areas. Previous attempts to deploy females from other areas have not been successful in providing a sustainable solution. Therefore, one o f the benefits o f having more female secondary school graduates in rural areas, as aimed by the project objectives, is that they can be potential female teachers for basic schools in their own villages. 203. Mothers' education and the role model effect o f educated sisters are significant variables affecting children's educational attainment and opportunities. These two types o f role model effects are captured through probit model regression analysis and proved quite strong for girls' enrollment at basic education. The analysis found that girls who have older sisters with more than secondary education are 24.2 percentage points more likely to be enrolled than those who do not have older sisters, and girls who have a mother with secondary education are 19.2 percentage points more likely to be enrolled than those with illiterate mothers.46 11.FiscalAnalysis and Sustainabilityofthe Project 204. The development o f the education sector in Yemen has been one of the country's highest priorities. The share o f the budget dedicated to education remained relatively high duringthe past decade, averaging between 14 to 20 % o f total government expenditure. Although there is a marginal decline since 2002, education expenditures remained proportionally significant at 5.4% o f GDP and 14.4% o f total public expenditure in 2005 as compared to other counties (e.g., 4.5% o f GDP spent in Sub-Saharan Africa). 205. The secondary education strategy identifies a total resource gap o f US$265 million between 2008 and 2013 in order to achieve the GOY'Snational targets (Table A.9.3). Over the six-year SEDGAP implementation period, the proposed external resource (US$91.4 million) will account for 10.2 percent o f the projected secondary education resources (i.e., 896 million). The contribution o f the proposed project will therefore finance 35 percent o f the resource gap during the same period (i.e., 91.4 million over resource gap o f 265 million). This implies that the resource gap will remain large despite the project and that government commitment to implement its national strategy from its own resources as well as through seeking additional external financing is still largely required. 206. The SEDGAP is expected to have minimal recurrent cost implications on the M o E budget.47 The recurrent costs resulting from the project are expected to be: (i)US$1.2 million each year for the last 3 years for the project (Le., years 4-6), 48and (ii)US$2.7 million average each year upon project close until year 20. As a proportion o f the MoE secondary education budget, this represents additional recurrent costs equivalent to 0.8% for years 4-6 o f the project and 1.7% inyear 7 upon project close.49 46World Bank staff estimation using HBS2005. Details inproject files. 41Unit cost per student is assumedto be unchangedbecausethe increasedcost due to project intervention will be offset by the reduced number of years investedper graduate as identifiedearlier inthis Annex 48Additional recurrent cost during 4`h-6`h year of program is incurred from maintenancecost of civil works, equipment, and materials. Iffinanced by the program, these do not affect the governmentrecurrent budget. 49The figure for year 7 is based on the MoE secondary education budget for 2014. Betweenyears 8-20, the proportion is expectedto be less. 65 66 Annex 10: Safeguard Policy Issues A. SOCIAL" 207. As detailed inAnnex 1, Yemenhas one of the largest gender gaps insecondary educationinthe world andthe country is not on-track to meetthe MDGof gender parity at all educationlevels by 2015. And, there are sharp disparities between urban and rural areas. The completion rate for 9th grade is 58.4 percent for males and only 29.2 percent for females (2004). For overall secondary education, this rate drops to 45.0 percent for males and 21.8 percent for females (MOE AES 2004/05 and CSO Census 2004). 208. This annex distills the findings of the background studies undertaken to develop this project, and flag the major social issues and impacts that should be taken into account in preparingthe SEDGAP. 