PID

THE WORLD BANK GROUP AWorld Froc of Povoriy

4ifoShopReport No AB59

Updated Project Information Document (PID)

Project Name PERU-Rural Education ProjectRegion Latin America and Caribbean Region

Sector Primary education (20%); Secondary education (20%); Tertiary education(20%); Pre-primary education (20%); Central government administration(20%)

Project ID P055232Supplemental ProjectBorrower(s) GOVERNMENT OF PERUImplementing Agency MINISTRY OF EDUCATIONAddress Ministry of Education

Address Calle Van de Velde 160, Distrito de San Borja, Lima, PeruContact Person Mr Juan ChongTel (51-1) 436-0106 Fax (51-1) 436-6853 Emailjchong@rminedu.gob.pe

Environment Category CDate PID Prepared April 28, 2003Auth Appr/Negs Date March 26, 2002

Bank Approval Date May 29, 2003

1. Country and Sector BackgroundLow quality of rural primary education

Twenty-eight percent of Peru's population lives in rural areas, characterized by poverty, geographicdispersion and inaccessibility, and cultural diversity. Ninety percent of the rural population lives inclusters of less than 500 people; 60 percent is poor (with 37 percent below the "food only" poverty line),

and a third speaks one of Peru's 42 indigenous languages. Social indicators for these populations are also

much below those for urban populations: rural women average only 4.9 years of education as compared

to 9.1 for urban women, and the infant mortality rate is 58 percent in rural, compared with 32 percent in

urban, areas.

Although Peru has done an impressive job over the last two decades in achieving universal access to

primary schooling, average schooling attainment and student learning are sharply lower in rural thanurban areas. While gross enrollment rates are similar for rural and urban areas (93 percent), on time

completion rates in rural primary schools are 20 percent as compared to 57 percent in urban areas. This

is the result of high repetition rates and dropout rates in rural areas as well as late entry into the system

(23.4 percent of poor rural children enter the system late as compared to 14.2 percent of poor urbanchildren). A 1996 national learning assessment found that only 38.5 percent of rural school children

mastered at least 9 out of 14 basic competencies, compared with 63.5 percent of urban school children.

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Initial results of the 2001 learning assessment show that children in multigrade schools perform wellbelow multi-teacher schools, and that Quechua- and Aymara-speaking children score worst of all,achieving 0 percent and 1 percent scores in reading comprehension.

Underlying reasons for this disparity in school performance include: grossly lower time on task. Ruralschools only function an estimated 200-250 hours per year, compared with the nationally mandated 1050hours for the primary level; inadequate learning materials; low teacher quality and motivation; teachers'inability to deliver bilingual education to indigenous children and lack of training in multigrade teaching;poor adaptation of the school to the local community and the agricultural calendar; and deficient schoolsupervision and support.

Low effective hours of instructionAbout 90 percent of rural primary schools are small multigradeschools in isolated communities with harsh physical and environmental conditions which make itdifficult to attract well-prepared teachers. Rural schools are generally the point of entry for new teachersinto the education system, suffer high turnover, and tend to remain with the least effective teachers.Teacher housing is rudimentary, if it exists at all, and teachers often leave their schools for distant townson the weekends, running the risk of not arriving back on time for class, or having to leave before the endof the school week, because of limited transportation. At a minimum, teachers must travel to theprovincial capital once a month to pickup their paychecks and needed supplies for the school, forcingthem to leave classrooms unattended at least several days a month. These factors, combined with studentabsenteeism linked to climatic conditions and families' need for children's labor all contribute to verylow effective hours of instruction in rural areas.

Ill-adapted curriculum and teaching methods. Although Peru has made strong efforts to ensure that theprimary curriculum is relevant to children in rural areas, teachers are not trained in multigrade teachingmethods, and students lack the self-paced instructional materials that are essential for effective learningin multigrade schools. The centralized teacher deployment system fails to ensure that teachers can speakthe local language and deliver bilingual education in the early grades, another demonstrated strategy forimproving rural education quality. Dropout rates in rural areas are 10.1 percent, far higher than 2.1percent found in urban areas. An estimated 63 percent of Quechua-speaking children, are over-aged,compared to 50 percent of all children.

Deficient school supervision and support. Communication and access problems make contact betweenrural schools, regional education offices, and the Ministry of Education sporadic to non-existent. In acase study carried out in 2001, rural schools reported less than one supervision visit per year. However, amore recent effort to establish school-to-school teacher networks for experience sharing and collectivework on common pedagogical problems appears to be having some positive results. Some innovativesmall-scale programs have piloted alternative models for assuring better school support and supervisionin rural areas, notably the partnership between the Ministry of Education and the Fe y Alegriaorganization for school supervision in the Quispicanchis Province.

Low pre-school and initial education coverage in rural areas.

Exposure to pre-school can boost primary school readiness and subsequent learning and attainment,especially among economically disadvantaged and indigenous children, such as those found in rural Peru.Despite the fact that lyear of pre-school education is mandatory in Peru, only 56 percent of rural 3-5year old have access to pre-schooling, compared with 67 percent of urban children. Programs to promoteearly childhood stimulation, or initial education, for 0-5 year old, through non-formal childcare andparent training, also have been demonstrated to be effective in promoting early brain development and

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avoiding malnutrition, stunting, and other problems among low-income and indigenous children, whichcan help equalize their future school success and life chances. Although some high quality NGO-run

programs of this type exist in Peru, coverage is very limited. The Government has not yet developed an

overall strategy for mainstreaming pre-school access in rural areas or supporting the delivery ofnon-formal initial education programs to target populations.

