Public Disclosure Authorized

Document o f
The World Bank

FOR OFFICIAL USE ONLY

Report No: 33215-AR
Public Disclosure Authorized

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN
Public Disclosure Authorized

IN THE AMOUNT OF US$l50.00 MILLION

TO THE

ARGENTINE REPUBLIC

FOR

RURAL EDUCATION IMPROVEMENT PROJECT-PROMER

November 17,2005
Public Disclosure Authorized

Human Development Sector Management Unit

Argentina, Chile, Paraguay and Uruguay Country Management Unit
Latin America and the Caribbean Regional Office

This document has a restricted distribution and may be used by recipients only in the
performance o f their official duties. I t s contents may not otherwise be disclosed without World
Bank authorization.
 CURRENCY EQUIVALENTS

(Exchange Rate E f f e c t i v e N o v e m b e r 10,2005)

Currency Unit = Argentine Peso
A R S $ 2 . 9 4 = US$1

FISCAL YEAR
January 1 - December 31

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy

CFE Consejo Federal de Educaci6n or Federal Education Council
CIPPEC Center for Implementation o f Public Policies for Equity and Growth (Centro de
Implementacidn de Politicas Ptiblicas Para la Equidad y el Crecimiento)
DGUFI General Directorate o f the Unit o f International Finance (Direccidn General
Unidad de Financiamiento Internacional)
DNGCyFD National Directorate o f Curricular Management and Teacher Training (Direccidn
Nacional de Gestidn Curricular y Formacidn Docente)
DNIECE National Directorate o f Educational Information, Evaluation and Educational
Quality (Direccidn Nacional de Informacidn y Evaluacidn de la Calidad Educativa)
EGB General Basic Education (Educacih General Bisica)
IIPE International Institute for Educational Planning (Instituto Internacional de
Planeamiento de la Educacidn)
INDEC National Institute o f Statistics and Censuses (Instituto de Estadistica y Censos)
MECyT National Ministry o f Education, Science, and Technology (Ministerio de Educacidn,
Ciencia y Tecnologia)
NAP Core Learning Priorities (Nzicleos de Aprendizajes Prioritarios)
NEA Northeast Argentina (Noreste Argentina)
NOA Northwest Argentina (Noroeste Argentina)
NPRE National Program for Rural Education
ONE Operativo Nacional de Evaluacion or National Evaluation Survey
PERMER Renewable Energy in the Rural Electricity Market (Proyecto de Energia Renovable
en el Mercado Ele'ctrico Rural or Project)
PNEIB National Intercultural Bilingual Education Program (Programa Nacional de
Educacidn Intercultural y Bilingiie)
PIRLS Progress in International Reading Literacy Study
PISA Program for International Student Assessment
PRODYMES Program o f Decentralization and Improvement o f Secondary Education (Programa
de Descentralizacidn y Mejoramiento de la Educacidn Secundaria)
PROMER Rural Education Improvement Project (Proyecto de Mejoramiento de la Educacidn
Rural)

Vice President: Pamela Cox

Country Director: A x e l van Trotsenburg
Sector Director: Evangeline Javier
Sector Manager: Eduardo Velez Bustillo
Sector Leader: Jesko Hentschel
Task Team Leader: Suhas D. Parandekar
 ARGENTINA
Rural Education Improvement Project .PROMER

CONTENTS

Page

A . STRATEGIC CONTEXT AND RATIONALE ................................................................. 1

1. Country and sector issues.................................................................................................... 1
2. Rationale for Bank involvement ......................................................................................... 5
3. Higher level objectives to which the project contributes .................................................... 6

B . PROJECT DESCRIPTION ................................................................................................. 6

1. Project development objective and key indicators .............................................................. 6
2. Project components ............................................................................................................. 7
3. Lessons learned and reflected in the project design .......................................................... 11
4. Alternatives considered and reasons for rejection ............................................................ 12

C . IMPLEMENTATION ........................................................................................................ 12
1. Monitoring and evaluation o f outcomes/results., .............................................................. 13
..
2. Sustainability ..................................................................................................................... 14
I

3. Critical risks and possible controversial aspects ............................................................... 14

4. Loan conditions and covenants ......................................................................................... 15
APPRAISAL SUMMARY ....................................................................................................... 15
1. Economic and financial analysis ....................................................................................... 15
2. Technical ........................................................................................................................... 15
3. Fiduciary ........................................................................................................................... 15
4. Social............................................................................................................................... 157
5. Environment ...................................................................................................................... 17
6. Safeguard policies ............................................................................................................. 17
7. Policy Exceptions and Readiness...................................................................................... 17

Annex 1: Country and Sector o r Program Background ......................................................... 18

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies .................30

Annex 3: Results Framework and Monitoring ....................................................................... 31

Annex 4: Detailed Project Description...................................................................................... 36

Annex 5: Project Costs ............................................................................................................... 44

Annex 6: Implementation Arrangements................................................................................. 45

Annex 7: FinancialManagement and Disbursement Arrangements..................................... 49

Annex 8: Procurement Arrangements...................................................................................... 63

Annex 9 : Economic and Financial Analysis ............................................................................. 70

Annex 10: Safeguard Policy Issues ............................................................................................ 76

Annex 11: Project Preparation and Supervision..................................................................... 88

Annex 12: Documents in the Project File ................................................................................. 90

Annex 13: Statement o f Loans and Credits.............................................................................. 94

Annex 14: Country at a Glance ................................................................................................. 97

Map IBRD 33362

 ARGENTINA

RURAL EDUCATION IMPROVEMENT PROJECT - P R O M E R

PROJECT APPRAISAL D O C U M E N T

Latin America and the Caribbean Regional Office

Human Development Sector Management Unit

Date: November 22,2005 Team Leader: Suhas D. Parandekar

Country Director: A x e l van Trotsenburg Sectors: General Education (100 percent)

Sector Manager/Director: Eduardo Velez Bustillo/ Themes: Education for all (S)
Evangeline Javier
Project ID: PO70963 Environmental screening category: B
Lending Instrument: Specific Investment Loan Safeguard screening category: B
(SIL)

[XI Loan [ ] Credit [ ] Grant [ 3 Guarantee [ ] Other:

For Loans/Credits/Others:
Total Bank financing (US$m.): 150.00

RECONSTRUCTION AND
DEVELOPMENT
Total: 228.39 12.19 240.58

Borrower:
Argentine Republic

Responsible Agency:
Ministry o f Education, Science and Technology (MECyT)
Santa Fe 1548-(1060), Piso 10, Buenos Aires, Argentina
TelDax: (5411) 4129-1931
email : aarango@me.gov.ar
Contact: Lic. Aida Arango, Directora General, D i r e c c i h General Unidad de Financiamiento
Intemacional.

i
Does the project depart from the C A S in content or other significant respects? Re$
No
PAD A.3
Does the project require any exceptions from Bank policies? [ ]Yes [XINO
Ref: PAD D. 7 [ ]Yes [ IN0
Have these been approved by Bank management? [ ]Yes [ IN0
I s approval for any policy exception sought from the Board?
Does the project include any critical risks rated “substantial” or “high”?
[XIYes [ ] N o
Re$ PAD C.5
Does the project meet the Regional criteria for readiness for implementation? Ref.
[XIYes [ ] N o
PAD D. 7
Project development objective Re$ PAD B.2, Technical Annex 3

The project seeks to support national Government policy to improve the coverage, efficiency, quality, and
governance o f the Argentine education system.

Project description Ref: PAD B.3.a, Technical Annex 4

The project seeks to contribute t o improving the growth potential o f Argentina and reducing socia’
inequality. Argentina’s rural sector, which would be supported by this proposed project, has a tremendou!
potential to contribute to growth and economic development in Argentina.

The proposed project would provide education inputs to rural schools under a scheme o f bilatera
agreements between the National and Provincial Governments that would seek t o attain results regardin8
the coverage and quality o f basic rural education. The inputs would include teacher training, didactic
material and equipment including textbooks, workbooks and guides, and school rehabilitation to briq
schools up to basic minimum standards. Special attention would be paid to ensure that these inputs arc
appropriate for the local context o f rural areas. The project has two components:

Component A: Improving Quality and Coverage o f Rural Education (US$244.60 million)

This component i s designed and implemented around three subcomponents: (i) Improving Operatin]
Conditions o f Rural Schools; (ii)
Expanding Coverage and Improving Student Promotion Flow; and (iii
Strengthening Line Departments at the Provincial Levels;

Component B: Enhancing Stewardship Capacity o f the National Government (US$5 -40 million)
This component consists o f the following two sub-components: (i)
Strengthening L i n e Departments at thi
National Level; and (ii)
Monitoring and Evaluation.

W h i c h safeguard policies are triggered, if any? Re$ PAD D. 6, TechnicalAnnex 10

(i)Environmental (OP/BP 4.01) and (ii) Indigenous Peoples OP 4.10.
Significant, non-standard conditions, if any, for: N o t applicable.
Ref: PAD C.7
Board presentation:

Loadcredit effectiveness: Signed bilateral agreements between the Federal Government and at least t w ~
Provinces.

Covenants applicable to project implementation: Signed bilateral agreements between Federal and
Provincial Governments

*.
11
A. STRATEGIC CONTEXT AND RATIONALE

1. Country and sector issues

Argentina i s n o w recovering from a severe economic and social crisis. After three years o f fast growth
(averaging some 8.5 percent during 2003-2005), GDP has recovered to the pre-crisis peak o f 1998. The
focus in Argentina must now move away from crisis response t o long-term structural issues regarding the
economy and society-issues o f growth, equity, resilience and avoidance o f further crises. Three features
o f Argentina’s growth path, as recognized in the Bank’s Country Assistance Strategy (CAS) for
Argentina (Report 27340-AR, January 29, 2004) have a crucial bearing on the policies for the education
sector and the role o f the Bank in support o f those policies:

First, Argentina seeks a permanent improvement in the investment climate to support sustained long-term
growth. There i s a strong growth in the productive sector o f the economy, not just in services but also in
agriculture and manufacturing. Argentina seeks to build o n i t s existing comparative advantages in
agriculture and certain manufacturing and service sectors to serve as engines o f growth. A successful
transition from economic recovery to sustained growth would further fuel a strong demand for skilled
labor and the education sector needs to be able to meet this demand.

Second, the issue o f long-term social inclusion of vulnerable groups i s a very important item o n the
agenda o f social policy. The Government seeks to provide equality o f opportunity, through employment
generation for excluded populations, like segments o f urban youth who never had a chance to complete
schooling, and by improving educational attainment o f the population in rural areas, particularly in the
poorer provinces o f the Northwest and Northeast. Annex 1 documents the nature o f disparities regarding
the quantity and quality of education.

m,the sustained long-term growth path would only be viable under a series o f simultaneous policy
actions such as measures to promote infrastructure, investment, improve the business environment and
simplify procedures to start businesses, strengthen property laws, and maintain macroeconomic stability.
Improved human resources are only part o f a complex interplay o f forces that lead to or impede economic
development. I t i s vital to remember that improvements in the education sector in turn influence and are
influenced by the larger context o f development as the particular context o f the education sector i s
examined more closely.

Uncompleted educational policy reforms

Argentina’s education sector i s characterized by uncompleted reforms, with decentralization as the central
element in the reform agenda. The history o f decentralization (of primary schools in 1978 and secondary
schools in 1992) i s checkered in Argentina. Provincial Governments had widely varying levels o f
ownership and capacity to administer the educational reform program in the 1990s. In addition to the
handover o f all schools to provinces that removed the Federal level completely from school
administration, there was simultaneously a major curricular reform. The system that had been in existence
for many decades consisted o f primary school in 7 grades, and secondary school in 5 grades (6 for
technical schools). The new system would consist o f a compulsory year o f pre-school, an extended
compulsory primary or basic school o f 9 grades, and a secondary school or Polimodal with flexible,
modular offering o f 3 years (4 for technical schools).

A significant changeover o f this kind required some rather difficult logistical problems o f organization,
and implied the need for significant additional resources t o retrain teachers and rearrange the
infrastructure, equipment and didactic materials. The two systems had t o co-exist for some time, as

1
children were moved from one educational model to another, which generated additional complications.
The resources available for such a dramatic change although not entirely absent, were not available in all
jurisdictions to the required level, and certainly not with any consistency or regularity for a complete
transition to the n e w system. Meanwhile, problems o f the quality and relevance o f the education system,
that had led to the reforms in the first place, remained largely in place, which led to considerable erosion
in the support for the reform.

The late 1990s and the early part o f this decade witnessed the worst economic crisis ever experienced in
Argentina, and the education sector suffered the brunt o f the cuts in the availability o f resources, even
though some jurisdictions were able to cope with less resources and less damaging disasters. In spite o f
the problems, there has been a real increase in educational attainment in the 1990s. The out-of-school
population in the 10-14 years age-group fell from 6.8 to 2.9 percent, and the out-of-school population o f
15-19 years fell f r o m 45.8 to 30.6 percent (Source: Population Census o f 1991 and 2001). Currently in
Argentina, approximately ten years after the reforms were initiated, there are s t i l l great disparities across
and within provinces in terms o f educational opportunities offered to people, depending o n where they
l i v e and their socio-economic background. The current status o f the Argentine education system i s often
referred to as “fragmented.”

In this fragmented context, the Federal Government recognizes a strategic opportunity to support
provinces through policy guidance and resource transfers under the aegis o f a revamped national
educational program. The regulatory framework in Argentina provides a role for a national program as
the responsibility for the education system i s shared between the Federal and Provincial levels. Provinces
are responsible for running the education system o f their jurisdiction; the Federal Government i s entrusted
with supporting the provinces under a national educational policy based on principles o f national unity,
cultural identity and equality o f opportunities. The role o f the Federal Government i s best understood in
the context o f some basic figures about public educational expenditures.

Public educational expenditures: Role o f the Federal Government in the Provinces

O f average public education expenditures o f US$6,700 m i l l i o n (in constant 2005 dollars) in Argentina in
the period 1995-2005, the Federal Government’s share was about 24 percent or an average o f
approximately US$1,600 million, o f which US$1,500 m i l l i o n i s the budget o f the National Ministry o f
Education (MECyT). O f the MECyT expenditures, about 70 percent or about US$950 m i l l i o n i s allocated
to universities. The remaining US$550 m i l l i o n i s spent as national grant transfers t o Provincial
Governments. O f the approximate US$4,900 m i l l i o n o f provincial education expenditures, about 95
percent pays salaries o f teachers and administrative staff. Although trends regarding the functional
classification o f non-university national educational expenditures over time i s difficult to make (due to
fluctuations in allocations), in recent years (1999-2005) MECyT transferred substantial amounts to
provinces to supplement teacher salaries, for an average o f about U S 3 5 0 million per year. These Federal
salary supplements were absent before 1999, and were largely begun to address the provincial
Governments’ inability to pay teacher salaries regularly, which led to massive teacher strikes and in
certain provinces, the virtual cessation o f educational service delivery. Federal grant transfers for
infrastructure, school materials including textbooks, in-service teacher training, and quality enhancement
programs and scholarships form nearly the entire corpus o f non-salary pre-university public expenditures
in provinces.

Argentina’s population and economic activity are highly concentrated regionally; o f the country’s 24
jurisdictions, the City o f Buenos Aires and three Pampa provinces (Buenos Aires, Santa Fe, and C6rdoba)
account for three-fourths o f the GDP and two-thirds o f the population. The remaining 20 provinces
account for only 25 percent o f the GDP and one-third o f the population. Even though provinces have their
own revenues from taxes, the regional disparities necessitate a large dependence o n a shared pool o f

2
national taxes under a ‘co-participation’ regime that has compensatory elements to make revenues
available to poorer provinces. Annex 1 provides a more detailed account o f educational financing issues.
The following five salient points are made in this analysis:

Even with compensatory elements in co-participation, owing to the basic differences in

economic geography, differences in revenue availability to each province are a driver o f
huge disparities across provinces in terms o f annual expenditures per student (which range
f r o m roughly US$200 in Salta to US$800 in Santa Cruz);

Differences in provincial fiscal effort for education account for only a small portion o f
differences in per student expenditures across provinces (education expenditures average
about 27 percent o f total provincial expenditures and most provinces are near that number);

Direct federal educational programs in provinces have made only a dent in the inequality o f
resource allocation, in part because even though the federal programs are practically the
only programs directed at items other than salaries, the relative magnitude o f these
programs i s small;

The magnitude o f federal programs i s changing drastically as a result o f a concerted policy

decision by the Government. For example, expenditures o n a quality and compensation
programs increased by nearly 17 percent in 2005 as compared to 2004, and an increase o f
similar or greater margin i s anticipated for the 2006 budget. I t should be noted that the
recent increase comes after a period o f decline between 1999 and 2004 in such programs
that cumulatively amounts to a decline o f nearly 40 percent; and

The margin for improvement within the envelope o f the existing pattern o f resource
distribution across provinces would not be sufficient to address the disparities in
educational opportunity. There i s a need for transparent and non-discretionary transfers
from the Federal Government to address the fundamental or structural inequalities.

Policy response: Improving distribution o f federal educational grant transfers to provinces

These structural problems characterized by inter-provincial spending differences are not uncommon in a
country with very high disparities in economic development, and it i s difficult to achieve a high degree o f
horizontal equity through the single instrument o f fiscal policy. There i s a limit to which high revenue-
generating provinces can be taxed t o transfer to poorer provinces before negative incentive effects set in,
not to mention the adverse incentives for the receiving provinces. Rather than wait for a comprehensive
reform in Argentina’s fiscal framework, the Government’s education sector policy seeks to work within
the limitations o f the existing arrangement. The Federal Government would continue to provide resources
for quality and compensatory programs that provinces would n o t be able t o implement o n their own.
Policy reforms underway aim to improve the impact o f scarce federal resources by applying well-defined
and measurable educational goals as a starting point for the identification o f needs and the subsequent
allocation o f federal grant transfers across provinces, with the distribution o f resources based on
transparent, non-discretionary criteria.

An important attempt to establish a strategic direction for the education sector i s being pursued through
the proposed L a w for Educational Financing, n o w under consideration by the National Congress. This

3
proposed l a w provides a clear vision of ten educational “bi-centenary goals”’ to be accomplished by the
year 2010, when Argentina completes 200 years o f i t s f i r s t independent Government. The proposed l a w
would also provide a mechanism for the utilization o f fiscal resources under the shared responsibility of
the Federal and Provincial Governments. Provinces would be able t o choose whether to enter into the new
financing framework, in which case they would s i g n a bilateral agreement with the Federal Government
committing to achieve specific goals and to match additional federal resources with additional resources
from their general revenues. Specific remedial measures would be made explicit in the proposed l a w to
deal with possible non-compliance. T w o modernizing principles would underpin the proposed l a w the
establishment o f clear systemic goals, and the provision o f resources under an established set o f rules for
resource allocations that provide incentives to provinces to meet those goals.

Bank financing i s proposed for one element o f the national educational program, namely the National
Program for Rural Education (NPRE). The NPRE would advance regardless o f whether or not the new
l a w i s approved or whether or not the Bank approves financing for the NPRE. In this context, the central
idea i s for the Bank to partner with the Government through financing and policy innovation that would
potentially be leveraged to other elements o f the national program. These innovations relate to the
identification o f systemic goals and the allocation o f resources t o follow provincial needs, using a model
o f bilateral agreements. The remainder o f this section provides a brief overview o f rural education in
Argentina.