1.MainIssuesAffectingGirls'Participationin SecondaryEducation 209. Poverty: Yemen i s the poorest country in the Middle East, with almost 35% of its population classified as "poor" in2005/06. Poorhouseholds are generallyheadedby personswithout formal education. In 2005/06, 68.3 percent of poor households fell in that category. Children o f educated fathers are five percentage points more likely to study full-time and 0.5 percentage points less likely to work, while for educated mothers, the numbers are 2 and 1 percentagepoints respectively. 210. One reason for non-enrolment involves having to work. Only about one-third (36%) of 10-14 year- old working children attend school, compared to 58% of non-working children. Attendance is especially low for working girls -just 14% of them go to school compared to 59% of working boys. Nineteen percent of girls between the ages of 15-19 (1999 data) work in agriculture, compared to 16% for boys. 211. Out-of pocket expenses also place a burden on educational participation. Even though education in Yemen is free, there are several out of pocket expenses which families must pay, particularly at the higher levels of education. 212. Social and cultural norms: Safety and propriety of girls are at the heart of Yemen's cultural and social norm. Girls who finish grade 9 face the constraint of not having schools at a commuting distance from the place of residence. According to the community survey undertaken for preparation of this project (henceforth referred to as the Community Survey, 2007), this is one of the major reasons behind student absenteeism. The lack of it constrains girls' enrollment. 213. There is a dearth of girls-only secondary or separate teaching facilities in co-educational schools. Even though girls can attend mixed schools, socially and culturally it i s not considered appropriate for them to sit inthe same classrooms as boys, particularly at later ages. Inthe Community Survey, 2007, the lack of clean water and bathrooms for girls were among the key issues highlighted by stakeholders" as affecting girls' learningoutcomes in secondary education. 214. Although studies carried out in the last decade have pointed to the important role that female teachers play in increasing the number of girls in schools, there remains a serious shortage of female teachers and staff in schools, particularly in rural Yemen. 50 A full social assessment was undertaken for the preparation of the SEDGAP and is available in the project files. The social assessment is basedon findings and recommendations from studies commissioned by the GOYto prepare the program, and benefitedfrom interviews with a number of officials and consultants ofthe MoE. 5 'Stakeholders interviewed in the Community Survey, 2007 include teachers, students, principals, social workers, andparents. 67 215. Finally, early marriage contributes to lowering the enrollment o f girls. According to Yemeni social norms, girls are expected to marry at an early age, normally after completing primary education (grade 6), i.e. either duringbasic school (grades 7-9) or at the secondary level. 2 16. Quality & Relevance: The quality and relevance o f the current education system are o f particular concern, especially when weighing opportunity costs in secondary school. One area relates to the quality o f teachers, who are thought not to be receiving the appropriate training and supervision, hence affecting the quality o f teaching. The availability o f teachers in specialized disciplines such as math and science is also limited, particularly female teachers. There is no link between the curricula and labor market needs, reinforcing the perception and - often - the reality that students are not well prepared for the labor market. At the same time, the curriculum lacks relevance at the practical level, consequently not meeting the needs o f students, families, and communities. 217. Finally, there is sense that educational rewards are lacking. Unemployment for secondary education graduates was one o f the reasons mentioned frequently (6.8% o f students, 4% o f parents, 14% of teachers, and 3.5% o f local community leaders). According to a recent WB report (WB 2007), the unemploymentrate amongwomen dramatically increasedbetween 1998and2005/06. 