Low secondary school coverage in rural areas.

Secondary education in rural areas faces major challenges of both coverage and quality. The netenrollment rate for education is only 61 percent in rural areas, compared with 81 percent in urban areas.

Because there are very few secondary schools in rural areas, many families' only option is to send their

children to urban centers for schooling, which creates direct costs (lodging and travel) as well asopportunity costs, from the loss of children's informal labor. Girls, especially, suffer from this. However,Peru's extremely low population density and poor roads and transportation in most rural areas make

expansion of secondary schooling using traditional face-to-face instructional models prohibitivelyexpensive. Where secondary schools do exist, quality is usually lower than in urban schools, for many of

the same reasons as observed at the primary level, in addition to the fact that frequently these schools arenot able to hold sufficient number of qualified staff to deliver all the secondary education courses.

Poor teacher quality and motivation.

The formal level of qualifications of Peru's teaching force is very high, with some 95 percent of teachersholding tertiary education degrees. However, the average quality of Peruvian teachers is consideredquite low (compared with other countries at similar levels of income), and motivation and performanceare problematic, especially in rural areas. The clear underlying issues are:

Mismatch between supply and demancDespite unattractive pay, because of the unconditional, rigidstability attached to tenured status, there is a massive and growing oversupply of teachers: by late 2001,some 270,000 teachers were employed while another 80,000 had a title but no position The teacherpreparation system is producing between 15,000 and 20,000 graduates per year, against needs of 4,000,and with the postponement of the retirement age, more aging teachers will remain in activity. This

notwithstanding, there are shortages in specific categories (pre-school, secondary, bilingual), disciplines(mathematics), and isolated areas.

Unregulated, low quality pre-service preparation. About 70 percent of teachers holding tertiary degreeshave been trained at universities, and 30 percent in one of the teacher training institutes (Higher Institutesof Pedagogy or ISPs). There are some 53 universities with faculties of education and 400 ISPs, 250 ofwhich are private. Due to the unregulated proliferation of low-quality training programs since 1994, the

number of formally qualified teachers has increased dramatically in recent years. However, in the

absence of an accreditation system for teacher education programs, a similar title may hide very differentlevels of professional preparation. At universities, the intake into initial teacher education programs tendsto be from the poorest performing students, while at ISPs, entry requirements are generally low.Universities emphasize content over pedagogy, and ISPs, the opposite. In both types of institutions, thecurriculum is highly theoretical. With a few exceptions of an experimental nature there is little

grounding in classroom practice (no courses to prepare students for multigrade teaching, for example)and students have few systematic opportunities for internships in schools as student teachers, which is an

essential part of training in most OECD countries. Only 7 percent of the ISP faculty have any graduate

training and only 18 percent hold undergraduate-level degrees in any content areas (mathematics,

physics, history, language) besides pedagogic related courses. The situation is hardly better in the

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universities.

Low standards for entry into the professioiihe disparities and deficiencies in preparedness are notcorrected at entry, as hiring is not based on formal teaching standards and rigorous procedures.Recruitment tests were introduced in 1998, but these tests assessed teachers' conceptual knowledge; theywere not criterion-based and did not evaluate pedagogical ability, methodological skills, interpersonaland team skills or community orientation. Since the 18,000 teacher training graduates currently beingproduced annually are well in excess of the Ministry's new hiring requirements, there exists considerablescope to elevate teacher standards. This could be achieved by introducing technically sound certificationprocedures prior to appointment, and periodic recertification to ensure the continuous maintenance and ifpossible, upgrading of teacher skills.

Low pay and inadequate incentives. The average teacher salary in Peru is approximately 1.6 times GDPper capita, to be compared to a multiple of 2-4 times prevalent in similar countries. This is low, evenafter adjustment for average hours of work, which are less in Peru than in other LAC countries, and lessfor teachers than for other professions. As a result, some 57 percent of teachers have taken up a secondjob, which has eroded the time they can dedicate to their school. The same nationwide salary scheduleapplies to secondary as well as primary teachers. It is quite compressed, with only a 10 percentdifferential in remuneration between the top and lowest grade for the same 40 hours work, comparedwith a good practice ratio of at least (5:1). The salary structure is fragmented and opaque, hardly

designed to promote equity, generate motivation, or produce results. For instance, the "main element" ofcompensation amounts to only a tiny fraction of the total, the bulk of which is represented by the"general increment" created to compensate for inflation. There are bonuses for activities, such as lessonplanning, which should form part of a teacher's routine. Most importantly, the allocation for rural areasand hardship posts is not only insufficient, but portable, instead of being tied to the position. Eventhough the system-wide student to teacher ratio, a relatively low 26:1 at the primary level, suggests thatthe overall number of teachers is adequate, there is a clear distribution problem which resubs a highshare of schools in rural and low-income urban areas operating with teacher shortages.

Duality of treatment between appointed and contracted teac6eme teachers have permanentappointment status, others work under fixed term contracts. There is no relationship between teacherqualifications and employment status, although appointed teachers have enjoyed more generous benefitsthan their colleagues under fixed term contracts. This has been a source of demotivation and discontent.This duality of treatment needs to be corrected by gradually expanding the practice of open-endedcontracts, making tenure conditional upon satisfactory performance to protect the right of each child to acompetent and committed teacher. Generally speaking, more efficient management of the maze ofoverlapping teacher categories would demand an upgraded Management Information System, with higherquality data and integrated data bases for monitoring and simulations.