Coverage, Quality and Efficiency of Rural Education

The education system in Argentina i s heavily biased in favor o f the overwhelmingly large urban
population. Rural education in Argentina still faces pockets with limited coverage, mainly in the poorer
Northeast (NEA) and Northwest (NOA) regions o f the country, where access to the ten obligatory years
of education i s not complete, particularly for pre-school and for the third cycle o f Basic Education
(EGB3). In rural areas where there i s provision o f pre-school and EGB3 education, there are few signs o f
constraints on the demand side. However, coverage for the extended span o f compulsory education (to
pre-school and EGB3) has lagged for rural areas. For Primary Education (EGB1 and EGB2), coverage i s
nearly universal even in rural areas; however, the quality o f this education i s uneven, which results in
high rates o f repetition and dropout, and constrains the possibility o f access to higher levels o f educationa2
While there are national programs that address the issue o f quality in urban schools, this has not been the
case for rural schools to date. As a result, the Government aims t o implement a targeted program that
would address the peculiarities o f schools in rural areas, including the need to provide education services
to localities with l o w population density, to provide closer involvement o f children with the ambience o f
farming and related activities, and to recognize the heightened role o f a school as a cultural node for the
local community. The Government’s National Rural Education Program would thus directly support the
first two bi-centenary goals at the focus o f the reform agenda-universalization o f pre-school and
complete coverage of ten years o f compulsory education. The Rural Education Program would also help
address another important bi-centenary goal regarding the quality o f basic education, especially related to

1 See Annex 1 for an enumeration of the ten goals. Essentially, these ambitious goals are concerned with an
improvement in the quality and contribution o f the education sector to the Argentine society, in a manner that carries
all Argentines with it, especially by including hitherto excluded groups.
2 At the end o f Annex 1, a series of schematic maps provides a graphic demonstration o f the distribution o f
education gaps in Argentina’s rural areas. I t i s estimated that roughly 140,000 children in rural areas do not have
access to pre-school and EGB3, with 70 percent o f those out o f school belonging to NOA and NEA. There are
approximately 714,000 children in rural areas in EGBl and EGB2, with 38 percent o f those children being overage,
compared to 23 percent for urban areas. The rural EGB 1 and EGB2 enrollment from the NOA and NEA provinces
accounts for nearly 60 percent of the total rural enrollment for the country, even though NOA and NEA represent
only about 20 percent o f Argentina’s population.

4
the core basic skills that form part o f the nationally ratified Core Learning Priorities (Nccleos de
Aprendizujes Prioritarios, NAP). Achievement o f the national goals for rural areas would contribute to
the task o f making the education system in Argentina more productive and equitable.

Similar t o coverage, the quality o f education in rural areas i s also significantly below that o f urban areas.
Owing to l o w population density, schools in rural areas have multi-grade classrooms, quite different from
the multiple sections per grade that characterize most urban schools. Rural teachers do not have access to
the information sources, peer support and opportunities for professional development that are often taken
for granted by urban teachers. In addition to the problem dealing with the organizational and pedagogical
model that has been used for rural schools, another serious problem has been the lack o f access to basic
educational inputs -rural schools have unfortunately tended to be at the end o f the priority l i s t in the
allocation o f resources for infrastructure, equipment, didactic materials and trained teachers. A significant
proportion o f rural schools do not have electricity or drinking water as they are off-grid. I t i s only recently
that rural schools have begun to be equipped with cost-effective alternative energy sources, such as solar
panels that are n o w commercially available, or with modem ecologically appropriate methods o f
collecting rain water, or with other l o w cost water sources. Shortcomings in the provision o f critical
inputs such as the physical plant and didactic materials are part o f a general picture o f lack o f adequate
attention to rural schools. The characteristics o f rural schools also include positive features, such as
greater cohesion with the community and the potential for developing educational activities that are better
integrated with the daily life o f children in rural areas, but this potential i s not always fully exploited.

The use o f inappropriate pedagogical and organization models, poor physical plant, the lack o f
educational equipment and didactic materials, and the neglect o f programs to provide training and
pedagogical support to rural teachers explain the l o w quality o f educational attainment o f the rural
population. Repetition, over-age and drop-out rates are much higher for rural children than for their urban
counterparts. Rural children learn less when they are in school, and drop out more often after continuous
repetitions. Improving the coverage and quality o f rural education has the potential to contribute to an
improvement o f the efficiency in the overall use o f public educational resources in Argentina. The use o f
multi-grade classrooms, when combined with the provision o f adequate materials and training also
provides an incremental mechanism to improve the overall efficiency in the deployment o f teacher
resources through the educational system.

2. Rationale for Bank involvement

Supporting the important National Program for Rural Education provides an excellent opportunity for the
Bank to continue to work in partnership with the Government, in an area that addresses social inclusion o f
vulnerable groups, equality o f opportunity and the improvement o f productivity-central themes in the
CAS. Bank support under the proposed operation would increase the financial envelope o f the Rural
Education Program, allowing it to accelerate implementation and increase i t s geographical scope. Bank
support would also provide state-of-the-art technical inputs that: (i)strengthen the Government’s
financial, technical and operational capabilities; (ii)contribute to the analytical basis o f policy decision-
making; (iii) bring cross-country experience, both fi-om developed and developing countries; and (iv)
facilitate work within a federal framework by building o n previous experience gained over several years
o f support to Argentina’s education sector at both federal and provincial levels. Experience expected t o be
gained by the national and provincial Governments through project implementation would help strengthen
the orientation towards results and development impact, not just for the proposed Bank-financed Project,
but for the Government’s education program as a whole.

5
3. Higher level objectives to which the project contributes

The Project supports key elements o f the National Educational Program that contributes to the task o f
reducing social inequality and improving Argentina’s growth potential. In Argentina, there i s a close
correlation between socio-economic levels and schooling success, suggesting that education has often
served in the past t o exacerbate rather than alleviate social and economic inequalities. Children who
come from relatively wealthier families do better in school, even if they attend public schools, and are
less likely to repeat and to drop out o f school, and they show better test scores. They tend to proceed to
more successful careers in the labor market and earn better incomes. Conversely, children from poor
families tend to perform worse in school and consequently afterwards. In general, the education system i s
not able to compensate for the economic deficits that constrain poor children in their home environment.
The proposed Project focused on rural areas would be a part o f various other efforts in a national
endeavor to reverse this process o f poor education perpetuating poverty. The proposed Project’s
contribution to a reduction in the inequality o f outcomes in rural education would help to lead to a
reduction in the overall inequality o f the education system.

B. PROJECT DESCRIPTION

The lending instrument i s a specific investment loan, which provides both financial and technical
assistance throughout implementation o f the proposed Project.

1. Project development objective and key indicators

The Project’s Development Objective i s to support national Government policy to: (i)improve the
coverage, efficiency, and quality o f the Argentine education system, and (ii)
to improve the governance o f
the Argentine education system through strengthening o f the normative, planning, information,
monitoring, and evaluation capacity at the national and provincial levels. These general objectives
translate into the following specific Project Development Objectives (PDO) to be reached in a period o f
five years:

A. Coverage
(Al) Reduce by h a l f the difference in the access o f 6 year o l d children in lst
grade as compared to
5 year old children in Pre-School in rural areas in Argentina;
(A2) Increase from 73 percent to 85 percent the access o f students completing the 7th grade to the
8’ grade o f schooling in rural areas in Argentina;

B. Efficiency
(B 1) Improve promotion rate in EGB 1 (Grades 1 to 3) in rural areas in Argentina from 76 percent
(2002) to 85 percent (2010);
(B2) Reduce two or more years o f overage enrollment in E G B 2 in rural areas f r o m 24 percent
(2002) to 12 percent (2010);

C. Quality
( C l ) Improve the percentage o f students in Grade 3 in rural schools achieving proficiencies in
the nationally ratified standards o f the Core Learning Priorities (NAP);
( C l ) Improve the percentage o f students in Grade 6 in rural schools achieving proficiencies in
the nationally ratified standards o f the Core Learning Priorities (NAP);

6
 D. Governance
(Dl) Number of bilateral agreements between national and provincial Governments in
satisfactory execution; and
(D2) Annual plans regarding the compilation, analysis, dissemination and use o f educational
statistics in satisfactory execution.

2. Project components

Component A: Improving Quality and Coverage o f Rural Education (US$234.85 million;

U W 4 4 . 7 9 million Bank financing)

This component would support improvements in rural educational services through the National Program
for Rural Education (NPRE) approved by the Federal Education Council (CFE) in 2004. The component
would finance the development and application o f pedagogical and organizational models that are
appropriately tailored for the particular social, cultural and economic context o f rural households.
Activities in the provinces would be part o f the education policy formulated around specified coverage
and quality targets regarding rural education for each province. The national program would be executed
through signed convenios-or bilateral agreements-between the national and provincial Governments.

The NPRE assigns resources to all provinces, with priority to those where the coverage and quality gaps
are the greatest. The distribution o f resources among the provinces would be based on the percentage o f
rural population and the percentage o f households with unmet basic needs in the province. The details o f
inter-provincial allocation o f resources are specified further in the Operations Manual. The main purpose
of this approach i s to use a more equitable instrument to link the federal resources to the needs o f
provinces, and contribute to redress the high level o f disparity in educational spending across Argentine
regions.

The implementation arrangement for the Project would center o n convenios between the national and
provincial Governments. These convenios form the basis o f an accountability framework for the project.
The accountability regarding the rural education component would be centered o n five-year goals and the
annual targets for rural education that would form part o f the convenios described in Annex 6. This annex
also describes h o w the flow o f resources would be linked to accomplishment o f the goals laid out in the
convenios.

This component consists o f a two-pronged implementation strategy, that would also be reflected in the
definition o f the disbursement categories for Bank financing as follows: (i) the first part o f the strategy
refers to the implementation o f activities that would be coordinated and purchased by the national level,
which include the provision o f didactic materials and teaching equipment and other inputs; and (ii) the
second part o f this strategy would consist o f activities that would be executed directly by the provinces
and schools with resources transferred by the national level to the provinces, referred to as Provincial
Sub-projects. B o t h o f these elements o f the implementation strategy would be included in the bilateral
agreement or convenio, and would form part o f the province’s plan for rural education. There are three
sub-components:

Sub-component A l : Improving Operating Conditions o f Rural Schools (US$117.79 million;

US$106.01 Bank financing)

This sub-component covers four activities that are common to a l l levels o f compulsory education in the
country: Pre-school, EGB 1, E G B 2 and EGB3, and special support for indigenous education:

7
 Provision o f basic didactic materials and teaching equipment: Didactic materials financed
by this sub-component would include: (a) textbooks, workbooks, student and teacher
guides; (b) library books, reference books, school supplies, audio-visual materials; (c)
science and technology equipment (computers and televisions) and software; and (d) sports
and didactic games.

Minimum school infrastructure standards: This activity intends to provide minimum school
infrastructure standards for all schools in the rural areas. This activity would prioritize
schools located in regions where the problem o f dilapidated infrastructure and lack o f water
and electricity supply are most crucial. T o achieve i t s objectives the activity would finance:
(a) construction o f additional classrooms to absorb additional enrollment; (b) replacement
of dilapidated schools and rehabilitation o f school facilities; (c) furniture; and (d) school
maintenance costs.

Establishment o f Clusters o f Rural Schools (amupamientos): T o facilitate local

organization and management, this activity would support the establishment o f school
clusters. These clusters would operate as a support system for teachers in isolated areas and
would increase the exchange o f experiences in the rural areas. A cluster o f rural schools
would group, more or less, ten schools. The cluster would provide space for dealing with a
common set o f problems while at the same time generating economies o f scale in core
functions such as educational planning, training and management o f didactic materials,
teaching equipments, and financial resources. This activity would finance: (a) technical
assistance; and (b) operational resources for the formation and functioning o f clusters as
detailed in Annex 4.

Distance education through the Education TV Channel: This activity would support the
supply o f technological tools to permit schools and students to receive the TV programs
delivered by the TV National Education Channel. The component would finance: (a)
technical tools to connect the TVs in each school with the satellite; and (b) operational
costs related to this activity.

Indigenous education: This activity would support the development o f actions to increase
awareness o f the cultural diversity existing in the rural communities as well as knowledge
o f the traditional language and culture o f the indigenous population. This activity would
finance: (a) technical assistance and consultant services for the preparation o f school
development plans; (b) training o f the members o f the community who would support the
implementation o f literacy programs and development o f institutional projects, and (c)
training programs for schools developing indigenous education programs.

Sub-component A2: Expanding Coverage and Improving Student Promotion Flow (US$106.46
million; US$29.17 Bank financing)

This sub-component would support four activities, each o f which corresponds t o a particular education
level within the general category o f compulsory education in Argentina (Pre-school, EGBl, E G B 2 and
EGB3):

(i) Expanding coverage for Pre-school education: This activity would support the extension o f
pre-school programs in the rural areas through the development and application o f multi-
grade pre-school models. T o expand the provision o f pre-school in the rural schools, this
activity would support the following: (a) provision o f teacher guides o n activities for pre-
school children; (b) training activities for teachers; and (c) technical assistance.

8
 (ii) Reducing repetition in EGB1: This activity would promote organizational and pedagogical
actions to prevent dropout and repetition in the first years o f schooling, through three lines
o f actions: (a) development o f actions to increase the reading ability o f students in the
initial grades, including preparatory activities at the pre-school level; (b) adoption o f a
three-year learning cycle as the framework for learning and students’ promotion; (c)
improvements in the curriculum materials for teaching math and other curricula contents;
and (d) training activities. This activity would finance teacher training programs and
technical assistance to ensure appropriate use o f the selected educational teaching-learning
materials financed under sub-component A1 ,

(iii)Acceleration program for increasing students’ attainment in EGB2: In most rural areas in
Argentina, an estimated 30 percent o f students 11 or 12 years o f age are over-age in relation
to the grade, due to repetition, dropout and sporadic re-enrollment in school. T o reduce the
overage problem, this activity aims to help the over-age students in rural areas catch up
academically and thereby reduce the serious age grade distortion in EGB2. The
implementation o f an accelerated learning program, using specially developed materials,
teacher orientation and student self-guided work would reduce the impact o f previous
repetitions and would stimulate the capacity in over-aged children for continuing their
studies rather than dropping out prematurely from school. This activity would finance: (a)
teacher training; (b) teaching-learning materials; (c) school supervision visits; and (d)
technical assistance.

(14 Lower secondarv education (EGB3): Schools that belonged to the previous 7-year primary
school system would be extended to the 9-year EGB system. T o extend the years o f
schooling o f students, and continue the use o f multi-grade classes in EGB3, this activity
would support: (a) the design o f learning modules for students, which would allow students
to work at their own pace with regular guidance; (b) textbooks, workbooks/manuals with
activities adapted to the rural context; (c) audio-visual materials specifically developed for
the rural context; (d) school development plans; (e) training for teachers t o act as tutors for
the self-guided activities o f EGB3 students; and (0 training o f secondary school teachers
who would be itinerant teachers or placed at nodes o f rural school clusters, or would utilize
distance learning methods (depending o n the specific rural context).

Sub-component A3: Strengthening Line Departments at the Provincial Levels (US$10.60 million;
US$9.61 million Bank financing)

This subcomponent would support the establishment and consolidation o f the management capacity o f the
provinces in the implementation o f the Project and sustainability o f the education policies and activities
after project completion. T h i s subcomponent seeks t o raise the quality o f management o f the schools and
intermediary institutions so that they can better achieve their academic functions and social
responsibilities o f providing equal access and quality education to the children in the rural areas. Thus, the
subcomponent would support measures for increasing the provincial ministries’ capacity in the following
dimensions: planning/information and pedagogical and administrative areas, including monitoring. The
l i n e departments at the provincial level would also be strengthened to support project implementation and
operation o f the education system at that level. Under this subcomponent, the project would finance: (a)
technical assistance and consultancy services for supporting the pedagogical, administrative and
information areas in each province; (b) travel expenses; (c) school supervision services; (d) information
system costs; and (e) other operational costs. Administrative capacity would include procurement,
financial management, and auditing capacity.

9
Component B: Enhancing Stewardship Capacity o f National Government (US$5.35 million;
US$4.83 million Bank financing)

The Project’s support for the National Program for Rural Education uses an organizational model that
does not rely on parallel institutional structures and functions that would depend o n a Bank-financed
project. Project implementation relies on the existing Government structures-existing units at the
MECyT, at the national level, and at the Provincial ministries o f education. The Project would finance a
large number o f inputs (as provided in Component A above) under the framework o f the national-
provincial convenio, which would establish a broad accountability framework for the Project. In order for
that accountability framework to function as planned, the Project would provide assistance for
strengthening the relevant line departments in MECyT. There are two sub-components:

Sub-component B1: Strengthening Line Departments at the National Level (US$2.37 million;
US$2.14 million Bank financing)

An institutional analysis assessing the capability o f the majors actors involved in project implementation
was undertaken, and capacity building measures were identified. The requirements at the national level
would strengthen the planning, normative, monitoring, evaluation and implementation support activities,
with the bulk o f the support being provided to the departments at the MECyT (i-e., the areas in charge o f
the rural education program; evaluation and statistics; analysis o f public educational expenditures, and
international project co-ordination). T o help ensure the adoption o f new processes and procedures and
long-term sustainability o f the proposed actions, through this subcomponent, the project would support:
(i)review of the institutional arrangements o f selected units to identify and correct overlapping o f
activities and establish modem procedures and mechanisms to monitor and evaluate education activities
and projects; and (ii) training programs to upgrade the technical skills o f those involved in improvement
of educational quality, mainly in the use o f implementation tools and information management systems.

This subcomponent would finance: (i)consultant services and technical assistance to increase the
institutional capacity o f line departments o f the Ministry o f Education dealing with rural education and
information, as well as monitoring and evaluation (M&E) activities; (ii)computer equipment; (iii)
independent auditing at the provincial level; (iv) travel expenses for supervising the provinces and
schools, and other operational costs.

Sub-component B2: Monitoring and Evaluation (US$2.99 million; US$2.69 Bank financing)

This sub-component would support the development and implementation o f a system o f data collection,
analysis, dissemination and use o f information for policy decisions at the National, Provincial and School
levels. I t i s expected that the information system would also provide inputs for future expansion o f Project
interventions and for deriving lessons learned for application o f educational policy areas not covered by
the Project, This sub-component would finance technical assistance, and equipment (computers and
software). This sub-component would develop the following activities:

(i) Surveys and Impact Evaluation Studies. Financing would be provided for a periodic survey o n
the functioning conditions o f rural schools. Surveys would include those at national and
provincial levels that would evaluate processes and outputs in the course o f Project
implementation, and an impact evaluation o f a general nature to provide insights into the
effectiveness o f public investments in education;

(ii) Student learning. assessments. The proposed Project would finance the extension o f a sample of
standardized national student assessments (Operativo Nacional de Evaluacidn or ONE) to
ensure representativeness for rural schools by province. This activity would also include the

10
 monitoring o f progress in the achievement o f the Core Learning Priorities (NAP) and
diagnostic information from this assessment to be provided to individual schools.

3. Lessons l e a r n e d and reflected in the project design

In the course o f supporting Argentina’s educational policy reform through the four PRODYMES Projects
(I, 11, I11 and IIIA), well as through support for other investment and adjustment (now development
policy) lending in Argentina, a number of lessons have been learned by the Bank. These can be classified
in five dimensions:

a) Definition of the borrower; In a previous project supporting investments at the provincial level
(PRODYMES I), provinces were identified and provincial willingness to borrow was confirmed during
project preparation. Even so, long delays ensued when external macro-economic shocks compounded
with internal problems led some o f the provinces, after loan approval by the Bank, to avoid taking on
additional indebtedness. In the case o f PRODYMES 11, the Federal Government stepped in to assume the
Bank loan after a period o f two years without disbursements. For the proposed Project, it i s clear that this
i s a national project with national indebtedness. In keeping with the national Government’s responsibility
for educational quality and for compensatory programs, the national Government would be responsible
for the production o f instruments for improved educational service delivery. Provinces would contract
with the nation to use these instruments to obtain improved educational services.

b) Consultation and Partnership with Provincial Education Ministries: An important lesson from
previous projects i s the need for a process o f consultation with the provinces that are responsible for the
administration o f the educational system in their respective jurisdictions. The project supports national
educational policy that i s shaped progressively in periodic meetings o f the Consejo Federal de Educacidn
(CFE). In addition, the project shares elements with the new proposed educational financing l a w that i s
the subject o f extensive consultations with provincial administrations as well as c i v i l society at large. At
the operational level, there have been a series o f meetings and consultations with provinces for defining
the Project interventions. The design o f the project incorporates provincial participation in determining
the timing and locus o f interventions. Convenios between the national and provincial Government would
further strengthen provincial ownership o f the project.

c) Systemic and sustainable impact: Projects that do n o t deal with systemic issues tend to have a l o w
development impact. For education projects, the inertia o f the entire education system can overwhelm
even well executed interventions in project schools. Targeted interventions in urban marginal areas, as
was the case with PRODYMES 11, are fine conceptually, but sustained performance improvement may
suffer since there i s n o political economy locus o f decision making for the schools outside o f the project.
Thus, when such a project ends, sustainability proves very difficult, due not only to budgetary restrictions,
but also to the absence o f an institutional locus for continuation. The proposed Project’s support o f
national educational policies for rural education, integrated with the bi-centenary goals that do not owe
their existence to this proposed Project are factors that enhance the chances for sustained and systemic
project impact .

d) Importance of monitoring and evaluation: In spite o f substantial investments in systems t o compile

educational statistics, there has not been a commensurate improvement in the ready availability and use of
such statistics as important inputs into policy decision making. The proposed Project includes a
component for monitoring and evaluation and provides resources at both the national and provincial
levels to strengthen the monitoring and evaluation function. The inclusion o f educational statistics as part
of national-provincial convenios addresses the need for good monitoring and evaluation. The project
design puts emphasis o n the timely collection and feedback o f educational indicators at various levels o f

11
educational administration and provides resources for the implementation and dissemination o f studies
including those o n impact evaluation.

e) Importance of Flexibility: Investment projects finance inputs. A key learning experience relates to the
need to build into project design a process that enhances the flexibility o f activities in order to achieve
productivity o f those inputs. The detailed and disaggregated prior definition o f activities to be financed
under the proposed Project, over a five year period and across multiple jurisdictions, required foresight to
define the optimal input mix to meet the development objectives. Experience shows that implementation
tends to slow down when circumstances change and alterations to the original plan require agreement by
multiple parties. To address this, the proposed Project incorporates flexibility by providing only a general
definition regarding possible inputs, an understanding o f the process by which those inputs would be
employed so as to monitor and obtain the results and a system for annual review and revision o n the basis
o f intermediate results.