2. Community Participation and Girls' SecondaryEducation 218. NGSES Development: The NGSES was prepared through a process o f consultations and workshops in all o f the country's governorates and involved education officials, school management personnel, supervisors, teachers, NGOs, local authorities, students and parents, participants from the MoE, education leaders, trading chambers, agricultural unions, and higher education beneficiaries. To this end, it benefited from extensive feedback throughout the country from a host o f stakeholders, and has been described as one o f the most country-owned strategies in Yemen. The government's third five-year plan includes measures for the education sector consistent with the strategy. 2 19. Community Participation: In 1999, a Community Participation Unit (CPU) was established in the MoE to support community-based interventions in education services delivery, the development o f multiple school designs based on local conditions, and lowering the cost per square meter o f school construction. A Ministerial Decree was promulgated in 2002 detailing regulations for establishing fathers' and mothers' councils to enable community participation in e d ~ c a t i o n .In ~ ~the context o f the country's decentralization policy established in 2002, community participation (CP) has also found its way in the Basic Education Development Strategy (BEDS) as well as in most development project^.'^ In 2005, the M o E established the CP directorate within the Girls Education Sector. However, the role o f communities in education and that o f the local authority in supporting schools i s not fully clarified in regulations or in the way that education is financed and therefore CP efforts remain ad hoc and limited to 52 The purpose of these councils includes selection of sites for schools, provision of classrooms, maintenance of buildings, furniture and equipment, as well as broader functions related to the day-to-day running of schools such as monitoring teacher attendance, care for school facilities and assisting needy children. Councils bring together the head teacher, teachers, mothers and fathers as well as other members ofthe community to work inpartnership. 53The BEDP incorporated community participation by includingtargetedbeneficiaries, communities andpartners in the project preparation as a means to improve project design and building support. BEDP called for the establishment of fathers' and mothers' councils and training programs in social worWcommunity development for selected educators and parents. The Conditional Cash Transfer pilot in Lahej and Hodeida governorates, the female teacher contracting scheme and the Whole School Improvement initiative (all BEDP financed) are also centered on community participation. Additionally, several education projects are piloting innovative schemes to promote education through community support, including the USAID-funded project on girls' education in Ma'reb, Shabwa andAmran. 68 foreign financed projects. And, its potential impact on addressing constraints to education is therefore limited. 220. Research is needed to gain a better understanding of how communities participate, the role of community leaders, sheikhs and other local elites in community participation, and how to promote participation in the Yemeni context, particularlyon issues such as girls' enrollment. Awareness-raising regarding roles and responsibilities of the councils and communities will also be an essential part of community participation.Mothers' and father's councils stand to benefit from training, a point that was articulated in the Community Survey, 2007 by social workers, local community leaders and school managers alike. Efforts should be made to provide literacy classes to fathers' and mother's councils, as well as other meansof ensuringthat parents stay involvedinthe education oftheir children. For instance, training mothers' councils on providing basic life skills to girls such as sewing, cooking and animal husbandry would be a good way to keep mothers involved in the education process. Alongside the mothers' and fathers' councils, social workers are assigned to work with the schools and communities to enhance enrolment and attendance, and avoid student drop-out. The Community Survey, 2007 revealed teachers and social workers bothneedto receivetrainingto better assess high risk students. 