Poor teacher deployment and supervision Teacher deployment is highly centralized and, although some30 percent of teachers have a mother tongue other than Spanish, the policy of deploying teachersgeographically in line with their language skills, providing salary incentives for bilingual teaching, orensuring that at least some experienced teachers are sent to those isolated areas has not beenappropriately implemented. Teachers, especially in rural areas, receive little or no performanceevaluation or support to improve their practice. Schools are seldom organized for learning, with emphasison leadership, academic teamwork, resources in support of a shared vision, strong relations with parents.Visits from the local UGE are few and far between and career development plans and in-service training

opportunities are limited, top-down, hardly related to the perceived needs of teachers, and seldomreinforced in-site. De facto, teachers face neither positive incentives for good performance nor the threatof sanctions for poor performance.

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Inefficient administration and low accountability for school performance.

The central Ministry of Education (MED) shares the responsibility for nationwide provision ofeducational services (from preschool to tertiary non-university education) with 24 Regional EducationDirectorates (DRE), which vary considerably in terms of geographic size, school system development,and student populations, ranging from Lima, with over 2.1 million students, to Madre de Dios, with lessthan 29,000 students. Each DRE is headed by a director. Between the DREs and the school level are 268sub-regional offices called: Educational Management Units (UGEs), which are administrative oversightoffices some of which have budgetary authority.

There are four clear issues with the current system. First, analysts concur in labeling the Ministry ofEducation as heavily centralized and inefficient. A high-level commission was tasked with developing anational decentralization plan by end-2002 affecting all sectors of Government. The current reality isthat top-down initiatives emanate regularly from the central level with little concern for prioritization,avoiding duplication, and the difficulties of administering cascading requests for information or action atthe regional, sub-regional and school levels. At the Directorate level, there is little autonomy andaccountability for the performance of the schools in their region. Data on school performance and studentlearning are not organized and monitored at the DRE level, and DREs are neither rewarded norsanctioned for their progress in improving educational indicators over time. Although some DREs areapparently more innovative and effective than otlti Ministry appears to lack instruments fordisseminating effective approaches or intervening where failure is persistent.

Second, there are clear problems at the UGE level, which is marked by confusing geographic andfunctional demarcation of responsibilities, inadequate staffing and equipment for their missions, and lowvalue added to schools. The Ministry recognizes that, particularly in rural settings, the sub-regionaloffices have generally been ineffective in reaching the schools, and often characterized by a bureaucraticand punitive orientation, rather than seeing themselves as a source of support.

The third and most important issue is that, system-wide, there is a lack of focus on the school level. Peruis one of the few countries in Latin America that has not yet put in place a standardized system of studentassessment to track learning outcomes. Although sample-based assessments were undertaken in 1996 and1998, they were not standardized so as to permit comparison of the results over time. A newstandardized assessment was administered in November 2001, again on a sample basis. As aconsequence, schools receive no regular information about how their student learning performance - orother education indicators such as graduation, repetition, dropout rates.

Finally, there have been some incipient attempts to encourage school-level development planning, but itis not undertaken systematically. Plans where they exist are not resourced, and there are no instrumentsfor holding schools accountable for implementing proposed improvements. More fundamentally, schoolshave no budgetary autonomy, and cannot even undertake minor purchases or repairs. Parents are invitedto serve on parent-teacher bodies (APAFAs), but these have no formal role in school personnel or otherdecisions and many operate only perfunctorily. In short, in contrast to the growing number of LatinAmerican countries which are strengthening budgetary and decision-making capacity, and accountabilityfor results at the school level while simultaneously strengthening key normative and assessmentfunctions at the Ministry (or system) level, the education system in Peru remains quite centralized and thefocus on school level results is weak.

Government Strategy:

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The Government of Peru launched an effort of bringing together representatives from political, religiouscivil society and government organizations in order to agree on key State policies. The result was theNational Agreement which enumerates a set of policies leading to four main objectives: Democracy and aRights Based State, Equity and Social Justice, Competitiveness, and a Efficient, Transparent andDecentralized State. Under the second objective, the key Policy provides forUniversal Access to a FreeQuality Public Education and Promotion and Defense of Culture and Sports Specific policies under thismajor one, include Early Childhood Development, Rural Education, Teacher Development, andStrengthening the Quality and Relevance of Basic Education through greater school autonomy.

The Education Sector has published Education Policy Guidelines which are aligned with the EducationPolicy stated in the National Agreement. Key actions identified to achieve the Education Sector Policiesare:

Increasedfocus on the needs of students and schools Two actions are called for under this objective: tostrengthen the curriculum in the areas of values and citizenship and to make school management moredemocratic, by creating school councils that promote accountability at the local level. In 2001 the GOPissued a Supreme Decree instituting voluntary school councils. Later on, in February 2002, MEDestablished school councils as compulsory and network councils were deemed necessary. Although thecreation of these school councils is an important step towards increased school autonomy withaccountability, a number of issues remain to be addressed to ensure their successful implementation,including (a) outreach and promotion efforts to make community members aware of this reform; (b)training of council members on their roles and responsibilities; (c) restructuring of MED's regionaloffices, to provide support to schools in this new strategy; and (d) creating incentives for schools tocreate the school councils. To address these issues, MED is currently developing a new proposedstructure and roles of the regional offices and preparing to launch a communications program to promotethe formation of school councils.