4. Alternatives considered and reasons for rejection

National vs. Provincial Loans. One alternative considered was a combination o f selected provincial loans
instead o f a national loan. This alternative would involve prohibitively high transactions costs both for
preparation as well as implementation. Also, in a scheme o f provincial loans, the provinces with the most
needy beneficiaries may be the ones least able to incur indebtedness, and such a scheme would not be
able to utilize the federal context o f Argentine educational policy, where the Federal Government has an
important role to play in redressing inequality and resolving problems o f quality.

SWAp. Since the project supports national programs, i t would seem a logical step t o prepare this project
as a Sector Wide Approach (SWAp), where there would be a full mingling o f resources from the National
Treasury and from Bank financing for project interventions. This project already meets one important
objective o f SWAPS that seeks to reduce transaction costs since parallel institutional mechanisms would
not be set up, other than those o f existing federal programs where execution i s cooperatively done with
provinces. However, with regard to financial flows and procurement arrangements, the Government has
indicated i t s interest in being able to continue a separation o f the financial sources and to follow the Bank
procedures.

With an investment lending operation that supports results and i s integrally linked t o educational policy
measures, another alternative could have been a Development Policy Lending (DPL) operation. However,
in addition to the policy aspects, the proposed operation also covers unmet investment needs for the
expansion of educational services in rural areas. Further, in the current C A S as w e l l as the upcoming C A S
under discussion, there i s a clear emphasis on investment lending in the Bank’s portfolio in Argentina. In
a detailed client survey carried out as part o f the C A S preparation, a key finding was the public preference
for the Bank to invest more in Argentina in projects for education, health and infrastructure.

C. IMPLEMENTATION

The implementation arrangements for this Project closely follow the principle o f partnership with the
Government in the delivery o f the national program o f rural education. The implementing agency would
be the National Ministry o f Education, Science and Technology (MECyT), through i t s Directorate
General for the Unit o f International Finance (DGUFI). The DGUFI would be responsible for
coordinating the various activities o f the Project with the other agencies o f MECyT as w e l l as other
Federal and Provincial Government Agencies. The DGUFI also manages an Inter-American Development
Bank-financed (IDB) Operation (see Annex 2) and has substantial experience with the international
standards o f financial management and procurement.

12
The DGUFI i s not expected to develop technical expertise that already exists in line departments o f
national and provincial education ministries. The Rural Education area i s under the Directorate General of
Curriculum Management and Teacher Training (DNGCyFD). The area o f monitoring and evaluation falls
under the National Directorate o f Information and Evaluation o f the Quality o f Education (DNIECE).
Other units such as the Infrastructure Unit o f the M E C y T would also be involved in the implementation
o f the program. The project implementation arrangements would build o n the experience o f these national
programs. The three key MECyT units receive a substantial budget for managing their respective national
programs. There w o u l d not be any need to set up Project Coordination Units (PCUs) either at the National
or at the Provincial levels. Where there i s a particular need to build provincial implementation capacity,
this would be done by strengthening existing l i n e departments at provincial Ministries o f Education,
rather than through parallel administrative units.

National-Provincial convenios or bilateral agreements would be signed that would delineate the
responsibilities o f the national and provincial Governments, and in some cases, as with resource transfers
to schools, specify the roles and responsibility at that administrative level as well. The bilateral
agreements would be supported by annual work plans with the provinces that would move beyond
specification o f inputs and contain targets about the results expected as outputs from the project
interventions. Rather than a pre-determined and fixed allocation across provinces for the duration o f the
Project, allocations would be made o n a yearly basis o f a review o f progress towards compliance with the
previous year’s work plan and projected activities for the future year’s plan. Provinces that are slow in
implementation o f targets would receive help and special attention from the national level. Continued
problems in implementation at the Provincial level would put at r i s k the allocation o f resources across to
non-performing provinces. Details about the bilateral agreements are provided in Annex 6 .

1. Monitoring and evaluation of outcomeshesults

The proposed support o f a national program with implementation through a combination o f national and
provincial arrangements makes the role o f monitoring and evaluation even more important than in more
traditional input-based projects. Implementation Completion Reports o f previous Bank-financed
education projects have indicated the need for closer attention to establishing benchmarks early o n in the
project cycle, and for follow-up regarding established targets. In order t o ensure the timely and regular
availability o f data about project implementation, resources have been set aside for a special monitoring
and evaluation component o f the proposed Project. There would be three related interventions in this area.
First, there would be special purpose surveys such as those to follow the status o f infrastructure o f rural
schools. Second, there would be training and technical assistance directed at the provincial level to
encourage the adoption o f the use o f analytical work on educational policy. Third, there would be
attention placed on dissemination activities including the establishment o f systems t o generate periodic
information o n Project implementation. Information on the success or otherwise in meeting targets used
for project supervision would also be devolved to the educational establishments who would benefit f r o m
the Project. Constant attention to the monitoring o f outcomes and results, as w e l l as the dissemination o f
results, including the tracking o f project expenditures and involvement o f c i v i l society organizations i s
expected to improve governance and accountability that i s crucial to the success o f the proposed P r ~ j e c t . ~
Details about monitoring indicators are provided in Annex 3.

3 MECyT already collaborates closely with NGOs regarding oversight o f the use o f public resources for school
infrastructure.

13
2. Sustainability

The support for an integrated national program within a federal framework, such as the National Program
for Rural Education, brings benefits o f continuity in Government policy and reduces the uncertainty
regarding sustainability in a project. In the case o f national programs, the role o f the decision making o f
the Federal Education Council (Consejo Federal) i s very important-the NPRE i s supported by
resolutions and declarations o f the Consejo Federal. Apart from the institutional role played by the
Consejo Federal, sustainability i s also aided by the operational level deliberations involving provinces.

The proposed Project’s goals have a modest fiscal impact. Increasing the enrollment at the Pre-School and
EGB3 levels in rural areas, with the use o f pedagogical and administrative models that rely on multi-
grade teaching and the use o f itinerant teachers, tutors and supplemental material for students would have
only a small marginal impact in terms o f the teacher wage bill. Improvements in efficiency from the
accelerated programs for over-age children and attention to problems o f repetition and dropout would
actually lead to improvements in the efficiency o f existing resources. The economic analysis in Annex 9
presents some basic simulations regarding the analysis o f sustainability o f the project interventions.

3. Critical risks and possible controversial aspects

Possible Risk Factor Proposed Mitigation Measures Risk Rating

1. Poor implementation a) Detailed Institutional Analysis o f Provincial Substantial
capacity in provinces would Capacity leading up to institutional
delay execution o f the strengthening measures in the National -
program. Provincial convenios.
b) Close and constant monitoring o f project
implementation and remedial action in case o f
problems.
2. Transfer of project a) Provision o f technical assistance to line units o f Medium
management from a P C U MECyT.
approach to management by b) H i g h priority placed by Government on
line units o f M E C y T may face strengthening o f Rural Education U n i t of
capacity constraints. MECyT.
3. The project may be a) Inclusion and monitoring o f outputs and Substantial
successful in providing inputs, outcomes in National-Provincial bilateral
but outputs and outcomes may agreements.
not be attained. b) Utilization o f results o f impact evaluation and
other studies incorporated into the project
design.
c) Flexibility in definition o f inputs to be financed
by the project.

4. A re-emergence o f crisis a) Improved portfolio monitoring procedures put Medium

conditions may lead to severe in place by the Bank’s Country Management
cutbacks in Government Unit after the last crisis would provide early
expenditures as in the 2000- warning.
2002 period. b) Current political and economic situation
indicates stability (this i s not a mitigation
measure).

Overall Risk Substantial

14
4. Loan conditions and covenants

Loan Effectiveness would require signed bilateral agreements between the Federal Government and at
least two Provinces. The project will be carried out following the requirements o f an Operational Manual
that will include among others the fiduciary and technical requirements o f the project, including the
selection and implementation requirements of the provincial subprojects and the school managed
activities. The project would also include disbursement conditions requiring for each Province where the
project would be implemented, a signed bilateral agreement and a satisfactory financial management and
procurement assessment o f the province.

APPRAISAL SUMMARY

1. Economic and financial analysis

Annex 9 reports the findings o f the economic and financial analysis, and it i s summarized here. The
Annex presents the findings from a recently conducted Rural Household Survey (RHS) carried out for a
study o n rural poverty in Argentina. The survey o f isolated rural areas i s small in scale (with 414
households sampled in the provinces o f Chaco, Santa Fe, Santiago del Estero, and Mendoza) in
comparison to the widely used Permanent Household Survey (Encuesta Permanente de Hogares or EPH)
that covers urban areas in Argentina. However, wage earnings regressions reported in the study provide
important insights regarding the potential benefits o f this Project. Following the presentation o f data from
the rural household survey, a cost-benefit analysis o f the Project is presented that indicates an internal rate
o f return o f 14.3 percent under conservative assumptions. The second part o f Annex 9 identifies the fiscal
impact of the investment, which appears to be minor considering the magnitude o f educational
expenditures in Argentina.

2. Technical

The technical justification of the Project i s based on three grounds: (i)

timely completion o f the obligatory
years o f basic education in rural Argentina would be an important element to reduce inequality and
poverty, and contribute to improved productivity o f the work force in the long term; (ii) the focus o f this
Project i s to provide educational inputs under a national program, with bilateral agreements with
provinces to enhance accountability; and (iii) the limited but important investment o f the Project in
deepening the use o f information and educational research would be very useful in malung marginal
improvements towards stronger analytical foundations o f educational policy.

3. Fiduciary

Financial Management and Audit Arrangements: The project would be implemented using the existing
structures that are in place at the DGUFI. Additional arrangements regarding project implementation at
the provincial level would be implemented to coordinate the flow o f funds and information. At the
central level, the MECyT, through the DGUFI, would be responsible for carrying out financial
management, procurement and disbursement activities, as well as for monitoring and supervising the
fiduciary arrangements at the provincial level. Provincial Governments would use their planning,
financial management systems, and internal control arrangements, e.g. M&E, fiduciary management and
internal arrangements, for supervising the rural school clusters.

A number o f measures have been agreed during project preparation to address the inherent complexities
o f fiduciary oversight for a decentralized operation. These include (i)the financing scheme for the
Project, under which some expenditures would be paid at the National Government level through the

15
DGUFI. Even though the DGUFI i s well organized and has experience from previous projects, it would
benefit from the provision of technical assistance to coordinate actions at the operational level regarding
both national and provincial line departments; and (ii) the strengthening o f the fiduciary capacity at some
o f the weakest provinces that would be required for the province to participate in the project. The DGUFI
would provide administrative and financial management support to the project and would be responsible
for all payments originated at the Federal Government level directly to providers, contractors and
consultants including the transfers made to the Provincial level and Rural School Clusters. The
Provincial Government level would be responsible to contract and directly pay contractors and
consultants hired by them. The DGUFI would have the main function in this case o f consolidating the
financial management information, and supervising the use o f project resources according to the project
objectives and the financial planning.

The Project’s Operational Manual would include procurement, disbursement, in-kind contribution,
financial management and internal control procedures and processes The DGUFI’s and the initial selected
provinces’ financial management capacity i s in the process o f being strengthened with the support o f
technical staff. The financial statements o f the Project would be audited annually by the Comptroller
General (AGN). The DGUFI would be responsible for collecting financial management data, accounting,
reporting, and ensuring external auditing o f all project-related expenditures. Annual audit reports would
be completed by AGN, and forwarded to the Bank within six months o f the end o f each fiscal year. The
Project financial statements audits would be conducted following national audit standards compatible
with International Organization o f Supreme Audit Institutions (INTOSAI). The Project would have
external audit arrangements for the central Government and all provinces, which would j o i n the Project,
under the responsibility o f AGN. This arrangement requires that external auditors would provide a
traditional independent audit jointly with the support o f the MECyT internal audit unit in order to provide
technical assistance during the fiscal year. The Project incorporates the Bank’s new policy on eligibility
for Bank financing. T o implement the policy, the Country Financing Parameters for Argentina were
approved by the LCR Regional Vice President in M a y 2005.

A special account (SA) would be required to transfer resources from the Bank based o n the requirements
to be made by the Government. The Bank would finance up to 90 percent o f the project total expenditures
effectively made by the project. Loan proceeds would be disbursed at a rate o f up t o 90 percent to cover
the cost o f goods, works, services and flat recurrent costs required to implement the bilateral agreement.
The terms and conditions for the advance o f finds from the S A to the provinces would be agreed in each
bilateral agreement. The Bank would monitor the Government o f Argentina’s assessment o f the
institutional performance o f each participating Province for the purpose o f adjusting the size o f the
advances in the future. As it i s customary in Argentina, the Government would open a SA, as a revolving
bank account to pre-finance project expenditures for all components and would request reimbursement for
the Bank’s share o f the financing. Requests for reimbursement would be submitted to the Bank o n the
basis o f Statements of Expenditure (SOEs). Resources would be transferred from the W o r l d Bank t o a
Ministry o f Finance transitory Bank Account at the B I S Bank in Base1 in dollars. The Bank would
disburse to the Government based o n transaction-based disbursement requests sent by the DGUFI.
Resources would be transferred from the W o r l d Bank to a special account open at the Banco de l a Nacion
Argentina in dollars. An operative bank account in pesos would be also open at “Banco de l a Naci6n” o n
the name o f the DGUFVMECyT t o manage resources transferred f r o m the SA.

An assessment o f the procurement capacity was carried out for the implementing agency DGUFI and for
one of the Provinces that would be responsible for the implementation o f the sub-projects (Province of
Misiones). The overall procurement r i s k i s assessed as AVERAGE. In order to mitigate risks, special
procurement provisions are being included in the Loan Agreement and a Procurement Action Plan has
been agreed. DGUFI would organize a procurement team consisting o f at least one senior procurement
specialist and two junior procurement specialists, all o f them should be already familiar with the Bank’s

16
procurement guidelines, documents and procedures. This team would assess the implementing capacity
o f the selected provinces and determine the level o f risk involved in the case o f each beneficiary Province
using a methodology acceptable to the Bank. The team would establish an Excel-based information
system to monitor project and procurement progress.

4. Social

The national program supported by this project has been discussed widely with civil society. There are n o
controversial social issues associated with this project. A brief summary o f the consultations i s presented
in Annex 10 in connection with the support being provided under the project for education in rural areas
where student beneficiaries include those from indigenous families, mainly in the NEA and NOA regions
o f the country. The Indigenous People’s Development Plan (IPDP) i s presented in Annex 10 and has been
duly discussed and divulged in accordance with Bank disclosure policies.

5. Environment

This Project does not support the large-scale construction o f new schools. However, the project does
include c i v i l works activities in general o f a small scale for the repair and rehabilitation o f existing
schools. In the case that provinces do undertake such construction activities, they would undertake
preventive measures to limit environmental damage. A template o f environmental guidelines to be used in
possible construction contracts has been presented to the Bank; and these guidelines would be included as
part o f an Environmental Management Framework (EMF) in the Operations Manual for the project.

6. Safeguard policies

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment (OP/BP/GP 4.0 1) [XI [I
Natural Habitats (OP/BP 4.04) [I [XI
Pest Management (OP 4.09) [I [XI
Cultural Property (OPN 11.03, being revised as OP 4.11) [I
Involuntary Resettlement (OP/BP 4.12) [I
Indigenous Peoples (OD 4.20, being revised as OP 4.10) [XI
Forests (OP/BP 4.36) [I [XI
Safety o f Dams (OP/BP 4.37) 11 [XI
Projects in Disputed Areas (OP/BP/GP 7.60) [I [XI
Projects o n International Waterways (OP/BP/GP 7.50) [I [XI

The National Program for Rural Education supported by the Project i s associated with a program o f
intercultural and bilingual education (Programa de Educacidn Intercultural Bilingiie or PEIB) for
indigenous groups in Argentina, about 50 percent o f w h o m live in rural areas. There are approximately
500,000 indigenous people in Argentina, including the following ethnic groups: Collas, Chiriguano-
ChanC, Chulupi, Diaguitas-Calchaqui, Huarpes, Wichi, Mocovi, Pilagh, Toba, Mbya-Guarani, Mapuche
and Tehuelche. Annex 10 includes a presentation about the status o f education regarding indigenous
populations in Argentina and discusses the support o f the project to the education o f children in
indigenous communities living in rural areas. The IPDP i s also presented in Annex 10 and has been duly
discussed and divulged in accordance with Bank disclosure policies.

7. Policy Exceptions and Readiness

N o policy exceptions are expected.

17
 Annex 1: Country and Sector o r Program Background
Argentina: Rural Education ImprovementProject - PROMER

Significant strides in educational attainment: Argentina’s education sector has made great strides in
the past four decades, and represents the highest average level o f education in the region.

United
Year Argentina Brazil Chile Mexico Uruguay Korea Canada Greece Italy Portugal Spain
States
1960 5.3 2.9 5.2 2.8 5.4 4.3 9.1 4.8 4.7 1.9 3.7 8.5
1965 5.5 3.0 5.0 2.9 5.1 5.4 8.8 5.1 5.0 2.4 3.8 9.1
1970 6.2 3.3 5.7 3.7 5.7 4.9 9.1 5.4 5.5 2.6 4.8 9.5
1975 6.3 3.0 5.6 3.9 6.2 6.6 9.8 5.9 5.7 2.8 4.7 9.7
1980 7.0 3.1 6.4 4.8 6.2 7.9 10.3 7.0 5.9 3.8 6.0 11.9
1985 7.1 3.5 6.7 5.2 6.9 8.7 10.8 7.3 6.2 3.9 5.8 11.6
1990 8.1 4.0 7.0 6.7 7.1 9.9 11.0 8.0 6.5 4.9 6.4 11.7
1995 8.5 4.5 7.3 7.0 7.3 10.6 11.4 8.3 6.9 5.5 6.8 11.9
2000 8.8 4.9 7.6 7.2 7.6 10.8 11.6 8.7 7.2 5.9 7.3 12.1

Increasingincome inequality:The increase o f educational attainment shown in the above table contrasts
markedly with the distribution o f income in the past three decades or so. Data are available only for
Greater Buenos Aires, but it i s remarkable that the Lorenz curve for income shown in Figure 1 has kept
-
Figure 1: Lorenz Curves Distribution of Equivalized Household expanding outward. The Gini
coefficient for the distribution o f
household per capita income increased
f r o m 34.5 in 1974 to 53.8 in 2002,
while the poverty headcount ratio
increased from around 5 percent to
more than 50 percent in the same
period. In “Argentina’s Distributional
Failure: The role o f Integration and
Public Policies”, by Leonard0
Gasparini, National University o f L a
Plata, C E D L A S Working Paper # 1,
Sept. 2003 (source o f Figure l), the
- - 19w .... m e -m-~soz - . -+ -sow
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.D 1
-isn author claims that there are n o
countries in Latin America and the
Caribbean that experienced such dramatic changes in the income distribution. Education i s often posited
to be the engine o f reducing social inequality, which makes eminent common sense-absent significant
physical asset redistribution, education potentially affords children from poor or relatively less well-off
families to acquire skills that would, in principle, help them to overcome their disadvantage at birth.
However, in Argentina over the past few decades, as the average educational attainment grew, the
inequality also grew dramatically. In order to understand this mystery, it i s important to l o o k at
productivity, since the link between education and incomes comes through productivity.