22 1. While there are some civil society organizations implementing education-related projects, their involvement is still limited. In this regard, efforts should be made to strengthen local civil society organizations in Yemen in the education sector. Workingwith national-levelorganizations with branches throughthe country such as the Yemeni Women's Union, particularly in areas of awareness is also very important. 3. Awareness-RaisingEfforts SpecificallyTargeting Girls' Secondary Education 222. Increasinggirls' enrolment needs to be the target of awareness-raising campaigns for the future. The Yemeni government has collaboratedwith donors (UNICEF, GTZ, JICA and Dutchgovernment) on awareness campaigns targeting parents and girls at the basic education level, but little has been done in secondaryeducation. Awareness raisingcampaigns couldfocus on: a. Target Groups: i. Boys need to be better preparedto handle the presenceof girls in their classes and schools, particularly as their behavior in mixed classrooms can deter parents from sendingtheir daughters to schools; ii. Religiousand community leaders can play a powerfulrole inthe expansion of female secondary education in Yemen. In rural areas, the mosque and mashayekhor community leaders have a role to play in raising awareness or even by sending their daughters to ... school, creatinga modelfor others to do the same, and 111. Community. Decisions on whether or not the girls should continue schooling is usually made by fathers but mothers play a big role in discussing the issue within the household. As such, it is importantto target bothin any awarenessraisingeffort. It is also important to take into account that many families, particularlymothers, are illiterate and to tailor campaigns in such a way so as not to excludethem. b. Themes: i. Awarenesscampaignsshouldimpartinformationtoenhanceaccountabilitvandresultsof the targeted demand-side interventions in the project, including selection criteria, responsibilitiesof all partners as well as target areas andpopulations; ii. Communities should be made aware of the economic benefits of girls' secondary education. This is particularlytrue in rural areas where men migrate in search of better jobs. Women are often left in charge of farming activities and the household's financial 69 management. Moreover, while it is important not to give false hopes, for those women who end up joining the labor market, data has shown that the female rate of return to education is much higher than that of males especially when they graduate from secondary education or TEVT (World Bank 2007), and iii. Communities should be made aware of the social benefits of educating girls at the secondary level, including the effect on sanitation and health, the link between mothers' education and child mortality, more educated and healthy children, and reduced vulnerability inview of divorce or loss of male earnings. c. Media of dissemination: i. Communicationmediasuch as radio and TV are effective in disseminatingtargeted messages to the population. This has been done in countries such as Bangladesh and Pakistan, where short targeted clips, describingthe advantages of girls' education and/or women's issues playeda positiverole inthe mobilizationof communities; ii. Holdingawareness meetings and discussions at the school or at the district levelwith parents and community leaders (incl. religious leaders) could be a useful way to foster ... support for girls' secondary education, and 111. Promotingsuccessfulwomen to be role models for girls' secondary education would be a good way to reach parents. Many Yemeni women have gained success within the norms of Yemeni society, and it is important to highlight their achievements within society. B. ENVIRONMENT 223. This project is rated in environmental category B as regards OP4.01. SEDGAP would finance construction for the purposes of expansion, rehabilitation and replacement of physical spaces in target schools. No new schools, student hostels, dry latrinesand facilities for female teachers' accommodations are to be financed by the proposed project. The majority of activities included in SEDGAP therefore are expected to be associated with minor, ifany, environmentalimpacts. 