A more democratic and accountable education management system.This strategic objective calls for thereorganization of the MED regional offices in order to reduce bureaucracy, focus the system on schoolperformance and increase transparency and accountability at all levels. MED is pursuing the following 5lines of actions toward this objective: (a) restructuring the regional offices to address corruption andinefficiency problems, and to prepare the system for greater regional autonomy; (b) continuedapplication of sample-based national assessments and publication of results. While the 1996 and 1998tests were norm-based and limited to mainly urban areas, the 2001 test was criterion-based and coveredalso rural areas and Quechua and Aymara speaking students; (c) publication of the results of the NationalConsultation on Education, which was carried out during the Transition Government (January-July2001); (d) creation of an National Council on Education with membership of a wide variety of citizengroups; and, (e) installation of a new complaints hotline and center.

Expand and improve the quality of the education services in rural cdbnen of Peru's 24Departments have been targeted for expanded investment, in order to bring the currently low ECD andpre-school participation, primary school completion and secondary school completion rates in theseimpoverished rural areas up to the national average. Priority investments include (a) expanding,strengthening and improving the quality of ECD and pre-school education, including universal coverageof 5-year old in pre-school, (b) strengthening primary education quality and expanding interculturalbilingual education, and (c) implementing a new model for secondary schooling in rural areas, usinginformation and communication technologies ("Plan Huascaran"). The MED has also initiated a pilotprogram to provide incentives to teachers in rural areas with the specific objective of ensuring qualityteachers in rural schools. MED is committed not only to implement this first phase of the incentivesystem but also to pursue a longer term strategy of improving the quality of teachers (see below).

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Include substantial indigenous participation in rural education Approximately one third of the nationalpopulation are indigenous and speak one of Peru's 42 native languages. To respond to these needs, the

Government strategy involves strengthening indigenous community participation in various aspects ofproject implementation, as well as addressing the basic educational needs of indigenous learners,regarding the use of indigenous languages in basic education along with the teaching and learning of

Spanish as a second language. Further measures to assure quality educational improvement in rural areas

include indigenous teacher training and employment, community outreach and revision of schoolcalendars to respond to the local agricultural cycle.

Reform the teacher .quality assurance system, career path and incenti-vt&Nough dialogue with theteachers' unions, setting standards to upgrade quality and reduce the variance in teacher preparation andperformance, implementing a continuous teacher professional development system, designing anincentives policy which supports what makes a difference for children learning, and introducing a

growth-oriented evaluation system. As a first step, MED has produced a study, which develops the basic

principles for the reform, including criterion-referenced standards as a basis for the certification,selection, promotion of teachers in the sector, proposals for an accreditation system for teacher traininginstitutions, for a streamlined salary structure, more efficient payment mechanism, and moredifferentiated incentives and sanctions.

In February 2002, the MED introduced new criteria for teacher recruitment as part of the reform.

Teachers considered for conversion from fixed term to open-ended contracts were evaluated through anobjective test and interview process that included the participation of parents and, when relevant,

indigenous organizations, who had the right to veto teachers if there were unable to show proper use ofthe local language. While this was a clear step in the right direction, the test scores registered by the

candidates (the median score was 11 out of 40 possible points) confirmed the serious issues of teachers'low cognitive and professional competencies. Approximately 22,000 teachers have now been convertedto open ended contracts. There is also a clear need for continuous, and more effective, professional

development programs for teachers if their quality is to be upgraded.

Evaluating Progress The GOP has identified three key medium term indicators to measure the

implementation of the strategy: (a) proportion of children who are in the normative age for each grade,

(b) proportion of children that complete primary and secondary education in 11 years, and (c) proportionof children that approve the standard performance evaluation. Each of the above strategic objectives willcontribute to the achievement of all these indicators, by ensuring that children attend schools and thattheir education is more relevant to their needs, making schools more accountable for their performance,ensuring targeted interventions in previously excluded areas in terms of coverage and quality ofeducation, and improving the quality of teachers, a key and previously underemphasized input to thequality of education.

2. ObjectivesThe Project objectives are to improve basic education access and quality in rural areas, improve teacher

quality and motivation, and strengthen education management.

3. Rationale for Bank's InvolvementThe World Bank has extensive experience in supporting projects on rural education, with strongmultigrade, bilingual and intercultural components. Also, the Bank has wide experience in

decentralization programs where local communities play an important role. The experience gained in

Central America, Brazil and Colombia in these areas will be instrumental in assisting MED's efforts in

developing quality education in rural areas.

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The Bank has already been working with GOP extensively in the early implementation of the proposedreforms. The project is tied to the Programmatic Social Reform Loans (PSRL I and II) which ispromoting the development of the new teacher career structure and the piloting of a rural teacherincentive program, as well as the first steps toward decentralization and community participation.

4. DescriptionComponent 1: Expanding Education Access for Rural Children(US$10.54 million, 11 percent of total Project cost)

The key objective of this component is to increase access to quality initial, pre-school and secondaryeducation for children in rural areas who have been previously excluded from these services.

Access to Quality Initial and Preschool Education

Two distinct children groups are addressed under this component: (a) the 0 through 2-year-old childrenparticipating in Initial Education programs focused on increasingly complex activities designed topromote a balanced early childhood development (ECD). In spite of pioneering ECD initiatives in the1960s, Peru shows today a surprisingly low coverage rate (around 3 percent nationwide, and 1 percent inrural areas) for this age group; and (b) the 3-5 year-old group being prepared (at pre-school) for theadequate and timely readiness for entry to formal primary schooling. Peru has reached a national 42percent coverage rate (36 percent in rural areas) for this age group, through the development of theNon-formal Initial Education Program (PRONOET) and the Initial Education Centers (CEI).