18
Contribution o f Human Capital to Productivity: The simplest evidence regarding the link between
human capital and productivity can be obtained by an empirical estimation o f a Cobb-Douglas production
function. Using data from 1991 from
155 countries, H a l l and Jones
analyzed the patterns o f output per
worker, using the United States as a Due t o Due t o
standard. Output per worker i s differences in differences in
regressed on a measure o f physical Output per Physical Human Residual
capital and human capital and the Worker Catital CaDital Differences
residual i s attributed t o productivity United States 1.00 1 .oo 1.oo 1.oo
that cannot be measured directly. Norway 0.76 1.20 0.91 0.70
Table 2 presents an excerpt o f the data Canada 0.94 1.oo 0.91 1.03
for a subset o f countries with a focus Hunparv 0.3 1 1.12 0.93 0.29
on the example o f Argentina. The Poland 0.241 1.281 0.801 0.24
table shows that the output per worker Ireland 0.58 1.051 0.771 0.71
in Argentina was 42 percent o f that in Argentina 0.42 0.951 0.681 0.65
the US., about the number that could
be expected for a middle-income
developing country. Workers from
Argentina have 68 percent o f the Human Capital o f the numeraire U.S. worker, so the years o f attainment
(used to measure Human Capital) does not quite explain the large difference in overall productivity, and
the difference in the residual i s closer t o Ireland than the Eastern European countries. It i s probable that
the productivity difference i s due to differences in educational quality, and due to the distribution o f
educational attainment within the country.

Low educational quality and skewed distribution: The Program for International Student Assessment
(PISA) provides a very useful understanding o f educational quality benchmarked to an international
context. -The data for the PISA assessment
Figure 2: C D F o f PISA Test Score 2000: Selected Comparison
for mathematics provides a revealing
700 picture. Considering mathematics scores, if
w e arrange the participating countries by the
600
average score, Argentina, with a score o f
500 388, comes in at the eighth from the bottom
amongst 43 participating countries. The
400
average scores range from a high o f 564
300 (Netherlands) to a l o w o f 292 (Peru), with
200
the average o f country averages being 473,
indicating that Argentina's score i s much

20 40 60
1 80 100
below the average. I t i s more interesting to
note that if the countries are ranked
according to the difference in average scores
o f the top 5 percentile and the bottom 95
percentile, Argentina's rank falls precipitously, second f r o m the bottom, with only Israel showing higher
inequality. The cumulative distribution function (CDF) comparing some countries makes this point
vividly-the top 20 percent o f students in Argentina (third line going down from the top) score more than
500 points, The second line from the top i s USA, and it crosses the 500 mark at about 60 percent -
meaning that 60 percent o f the students in U S A scored less than 500. Thus, 20 percent o f Argentine
children scored better than 60 percent o f children in the U S A . If w e imagine taking these 20 percent o f
Argentine children to the United States, a country with four times the per capita GDP in PPP terms (it
would be 8 times in terms o f nominal exchange rates), they would be doing better than the median U S
child, or alternatively, they would be performing much better than other groupings o f similar size in the

19
U S A . At the same time, at the bottom end o f the distribution, Argentina crosses over to be below Chile
and Peru. In Argentina, therefore, the high performing students do much better than at least the general
regional pattern, and the l o w performing students do much worse.

Nexus between Equity and Quality: Figure 2 above shows only the distribution o f the test scores and
not incomes. However, there i s a close correlation between student achievement and family background
and income. A recent Bank report (“Building a Skilled Labor Force for Sustained and Equitable
Economic Growth”, W o r l d Bank 2005) reports from a regression analysis o f three different kinds o f test
scores, including the PISA, the Progress in International Reading Literacy Study (PIRLS) and the
ONE, Argentina’s own national standardized test. The authors also used multiple measures o f household
resources, including household income. The authors report “Consistent with prior research on the factors
associated with learning in Argentina and in other countries, our analyses also find that family
background i s closely related to student achievement. Parental education i s strongly associated with
student achievement in all three assessments. Children o f better educated parents, have higher scores, on
average, in all three assessments evaluated for this report. This consistent result indicates that
intergenerational mobility in educational attainment and quality remains a challenge.”

Regional Disparities: There are significant disparities in terms o f access to pre-school education and to
EGB3 or lower secondary education. Primary Education (EGB1 & 2) has universal coverage, though this
level i s plagued by problems o f inefficiency. The table below shows the coverage across the provincial
jurisdictions and by urban and rural areas within a Province. Note the l o w figures for coverage o f Pre-
School (age 5 years) in some provinces, such as the 44.6 percent coverage in rural areas o f Chaco. In the
age-group o f 12 to 14 years, corresponding to EGB3, the figures showing coverage in the seventies and
eighties in percentage terms correspond to the poorer N o r t h Eastern and N o r t h Western Provinces.

20
 Table 3: Coverage o f the Education system b y Urban and R u r a l Areas across Provinces.

Bicentenary Goals: Argentina celebrates i t s second bicentenary in the year 2010, and has proposed to
meet ten simple but strategic educational goals that are drawn from the Millennium Development Goals
(MDGs) and the Dakar goals o f Education For All (EFA). The bicentenary goals are as follows:
Enrollment o f the population o f 5 years o f age into schools throughout the country. Fifty
percent o f children between three and four years old enrolled into pre-school level.
Guarantee a minimum o f ten years o f compulsory schooling for Argentine children and
youth. Aim for 30 percent o f EGB students accessing full-time school.
Move forward towards universal access to secondary education, including young people
who are out o f school and helping them complete their studies.
Improve teachers’ labor and salary conditions, contributing to giving prestige t o teaching
as a career.
Expand the incorporation o f information and communication technologies in an
increasing number o f establishments and move forward towards a universally taught
second language.
Improve the quality o f the national education system, guaranteeing a 100 percent
achievement o f the Core Learning Priorities (NAP) by EGB students
Eliminate illiteracy throughout the country.

21
 Guarantee equipment and modernization o f technical schools and the necessary
pedagogical transformations in order to reach the federally agreed quality standards for
competency-based national certifications o f technical and vocational education.
Strengthen democratization, quality, innovation and relevance o f higher-level education.
Give prestige to science and technology research, guaranteeing the goals proposed for the
Science and Technology Pluri-annual Plan approved by the Cabinet Committee o n
Science and Technology (GACTEC).

Increased Educational Expenditures within an accountability framework: In order to meet these

goals, the Government has proposed legislation that seeks to increase the amount o f public expenditure on
education from 4.2 to 6 percent o f GDP, distributed between the National and Provincial Governments,
with the National Government potentially contributing 40 percent and Provinces potentially contributing
60 percent o f the increment in expenditures. The proposed changes in the framework o f educational
financing would include the linkage o f incremental resources for education to three factors regarding each
Province: (i) actual enrollment (a weight o f 80 percent); (ii) contribution o f rural to total enrollment (a
population o f 3 to 7 year children out o f school (a weight o f 10 percent).
weight o f 10 percent); and (iii)
The proposed project i s but a small part o f the overall picture regarding public educational expenditures
and the associated reforms. The project would make federal resources available to Provinces for rural
education, with Provinces contributing resources in terms o f teachers’ salaries.

The MECyT makes grant transfers that averaged US$550 million to provinces for non-university
education. The Ministry o f Education (MECyT) has spent an average o f US$1,500 million per year
between 1995 and 2005. Of this expenditure, approximately US$550 m i l l i o n or AR$1,600 million i s for
non-university expenditures that are spent as federal grant transfers to provinces, as shown in Table 4
below. In the table, the entry for FONID refers to the Incentive Fund for Teachers (Fondo de Incentivo
Docente) that i s a federal supplement to the provincial salaries o f teachers. Other federal transfers are for
quality and compensatory programs. The M E C y T budget between 2004 and 2005 increased by 17 percent
after a drop o f 40 percent between 1999 and 2004. An increase in 2006 similar to the magnitude for 2005
i s foreseen.

Table 4: Federal Education Expenditures (MECyT): 1995 - 2005

Source: MECyT; * Figure for 2005 shows programmed expenditure

Provinces in the North East and North West that represent the greatest education deficit are the
ones that are most dependent on Federal Co-participation Transfers: Table 5 shows the provinces
arranged in descending order o f dependence o n National Transfers. The provinces at the bottom o f the l i s t
are the very NEA and NOA provinces that have the greatest deficit in terms o f provision o f educational
services as shown in Table 3. These are the poorer provinces in the country, and their l o w revenue

22
collection i s strongly linked to the lower level o f economic activity. The table shows that only a few o f
the provinces escape the dependence on national transfers. Other than the City o f Buenos Aires, this
includes the Patagonian provinces that receive o i l revenues. This regional inequality in Argentina i s very
important when it comes to considerations o f national expenditures for education-the capacity o f the
most needy provinces to raise their own revenues may be very limited in some cases, and even the not so
needy provinces in the Pampa region (Entre Rios, Santa Fe, C6rdoba) and the Cuyo region (Mendoza,
San Juan, San Luis, L a Pampa) are dependent on national transfers. The case o f the Province o f Buenos
Aires i s completely unique and i s not discussed further here, except to say that the project does not intend
to make large transfers to this Province.

Table 5: Provincial Dependence on National Transfers (Year 2003)

In thousands of pesos
I
own
I

Total Receipts (Own Provincial Provincial own

Jurisdiction Revenues + National RevenuedTotal
Revenues
Transfers) Receipts

Ciudad de Buenos Aires 3,988,452.81 3,498,597.88 87.72

Neuquen 1,802,800.74 1,410,542.93 78.24
Chubut 1,048,651.24 669,916.58 63.88
Santa Cruz 1,259,455.88 791,760.22 62.87
Buenos Aires 11,345,998.71 6,573,742.00 57.94
Mendoza 1,790,952.89 925,447.79 5 1.67

Chaco 1,158,405.49 174,35 1.OO 15.05

Corrientes 864,803.53 111,550.50 12.90
Jujuy 755,741.73 92,625.83 12.26
L a Rioja 674,760.49 60,282.45 8.93
Formosa 778,671.65 59,432.4 1 7.63
TOTAL 41,846,870.3 1 19,388,120.62 46.33

Federal transfers are in principle based on non-discretionary rules, but in practice significant
discretionary elements have entered into the picture: Table 6 shows the provinces arranged in
descending order o f the provincial per capita income. It can be seen at a glance f r o m the table, comparing
the first and last column of numbers in the table, that there was n o clear compensatory pattern to transfers,
though provinces with high per capita income are not necessarily richer in terms o f the population o f poor
or those in greater need o f social services. The simple correlation coefficient between the two columns o f

23
co-participation transfers and provincial per capita income i s -0.22; however, if the r o w o f the City o f
Buenos Aires i s excluded, the correlation coefficient becomes +0.22.

Table 6: Compensatory Effect of National Transfers: Average Annual (1994-2000)

Source: Mezzadra and Rivas, (CIPPEC) 2005; Figures are in current pesos o f the period.

High Inequality in Public Expenditures per Student: Table 6 shows the inequality in availability o f
public resources across the provinces in Argentina, that i s in large part a product o f the historical
development o f Argentina. Next, the correlation between total resources and education expenditures i s
presented in the graph below.

24
 Figure 3: Per Student Expenditurescompared to Province Total Fiscal
Resource per Capita
Expenditure per Student (Current Pesos, Av. Annual for 1994-
*'O0' 3,000 1

2,500

2,000

1,500

1,000

500 -

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Total Fiscal Resources per Resident of Province

Whereas Table 6 and Figure 3 deal with general transfers per capita and consolidated education
expenditures per student respectively, i t i s useful to examine the incidence across provinces o f specific
transfers in educational programs directed through MECyT. Table 7 shows that there i s s t i l l a positive
correlation between provincial education per spending and national transfers (the value o f the correlation
coefficient, not shown in the table, i s 0.27). Given the inequality alluded to earlier regarding provincial
spending, if the national transfers had been perfectly compensatory, there would have been a negative or
at least an absence o f a positive correlation between the two amounts. I t should be noted that even though
it may not be so good for inter-provincial equity; the more positive the correlation, from a point o f view
o f encouraging fiscal effort from the provinces, the less tendency there would be for national crowding
out o f provincial expenditures.

25
 Table 7: Comparisons of Education Spending per Student and
National Educational Programs

Source: CIPPEC, 2005; Figures are in current pesos o f the period.

Table 7 shows that for a child born in NeuquCn or Santa Cruz, the State spends AR$2,000 or AR$2,800
on one year o f education, and for a child born in Misiones or Chaco, this figure i s around AR$800. The
differences in expenditures are related t o differences in teacher salaries, and in the number o f teachers
employed, and to a lesser extent on non-wage expenditures. The wage bill accounts for roughly 90
percent o f expenditures. Does a higher paid teacher necessarily mean a better quality o f education? This i s
a difficult question to answer, but an interesting analysis reported by Mezzadra and Rivas i s that there was
an inverse correlation between the days lost to teacher strikes and the average teacher salary. In addition,
there i s a strong correlation between higher paid teachers and the presence o f auxiliary or support services
to teachers and non-salary expenditures. In general, the conclusion reached by the various authors who
have examined public educational expenditures in Argentina’s federal and decentralized environment i s
the following-there are important differences in the general fiscal effort made by provinces and in the
distribution o f provincial fiscal resources for education as compared t o other areas o f expenditure, and
reforms should be made to encourage greater provincial fiscal effort, in general and for education in
particular. At the same time, the margin for improvement within the envelope o f the existing pattern o f

26
distribution o f resources across provinces would not be sufficient to address the disparities in educational
opportunity, and there i s a need for transparent and non-discretionary transfers f r o m the national
Government to address the fundamental or structural inequalities.

Solving the problem of inequality and inefficiency in expenditures through tied and matching
transfers from the Federal Government: The policy response o f the Federal Government i s to make a
marginal effort at change, provide earmarked fiscal resources for education t o provinces, follow
principles o f transparency and provide adequate attention to issues o f accountability for the expected
results. The project seeks to serve as an example o f h o w the national Government can provide direct
assistance to provinces to improve the quality o f educational services in the area o f rural education, while
at the same time encouraging provinces to take ownership o f the program and to increase their o w n
commitment to the educational sector. The use o f multi-grade instruction implies a lower need to hire
more teachers as compared to the standard model o f one teacher per section. Project interventions to
reduce repetition, overage and drop-out in rural areas would result in more students being retained
productively in the educational system. In this way, the project would not lead t o a worsening o f the
situation regarding efficient teacher deployment, and may even lead to marginal improvements. However,
the project i s not going to solve the general problem o f inefficiencies in teacher d e p l ~ y m e n t . ~

A series of schematic maps provides a graphic demonstration of the distribution of education gaps
in Argentina’s rural areas. I t i s estimated that roughly 140,000 children in rural areas do not have
access to pre-school and EGB3, with 70 percent o f those out o f school belonging to NOA and NEA.
There are approximately 714,000 children in rural areas in EGBl and EGB2, with 38 percent o f those
children being overage, compared to 23 percent for urban areas. The rural EGBl and E G B 2 enrollment
from the NOA and NEA provinces accounts for nearly 60 percent o f the total rural enrollment for the
country, even though NOA and NEA represent only about 20 percent o f Argentina’s population. The first
map shows the geographical area o f provinces, that appears similar in shape to the familiar geographical
map o f Argentina. The second map shows the distribution o f the population across provinces, with the
city o f Buenos Aires and the Province o f Buenos Aires distorting the geographical map owing to their
huge populations. The third map shows the rural students in school, which indicates the influential weight
of the NOA and NEA provinces. In the last map, showing gaps in rural coverage, the distortion i s
completely towards the NOA and NEA provinces.

4 This problem does n o t appear as serious when the provincial distribution o f teachers in the NOA and NEA
provinces i s considered. The national average o f students per teacher i s 16 at the EGBl and 2 levels, w h i c h i s l o w
compared t o international standards. However, a number o f those classified as teachers are in fact administrative
staff rather than teachers, and a l l the NOA and NEA provinces are above t h i s national average, with the exception of
Catamarca, that comes in with 15.8 students per teacher.

27
 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
Argentina: Rural Education ImprovementProject PROMER -
Sector Project Last supervision ranking (ISR)
World Bank financed Projects Implementation Development Objective
Progress (IP) PO)
1. Energy and Renewal Energy and S S
Mining Sector Rural Markets
(P006043)
2. Health Sector Maternal and Child S S
Health (P006959)
3. Education Sector Prodymes IIIA S S
(Province o f Buenos (PO646 14)
Aires)

Other Agencies’ Proj cts

3. Improving the M E C y T - IDB Loan The Program supports provinces in the
Education System 1345/0C AR improvement o f quality, equity and efficiency
Program in the education system and the development o f
an active citizenship, thus contributing to
diminishing social inequality through an
increase in enrollment rates, helping youth-at-
risk t o fulfill their educational needs. These
objectives are oriented towards reaching full
secondary school coverage, increasing average
years o f schooling, improving academic
performance and efficiency regarding
provincial education spending.
Target population: public middle schools o f
urban and marginal areas.
Duration: 5 years.; Amount US$l,OOO million
4. Equity in MECyT- European The Equity in Education Integral Project (PIIE)
Education Integral Commission i s a national program to strengthen primary
Project urban educational institutions with children in a
social vulnerable situation in the country. T h i s
Program has formulated a series o f goals and
actions that are part o f the MECyT’s overall
strategy including: inclusion and rights, the
right to education and the principle o f equal
opportunities for all.
Duration: 5 vears: Amount USs12.5 m i l l i o n

30
 Annex 3: Results Framework and Monitoring
Argentina: Rural Education Improvement Project PROMER
PDO
To support the National
Educational Policy in i t s
efforts to improve the a)
coverage; b) efficiency; c)
quality; and d) governance o f
the Argentine Education
System.
* Impact Evaluation Studies refers to the studies o f results obtainec k o m the interventions o f the
project.
Outcome Indicators
Coverage [Improving
coverage o f Pre-School
Education and EGB3 in rural
areas o f Argentina]
0 Efficiency [Improve
Promotion Rate and reduce
Overage Enrollment and
Drop-Out Rate at the EGB 1
and EGB2 levels in Rural
Areas]
Quality[Improve the
Percentage o f Students in
Rural Schools achieving
Proficiency on NAP]
Governance[Bilateral
Agreements between
National and Provincial
Governments in Satisfactory
Execution; Annual Plans
regarding Educational
Statistics and Impact
Evaluation Studies* in
satisfactory execution]
31
-
Use of Outcome Information
Information from the successes
and failures o f individual
project interventions will be
fed back into ongoing
implementation o f the project
and in other areas o f national
educational policy.
An important intervention o f
this project i s that information
about the progress o n
implementation or lack o f it
needs to be fed back at various
implementation levels. Thus,
wherever feasible, indicators
would be made available at
various levels o f
disaggregation - schools,
clusters, districts and
provinces.
The lack o f timely information
o n indicators in the process o f
Bank Supervision would
immediately result in an
unsatisfactory implementation
flag being raised. A s long as
such a flag i s noted, the Bank
would not provide any no-
objections that may be
required, regardless o f the
particular merits o f each case.