224. The GOY has prepared and published an Environmental Management Plan (EMP) for the SEDGAP on the basisof lessons learnt ofthe on-goingBEDP. This EMP includesenvironmentalcriteria for: the upgrade of existing sanitationwith new facilities andor improvementof sewage systems (no dry latrines) andthe procurement of laboratoryequipments (including chemicalmaterials) for secondary level students. The EMP also includesan assessment ofthe applicationofthe EMP procedures and institutional arrangements under the BEDP. 225. Based on the experience of BEDP, SEDGAP would apply similar mitigation measures. Yet, SEDGAP contains a set of activities that would contribute to improve these measures, such as: (i)the carrying-outof more frequent and random visits to project schools by trained GEO/DEO supervisors and engineers to monitor the implementationof the project with respect to the agreed EMP; (ii)the carrying out of trainings to build the capacity of DE0 and GEO staff and school principals in school supervision, including environmental aspects; the carrying out of trainings and awareness campaigns for school managers, teachers and social workers in secondary school managementthat would also includea section on environmentalaspects and safety measures for the use of chemicals in class; (iii) the development of guidance manuals for school staff with a section on environmentalaspects; (iv) an increasingand more active participationof mothers' and fathers' councils in the selection of sites, maintenance of schools, and utilization of resources by the school community, as a way to improve school quality and environment. This would be achievedthroughtrainings, workshops, and awarenesscampaigns. 70 Annex 11: ProjectPreparationand Supervision Planned Actual PCN review 0713112006 07/05/2006 Initial PID to PIC 11/21/2006 Initial ISDS to PIC 11/20/2006 Appraisal 10/20/2007 12/17/2007 Negotiations 12/03/2007 1/22/2008 BoardIRVP approval 0311812008 Planned date of effectiveness 0810112008 Planned date of mid-term review 9115/2011 Planned closing date 1/3 112015 Key institutions responsible for preparation of the project: Ministryof Education Bank staff and consultants who worked on the project included: Ayesha Vawda I Senior Education Specialist, MNSHD Task Team Leader Karine Pezzani Operations Analyst MNSHD I Teacher Professional Consultant Leo DeFeiter Development and Curriculum Specialist Asma Al-Hanshali Program Assistant MNCYE John Fitzgibbon Curriculum Specialist Consultant Brigitte Franklin Program Assistant MNSHD Bank funds expendedto date on project preparation: 1. Bank resources: US$333,400 2. Trust funds: US$500,000 3. Total: US$833,400 71 Annex 12: Sector Policy Letter 72 73 74 Annex 13: Documents in the ProjectFile RepublicofYemen National General Secondary EducationStrategy 2007-2015. CapacitvAssessment Reports: Al-Shami, AhmedMohammed. Final Reportofthe Diagnostic Study ofthe Current Situationofthe Ministry of Educationand its Branches.June 2007. Cameron, John S., Assessment of InstitutionalCapacity of Ministry of Education,Governorate and District Offices.March 19, 2004. Smart, Andy. A Reviewof curriculumand textbook activities plannedunder World Bank-funded programs. June 2005. Smith, Ian. Study on the Capacity ofthe Ministry of Educationto Support the Implementationofthe Basic EducationDevelopmentStrategy. Draft Report. Reportfor the SecondJoint Annual Review, March 2006. Todd, Mark. Institutionaland CapacityBuilding. MissionReport.February 14-27, 2004. Reportof FieldVisit to HodeidaGovernorate to DetermineInstitutionalCapacityfor the SEDGAP, November2007. FinancialManagement Capacity Assessment (December, 2007) ProiectPreparation Studies: Anzar, Uzmaand Qassem, InsafAbdul. Incentivesto EnhanceGirls' Secondary EducationinYemen. Strategies and Options.Academy for EducationalDevelopment.June 2007. Bienvenue, Marcos Quality of Secondary EducationProgram-Developmentand Delivery inYemen- Recommendations for the Implementationof the UpcomingGirls' Secondary Educationproject. September 2007. Georges, Onsi. Secondary School Survey in Yemen. September, 2007 Johns, Adele. Teacher Professionalism.September, 2007. Ragheb, Mohamed. PrivateInvestmentin SecondaryEducationin Yemen. September 2007. Schellekens, Leo. Secondary EducationImplementationStructure and CapacityBuilding Arrangements. August 2007. Wakeham, Nigel. PhysicalInputsto ImproveAccess to Secondary Girls' Educationin Yemen. Preliminary Report.June 2007. 