For children 0-2 years qlaa non-formal approach will be implemented in which children will beeducated along with their parents and siblings within a family and community framework. Services willbe delivered by trained community educatami(iXadoras) through home-based and center-basedstrategies. Wherever relevant, community educators fluent in the local vernacular languages will betrained for the provision of Initial Education. It is expected that 30,000 children will benefit from thisprogram, amounting to a coverage from I percent to 4.7 percent.

For children 3-5 years old,an intervention combining of formal and non-formal approaches will beimplemented. Wherever relevant, community educators fluent in the local vernacular languages will betrained for the provision of initial education and the introduction of children to Spanish. Services will beimplemented by train&animadoras, teachers and teaching coordinators and sub-central officespecialists. The CEI and PRONOEI program will be strengthened, and 300 new PRONOEIs will becreated. A total of 38,000 children 3-5 year old are expected to benefit from the Project, of which 29percent (or 11,000) would result from Project-expanded coverage.

Secondary Education

Secondary education is compulsory and has become part of the basic education structure, together withpreschool and primary. In rural areas, however, access to post-primary schooling, even the five-yearbasic secondary education, is made particularly difficult, especially for those groups who have to faceeither geographic constraints in the Andean mountains or sheer remoteness in the Amazon forest. Anyimpact-oriented solution must identify creative strategies other than traditional school delivery. Inselected rural areas, the Project will develop distance secondary education programs through theapplication of cost-effective information and communication technologies. For the Phase 1, a coverageof 5,000 students is planned, a 14 percent increase in coverage as compared to the 2002 rates in the pilotareas. Phase I will pilot and assess two models using varying levels of information and communication

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technologies. The focus will be on testing and gauging two secondary education models in order to

determine the cost-effective solutions that better fit each particular rural environment of Peru. The pilotwill be implemented gradually during the three year period up to a total of 116 schools which will be

located at the center of the rural networks which do not have a secondary school currently available. It is

expected that facilities will also be used for teacher training and, possibly, enrichment of upper primarystudents.

Component 2: Improving Quality in Rural Primary Schools(US$63 58 million, 68 percent of total Project cost)

This component focuses on the quality of teaching and learning in primary schools in the targeted ruralareas. It will support quality improvement through three sub-components: (a) a program of continuous

professional development with a focus on rural teachers; (b) the development and distribution of

multigrade and bilingual instructional materials; and (c) classroom rehabilitation and equipping.

Continuous Teacher Development System (CTDS)

This sub-component will upgrade both initial and in-service teachers' educational and professional

quality and performance through: (a) the design of a continuous teacher training system based on aredefined pre-service and a decentralized and consistentin-service teacher training strategy; and (b) thetraining of the initial, primary and secondary school teachers required for adequate projectimplementation in the target Project areas.

With respect to initial teacher training, the sub-component would support the design and introduction of acontinuous two-phase (pre- and in-service) teacher development system that will: (a) redefine the

pre-service teacher training; (b) set up an ISP accreditation system; (c) offer specialized training to 600

teachers trainers; and (d) implement 15 competitive innovation projects at the ISP level.

With respect to in-service programs the sub-component will (a) support six new regional "Amauta"Teachers Professional Development Centers (linked to DINFOCAD); (b) coordinate and hire externaltraining institutions to provide training to 19,800 rural teachers, 3,400 ECD and PRONOEI animadorasand 250 secondary education tutors; and (c) develop a social marketing plan to promote teacher

appreciation and motivation.

Curriculum Adjustment and Provision of Educational Materials

This sub-component seeks to contribute to quality improvement of rural primary schooling, includingareas in which one or more indigenous languages are predominantly spoken. Two complementarymodels will be implemented: (a) delivery at the national level of already experimented bilingual

educational materials prepared by the MED; and (b) the design and validation within the networksselected for this project of a new educational proposal for the rural areas, aiming at more pertinentpedagogical service, through high quality self-paced learning strategies, materials, and teacher manuals to

support multigrade instruction and bilingual education. In both cases, rural indigenous vernacular and

Spanish-speaking children will be benefited by the project. Teacher training activities will also be

included in both modalities.

For indigenous vernacular-speaking students,the sub-component includes support to primary schoolstudents belonging to 14 different indigenous groups, at the national level, through the implementation ofthe education program in their respective mother tongues and the teaching of Spanish as a second

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language. Within the scope of the Project, the following materials will be distributed: (a) previouslyvalidated workbooks (three per student) in language and communication for the indigenous languages,Spanish as a second language and mathematics for the six grades of primary education; (b)corresponding teachers guides; (c) bilingual classroom libraries (18,000); and (d) sets of complementaryeducational materials. During Phase 1, approximately 15,000 teachers working with 375,000 children willbe trained in the use of these materials as part of the full training program offered to bilingual teachers. Itis estimated that through these activities 69 percent of the vernacular-speaking indigenous ruralpopulation at primary level will be covered.

Rehabilitation and Equipping of Rural Schools

In this Phase I, this sub-component will finance civil works, furniture and equipment in order to refurbishclassrooms and other educational and administrative spaces, benefiting 35,000 children in 540 schoolslocated in poor rural areas of the three climatic regions of Peru; these schools make up 116primary-school networks in 11 Departments of the country. The Project would target the refurbishmentof up to 1,900 classrooms and approximately 1,500 complementary facilities (such as administrativeoffices, small cooking facilities, sanitary services, etc) in existing schools according to architecturalprototypes agreed with the Bank.

The Compensation and Social Development Fund (FONCODES) will be the executing agency for allconstruction work. During appraisal, the Project cycle to be followed was reviewed and agreed upon.MED, through the Education Infrastructure Office (OfNFE), will perform random inspection of works.The MED PCU will carry out the general coordination and the furnishing and equipment of thecompleted infrastructure, in close coordination with FONCODES.