Component A: Improving (
Results
1, School coverage at the
Preschool level for 5 year
olds in rural areas.
2. School coverage in EGB3
level in rural areas
3 . Improvement o f internal
enrollment flux between
EGB 1 and 2 and within
EGB 2
4. Improvement in Student
Achievement
dion
~
iality and Coverage o f Rural Edul
Results Indicators Use o f Results Monitoring
Enrollment o f 5 year old children The results would f o r m part o f
in rural areas. the Provincial and National
agreements, with annual
Promotion Rates for Grades 7 to follow-up.
Grade 8 in rural areas
Promotion Rates in Grades 1
through 3
Extreme Overage (2 or more years
Overage) Enrollment Rate and
Overage Enrollment Rate for
EGB2 [Measured in Percentage
o f overage children over total
enrollment for EGB21
Proficiency in the NAP (Priority
Learning Core) measured in Grade
3 and Grade 6
32
Component B: Enhancing Ste zrdship Capacity of National Govern lent
Intermediate Results
1. Improvement in the timely
availability o f educational
statistics that would be used for users.
project monitoring.
2. Standardized National
Assessment Tests (ONEs)
sample extended and specially
designed student achievement
tests (in alternate years)
regarding the meeting o f NAP
in rural schools in Grade 3 and
in Grade 6.
statistics to schools.
4. Capacity building o f
Provincial Jurisdictions
regarding compilation and use
o f educational statistics.
5. Implementation o f Impact
(Output) Evaluation studies
and dissemination through
seminars.
6. Strengthened capacity o f line
units at the national and
provincial levels.
Results Indicators Use o f Results
Monitoring
Database with indicators established This component seeks to
and online access provided to eligible ensure that a) monitoring
and evaluation o f the
core interventions o f
Project Component A are
~~ ~
Test instrument needs to be
developed, pilot tested, and applied in working effectively and
alternate years. During life o f this efficiently; b) progress i s
project, test should be implemented at achieved in reducing
least twice; once at the beginning o f parallel structures due to
the project; and again near the end o f existence o f a Bank-
the project with compatibility financed project, and to
between the two applications. ensure that the project i s
Sample Size should be sufficient for mainstreamed as an
inferences to be drawn regarding integral part o f the
schools and rural schools by Province National and Provincial
administrative setup.
Complementary instruments to the
ONEs would include additional
modules for Rural Schools.
Implementation o f school-level
projects for the use and dissemination
o f educational information; and
impact evaluation study at project
comdetion.
Institutional Capacity Assessments to
be carried out and Technical
Assistance provided.
Number o f Impact Evaluation Studies
carried out and number o f seminars
held (national and provincial).
Quality Standards regarding different
administrative procedures connected
with fiduciary matters (Procurement,
Financial Management, including
audits) t o be set up and monitoring o f
those standards to be performed at
least twice a year.
33
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 Annex 4: Detailed Project Description
Argentina: Rural Education Improvement Project PROMER -
Component A: Improving Oualitv and Coverage of Rural Education (US$234.85 million;
US$144.79 million Bank financing)

Objective: The objective of this component i s t o support improvements in quality and coverage
o f rural educational services in the country.

This component would support improvement in rural educational services through the National
Program for Rural Education approved by the National Council o f Education Ministers o f
Argentina in 2004. T h e component would finance the development and application o f
pedagogical and organizational models that are appropriately tailored for the particular social,
cultural and economic context o f rural households. Activities in the provinces would be
imbedded in the provincial education policy formulated around specified coverage and quality
targets, The National Program for Rural Education (NPRE) would be executed through signed
Convenios-or bilateral agreements-between the national and provincial Governments.

The NPRE assigns resources to all provinces, with priority to those where the coverage and
quality gaps are the greatest. The distribution o f resources among the provinces would be based
o n the percentage o f rural population and the percentage o f households with unmet basic needs in
the province; detailed criteria would be defined in the Project Operations Manual. The main
purpose o f this approach i s to use a more equitable mechanism t o link the federal resources to the
needs o f provinces, and contribute to redress the high level o f disparity in educational spending
across Argentine regions.

Component activities: This component has three broad sets o f activities-each supporting a
different objective. The first set o f activities (A1 below) covers activities directed at rural basic
education in general, without a specification o f the particular education level that would benefit,
The second set o f activities (A2 below) includes activities that are aimed at specific education
levels, ranging f r o m pre-school through to lower secondary or EGB3. The third set o f activities
(A3 below) would provide technical assistance for strengthening line departments at the
provincial level and capacity building o f provincial jurisdictions in the use o f information systems
through specific ‘information projects’ in each province to monitor the performance indicators o f
rural schools.

Implementation arrangements: This component would use a two-pronged implementation

strategy: (i)the first part o f the strategy refers to the implementation o f activities that would be
part of the convenios to be signed by the provinces, but for economy o f scale would be purchased
at the national level and distributed to the province accordingly. This category includes: (a) the
provision o f didactic materials, training materials and learning modules, (b) equipment--
television, computers, and also transportation costs; and (ii) the second part o f the strategy would
include activities that would be executed directly by the provinces and schools with resources
transferred by the national level. Each provincial plan would include all the Project activities that
would benefit the education in the province, even those directly developed by the national level.
Investments directly operated by the provinces would constitute Provincial Sub-projects.

Financing: This component would finance: textbooks, workbooks, student and teacher guides,
reference books, audio-visual material, science and technology equipment and material, sports
and didactic games. The activity would also include technical assistance t o ensure that the

36
materials w o r k together with training and other inputs so that the materials would be used
effectively and efficiently.

Sub-component A l : Improving Operating Conditions of Rural Schools (US$117.79 million;

US$106.01 Bank financing)

This sub-component covers four activities that are common to all levels o f compulsory
education-Pre-School, EGB 1, EGB2 and EGB3 and special support for indigenous education:

Provision of basic didactic materials and teaching equipment: Didactic materials would
include textbooks, workbooks, student and teacher guides, library books, reference books, school
supplies, audio-visual materials, science and technology equipment (computers and televisions)
and software; and sports and didactic games. Each year, the quantity and type o f didactic
materials for the different levels and modalities o f education levels would be indicated through
the bilateral agreements. The didactic materials would be selected takmg into consideration the
NAP (Nzicleos de Aprendizaje Prioritarios).

Minimum School infrastructure standards: This activity would target schools located in
regions where the problem o f dilapidated infrastructure and lack o f water and electricity supply
are greatest. This activity would finance: (a) construction o f classrooms t o absorb additional
enrollment; (b) replacement o f dilapidated schools and rehabilitation o f school facilities; (c)
furniture; and (d) and school maintenance costs. A basic standard for school infrastructure has
been developed by the MECyT, which i s also carrying out a survey o f actual conditions o f all
rural schools in the country. T h i s activity has already been implemented for some 1,000 schools
using project preparation funds fkom a P H R D grant. The survey methodology includes the use o f
Geo-Positioning Satellite or GPS locators and digital images o f both the inside and outside o f
buildings. The minimum infrastructure standard assumes that as prerequisites o f schooling, a
school should have a set o f inputs (materials, furniture and equipments). Thus, a school operating
at minimum infrastructure standards i s one that i s considered minimally capable o f providing
satisfactory conditions for student learning. Another item t o be addressed by this activity i s the
provision o f electricity in the schools. The provision o f electricity in school buildings in many
rural areas in Argentina has been made possible through PERMER, a federal program o f
alternative energy sources for rural areas. Depending on the specific situation, this project activity
would support the provision o f electricity to schools not attended by the PERMER program. T o
preserve the quality o f the school infrastructure in the rural areas, school maintenance activities
would be implemented through the establishment o f a Rural School Maintenance Program, which
would finance the schools’ maintenance costs.

Establishment of Clusters of Rural Schools: T o facilitate local organization and management,

this activity would support the establishment o f school clusters. These clusters would operate as a
support system for teachers in isolated areas and would increase the exchange o f experiences in
the rural areas. A cluster o f rural schools would group, more or less, ten schools. The cluster
would provide space for dealing with a common set o f problems while at the same time
generating economies o f scale in core fimctions such as educational planning, training and
management o f didactic materials, teaching equipments, and financial resources. This activity
would finance: (a) technical assistance; and (b) operational resources for the formation and
functioning o f clusters. Implementation arrangements for the cluster activities The provincial
jurisdictions would assign coordination functions for the cluster to selected supervisors. This
supervisor would ensure coherence and continuity o f activities among the schools that belong to a
cluster. The supervisor selected, who should have prior experience as a rural school teacher
and/or school principal, would be responsible for (a) resource management, (b) identifying

37
teacher professional development needs in consultation with each school principal and teachers,
and (c) organizing the cluster meetings.

Distance education through the Education TV Channel: This activity would support the
supply o f technological tools to permit schools and students to receive the TV programs
developed by the national Education channel. The component would finance: (a) technical tools
to connect the school TVs with the satellite; and (b) operational costs related to this activity. In
order to execute this activity, a specific agreement on technical issues i s required, which the
M E C y T would present to the Bank.

Indigenous Education: T h i s activity would support the development o f actions to increase

awareness o f the cultural diversity existing in the rural communities and knowledge o f the
traditional language and culture o f the indigenous population. This activity would finance: (a)
technical assistance and consultant services for the preparation o f school development plans; (b)
training o f the members o f the community who would support the development o f literacy
programs and development o f institutional projects, (c) training programs for schools developing
indigenous education programs; and (d) school development plans. The school development
plans would be designed and evaluated by the school members and other members o f the
community.

Sub-component A2: Expanding Coverage and Improving Student Promotion Flow

(US$106.46 million; US$29.17 Bank financing)

This sub-component would support the development o f four activities, each o f which corresponds
to a particular education level @re-school, EGB1, E G B 2 and EGB3):

Expanding coverage for pre-school education: This activity would support the extension o f
pre-school programs in the rural areas through the development and application o f multi-grade
pre-school models. Several alternative models have been adopted by the provinces in the
provision o f pre-school services to children in the rural areas. The expansion o f the pre-school
program would be made through the: (a) opening o f classrooms for preschool level, where there a
strong demand for this level o f education services, or the adoption o f “plurisalas,” in which 4 and
5 year olds would attend together; (b) incorporation o f 5 year old children in an integrated
“plurigrado” in the first cycle o f EGB; and (c) establishment o f pre-school activities by specially
trained community agents. The extension o f the model in the rural areas would include the
following: (a) provision o f teacher guides o n activities for pre-school children; and (b) technical
assistance and training programs for teachers. The didactic materials for pre-schools models
would be developed under component A1.

Reducing repetition in EGBl: This activity would promote organizational and pedagogical
actions to prevent dropout and repetition in the first years o f schooling, through a three-pronged
strategy, which includes: (a) the development o f actions to increase the reading ability o f students
in the initial grades, including preparatory activities at the pre-school level; (b) the adoption o f a
three-year learning cycle, as the framework for learning and students’ promotion; and (c)
upgrading the curriculum methodologies for teaching math and other school subjects. T h i s
activity would finance teacher training programs and technical assistance to ensure appropriate
use o f selected educational teaching-learning materials. These teaching-learning materials would
be financed by sub-component A1 (Para. 7.i).

Acceleration program for increasing students’ attainment in EGB2: In most rural areas in
Argentina, at least, 30 percent o f students 11 or 12 years o f age are over-age in relation to the

38
grade, due to repetition, dropout and reentry problems. This activity aims to help these students
catch up academically, and thereby reduce the serious age grade distortion in EGB2, and would
support the implementation o f an accelerated learning program to reduce the impact o f previous
repetitions and t o stimulate the capacity for continuing studies. This activity would finance:
teacher training, teaching-learning materials, school supervision visits, and technical assistance.
In addition, t o help with the schooling attainment o f children and adolescents with special needs,
the program would finance the contracting o f specialists who would develop local-level models
for early detection of special education needs and develop micro planning with specialized health
services. In order to better attend children with special needs and learning gaps, a systematic
support system would be developed for basic education teachers. In order to implement this
activity, four operations would be considered: (a) Development o f learning modules focusing on
knowledge o f the central areas o f the Core o f Priority Learning. This material should allow each
student to gain knowledge o f the curriculum content autonomously and progressively, according
t o hisher own pace and learning skills; (b) Teacher training for the application o f a pedagogical
and didactic acceleration model to follow students’ progress. Teachers would be trained in h o w to
(i) organize the learning sequences for each student,(ii) organize classroom team w o r k ; and (iii)
prepare Complementary didactic sequences, as needed; (c) Pedagogical support for the initial
stage o f implementation to make room for the necessary adjustments and complementary
activities during the first three years o f the application o f the acceleration program; and (d)
Definition of a normative amendment at the jurisdictional level for recognizing and encouraging
the acceleration model and an indication o f the administrative requisites for i t s implementation.

Lower secondary education (EGB3): Schools that belonged to the earlier 7-year primary school
system would be extended to the 9-year EGB system. The problem o f ensuring completion o f all
nine grades o f compulsory education i s larger than merely ensuring that all children in the 8th
grade be enrolled in 9th grade. The statistics on rural schools for the year 2003 reveal that while
there were 67,000 students in the 7th grade, there were 48,000 students in the 8th grade and only
42,000 students in the 9th grade; a net gap o f 44,000 within the same cycle. If w e consider that
there are about 264,000 students in EGB2, the supply gap for offering compulsory schooling at
the EGB3 level i s approximately 100,000. T o extend multi-grade schooling to EGB3, this activity
would support: (a) learning modules for students to be able to w o r k o n their own pace with
regular guidance; (b) textbooks, workbooks/manuals with activities adapted to the rural context;
(c) audio-visual material specifically developed for the rural context; (d) school development
plans; (e) training for teachers to act as tutors for the self-guided activities o f E G B 3 students, and
(9 training o f secondary school teachers who would be itinerant teachers or placed at nodes o f
rural school clusters, or utilize distance learning methods (depending o n specific rural context).

School Development Plans: The School Development Plans would consist o f a set o f
pedagogical and organizational activities to be selected and developed by the school community
(teachers, students and parents) that would contribute to improve the school and the students’
performance. The School Development Plan would be developed by the local community, with
technical assistance from the provincial jurisdiction and the MECyT. A wide range o f possible
activities i s contemplated, with the budgetary restriction o f a maximum o f US$900 per school
over the length of the program. Examples o f activities would include productive activities (such
as a vegetable garden), cultural activities (such as music and dance groups), sports, public health
awareness campaigns and care o f community resources.

39
Sub-component A3: Strengthening Line Departments at the Provincial Levels (US$10.60
million; US$9.61 million Bank financing)

Strengthening Line Departments at the Provincial Level: This subcomponent would support
the establishment and consolidation o f the management capacity o f the provinces in the
implementation o f the project and sustainability o f the education policies and activities after
project completion. The main objective i s to increase the provincial ministries’ capacity in the
following dimensions: planning/information, pedagogical and administrative areas and
monitoring. The l i n e departments at the provincial level would also be strengthened to support
project implementation and operation o f the education system at that level. T o achieve these goals
this sub-component would finance: (i)technical assistance and consultancy services for
supporting the pedagogical, administrative and information areas o f each province; (b) travel
expenses; (c) school supervision services; (d) information system costs; and (e) other operation
costs.

Each province would develop a Provincial Plan of Rural Education. This Plan would be
developed with the technical assistance o f the MECyT. In addition, this activity would design
capacity building processes/procedures/ instruments and training programs at the provincial level
t o train staff members o n the new instruments and procedures for increasing
rnanagementhnforrnatiod monitoring and evaluation o f education policies and service delivery.
These instruments would be defined through agreed protocols with the national authorities
regarding data collection and formatting o f reports to be made available across different
hierarchical levels o f provincial administration, including the schools. The output o f these
information projects would constitute an important tool for monitoring the national-provincial
bilateral agreements, and would include provisions for an independent audit.

Comuonent B: Enhancinp Stewardshiu Cauacitv o f National Government (US$5.35 million;

US$4.83 million Bank financing)

The Project’s support for the National Program for Rural Education uses an organizational model
that does not rely on parallel institutional structures and functions that would owe their existence
only to a Bank-financed project. Project implementation relies o n the existing Government
structures-existing units at the MECyT, at the national level, and at the Provincial ministries o f
education. The Project would finance a large number o f inputs (as provided in Component A
above) under the framework o f the national-provincial Convenio which would establish a broad
accountability framework for the Project. For the accountability framework to function as
planned, the Project would provide assistance for strengthening the pertinent line departments in
the M E C y T .

This component would finance: (i) consultant services and technical assistance to increase the
institutional capacity o f line departments o f the Ministry o f Education dealing with rural
education and information, as well as monitoring and evaluation activities; (ii) equipment; (iii)
travel expenses for supervising the provinces and schools, and other operation costs.

Sub-component B1: Strengthening Line Departments at National Level (US$2.37 million;

US$2.14 million Bank financing)

The institutional assessment o f the MECyT has resulted in the identification o f specific areas that
require institutional building activities for supporting successful project implementation. Since
the Project would support national programs integrally, the requirements at the national level
would be aimed at strengthening the planning, normative, monitoring and evaluation and

40
implementation support activities, with the bulk o f the support being provided t o the departments
at the MECyT, Le., the area o f Rural Education that i s placed within the Directorate o f Curricular
Management and Teacher Training (DNGCyFD); and the area o f Evaluation and Statistics, in the
Directorate o f Information and Evaluation o f School Quality (DNlECE).

Sub-component B2: Monitoring and Evaluation (US$2.99 million; US$ 2.69 Bank
financing)

This sub-component would support the development and implementation o f a system o f data
collection, analysis, dissemination and use o f information for policy decisions at the national,
province and school levels. I t i s expected that the information system would also provide inputs
for future expansion o f Project interventions and for deriving lessons learned for application o f
educational policy areas not covered by the Project. T h i s sub-component would finance technical
assistance, and equipment (computers and software).

This sub-component would develop the following activities:-

(i)Surveys and Impact Evaluation Studies. Financing would be provided for a periodic
survey on the functioning conditions o f rural schools and for initiating a longitudinal
survey o f graduates o f technical schools. Surveys would include those at national and
provincial levels that would evaluate processes and outputs in the course o f Project
implementation, and an impact evaluation o f a general nature to provide insights into the
effectiveness o f public investments in education;

(ii)Student learning assessments. The proposed Project would finance the extension o f
a sample o f standardized national student assessments (Operativo Nacional de
Evaluacihn or ONE) to ensure representation o f rural schools by province. This activity
would also include the monitoring o f progress in the achievement o f the core priorities o f
learning (NAP) and diagnostic information from this assessment to be provided to
individual schools. The monitoring o f progress in NAP would be performed in two ways
- one includes the implementation o f standardized assessment tools for rural schools in
the alternative years when the ONESare not conducted; the second i s the implementation
of testing at the school and classroom level.

41
 Appendix-Annex 4

The following tables provide an indication o f (i) the magnitude o f the system o f rural education
in Argentina, and a comparison between urban and rural education; and (ii)an indicative
calculation o f the distribution o f project resources across provinces, using an index combining the
rural enrollment, the number o f rural schools, the flow bottlenecks and the children outside of
school in rural areas.

Table 1: Representationof Rural Schools within Argentine Education System

Source; MECyT, F r o m Relevamiento Annual 2001 and 2002 and ONE 2000
': Percent o f students who do not enroll in subsequent year. The high percentage for rural schools at the EGBl/2 level
reflects migration between schools rather than complete drop-out from the education system, which can be obtained
from Household Surveys;
- indicates that data were not available.
Table 2: Distribution o f Rural Component Spending and All Public Education Expenditures

Source; Own calculations for Project expenditures; MECyT for Public Education Expenditures 2003

42
The above table shows the distribution o f public educational expenditures across the Provinces, as
compared to the distribution o f resources for Component A. The calculation i s based o n the
distribution o f the student population across urban and rural areas (index o f rurality) and o n the
Percentage o f households with unmet basic needs (NEI). The Operations Manual for the Project
specifies the method used for calculating the distribution o f resources across Provinces.