75 Other: EnvironmentManagement Plandeveloped by the GOY(November, 2007). EducationSector Issues(extract from PAD, October, 2007). Economic Analysis Probit Study Results(December, 2007). DevelopmentPartner Memorandumof Understanding(draft as ofNovember 20, 2007). Protocolof Engagement inthe SEDGAP (draft, December 2007). Job Descriptionof the Secondary EducationCoordinatorof the MoE (December, 2007). 76 Annex 14: Statement of Loansand Credits Difference between expectedand actual Original Amount in US$ Millions disbursements Program FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm Rev'd ID PO89259 2007 RY Rainfed Agriculture and Livestock 0.00 20.00 0.00 0.00 0.00 21.22 2.03 0.10 PO86308 2007 RY-Second Vocational Training Program 0.00 15.00 0.00 0.00 0.00 15.43 0.00 0.00 PO86886 2006 RY-Fisheries Res. Mngmnt & Conservation 0.00 25.00 0.00 0.00 0.00 25.19 -1.03 0.00 PO86865 2006 RY-POWER SECTOR 0.00 50.00 0.00 0.00 0.00 52.07 13.39 0.00 PO85231 2006 RY- SECONDRURAL ACCESS 0.00 40.00 0.00 0.00 0.00 34.76 2.20 0.00 PO76185 2005 RY-Basic Education DevelopmentProgram 0.00 65.00 0.00 0.00 0.00 89.61 15.45 0.00 PO82976 2004 RY-THIRD PUBLIC WORKS 0.00 45.00 0.00 0.00 0.00 15.38 -0.66 0.00 PO82498 2004 RY-SOCIAL FUND FOR 0.00 60.00 0.00 0.00 0.00 21.33 0.90 0.00 DEVELOPMENT III PO74413 2004 RY-Groundwater & Soil Conserv Proj 0.00 40.00 0.00 0.00 0.00 24.55 13.29 0.00 PO651 11 2003 RY-PORT CITIES DEVELOPMENT 0.00 23.40 0.00 0.00 0.00 13.94 10.69 8.91 PROGRAM PO64981 2003 RY-SANA'A BASIN WATER MGMNT 0.00 24.00 0.00 0.00 0.00 17.39 7.31 0.00 PROJ PO57602 2003 RY URBAN WTR SUPPLY & 0.00 130.00 0.00 0.00 4.74 83.44 56.30 0.00 SANITATION APL PO70092 2002 RY TAIZ MUNICIPAL DEV & FLOOD 0.00 45.20 0.00 0.00 0.00 3.03 -3.33 -7.24 PROTEC PO76183 2002 RY Higher Education 0.00 5.00 0.00 0.00 0.00 3.94 2.77 -0.32 PO43254 2002 RY-Health Reform SupportProj (HRSP) 0.00 27.53 0.00 0.00 0.00 16.12 6.92 -4.16 PO62714 2001 RY-IRRIGATION IMPROVEMENT 0.00 21.30 0.00 0.00 0.00 6.59 3.99 2.81 PO05906 2001 RY-RURALWATER SUPPLY & 0.00 20.00 0.00 0.00 0.00 3.64 0.45 -1.24 SANITATION PO50706 2000 RY-CIVIL SERVICE MODERN 0.00 30.00 0.00 0.00 0.00 11.31 8.27 0.00 Total: 0.00 686.43 0.00 0.00 4.74 458.94 138.94 - 1.14 IFC's Held and DisbursedPortfolio (in Millions of US Dollars) Committed Disbursed FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1999 ACSM 6.37 0.00 0.00 0.00 6.37 0.00 0.00 0.00 2002 Ahlia Water 1.36 0.00 0.00 0.00 1.36 0.00 0.00 0.00 2006 NCC Yemen 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total portfolio: 42.73 0.00 0.00 0.00 7.13 0.00 0.00 0.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2006 has 0.00 0.00 0.00 0.00 2006 Ras Issa 0.05 0.00 0.00 0.17 Total pending commitment: 0.05 0.00 0.00 0.17 77 Annex 15: Country at a Glance M. East POVERTY and SOCIAL & N o r t h Low- Yemen Afrlca income Jevelopment diamond' ZOO5 Population, mid-year(millions) 210 305 2,353 GNIper capita (Atlas method, US$) 600 2,241 580 Lifeexpectancy GNI (Atlas method, US$ billions) P.6 685 1364 T Average annual growth, 1999-05 Population (W 3.1 19 19 Laborforce (%) 4.1 3.5 2.3 GNI Gross per primary M o s t recent estlmate (latest year avallabie, 1999-06) capita enrollment Poverty (%of population belownalionalpovedyline) Urbanpopulation (%of totalpopuiation) 27 57 30 Life expectancy at birth(pars) 61 69 59 1. Infant mortality(per looolivebidhs) 82 44 80 Childmalnutrition (Mofchildrenunder5) 46 0 39 Access to improvedwatersource Access to an improved watersource (%ofpopulation) 67 89 75 Literacy (%ofpopulationage 15t) 71 62 Gross primaryenrollment (%of school-age population) 87 0 3 0 4 1-1-11, Yemen Rep M ale 0 2 06 m Low-Incomegroup Female 72 DO 99 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1985 1995 2004 2005 Economic ratios' GDP (US$ billions) .. 4.2 a 9 145 Gross capitalformationlGDP 219 6 9 l72 Exports of goods and services/GDP 50.7 251 224 Trade Gross domestic savingsiGDP 14.6 66 7 3 Gross national savings/GDP ........ 200 n 4 7 0 Current account balance/GDP 4 3 -11 -20 Interest paymentsiGDP .... 0.6 0 5 Domestic Capital Total debffGDP 146.8 42 5 savings formation Total debt service/exports .... 