The preventive maintenance program for all infrastructure considered during this Phase I will beimplemented directly by the schools through the local Parent/Teacher Associations with funds providedby MED at an expected annual rate of US$100/classroom.

Component 3: Reform of Teacher Policy and Education Management(US$20.08 million, 21 percent of total project cost)

Systemic reforms of teacher policy and education management are crucial for improving the quality ofbasic education and the efficiency of education spending. A key objective of the proposed program is tosupport the new Government's efforts to address politically sensitive issues in these areas that have beenamong the most important constraints to educational progress in Peru. The reforms of teacher policy andeducation management will be national and will have considerable implications for rural schools, whichhave suffered the most from: (a) teacher low quality, and motivation linked to inadequate standards andincentives; and (b) a centralized system of education management that has failed to monitor and supportrural schools.

This component has six inter-related sub-components: (a) teacher policy reform; (b) reform of educationmanagement; (c) support for school development; (d) national assessment system; (e) strategic analysisand policy research; and (f) Project management.

Teacher Policy Reform

The purpose of this sub-component would be to support MED efforts in developing and implementing astandard-based teacher career and development reform relying on a professional performance evaluation

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mechanism, a certification system, and remuneration and recognition instruments. Specifically, theProject would finance: (a) the design and implementation of the teacher career and development system,including: (i) a detailed structure of the teaching career ladder, its performance and experience levels andcorresponding promotion criteria; (ii) a systematic teaching performance evaluation covering themultidimensional intra- and extra-classroom roles played by teachers in their daily educational activities;(iii) a teacher's initial certification of professional quality, and periodic re-certification system. There-certification process is expected to be initially on a voluntary basis, and later shifted to compulsorystatus; (iv) the established scenarios for the remuneration package and other forms of incentives andrecognition; (b) the development and dissemination of guidelines, operating manuals, software and otherinstruments to share with all teachers and managers information on the benefits legally guaranteed andconditions set by the teacher development system; (c) the upgrading of the teacher MIS (ManagementInformation System) to support information-based teacher management and deployment. The MIS willmaintain an updated data bank of the professional training and development status of every singleteacher, starting with those involved with the 290 proposed school networks. This information systemwill become a sine qua non condition for the adequate operation of the Continuous Teacher TrainingSystem; and (d) the implementation of several national and local workshops to inform teachers and othermembers of the education community of the forthcoming changes.

Reform of education management

This sub-component will support the Government's efforts to "invert the pyramid" of educationadministration in Peru, by strengthening the focus on school initiatives and results. The reform willincrease autonomy and community voice in decision-making at the school level; establish networks inrural areas to provide support for isolated rural schools; transform the existing sub-central offices into anew structure for local supervision and support to schools at the regional and sub-regional level; andincrease the accountability of regional offidir the performance of schools and other educationinstitutions under their jurisdiction. Investments will be made in consulting, training, mediadissemination, stakeholder meetings, equipment for sub-central offices, and evaluation, material andhandbook development and printing.

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School Development Fund

This sub-component will support the implementation of school-initiated improvement projectscoordinated by the Rural School Networks. Since the ultimate objective of the education system is to

support students' learning improvements at the school level, each school council will develop a school

improvement plan. Individual schools will work through their networks to support each other in

diagnosing problems, setting priorities, and developing credible, time-bound action plans for achievingtheir individual school goals. As a network, the schools will ensure that these school level plans

aggregate into a network development plan that represents a coherent strategy for the sub-region. Thenew UGEs will review and approve network development plans. To assist schools in implementing theirimprovement plans, a School Development Fund will be established, which will channel resources to

individual schools through their networks. Under Phase 1, the Project will finance the implementation of150 PEIs.

National Assessment System

This sub-component will help the MED Quality Assessment Unit Wnidad de Medici6n de la Calidad -UMC): (a) carry out activities to continue strengthening its technical capacity and promoting theenhancement of an "assessment culture"(b) develop and administer the 2004 national assessment

system on mathematics and communication for 2nd and 6th grade students of primary as well

as 3rd and 5th grade students of secondary schools. Similarly, in 2004 the system will assesscitizenship education (formaci6n ciudadana) for students enrolled in 6th grade of primary and 5thgrade of secondary education; (c) develop and administer in 2004 a census-based assessment onmathematics and communication skills (2nd and 6th grades of primary education) andcitizenship education (6th grade of primary education) in areas determined by the UMC; (d)develop and administer in collaboration with the school networks a self-administeredcensus-based application to assess mathematics and communication skills of students enrolled in6th grade of primary schools using the item bank developed by the UMC. These tests will beadministered in schools of the project area in 2006 after a pilot is conducted in 2005. In additionto these tests each school will receive a set of materials containing information regarding the

tests, how to administer them, evaluate them and interpret their results; (e) carry out alongitudinal study aimed at assessing trends in basic education in areas to be defined by the

UMC; (f) carry out studies to assess communication skills in a sample of students whose nativelanguage is Aymara, Aguaruna and two variants of Quechua; (g) implement a study on schooleffectiveness in a small number of schools aimed at complementing national assessment results

and gathering knowledge on educational processes; and (h) finance institutions or consultants to

carry out research using the data available.

The sub-component will also assist the Statistics Unit in: (a) restructuring of the statistics system; (b)training at the UGE level on data collection, and analysis and system maintenance; (c) strengthening

analytical capacities at the central level and developing data dissemination instruments; (d)

strengthening the geographic information system to support school network identification and validation;and (e) validation of a student-based information system in the project areas.