43
 Annex 5: Project Costs
-
Argentina: Rural Education Improvement Project PROMER

Project Cost by Component Indicative % of Bank % o f Bank

cost Total financing financing
(US$)
A. Improving Quality and Coverage in Rural Education 234.85 98% 144.79 62%

A 1 . Improving Operating Conditions o f Rural Schools 117.79 49% 106.01 90%

A2. Expanding Coverage and Improving Student 106.46 44% 29.17 27%
Promotion F l o w
A3, Strengthening L i n e Departments at the Provincial 10.60 4% 9.61 91%

B. EnhancingStewardship Capacity o f National 5.35 2% 4.83 90%

Government
B 1. Strengthening Line Departments at the National level 2.37 1Yo 2.14 91%

B2. Monitoring
- and Evaluation 2.99 1Yo 2.69 90%
Front-end Fee 0.38 0% 0.38 100%
Total Financing Required 240.58 100% 150.00 62%

44
 Annex 6: Implementation Arrangements
Argentina: Rural Education Improvement Project - PROMER

Introduction

The implementation arrangements for this Project closely follow the principle o f partnership with
the Government in the delivery o f the national programs o f rural education. The implementing
agency would b e the National Ministry o f Education, Science and Technology (MECyT), through
i t s Directorate General for the Unit o f International Finance (DGUFI). The DGUFI would be
responsible for coordinating the various activities o f the Project with the other agencies of
M E C y T as w e l l as other Federal and Provincial Government Agencies. The DGUFI also manages
an Inter-American Development Bank-financed (IDB) Operation (see Annex 2) and has
substantial experience with the international standards o f financial management and procurement,

The DGUFI i s not expected to develop technical expertise that already exists in line departments
o f national and provincial education ministries. The Rural Education area i s under the Directorate
General o f Curriculum Management and Teacher Training (DNGCyFD). The area o f monitoring
and evaluation falls under the National Directorate o f Information and Evaluation o f the Quality
of Education (DNIECE). Other units such as the Infrastructure Unit o f the MECyT would also be
involved in the implementation o f the program. The project implementation arrangements would
build on the experience o f these national programs. The three key MECyT units receive a
substantial budget for managing their respective national programs. There would not be any need
to set up Project Coordination Units (PCUs) either at the National or at the Provincial levels.
Where there i s a particular need to build provincial implementation capacity, this would be done
by strengthening existing line departments at provincial Ministries o f Education, rather than
through parallel administrative units.

Project execution would be based o n the signed agreements between the Federal and Provincial
ministries o f education. These agreements, also termed as Convenios would approve Provincial
Rural Education Plans and the operational mechanisms for the execution o f actions. The
agreements would lay out the assignment o f responsibilities between the t w o levels o f
Government, describe the monitoring mechanism to be used and the re-programming o f the
activities in case o f non-compliance o f the goals, contain articles that would be in effect for all
five years o f project implementation, and include annual program covenants (Actas de
Programacidn Anual) for activities complementary to the agreement.

At least two provinces must have signed bilateral agreements for the project to be declared
effective, and a particular province can only enter the project with the signing o f a bilateral
agreement.

Content o f Bilateral agreements

The agreements would include the following duties and faculties for each o f the involved entities:

I Duties-Faculties o f the Nation (Ministry o f Education):

0 Approve the actions plans for each sub-project (specific activities contemplated).

0 Supervise execution o f the sub-projects and the fulfillment o f the results indicators.

45
 0 Finance the subproject with loan proceeds and according to annually established
implementation needs.

0 Contribute counterpart funds.

0 Provide goods from centralized procurement (computer, texts and printouts) according to
the agreed programming.

0 M a k e payments to suppliers and contractors “por cuenta y orden” o f the province in the
case that i t i s so established.

0 Keep a registry o f fund transfers to the Rural School Clusters (that would serve as a basis
for disbursement).

0 Procurement for centrally procured items would not be bound by signing o f bilateral
agreements, but the nation would ensure that centrally procured items are used only in
eligible provinces, ie, provinces that have entered into signed bilateral agreements.

I1 Duties o f the Province:

0 Develop the provincial level sub-project.

0 Execute the activities o f the sub-project following the requirements o f the Loan
Agreement and the provisions o f the Operational Manual regarding sub-projects.

0 Use the transferred funds to execute sub-project activities.

0 Keep financial and accounting registies and documentation o f expenses incurred

following procedures in the Loan Agreement and the Operational Manual.

0 Develop an annual Plan o f Activities (POA) and a Procurement Plan (PP) for goods,
works [if compatible] and services, provide annual adjustments, and accomplish the POA
and PP arrangements.

0 Keep the registry and required documentation for disbursement as established in the L o a n
Agreement (following the established procedures in the Bilateral Agreement and the
Operational Manual).

0 Sign a specific agreement about indicators, baseline and goals n o longer than six months
after the initial bilateral agreement;

0 Carry out the activities established in the Indigenous Peoples Development Plan (IPDP)
and the environmental safeguards.

0 Sign agreements with Rural Schools Clusters, School Principals o f provincial schools, or
parent associations o f agricultural schools or other mixed type o f school, if eligible, for
financing expenditures for works, school materials and other inputs for the clusters’
functioning conditions and institutional and pedagogical activities. The signature o f this
agreement with the authorities would be a prerequisite for fund transfers.

46
 0 Present the supporting execution and fiduciary documents (needed for financial auditing
o f the project’s accounts following the Loan Agreement) to the Nation.

0 Specify school regulations (school organization, curricular adjustment, promotion) in

accordance with the project’s objectives.

0 Appoint school teachers for the expansion o f EGB3 as stipulated in the provincial
development plan.

0 Take part in annual meetings to review implementation progress.

Diagnostic Tool

The bilateral agreement would include an activity by each province to undertake the diagnostic
work required to define the gaps o f coverage and in the efficiency indicators for rural education,
using a standardized methodology developed by the MECyT for that purpose. For this purpose, a
Complementary Agreement o f Goals and Indicators (Acta Complementaria de Metas e
Indicadores) would be signed within six months from the signature o f the Bilateral Agreement.
The diagnostic work would include an analysis at disaggregated levels, f r o m provincial
departments and regional units to the level o f school communities and schools. The diagnostic
work would be a key input into determining the annual goals to be agreed upon, and would be
used as a tool to define progress in adhering to the annual plan, as well as an input for the
identification o f rescheduled actions. The protocol for the diagnostic tool would be included in
the Operational Manual for the project.

Phased Approach

The bilateral agreement would recognize that some time would be required before the project
intervention results in measurable outcomes for project beneficiaries. The agreement would also
recognize that events outside o f the control o f the national Government or the provincial
Government could influence the pace o f execution o f the program. Accordingly two measures
would be incorporated in the bilateral agreement.

First, there would be a phased approach regarding expected results. In the f i r s t t w o years o f
execution o f the program, the results expected would be those that deal with processes, and in the
final three years o f the program, the annual programming agreements would also include results
pertaining to outcomes. Process indicators would consist o f the various institutional and
methodological inputs for execution. Thus, for rural education, the results would include the
definition o f the rural school clusters and the identification and initial execution o f school
construction activities where such activities are deemed to be necessary for meeting the program
goals, Results indicators in the next phase would deal with outcome measures such as enrollment
rates and internal efficiency indicators.

Second, throughout the first and second phase o f the program, there would be an institutional
mechanism to evaluate compliance with the Annual Programming Agreements. This mechanism
would include an annual meeting between provincial and Federal Government representatives in
the months o f October and November to allow for sufficient time to prepare for the beginning o f
the school year in March o f the subsequent year.

47
If a province i s n o t in compliance with the annual programming Agreements, the province would
submit a report t o the Federal Government detailing the corrective measures being taken by the
province. These corrective measures could include, where appropriate, the assignment o f further
resources for technical assistance from the Federal Government. The acceptance o f the report
based o n the corrective action would include a continuation o f program activities in the
subsequent year. If compliance proves to be a problem for a second year in succession, the
Federal Government would be empowered under the terms o f the agreement for a partial or total
suspension o f project activities in the non-performing province. In this case, the Federal
Government would be empowered to reassign resources to other provinces with a satisfactory
track record o f meeting the agreed goals.

Levels o f Program Execution

Three management and execution levels have been identified: Level 1 or central level; Level 2 or
provincial level and Level 3 or local level (rural school clusters).

Level 1- or central level- would consist o f DGUFI, DNGCyFD, DNIECE, DPC (Directorate o f
Compensatory Programs) and the DI (Directorate o f Infrastructure). DGUFI would be responsible
for general administrative execution o f the entire project, channeling the requirements from the
other Directorates..

Level 2 -or provincial level would consist o f a specific department designated by the provincial
education authority (Provincial Sub-secretary for Administration and Finance or equivalent). The
requirements for contracting and payments would be initiated by the corresponding technical
areas o f rural education (Provincial EGB Directorate or equivalent), and evaluation and statistics
(Statistics Directorate or equivalent).

Level 3- or local level would consist o f rural school clusters.

48
 Annex 7: Financial Management and Disbursement Arrangements
Argentina: Rural Education Improvement Project PROMER -
Executive summary

The overall conclusion of the Financial Management Team was that, under the management o f
the MECyT, the Project would be able to maintain financial management arrangements
compatible with Bank requirements. Agreement was reached on an action plan on the standards
to be met by the financial statements and the time frame for their submission to the Bank after
being certified by the auditors, and on the Financial Management Report (FMR) format. Specific
recommendations were made regarding the organizational arrangements, the strengthening o f
human resources and the operational manual, and included in the action plan. The conclusions o f
the Financial Management (FM) assessment are that: (i)the financial management risk
assessment shows a moderate to high risk for the project implementation based o n the weaknesses
at the provincial level, (ii)FM design i s tailored to support the mainstreaming o f project
management to the DGUFI to strengthen their financial management capacity; (iii) the DGUFI
would be responsible for the preparation o f project consolidated financial management statements
and supervision o f provincial level, and (iv) the provinces would require additional investments to
improve their financial management institutional capacity. The provinces’ capacity has t o be
complemented by an additional accountant to help manage project financial affairs, and the use o f
information systems capable o f operating using the intranet accessible via the Web.

The financial management risk assessment concluded that the inherent and control risks for the
project are moderate.

Country Issues

The Country Financial Accountability Assessment (CFAA) prepared by the Bank in 2003 -2004
states that at the central level, the Government o f Argentina has a fully integrated budget,
accounting, treasury, and public debt financial management system. These systems control the
funds received by the central Government from any source and provide sufficient information to
determine i f the funds were utilized as planned.

This CFAA covered the Federal Government central system and did not cover the assessment o f
public financial systems at the sub-national level (Provinces). A CFAA update o f the Federal
system in Argentina i s planned for FY2006 while the evaluation o f Provincial systems i s planned
for FY2007.

A FM issue raised in the Country Assistance Strategy (CAS) document (January 2004) was the
chronic problem related to the timely submission o f audit reports to the Bank. However, since
2003, there has been some improvement o n country audit report compliance. The audit
compliance issue i s being addressed by the Bank at the portfolio level and through an Institutional
Development Fund (IDF) grant to strengthen the institutional capacity o f the Auditoria General
de la Nacidn (Borrower’s Auditor General Office, AGN). The 2006-2008 C A S for Argentina that
i s currently under preparation develops a fiduciary action plan that seeks to improve the
timeliness and effectiveness o f the external audit function in the country.

The International Monetary Fund issued an experimental Report o n the Observance o f Standards
and Codes (ROSC) for Argentina in April 1999, which includes a section o n Fiscal Transparency.
This report noted that based o n the description o f practices provided by the authorities and

49
summarized in the report, Argentina has achieved a high degree o f fiscal transparency. This i s a
reflection o f the significant progress that has been made since the implementation o f landmark
legislation o n financial administration and control in 1992.

Financial Management Assessment

As required by OP/BP 10.02, a Senior Financial Management Specialist carried out a financial
management assessment during the Project’s pre-appraisal phase. A Senior Finance Officer from
Bank Headquarters also provided guidance regarding the Project’s financing and disbursement
arrangements.

The Financial Management Assessment (FMA) indicates that an adequate financial management
system to keep records and report on the use o f funds o f the project i s in place. However some
further steps need to be taken as described in the Action Plan below.

The FMA took into account a preliminary assessment o f provinces selected by the DGUFI and
MECyT. This assessment involved ensuring that project design allows for an appropriate level o f
transparency, facilitating oversight and control while also supporting smooth implementation.
The assessment included discussions with the financial team, a review o f the financial systems to
be used for project accounting, financial administration, controlling and reporting and the internal
controls and administration procedures to be implemented to control and monitor the project’s
executing and auditing arrangements.

ImplementingEntity

The DGUFI o f the borrower’s Ministry o f Education (MECyT) would be the coordinating unit for
the proposed project. The DGUFI would be responsible for project accounting, reporting
including preparation o f FMRs, internal control, disbursements and the external audit. The
DGUFI FM staffing would be specified in the Operational Manual.

FinancialManagement Arrangements

At the Central and the Provincial Government

0 The MECyT financial management responsibilities. The MECyT would be the Bank’s
direct counterpart responsible for financial management issues. I t s responsibilities
include the preparation o f consolidated financial statements; disbursement arrangements
with the Government and Bank financial authorities; external audit arrangements; and
supervision o f provincial level financial management and disbursement arrangements;
among others.

0 Institutional Arrangements. Implementation o f the project in general would be carried

out using the same financial management and audit arrangements that are in place at the
MECyT. Additional arrangements regarding Project Component A would be
implemented at both the system and the institutional level to strengthen the DGUFI and
i t s relationship with the provincial level.

At the central Government level, the MECyT would be responsible for carrying out financial
management, procurement and disbursement activities at the central level, as well as for
monitoring and supervising the fiduciary arrangements at the provincial level. The DGUFI has
the experience and capacity f i o m other W o r l d Bank-financed projects: (Loan 3971-AR PO06057

50
amount US$115.0 million, approval December 21, 1995; closing date April 30, 2004 - Loan
3794-AR PO05992 amount US$190.0 million, approval September 15, 1994; closing date June
30, 200 1) and Inter-American Development Bank (IDB)-financed projects to manage large
projects, implement their fiduciary procedures, monitor implementation and provide technical
assistance t o beneficiaries.

At the provincial Government level, institutions would use their planning, financial management
systems, and internal control arrangements (e.g. M&E, fiduciary management and internal
arrangements) t o achieve the bilateral technical agreements with rural schools clusters. An
assessment o f the Provincial Tribunales de Cuenta (PTCs) would not be carried as part o f the
Project. However, the Government o f Argentina i s responsible for periodic assessments o f these
institutions.

A number o f options were considered during project preparation to address the inherent
complexities o f fiduciary oversight for this decentralized operation including: (i) the financing
scheme for the project, in which a substantial portion o f Project expenditures would be paid at the
national Government level through the DGUFI; (ii)the strengthening o f the DGUFI to ensure
continuity and adequate coordination with the provinces; and (iii)the strengthening o f the
fiduciary capacity o f some o f the weakest provinces that would participate in the Project.

The minimum financial management requirements provinces would have to comply with, in order
to be eligible t o receive resources from the project are summarized as follows:

1. Contract an accountant or business administration specialist with experience in project

management financed by international cooperation.
2. Consultant contract arrangements. Based on the existing legal framework, contracts for project
coordination units personnel have to be at least for one year.
3. Project coordination units have to be built-in to the organizational structure o f the provincial
Ministry of Education or the Educational Council. N o parallel structure to the central
administration i s acceptable.
0 Project coordination unit budget i s integrated into the province budget,
0 Their financial management and control systems respond t o the needs o f the province
authorities. The accounting, the budget, the f l o w o f funds and the internal control would
have to be defined according to province financial management arrangements,
0 Processes and procedures are developed and monitored by the provincial authorities, and
0 Project coordination unit human resources arrangements are an integral part o f the central
administration.
4. The project coordination unit in the Province received technical assistance and initial basic
training from the DGUFI.

Disbursement Arrangements

0 New EZigibiZity Policy. The project incorporates the Bank’s n e w policy o n eligibility for Bank
financing.’ T o implement the policy, the Country Financing Parameters for Argentina were
approved by the LCR Regional Vice President o n M a y 11,2005.

The Bank would finance up to 90 percent o f the project total expenditures effectively made by the
project. Loan proceeds would be disbursed based o n expenditure incurred at a rate o f up to 90

5 See OP 6.00, Bank Financing.

51
percent o f the variable advances made by the Borrower to provinces to cover the cost o f goods,
works, services and flat recurrent costs required to implement the bilateral agreement. The terms
and conditions f o r the advance o f funds to provinces would be agreed in each bilateral technical
agreement. The Bank would monitor the DGUFI’s assessment o f institutional performance of
provinces interested in participating in the project.

0 Execution accounts. As i t i s customary in Argentina, the Government would open a Special

Account (SA), as a revolving bank account to finance project expenditures for all components
and would request replenishment for the Bank’s share o f the financing. Requests for
reimbursement would be submitted to the Bank on the basis o f Statements o f Expenditure
(SOEs).

Resources w o u l d be transferred from the World Bank to a special account opened at the Banco de
l a Nacion Argentina in dollars. An operative bank account in pesos would be also open at “Banco
de l a Naci6n” in the name o f the DGUFWECyT to manage resources transferred from the SA.

0 Disbursement Mechanisms and Documentation. The Bank would disburse to the

Government based o n transaction-based disbursement requests sent by the DGUFI. Advances to
provinces for a 60 day period o f eligible expenditures will be allowed based o n the presentation
of an acceptable action plan presented by the provinces to the DGUFI. Prior to approving further
advances, provinces will have to present full documentation proving that the advances were used
for eligible expenditures. The following describes the disbursement approach for the main
activities:

0 Flow of Funds and Information. A number o f entities would be involved in project

implementation, oversight, and financial management. For Component B, all expenditures would
be made by the MECyT, through the DGUFI , for activities carried out at the central level, and
for preparing the information required by the Financial Monitoring Reports.

The DGUFI provides administrative and financial management support to the project and would
be responsible for all payments made directly or upon request by the provinces to providers,
contractors and consultants for Components A or B, for contracts and expenditures over
US$lOO,OOO. In addition, for Component A, advances for a 60 day period o f eligible expenditures
could be made to the provincial level to be executed by the province. The various provincial
Governments could be responsible for payments to contractors and consultants contracted by
them under US$ 100,000. The DGUFI would have the main function in this case o f consolidating
the financial management information and supervising the use o f project resources according t o
the project objectives and the financial planning.

52
 Disbursement Categories and Allocations

Project
Flow of Funds

e Reporting between provincial level and the MECy T:

1. The DGUFI proceeds to assess completion o f technical requirements and verifies that
contracts and agreements conditions were fulfilled;

53
 2. Provincial level pays providers or contractors directly and would inform the DGUFI that
the payment process has been completed on a monthly basis.
3. The FMRs and disbursement documentation would be prepared by the DGUFI, based o n
consolidated information provided by the provincial level and the M E C y T itself.

The Bank would monitor the flow o f funds, especially to ensure that undisbursed funds do
not s i t in the provincial level for a long period o f time.

In-kind Contributions. In-kind contributions would be an integral part o f project execution,

jointly with cash resources provided by the central and provincial governments. However, in-kind
contributions will not be included in the local counterpart hnding. The concept o f in-kind
contribution would be used to promote involvement o f provinces and m a l schools in project
execution with materials, work, and other non-cash investments that otherwise would be not
accounted for.

A table for conversion o f in-kind contributions into monetary measurements would be developed
by the DGUFI and distributed to the provinces. The responsibility for the preparation o f the
reports, including in-kindcontributions and reporting, would be under the province coordinator.

The DGUFI financial team would register these contributions using the project chart o f accounts
under “cuentas de orden”. These in-kindcontributions would not need to be audited.

Information Systems. The project would not require a new information system. There i s a basic
system in place implemented by the DGUFI for the IDB-financed PROMSE Project, to monitor
subproject implementation and resource transfer. This system would also be used to produce the
requisite financial statements for this project. Even though, the system i s not linked with the
national Government’s integrated financial management system, it provides a comprehensive tool
for project monitoring and can work in parallel with the central Government budget information
system.