3.1 5 0 Present value of debtiGDP 296 Present value of debtiexports 849 Indebtedness 1985-96 1995.06 2004 2005 2006.09 (average annualgroMh) GDP 5.3 5.4 3.2 42 yeme men, Rep GDP per capita 0.5 2.2 0.0 t o ___Low-incomegroup Exports of goods and services 423 13 -14 14 STRUCTURE o f the ECONOMY 1985 1995 2004 2005 (%of GDPJ Agnculture 20 0 0 7 129 Industry 32 0 373 35 4 Manufactunng 141 49 4 6 Services 48 0 49 0 518 Householdfinal consumption expenditure 711 765 798 Generalgov't final consumption expenditure 144 0 0 P 9 Imports of goods and sewices 58 0 33 5 32 3 -GCF -GDP 1985-95 1995-05 2004 2005 (averageannualgroMhJ Growth o f exports and imports (Oh) Agriculture 4 6 57 47 5 1 Industry 5 9 3 1 5 0 2 0 M anufactunng 4 9 0 9 53 5 7 Services 5 3 52 -14 6 6 8 Householdfinal consumption expenditure 2 7 5 8 15 14 Generalgov't final consumption expenditure 2 0 4 8 07 5 6 , Gross capital formation 6 0 16 0 0 PO Imports of goods and services 289 03 -06 05 -Exports - - O - l n p O r t S Note 2005 data are preliminaryestimales This table was producedfrom the Development Economics LDB database 'Thediamonds showfourkeyindicators inthecountry(in bold) comparedwthits incomegroupaverage fdata aremissing,thediamondwll be incomplete 78 Yemen, Rep. P R I C E S and G O V E R N M E N T F I N A N C E 1985 1995 2004 2005 Domestic prices (%change) Consumer pnces 55 1 Implicit GDP deflator 50 7 128 114 Government finance (%of GDP,includes current grantsj Current revenue 573 Current budget balance -2 0 Overall surDlus/deficit -5 2 T R A D E 1 (US$ rnisons) 1985 lgg5 /Export and import levels (US$ mill.) 1% Totalexports (fob) 1980 3 000 I CNde oii (government share) 777 Crude oil (company share) 957 ~" """ Manufactures I Total imports (cif) I Food Fuel and energy 16 Capitalgoods 339 Export priceindex (2OOO=WO~ 99 00 01 02 03 04 05 Import price index(2000=WOj c3EYports Ulmports Terms of trade (2000-WO) B A L A N C E o f P A Y M E N T S (US$ rnlnrons) Exports of goods and services 2 6 0 2954 2840 Imports of goods and sewices 2471 3938 4090 Resource balance -311 -984 -1249 Net income -561 -459 -382 Net current transfers 1056 1306 1336 Current account balance 284 -237 -295 Financing items (net) -444 211 465 Changes in net reserves Memo: ReSeNeSincluding gold (US$ miliions) 622 4,723 4,543 Conversionrate (DEC,/oca//US$j r217 1848 1915 E X T E R N A L D E B T and R E S O U R C E FLOWS 1985 1995 2004 2005 (US$ rnillionsj Composition o f 2004 debt (US$ mill.) Totaldebt outstandingand disbursed 3,339 6,257 5,488 IBRD 0 0 0 0 0 3 8 IDA 348 828 1,701 1689 C n Totaldebt service 231 x)2 223 IBRD 0 0 0 0 IDA 4 14 41 42 Compositionof net resourceflows Official grants 208 92 572 Official creditors 202 55 44 Pnvate creditors 6 -2 0 Foreign direct investment (net inflows) 3 -218 u 4 Portfolio equityinet inflows) 0 0 0 World Bank program Commitments 44 0 2x) Disbursements 45 42 A-IBRD E-Bllaterai Pnncipalrepayments 1 8 26 G - Short-term Net flows 44 34 66 0 2 Interest payments 3 6 15 15 Net transfers 41 28 52 87 Note This table was producedfromthe Deveiopment Economics LDB database 8/t3/06 79 MAP SECTION REPUBLIC OF 46E 48E 50E 52E 54E This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information YEMEN shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. SELECTED CITIES AND TOWNS 20N 20N GOVERNORATE CAPITALS REP. OF S A U D I A R A B I A NATIONAL CAPITAL YEMEN RIVERS MAIN ROADS GOVERNORATE BOUNDARIES INTERNATIONAL BOUNDARIES O M A N 18N 42E To Abha 44E Sanaw Sanaw To Thamarit A L - H A D R A M O U T M A H RRA H M A H AT Habarut Habarut ThamudThamud S A A D A H Saadah Saadah A L - J O W F WadiMakhun M a h r a t To Mirbat M t n s . ZamakhZamakh Damqawt Maydi HuthHuth ¸- Wadi Al Jiz Al Hazm Al Hazm ab'atayn Dese eserrt Mar'ayt Mar'ayt Al Ghaydah 16N HAJJAHHAJJAH AMRAN AMRAN Wadi Wadi Jawf 16N Al Ghuraf Al Ghuraf Al Luhayyah HajjahHajjah Sab'ata Hadramout Nishtun Amran Amran as M A R I B Ramlat lat Hawra Hawra Salif Al Mahwit Al Mahwit SANAASANAA MaribMarib ShabwahShabwah AL- uw tt Qishn MAHWIT S H A B WA a o Red SANA'ASANA'A a m Sayhut Al Hodeidah r Dhamar NuqubNuqub HODEIDAH DAHDAH DHAMAR DHAMAR HaribHarib a d (3199 m) (3199 m) NisabNisab Ataq Ataq Shihr Sea RAIMHRAIMH H Dhamar Dhamar Rida Rida Al Mukalla Wadi Zabid A L - B E I D A 14N I B B AL-AL- Al Beida Al Beida Al Huwaymi Al Huwaymi 14N IbbIbb DHALE'EDHALE'E (3227 m) (3227 m) Al Dhale'e Al Dhale'e Bir Ali Taiz aiz Wadi A B YA N Mocha TA I Z TA Bana Ahwar Shaqra ERITREA At Turbah At urbah LahejLahej Zinjibar Gulf of Aden At L A H E J Turbah ADENAden Qalansiyah Qadub Socotra 'Abd al Kuri OCTOBER DJIBOUTI Samha 0 50 100 150 Kilometers Darsa IBRD 12N The Brothers 12N 33513 2005 0 50 100 Miles 42E 44E 46E 48E 50E 52E 54E