Strategic Analysis and Policy-oriented Research

This sub-component will support the development of studies and strategic analysis capacity of the RuralEducation Office in order to ensure a well coordinated and adequate Program implementation, process

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and results monitoring and follow-up and timely preparation of the second Phase. Studies will be carriedout within five large groups of themes: (a) teacher career development, (b) decentralization and schoolautonomy, (c) development of strategies to provide demand incentives; (d) introduction of theintercultural component in the classroom; and (e) project process and impact evaluation.

Project Management

The PCU will be established as part of MED's Strategic Planning Secretariat and will operate accordingto the structure and management procedures set forth in the Project Operations Manual (OM). The PCUwill be guided and monitored by the Project Steering Committee. Approval of the OM and establishmentof the Project Steering Committee are conditions for Project Effectiveness. The PCU will be responsiblefor coordinating and monitoring the yearly Operations Plan, financial management of the project, andprocuring goods and services.

Summary of Project Costs by Sub-Component1. Expanding Education Access for Rural Children

1.1 Access to Quality Initial and Preschool Education1.2 Secondary Distance Education

2. Improving Quality in Rural Schools2.1 Continuous Teacher Development System (CTDS)2.2 Curricular Adjustment and Provision of Educational Materials2.3 Rehabilitation and Equipping of Rural Schools

3. Reform of Teacher Policy and Education Management3.2 Reform of Education Management3.3 School Development Fund3.4 National Assessment System

5. FinancingTotal (US$m)

BORROWER $29.50IBRD $52.50IDAINTER-AMERICAN DEVELOPMENT BANK $12.20Total Project Cost $94 20

6. ImplementationImplementation Period. 4 years (APL 1).

Executing agencies. The Ministry of Education will be the primary implementing agency for the Project,with FONCODES taking on the responsibility for the execution of the infrastructure sub-projects. At thenational level, the Vice-Ministry for Pedagogical Management will take responsibility forimplementation oversight. MED National Directorates will be responsible for implementation of thevarious sub-components under a yearly Project Implementation Plan. At the regional and local levels (i)the Regional Offices of Education (DREs) and UGEs will be responsible for local implementationoversight (ii) local schools and networks will be responsible for diagnosing needs, preparing localstrategic plans and implementation, and, (iii) ISPs and other training institutions under contract witiMED will take on the role of training and providing external supervision of the project activities.

FONCODES will carry out the refurbishment of schools according to an annual plan agreed upon withMED and will be subject to the agreement to be signed with MED. This agreement will include the

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environmental guidelines to be used by FONCODES during the implementation of the infrastructuresub-projects. During project preparation, environmental guidelines were developed and discussed withMED and FONCODES. These are being used by FONCODES to review their existing guidelines.

Project Coordination. MED will be assisted by a PCU responsible for overall coordination andmonitoring of project implementation. The PCU will be accountable to the4lta Direccion (the Ministerand Vice-Ministers) and will report to the Project Steering Committee, in which the key MEDdirectorates will participate. The PCU will procure goods and services. Detailed procedures forprocurement and financial management processes will be specifiedOp*rCfions ManualRegardless of size, contracting will be carried out using procurement procedures and standard biddingdocuments satisfactory to the Bank.

Operations Manuals.The project will use 6*erations Manual covering all aspects of projectimplementation, including but not limited to: project components, organizational and managementstructures, supervision and evaluation mechanisms; targeting and other criteria for resource allocation;procedures for the formulation of annual implementation plans, financial, accounting and auditingprocedures; procurement procedures and standard bidding documents; structure of the SteeringCommittee and environmental guidelines to be used in the refurbishment of the schools. The adoption ofan Operations Manual satisfactory to the Bank is a condition for effectiveness.

Monitoring and Evaluation Arrangements Project monitoring and evaluation will measure not onlyprocedures but also results, thereby allowing the project to learn. The PCU will be responsible formonitoring of the Project as well as for results and impact evaluation.

Monitoring of the coverage of the Project interventions will be based on PCU administrativedata and statistical information from MED's information system. Given that the system requires furtherstrengthening, the Project will finance technical assistance to MED's Statistics Unit in order to refurbishthe data collection and auditing system, as well as the GIS. Progress reports, including monitoringindicators will be submitted by the PCU every six months. An annual review of the Project will becarried out jointly with the Bank based on these Progress reports. The Bank will carry out at least twotechnical supervision missions per year in close coordination withi MED, FONCODES and MEF. Prior toDecember 2005, the Bank, in close collaboration with MED and FONCODES will conduct acomprehensive mid-term evaluation of the Project. The results of this evaluation will be used to proposeeventual adjustments or changes to improve Project implementation.

Evaluation of the Project results and impact will be based on data of the LSMS and on customdesigned sample-based and case studies. The studies will aim at both assessing the project as well as tolearn and provide feedback to improve project implementation. The evaluation studies will include, butwill not be limited to, a mid-term evaluation, an impact evaluation, and a case-study to determine theimpact on teacher training in their performance in the classroom as well as in the learning processes.

7. SustainabilityProject objectives reflect GOP priorities and the National Consultation on Education. The Governmenthas committed itself to raising the share of the education budget incrementally during the next five years.

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8. Lessons learned from past operations in the country/sectorRural education has been particularly defying when trying to implement actions to achieve equity andquality objectives. Projects such as EDURURAL in Northeast Brazil, Colombia'sEscuela Nueva, and ElSalvador's EDUCO, among others have been exemplary on how to address the specific needs of ruraleducation in a diversity of approaches and many lessons have been derived from them in the design ofthis Project.