Written Procedures. Project financial procedures would be documented in an Operational

Manual, which would define the roles and responsibilities o f all entities involved in Project
implementation. The Operational Manual would include, among other financial procedures: (i)
accounting policies and procedures, including basis o f accounting and chart o f accounts; (ii)
the
reporting requirements fi-om the provincial level; (iii) formats o f the consolidated Financial
Monitoring Reports for the program; (iv) internal controls including criteria and procedures for
processing payments and advances; (v) records management; (vi) audit arrangements; and (vii)
format and content o f the financial statements

Financial Reporting. The DGUFI would prepare semiannual Financial Monitoring Reports
(FMRs) in accordance with Bank procedures, which specifies accounting and report formats for
all Bank-financed projects. Financial Monitoring Reports (FMRs) would comprise at least:

A financial section stating for the period and cumulatively (project life) cash receipts by sources
and applications by main expenditures classification as w e l l as beginning and ending cash
balances o f the project and a statement o f accumulated investments by project component with a
comparison between actual and planned expenditures.

An output monitoring section that: (a) sets forth physical progress in project implementation, and
(b) explains variances between the actual and previously forecast implementation target.

54
A procurement section describing the status o f procurement under the project, as o f the end o f the
period covered by the report.

The FMR’ s formats would be agreed with the DGUFI and included in the Operational Manual,
The Operational Manual prepared by the DGUFI and acceptable to the Bank i s part o f the Action
Plan. The DGUFI would be responsible for the project financial management, including
accounting, and timely submission o f the Financial Management Reports, annual audits and
disbursements and would record all transactions in i t s own system. The physical progress
indicators and the timing o f the FMRs would be consulted with the Bank to ensure the usefulness
o f the FMRs in the overall project supervision. The preparation o f these reports would rely
heavily o n the information provided by the provincial level. The DGUFI financial management
team agreed on the format o f reporting and the preparation o f consolidated reports for project
management and distribution to the various stakeholders, including national control entities and
the Bank.

Financial statements would be prepared o n the basis o f accrual accounting and shall be in line
with the Bank requirements.

Audit. The financial statements of the project would be audited annually by the Comptroller
General (AGN). The project financial statements audits would be conducted following national
audit standards compatible with the International Organization o f Supreme Audit Institutions
(INTOSAI). The project would have external audit arrangements under the responsibility o f
AGN, for the central Government and all provinces, which would j o i n the project. This
arrangement requires that external auditors would carry out a traditional independent audit,
jointly with the support o f the M E C y T internal audit unit, and the auditors would provide
technical assistance during each fiscal year. There are several objectives o f this additional
requirement:
0 Ensure external auditors would have close follow-up on internal control, accounting and
budgeting processes and procedures, based on the understanding this would not affect
their independence and objectivity.
0 External auditors would have the opportunity to assist or guide the project to correct any
deviations from the procedures to avoid any possible problems during the fiscal year.
0 Ensure a better understanding o f project execution that would contribute t o carrying out
the external audit.
There i s n o need to wait until the end o f the fiscal year to perform an ex-post audit review where
the possible outcomes would have only a retroactive effect o n project execution.

Detailed Financial Management Arrangements

In order to contribute to a better understanding o f project financial management arrangements, a

matrix was developed to describe the different activities and responsibilities o f the different
entities involved in project execution.

55
Table 1: Project FM Issues General Understanding and Financial Management
Arrangements
, BY COMPONENT
Financial Management Component A Component B
Arrangements Improving Quality and Enhancing Stewardship
Coverage o f Rural Education Capacity o f National
Government

GENERAL ARRANGEMENTS
FINANCIAL MANAGEMENT Traditional approach rraditional approach
ARRANGEMENTS IN GENERAL
W o u l d b e conditioned by two m a i n The DGUFI o f the MECyT The DGUFI o f the MECyT
instruments: has main responsibility for has m a i n responsibility for
0 Provincial Capacity project oversight and project oversight and
Assessment implementation implementation
(already in place) (already in place)
0 Bilateral technical agreement

PROVINCES CAPACITY W o u l d b e prepared jointly with W o u l d be prepared j o i n t l y with

ASSESSMENT CRITERIA AND the counterpart team and included the counterpart team and included
METHODOLOGY ON FM AND in the Operational Manual in the Operational Manual
BILATERAL AGREEMENT

ADMINISTRATIVE Preparation o f consolidated Preparation o f FM information,

ARRANGEMENTS financial statements, centralized Centralized at the
at the MECyTDGUFI MECyTDGUFI

Provincial level execution -

decentralized at each province
DISBURSEMENT Traditional Approach
ARRANGEMENTS - FLOW OF
FUNDS The Government spends and
Disbursements would be based o n the requests reimbursement through
use o f a S A to pre-finance expenditures traditional SOEs
incurred and SOEs
An S A i s needed as a revolving
fund
Traditional Approach
The Government spends and
requests reimbursement through
traditional SOEs
Commercial bank account at
“Banco de l a Nacion”.

Lump sums w o u l d be advanced MECyTDGUFI responsible for

in tranches t o the provinces payments at the completion o f the
procurement process at the
MECyTDGUFI responsible for provincial level.
payments when acquisition
process i s performed at the
central level.

INFORMATION SYSTEMS The DGUFI existing information The DGUFI existing information
system t o b e shared with system
provinces
BUDGETING, TREASURY AND The DGUFI existing information The DGUFI existing information
ACCOUNTING system system
Internal Control MECyT and Provinces MECyT

56
External Audit SA1 - AGN SA1 - AGN, or
Private Audit Firms at the
provincial level for recurrent
audit arrangements

Reporting -Financial Monitoring M E C y T / D G U F I MECyTiDGUFI

Reports
Bilateral Technical Agreement Responsible for bilateral Responsible for bilateral
technical agreement preparation technical agreement preparation
and signing with provinces and signing with rural schools
clusters
Technical Assistance and Training Responsible for technical
assistance and training to
I provinces
Arranger mts by National and Provincial Levels
National Level 1 Provincial Level
Provincial Plans Approves provincial plans Prepares provincial plans
Approves advance reports for Prepares advance reports
disbursement purposes Requests cash advances
Works Direct payment t o providers and Direct payment to providers and
contractors hired by the central contractors hired by the
Government 1
provincial Government
Goods and Materials Responsible for educational I Prepares procurement process

Approves catalogs, selects

material, acquires materials and
books,
Assigns quantities for distribution
t o rural schools, and
Responsible for procurement
process at the central Government
Responsible for approval o f
provincial draft documents
Direct payment t o providers and Direct payment to providers and
constructors hired by the central constructors hired by the central
Government Government
Terms of Reference Prepares terms o f reference for Prepares terms o f reference for
central Government central Government
Assist and supports the
preparation o f terms o f reference
at the provincial level
Cluster activities Advances for a 60 day period o f Advances would b e managed at
eligible expenditures w o u l d be separate bank accounts for each
made f r o m the S A t o the grant per cluster at the "Banco de
provinces bank accounts at the laNaci6n"
"Banco de l a Naci6n" A table w o u l d be prepared by
The provincial coordinator w o u l d each cluster including a l l
approve the content o f expenditures o f project resources
expenditures as reported by the through the grants
provinces

57
Table 1: Project FM Issues General Understanding and Financial Management
Arrangements
B. BY EP ‘ITIES
Financial Ministry of Economy MECyTLDGUFI Provinces
Management
Arrangements

Central Budget Developed and Implements the central

Information Implemented by the Public Financial
System Ministry o f Economy Management system

Provinces Capacity Provides inputs to the Are subject to FM

Assessment Bank’s F M S for the Capacity
Criteria and preparation o f FM Assessment
Methodology o n FM Capacity Assessment
and Performance and supervises provinces
Agreement performance
Disbursement GOAspends and Lump sums would be Separate project
Arrangements - Requests Reimbursement transferred in trenches accounts
Flow of Funds through Traditional management
Disbursements SOEs by the Treasury
would be based o n S A i s needed as a
S A advances and revolving fund
expenditures
incurred

Information SIDIF DGUFI Information Provinces are

Systems System required to use the
DGUFI Information
System

Accounting DGUFI Information Provinces are

System required to use the
DGUFI Information
System
Internal Control MECyT Provinces Internal
Internal Audit Audit arrangement
arrangement
External Audit SA1 - AGN SA1 - AGN, or
private
recurrent external
audit
Reporting - FMRs consolidation o f Prepares inputs for
Financial project information the FMRs
Monitoring
Reports
Technical Responsible for service Responsible for
Assistance and provision to provinces service provision t o
Training rural schools
clusters

58
Financial Management Risk Assessment

The overall project financial management risk i s moderate based o n the consolidated financial
management assessment, performed at the federal and provincial level.

MODERATE

2. CONTROL RI
Risks that the project’s accounting and internal control framework are inadequate to ensure project

ff in the implementing agency. The FM capacity i s defined by the

o f audit work performed, and audit results delivered: (i)

Quality o f
tions/ disclaimedadverse opinions; (ii)Content o f Management
Letters.
2.3.3 Internal Audit arrangements HIGH
Assesses quality o f the internal audit arrangements o f the implementing entity.

59
 Risk Mitigation Measures

The mitigation measures will be financed using loan proceeds. In order to mitigate the project
fiduciary high risk areas assessed during the appraisal mission, the Operational Manual would
include several actions that are described in the following table:

Table 3: Risk Mitigation Measures

Risk Description Risk Level Weaknesses Mitigation Measures

2.1. FM Arrangements MODERATE Week capacity o f FM staff
Budgeting and Financial in the implementing agency.
Planning, FM Staff The FM capacity at the
capacity provincial Government i s
also weak; the number and
qualification of the
accountants, disbursement
specialist and other FM staff
employed o n the project
needs to be mainstreamed
Strengthening the DGUFI financial
and procurement management team.
Concentrate the project accounting,
budgeting and reporting system in
the DGUFI using an intranet network
to connect a l l provinces to perform
data entry under one software

r
into the provincial FM
structure.

2.1.2 Internal Controls HIGH Poor internal control Strengthen the MECyT internal audit
measures in place, lack o f unit operational capacity.
processes and procedures at Strict implementation o f internal
the federal and provincial control procedures at the provincial
levels designed to support level according to the Operational
and ensure effectiveness and Manual.
efficiency o f operations,
reliability of financial Technical assistance and training t o
reporting and compliance provincial staff o n internal control
with applicable and financial management
lawsiregulations during the
project’s implementation.
HIGH
HIGH Delays o n audit reports and Implementing concurrent external
timeliness quality o f audit w o r k audit by AGN, with the support o i
performed, and audit results the provincial external audit
delivered institutions “Tribunal de Cuentas
Provincial” and “Contaduria
Provincial”, for a l l participating
provinces during the fiscal year
HIGH Poor quality o f internal Strengthen the MECyT internal audil
arrangements audit arrangements of unit operational capacity
provinces and the MECyT
internal audit.
Concentrate payments at the DGUFI
for contracts over US$lOO,OOO, and
centralized procuremenl
arrangements for specific contracts
and purchases

60
 Financial Management Action Plan

A Financial Management action plan was agreed with the Government. The priority items are the
strengthening o f the DGUFI and the provinces financial management arrangements, which would
include the incorporation o f additional staff.

Table 4: FinancialManagement Action Plan

ACTIVITIES FINAL PRODUCT RESPONSIBLE COMPLETION

DATE
Strengthen the DGUFI The DGUFI has incorporated DGUFI Assurance
financial management a professional with experience received from
team in financial management, and DGUFI that this
the intranet connection with activity i s in the
the provinces i s functioning process o f being
effectively completed.
The Operational Manual, The operational manual FM DGUFI Completed
Financial Management component i s completed and
component in place approved by the Bank, and
includes all new arrangements
and procedures for the
implementation of the
financial information system,
and terms o f reference for
external audit (including
FMRs), format and contents
o f the financial statements.
The DGUFI financial The DGUFI provided at least DGUFI Part o f bilateral
management group one workshop including all agreement and
provided technical the provinces enrolled in the Financial
assistance and training to project, and technical Management
the provinces including assistance to each o f them. Assessments
in the first stage o f the
project
Establish a separate The .separate line would be DGUFI Completed
budgetary line in the ensured by the Ministry o f
MECyT annual budget to Economy
keep track o f project
execution
The provinces comply The financial system i s Provinces Part o f bilateral
with the minimum FM operating effectively using the agreement and
requirements described intranet, and staff i s trained. Financial
above. The provinces are able to Management
connect to the intranet Assessments
Review DGUFI FM CVs o f all DGUFI’s FM staff WB -FMS Assurance
Staffing presented and reviewed by a received from
Bank F M S DGUFI that this
activity i s in the
process o f being
completed.

61
Type Timing Mechanism Objective
Visit General Integrating supervision Review FM system.
Supervision: missions at least one time each Supervise Special Account
Twice a year semester. Reconciliation. Use o f funds.
for first year, Follow up o n External Auditors
once a year for recommendations/ raised issues.
the following Review staffing.
years.
FMRReview With each The FMR submitted to the Review FMR information
report Bank. consistency.
Raise issues disclosed in FMR.
Audit Once a Year The Audit Report submitted to Review Audit Report.
Review the Bank Raise issues disclosed in Audit
Report

62
 Annex 8: Procurement Arrangements
Argentina: Rural Education Improvement Project - PROMER

A. General

Procurement w o u l d be carried out in accordance with provisions stipulated in the Legal

Agreement and the W o r l d Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits"
dated M a y 2004 for the supply o f goods and civil works; and "Guidelines: Selection and
Employment o f Consultants by World Bank Borrowers" dated M a y 2004 for technical assistance
and other consultant assignments. The various items under different expenditure categories are
described and summarized below. For each contract which would be financed by the Loan, the
applicable procurement methods or consultant selection methods, the need for pre-qualification,
when necessary, estimated costs, prior review requirements, and time frame are agreed between
the Borrower and the Bank in the Procurement Plan that i s described in the Operational Manual,
The Procurement Plan would be updated at least annually or as required t o reflect the actual
project's implementation needs and improvements in institutional capacity. The Bank's Standard
Bidding Documents (SBD) and Standard Request for Proposals would govern the procurement o f
Bank-financed International Competitive Bidding (ICB) goods and c i v i l works and consultant
services respectively. The same rules would apply to ICB procurement and t o large contracts
with consultant f i r m s as identified in the procurement plan o f the participating Provinces. For the
National Competitive Bidding (NCB) and Shopping or Three Quotations procurement o f goods
and c i v i l works, the DGUFI would use National SBD agreed with or satisfactory to the Bank. All
SBDs would b e used for each procurement method, as well as model contracts for works, goods
and consultants procured, and should be included in the Operational Manual (OM).

Procurement o f Works: Civil works procured under this project would include infrastructure for
rural and vocational schools. This may imply repairing and expanding existing buildings or
through the replacement o f existing buildings where rehabilitation i s not feasible and only minor
maintenance o f school buildings. The Bank evaluated one Province and the rest o f the
participating Provinces would be evaluated by the DGUFI, following the Bank's standard format.
The initial risk grading o f the participating Provinces would be subject to review (upgrade or
downgrade) depending upon their performance as monitored by the DGUFI. All civil works
contracts estimated to cost over US$5 .O million equivalent would be procured using International
Competitive Bidding (ICB) procedures and the Bank's SBD. Civil works contracts estimated to
cost less than US$5.0 m i l l i o n equivalent may be procured using National Competitive Bidding
(NCB) procedures. Works estimated to cost less than US$350,000 equivalent, may be procured
on the basis o f at least three quotations from qualified contractors. The procurement under N C B
and three quotations would be done using national S B D acceptable t o the Bank. For small-scale
rehabilitation or maintenance o f existing schools, the participating schools would subcontract
directly to contractors when the individual contracts do not exceed US$20,000. When n o such
contractors are available in the participating school area, the schools would select a contractor
from outside the local area o n the basis o f acceptable administrative procedures under national
regulations. This type o f investment would be specified in the procurement plans contained in the
sub-project plans presented by the participating Provinces during Project's implementation.

Procurement of Goods: Goods to be procured would include: equipment provision especially for
drinking water and for the supply o f electricity for rural schools; textbooks, didactic materials,
printouts, furniture, videotapes, computer and audiovisual equipment. All goods estimated to cost
over US$500,000 may be procured using International Competitive Bidding (ICB) procedures
and the Bank's SBD. Goods estimated to cost less than US$500,000 may be procured in
accordance with the National Competitive Bidding (NCB). Books, libraries and didactic materials

63
may be procured under Community Participation in Procurement (para. 3.17 o f the Guidelines).
This process requires that representatives o f all levels o f the Education Community including
MECyT’s will participate in the evaluation o f samples o f books, libraries and didactic materials
provided by the Education industry. The terms o f reference o f the evaluation committee should
be satisfactory to the Bank. The industry will be asked to submit samples to be assessed by the
Education Community based on their technical, pedagogic, curricular, and graphic factors,
competitive aspects, and on price reasonability. The technical competition i s the result o f an
open request o f expression o f interest. The outcome o f this technical assessment will be included
in the catalogue o f books and didactic materials which will be reviewed by the Bank before the
MECyT proceeds with the direct purchase. Details arrangements and criteria for evaluation are
included in the technical section o f the Operational Manual. Contracts for goods that cannot be
grouped into larger bidding packages and estimated to cost less than US$lOO,OOO per contract
may be procured using Shopping (National/International). The procurement would be done using
National S B D and a model request for quotations agreed o n or satisfactory to the Bank.

Advertisement: All procurement notices shall be advertised in the National Contracting Office
(Oficina Nacional de Contrataciones, ONC) web page or in at least one local newspaper o f
national circulation. The I C B procurement notices and contract award information shall be
advertised in the UN Development Business online (UNDB online) and in the Development
Gateway’s dg Market. The O N C shall also be used to publish information o n awarded contracts
in accordance with provisions o f paragraphs 2.60 o f the Procurement Guidelines and as mandated
by local legislation.
Procurement o f non-consulting services: Non-consulting services under this project would
include contracts for logistics services to support training.

Procurement o f Consultants’ Services:

(i)Firms: it i s expected that the project would finance technical assistance for the implementation
of the components (a) Improving Quality and Coverage o f Rural Education and (b) Enhancing
Stewardship Capacity o f the National Level. At the national level, Consulting Services through
f i r m s would include technical assistance for the development and application o f pedagogical and
institutional models, for the design o f teaching materials and didactic models for student
throughput, and for organizing school clusters and training. At a provincial level, this would
include technical assistance for organizing teacher training and providing support in the field. All
contracts for f i r m s would be procured using Quality-and Cost-Based Selection (QCBS), except
for small contracts for assignments o f standard or outing nature and estimated to cost less than
US$lOO,OOO equivalent, which would be procured using other methods such as Least-Cost
Selection (LCS) or Consultants’ Qualifications (CQ). Single-source selection (SSS) procedure
may be used only in exceptional cases, with prior agreement o f the Bank, in accordance with
provisions o f paragraph 3.10 o f the Consultant Guidelines, for assignments when only one firm i s
qualified or has experience o f exceptional worth, and it has been confirmed by a request o f
expressions o f interest. Consultants’ services to organize workshops would be selected using
LCS. Universities for training purposes would be selected in accordance with provisions o f
paragraph 1.11 (b) and (c).

Short lists o f consultants for services estimated to cost less than US$300,000 equivalent per
contract may be composed entirely o f national consultants in accordance with the provisions o f
paragraph 2.7 o f the Consultant Guidelines.

64
(ii)Individual Consultants: Most o f the consulting services to be contracted would be related to
supervision, training and technical assistance. The consulting services mentioned above would be
provided by individual consultants selected by comparison o f qualifications o f at least three
candidates and hired in accordance with the provisions o f Section V o f the Consultant Guidelines.
Individual consultants for services with an expected duration o f six months or more would be
selected as a result o f a request o f expressions o f interest advertised in a national newspaper
and/or ONC, and contracts would be signed for the expected duration o f the assignment, subject
t o annual reviews for performance. Contracts with individuals may only be terminated for poor
performance or for non-completion o f the work with Bank’s prior agreement. The Bank would
not agree to the replacement o f individual consultants terminated for other than the
aforementioned reasons.

Advertisement: The ONC or a national newspaper shall also be used to advertise a request o f
expression o f interest for consulting f i r m s or individuals, and to publish information o n awarded
contracts in accordance with provisions o f paragraphs 2.28 o f the Consultants Guidelines and as
mandated by local legislation. Contracts expected to cost more than US$200,000 shall be
advertised in UNDB online and in dgMarket.