Bilingual education has proven to be a cost-effective means to reduce repetition and dropout rates as wellas low academic achievement in indigenous populations, as observed in a number of World Bankprojects in Mexico, Guatemala and Bolivia. The current bilingual education program in Peru has yieldedvaluable information on teacher training, production and distribution of materials and communicationwith the community, which have been taken into consideration during the design of the relevant activitiesto be carried out under the Project.

Teacher training has been object of renewed and increasing interest as the most important quality factorfor school-based education improvement. Projects like the Brazilian FUNDESCOLA and Parana, theMexican PAREB and the Uruguayan MECAEP emphasized teacher training in a way that proved to bedecisive. The proposed project will help design a carefully conceived "continuous teacher trainingsystem" with immediate application to teacher training in rural areas.

School autonomyhas been the focus of well-known and positive education reforms in Minas Gerais(Brazil), Chile, El Salvador and Nicaragua as a meaningful strategy to boost local ownership andcommunity participation. The proposed project will support school autonomy mainly by the developmentof the "education community" concept, strengthening of the school councils and the development andimplementation of the school-centered Institutional Education Plan - PEI.

The concept of school networkas an instrument for micro-regional school association and planning hasbeen implemented in Ecuador and in Ceara (Brazil) with the Regional Education Development Centers -CREDE. In the project preparation period, Peruvian professionals benefited from Ecuadorian assistanceand visited the Ceara model. Both cases inspired the design of the proposed school network structure,which seeks to promote closer-to-school management and pedagogical initiatives in rural areas.

Provision ofsecondary education through distance learningith support from information andcommunications technology, has been carried out in a number of countries, including Mexico andColombia. Results are encouraging showing positive impacts both in coverage and quality that arecomparable or, sometimes, better than traditional secondary education.

This project also builds on the lessons learned formPtha Primary Education Quality Projectparticularly on teacher training and production of materials. This Project found a successful mechanismfor the provision of teacher training through the use of Universities, ISPs and NGOs, as opposed tointernal training programs. The same strategy will be used during this project. Production anddistribution of materials for primary grades in Spanish was also successful and is now being carried outregularly by MED. These processes will continue during the implementation of this project. Onlymaterials targeted to the multigrade classrooms (including self-paced materials) will be produced andtested.

The previous project, was implemented by the Ministry under MECEP-PCU coordination. The ProjectPCU staff was only dedicated to the administration of the Project funds. This project implementationsystem ensures process ownership and sustainability. However, it also creates lags in implementationmainly because there is great need for intra-institutional coordination. The first lesson learned is that it is

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better to sacrifice timeliness for ownership. Even though it would be more practical and timely to have aseparate group of people executing project activities, it is best to involve the whole Ministry, keeping theresponsibility under the directorships. The proposed project would also be implemented by the Ministrywhile intra-institutional coordination issues would be addressed through the participating directorates andfacilitated by the Steering Committee.

A small-size and qualified PCU was able enough to manage, particularly for the last two years, thePrimary Education Quality Improvement Project - MECEP (1996-2001) and carry it out to successfuland timely completion. Among other lessons learned, the continuity of committed staff was key tosuccessful implementation.

Through the preparation of the Programmatic Social Reform Loans (PSRL I and PSRL 11) there wasfrequent contact with other ongoing Peruvian projects in the social areas. This helped place thiseducation project in a broader political and administrative framework, which has added synergy toproject-supported components. One of the lessons learned in this process is that the Bank needs to paymore attention to inter-institutional processes as part of project design and supervision. This new projectwill benefit from the same interaction with other Bank or otherwise social projects in the country.

The availability of a well-conducted sector work means a source of information and a comparative pointfor data validation. This role was played by "Peruvian Education at a Crossroads: Challenges andOpportunities for the 21st Century" (Washington, DC: The World Bank, 2001) in the whole preparationprocess.

9. Environment Aspects (including any public consultation)Issues : The environmental impact of the project is expected to be insignificant since only

rehabilitation of schools will be financed. MED is not projecting any growth in primary schools and anyinfrastructure for the preschool classrooms or secondary program would be linked to existing schools.During project preparation, a set of guidelines were prepared for the project's civil works in order toincorporate simple environmental rules for project design, evaluation, and supervision. These guidelineshave been discussed in detail with FONCODES and are being used to enrich the existing FONCODESenvironmental guidelines for school infrastructure. The environmental guidelines will become integralpart of the Operations Manual and of the MED-FONCODES agreement.

FONCODES, the executing unit for the infrastructure sub-projects, has already implementedenvironmental assessment and mitigation measures into the project cycle. The above guidelines wouldbe used to enrich the FONCODES procedures in order to strengthen two areas where the environmentalsafeguards were weaker, that is project screening and supervision. The FONCODES Project cyclealready includes environmental assessment during the evaluation period and assurances of theimplementation of mitigation measures during supervision.

10. List of factual technical documents:

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11. Contact Point:

Task ManagerLivia M. BenavidesThe World Bank1818 H Street, NW

Washington D.C. 20433Telephone (511) 215-0660Fax: (511)421-7241

12 For information on other project related documents contactThe InfoShopThe World Bank1818 H Street, NWWashington, D C. 20433Telephone (202) 458-5454Fax (202) 522-1500Web: http.// www worldbank.org/infoshop

Note: This is information on an evolving project. Certain components may not be necessarilyincluded in the final project.

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