Operating Costs: The loan would finance operating costs that would be procured using Bank
Shopping procedures, if the conditions o f Clause 3.5 o f the Procurement Guidelines are met. The
operating costs include cost o f maintenance o f computer, office and audiovisual equipment,
transportation fares, travel expenses and per diem, either related to training or supervision
activities and other operational costs o f the Program.

Others: Didactic materials and book fairs (FERIAS). An innovative procurement procedure
known as the Didactic Support and School Books Fair (Feria de Apoyos Didkcticos y Libros
Escolares, FERIA), would be conducted under special procurement arrangements in the project.
The strategy o f the FERIA seeks to resolve a supply-side procurement issue for these educational
inputs via a participatory scheme in the educational chain o f the MECyT. All books, materials
and other education items in the catalogue are then shown during a FERIA Week to all school
community teams, invited ex-profeso by the MECyT. The MECyT may again use the services o f
a specialized logistics firm to provide support during the FERIA events and later to distribute to
schools the books delivered by all publishers or editorial homes that were awarded purchase
orders/contracts at time o f FERIA. With the financing provided by the MECyT to schools,
according to specific school/student quotas, school teams can decide to buy the books and
materials that their schools want and need, without any intervention at this stage f r o m the MECyT
central areas. Schools place direct purchase orders with each editorial home representative
attending the FERIA. When these purchase orders and contracts are finalized, the editorial homes
are made responsible for making arrangements to deliver all materials and books, either directly
to each school or to the designated warehouse, depending on the option selected by the MECyT
for distribution. Details o n the FERIA arrangements and criteria for evaluation are included in the
technical section of the Operational Manual.

B. Assessment of the agency’s capacity to implement procurement

Procurement activities would be carried out at the national level by the Ministry o f Education,
Science and Technology (MECyT) through i t s Directorate General for the Unit o f International
Finance (DGUFI). The DGUFI would have technical support from the area o f Rural Education
under the Directorate General o f Curriculum Management and Teacher Training (DNGCyFD).
The DGUFI i s staffed with a General Coordinator and various technical experts.

65
Procurement Responsibility. There would be three levels o f implementing agencies. At the
central level, the Directorate General for the Unit o f International Finance (DGUFI) o f the
Ministry o f Education Science and Technology (MECyT) would hire an additional consultant to
complete the procurement unit for the project. The unit would procure larger packages o f goods
and consultants services. As an option, the M E C y T could contract UNOPS to facilitate
procurement processes; the fee related to the services would be paid with local funds. The
UNOPS would carry out procurement activities using the methods established in the Loan
Agreement (LA) and in the OM and would be subject to the same prior and ex-post review
procedures. The Provinces participating in the subprojects would also carry out procurement
activities using the methods established in the LA. The third level, schools, would contract small
contractors to carry out the maintenance o f the buildings and procure small goods using
administrative procedures defined in the OM. The DGUFI would be responsible for overall
procurement activity under the Project, including compliance with procedures and timetables
agreed with the Bank.

For financing c i v i l works and goods related to them, each jurisdiction must submit technical
documentation of each project to the Infrastructure Department o f the M E C y T for i t s approval.
Once the project i s approved, funds would be transferred. The responsibility o f the area and time
frame for the review o f the documents would be indicated in the OM, to avoid delays in the
process.

An assessment o f the capacity o f the Implementing Agency to implement procurement actions for
the project was carried out by the Directorate General for the Unit o f International Finance
(DGUFI) with the resources o f a PHRD grant during project preparation between April and M a y
2005 and by the Bank during the pre-appraisal mission. The assessment also reviewed the
organizational structure o f the Province o f Misiones for implementing the project and the
interaction between the project’s staff responsible for procurement and the relevant central unit
for administration and finance.

The capacity assessment o f the DGUFI and the unit in Posadas (Province o f Misiones) as well as
the action plan for improving their procurement capacity includes providing office space, hiring
specialized staff, and maintaining an information system.

The key issues and risks concerning procurement for implementation o f the project have been
identified and include: (i)obsolete regulatory framework for the procurement o f goods and works
and lack o f legal framework for the selection o f consulting services, (ii)inadequate office space
and equipment, and (iii) lack o f an information system for monitoring project and procurement
progress.

The corrective measures that have been agreed to mitigate each o f the above-mentioned risks are:
(i)the Loan Agreement would include Special Provisions and the DGUFI would adopt a Project
OM satisfactory to the Bank before implementation begins, (ii)adequate office space and
equipment would be provided by the MECyT ; (iii) an Excel-based information system to monitor
project and procurement progress. The Project O M includes the agreed NCB documents.

The overall project risk for procurement i s AVERAGE.

A r i s k level would be established for each participating Province based o n a self-assessment by

the Province and a review by qualified staff at the DGUFI. The Bank would confirm the resulting
estimate o f risk in each case. Based o n this approach, the DGUFI would prepare a capacity
assessment for each participating Province before any disbursement i s made under Subprojects,

66
The DGUFI w i l l use the Bank’s toolkit for determining the procurement implementing capacity
and assessing risk. The DGUFI would be using the same questionnaire and methodology used by
the Bank in classifying the risk o f the participating Provinces.

C. ProcurementPlan

The Borrower, at appraisal, prepared an overall Procurement Plan for the tasks to be carried out
during the Project’s implementation. This model procurement plan i s included in the OM.
Procedures for institutional procurement planning are specified in the OM.

The plan has been agreed between the Borrower and the Project Team. I t i s also to be made
available in the project’s database and in the Bank’s external website. The Procurement Plan
would be updated in agreement with the Project Team. The Bank would review the project
procurement plan annually, including the plan for selecting consultants, and confirm i t s approval
of the procurement risk classification o f each participating Provinces. Before presenting the
consolidated plan to the Bank, the DGUFI would review the plan o f each participating Province.
The quality o f the plan and i t s timely presentation to the DGUFI and the Bank would help both to
identify weaknesses in the units. An action plan would be prepared to correct and follow-up on
these issues.

In the case of ICB for works and goods and consultant contracts expected to cost more than
US$300,000 a General Procurement Notice (GNP) i s required. The Bank would arrange for i t s
publication in UNDB online and in dgMarket.

D. Frequency of Procurement Supervision

The Bank would carry out ex-post reviews through an annual supervision mission o n
procurement. The DGUFI and the Bank, including procurement and financial management staff,
would meet biannually to discuss the classification o f Provinces, t o review their procurement and
action plans and to carry out the ex-post review. The Bank’s project supervision would review
procurement reports and would carry out procurement reviews in the participating Provinces.

Independent Procurement Reviews; For investments under the school activities, the DGUFI
would provide the Bank, n o later than six months after the end o f each year, the reports o f the
independent procurement reviews audited by procurement experts, acceptable to the Bank.

E. Details o f the Procurement Arrangements Involving International Competition

A description o f the detailed procurement arrangement involving international arrangements,

following the format of the t w o tables described below i s part o f the Procurement Plan that would
be made available in the project’s database and in the Bank’s external website.

67
1. Goods, Works, and Non Consulting Services

(a) List o f contract packages to be procured following ICB and direct contracting:

1 2 3 4 5 6 7 8 9

Ref. Contract Estimated Procurement P-Q Domestic Review Expected Comments

No, (Descriptio Cost Method Preference by Bank Bid-Opening
n) (yedno) (Prior/ Date
Post)

(b) I C B contracts estimated to cost above US$5.0 million for works and US$300,000 for goods
and non-consulting services per contract and all direct contracting would be subject to prior
review by the Bank.

2. Consulting Services
(a) L i s t o f consulting assignments with short-list o f international firms.

5 16 17

Review Expected Comments

Method by Bank Proposals
(Prior / Submission
Post) Date

(b) Consultancy services estimated to cost above US$200,000 per contract and single source
selection o f consultants (firms) would be subject to prior review by the Bank.

(c) Short l i s t s composed entirely o f national consultants: Short l i s t s o f consultants for services
estimated t o cost less than US$300,000 equivalent per contract may be composed entirely o f
national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant
Guidelines.

F. Special Procurement Conditions

The following Special Procurement Conditions would be included in the Loan Agreement (LA)
and shall apply to procurement under the project:

General
0 Foreign and local contractors, service providers, consultants and suppliers shall not be
required to: (a) register or (b) establish residence in Argentina or in a Province or (c)
enter into association with other national or international bidders as a condition for
submittingbids or proposals.
0 International Arbitration shall be included as a condition o f conflict resolution
mechanism in contracts with foreign contractors, service providers, consultants and
suppliers.
0 Invitations to bid, bidding documents, minutes o f bid opening, requests for expressions o f
interest, and modifications o f award o f all goods, works and services, including
consultants’ shall be published in the web page o f the ONC in a manner acceptable to the
Bank.
0 Witness prices shall not be used as a parameter for a bid evaluation or contract award.

68
W o r k s , Goods and Non-Consultant services
0 A two-envelope system for procurement would not be used for procurement o f goods,
services (other than consultant services) and works.
0 After the public opening o f bids, information relating to the examination, clarification
and evaluation of bids, and recommendations concerning awards shall n o t be disclosed to
bidders or other persons not officially concerned with the bidding process until the award
i s published. Bidders shall not be allowed to review or make copies o f others bidders’
bids.
0 For contracts for goods, services, other than consulting services, and works, “the most
convenient” bid shall be the one that has been determined t o be substantially responsive
and has been determined to be the lowest evaluated bid, provided that the bidder i s
determined to be qualified to perform the contract satisfactorily.
The lowest evaluated bidder shall not be required to reduce i t s bid as a condition o f
contract award.
0 Price Adjustment for Civil Works Contracts should follow the Price Adjustment
Methodology agreed between the Government o f Argentina and the Bank.
The NCB procedures would be modified to make them identical to the ICB procedures,
except for the following features: (a) advertisement may be limited t o the national press
or official gazette, or the O N C website, (b) the currency o f the country o f the Borrower
may be used for the purposes o f bidding and payment, (c) the bidding period (from the
date of publication o f the invitation to bid or the date that the documents are available,
whichever i s later to the date o f bid opening) may be reduced to 30 days, (d) the
INCOTERM clause DDP may be used for the procurement o f goods and (e) the price
adjustment mechanism applicable to NCBs, as stipulated in the above-mentioned Price
Adjustment Methodology.

Consultant services
0 Consultants shall not be required bid or performance securities.

Procurement records. Detailed procurement records, reflecting the Project’s supply o f goods,
civil works construction / rehabilitation and consultant services, including records o f time taken
to complete key steps in the process and procurement activities related t o supervision, review, and
audits, would be maintained by the DGUFI. These records would be maintained for at least two
years after the Project’s closing date. The records for c i v i l works and goods would include public
notices, bidding documents and addenda, bid opening information, bid evaluation reports, formal
appeals by bidders and outcomes, signed contracts with related addenda and amendments, records
on claims and dispute resolutions, and any other useful information. The records for consultant
services would include public notices for expression o f interest, request for proposals and
addenda, technical and financial reports, formal appeals by consultants and outcomes, signed
contracts, addenda and amendments, records on claims and dispute resolution and any other
useful information. The participating Provinces would retain all invoices, price comparisons,
bids received, bid evaluation reports, and all o f the documentation required under the l a w and
ensure that i t i s readily available. The filing, record keeping, auditing, reporting, post-review, and
monitoring o f the smaller procurement activities are crucial for the successful application o f the
funds for ensuring economy, efficiency, and transparency.

69
 Annex 9: Economic and Financial Analysis
Argentina: Rural Education Improvement Project PROMER -
-
The economic and financial analysis o f the “Rural Education Improvement Project PROMER’
(hereafter, the project) i s carried out in two parts:

The Annex begins by presenting the findings from a recently conducted rural household survey
(RHS) conducted for a study on rural poverty in Argentina. The survey o f dispersed rural areas
in Argentina i s small in scale (with 414 households sampled in the provinces o f Chaco, Santa Fe,
Santiago del Estero, and Mendoza) in comparison to the widely used Permanent Household
Survey (Encuesta Permanente de Hogares, EPH) that covers urban areas in Argentina. However,
wage earnings regressions reported in the study provide important insights regarding the potential
benefits o f this project. Following the presentation o f data f r o m the rural household survey, a
cost-benefit analysis o f Component A o f the project (rural education) i s presented that indicates
an internal rate o f return o f 14.3 percent under conservative assumptions. The second part o f this
Annex identifies the fiscal impact o f the investment, which appears to be minor considering the
magnitude o f the educational expenditure in Argentina.

Part I : Economic Benefits for Rural Education in Argentina

Rural poverty i s extensive in Argentina, especially in the Northwest and Northeast regions o f the
country, The Rural Poverty Study shows that Extreme Poverty i s higher in rural areas (39
percent) than in urban areas (28 percent). Analysis o f available empirical data indicates high
potential benefits from improving educational attainment in rural areas. At average values o f
other variables, the Rural Poverty Study reports that having completed primary education raises
the probability o f employment in high-return jobs to 18 percent. Raising one’s education to the
secondary level shows that those with a secondary education are more than twice as likely to be
employed in the high-return nonagricultural employment as workers with only a primary school
education.

The Rural Poverty Study further reports that more educated individuals in rural Argentina earn
higher incomes than their less-educated counterparts. Interestingly, the findings indicate that
workers with completed primary education in the l o w end o f the income distribution receive far
lower returns to education than their peers in the middle and high end. Workers in the l o w end
(25th quintile) receive a 10 percent return o n completing primary education, as compared to
median workers who earn a 27 percent return. The variation in the partial correlation between
education and earnings indicates the very high heterogeneity o f primary education quality in rural
areas. T h i s problem o f heterogeneity has a quantitative and a qualitative dimension.
Quantitatively, the coverage o f early childhood education i s very l o w in rural areas, as i s the
coverage o f secondary education. In the absence o f teaching and learning methods and associated
materials tailored to the special circumstances o f rural schools (such as the presence o f multi-
grade classrooms), the quality o f the education experience varies widely across schools. The
findings fkom the earnings function regression are reported below as Table 1.

The extremely high returns reported in the table for levels other than primary education indicate
the presence o f relatively few individuals in the sample with these levels o f education, rather than
tremendously high rates o f retum to education for these levels. O f the 5 14 individuals whose data
was used for the regression analysis reported below, 35.7 percent had less than primary education
completed; 52.7 percent had primary education completed; 7.6 percent had secondary education

6 Verner, Dorte, June 2005. Rural Poverty and Labor Markets in Argentina, Working Paper, World Bank.

70
 completed, and 3.9 percent had higher education completed. With significant out-migration o f
more educated individuals fkom rural areas, the small sample o f higher educated workers cannot
be taken as representative, and the coefficients for levels beyond primary education completed
should not be considered as representative o f the earnings benefits that would accrue from an
expansion o f access to secondary or higher education in dispersed rural areas o f Argentina.

Table 1: Determinants o f Labor Income in Dispersed Rural Areas o f Argentina,

OLS and Quantile Regressions, 2003

1 1
Dependent variable: L o g labor income
OLS 25" 50th 75" 90"
I I

Return Return Return Return Return

% P>JtJ % P>JtJ % P>Jtl % P>JtJ % P>Jtl
Age 0.30 0.00 0.30 0.00 1.21 0.00 0.80 0.00 1.11 0.00
Female -53.51 0.00 -43.33 0.00 -35.21 0.00 -34.56 0.00 -17.06 0.00
Education
Primary education complete 7.79 0.00 9.75 0.00 27.12 0.00 25.99 0.00 15.60 0.00
Secondary education complete 144.49 0.00 58.57 0.00 72.12 0.00 55.89 0.00 88.89 0.00
University education complete 353.13 0.00 192.41 0.00 135.84 0.00 92.13 0.00 52.50 0.00
Labor status 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Has a permanent j o b 121.00 0.00 138.69 0.00 42.19 0.00 34.72 0.00 54.19 0.00
Has a formal j o b 149.93 0.00 66.36 0.00 59.84 0.00 40.07 0.00 16.53 0.OC
Self-employed -23.43 0.00 -35.60 0.00 -26.36 0.00 4.50 0.00 24.23 0.OC
Wage worker -16.14 0.00 -5.45 0.00 -3.34 0.00 12.30 0.00 -7.96 0.OC
Sector 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0C
Commerce and Services -72.11 0.00 -43.62 0.00 -22.59 0.00 -21.96 0.00 -9.06 0.OC
Agriculture and Livestock -71.75 0.00 -35.92 0.00 -27.67 0.00 -21.26 0.00 -13.24 0.OC
Other sector -13.93 0.00 2.74 0.00 -15.72 0.00 -15.21 0.00 -9.43 0.oc
Public Administration -81.33 0.00 -36.87 0.00 -31.55 0.00 -27.82 0.00 -12.89 0.0C
Province
Santiago del Estero -32.23 0.00 -46.74 0.00
Chaco -36.43 0.00 -55.34 0.00
Mendoza -33.77 0.00 -48.93 0.00
Constant 62705.68 0.00 436673.57 0.00

djusted R2 (OLS) and Pseudo R2

uantile Regression) 0.13 0.085 0.097 0.103 0.136

province. The percentage return i s calculated as (exp (coefficient estimate) - 1) * 100. Number o f observations: 5 14
(weighted: 209,984) Source: Rural Household Survey, 2003; This table replicates Table 7.8 in Rural Poverty and
Labor Markets in Argentina, by Dorte Verner, W o r k i n g Paper, W o r l d Bank, June, 2005

Results o f Part 11: Cost-benefit Analysis

This section presents a cost-benefit analysis o f Component A (rural education) o f the project.

Project Interventions and Direct and Indirect Beneficiaries. The project seeks t o increase
educational attainment among the youth population residing in rural areas, particularly in those

71
regions with the lowest education indicators. The project includes the following interventions: (i)
Expansion o f Pre-School and Lower Secondary Coverage in Rural Areas; (i)Improving
Functioning Conditions o f Rural Schools; (iii)Directed Programs for Improving Student
throughput in Rural Primary Education; (iv) Rural School cluster.

Assumptions for Economic Analysis of Equity and Education Project. The following
parameters are considered relevant in estimating the economic benefits o f the proposed project:
(i)the length o f the project horizon, (ii)the time o f impact o f the project o n the student
population, (iii)the size o f the target population, (iv) the existing patterns o f repetition and
dropout rates o f the rural population, (v) the completion rate for EG3,

Given the medium-to-long-term effect o f the changes, the estimates presented in terms o f reduced
repetition and dropout rates and increased the EGB3 completion rates, which assume a project
horizon o f only five years, are conservative. Therefore, this analysis assumes a longer horizon.
The analysis o f the Project uses the following assumptions to measure the direct and indirect
benefits (Table 2).

Table 2: Beneficiaries and Targets

Rural population at school age

D i r e c t Target Population 868,540
(age: 5 t o 14). A l l rural areas.

Pre-school(5 year o l d children) 89% Assume 95% enrollment after five years.

EGB3 66% Assume 85% enrollment after five years.

Internal Eficiency (I)
Reduced Repetition Rates EGB 1 and 2
Reduced Repetition Rates EGB 3
Reduced Dropout Rates EGB 1 and 2
Reduced Dropout Rates EGB 3
Assume 30% reduction in repetition rates after five
10.1% years
Assume 30% reduction in repetition rates after five
5*6% years
Assume 30% reduction in repetition rates after five
O% years
Assume 30% reduction in repetition rates after five
25.9%

Table 3: Unit Costs and Cost o f Intervention

Total Cost o f the Project (Component A)* US$244.6 m i l l i o n

Unit Cost of a student (Year 2003) US$413/year
Estimate average incremental earning o f lower
secondary education graduates over non-graduates US$468/year
(EPH, 2003)

Additionally, the following parameters were assumed:

(i) Discount rate o f 10 percent;

72
 (ii) Projections of enrolled students are based o n annual growth rate estimations o f the
enrollment statistics during 200 1-2003; and
(iii) T i m e horizon: 10 years.

Cost-Benefit Analysis (CBA). The CBA i s a powerful tool available to policymakers that are
deciding between alternative project structures, or the “with and without” scenario o f project
analysis. The criteria used to evaluate the economic efficiency o f the project included N e t Present
Value (NPV) and the Economic (or internal) Rate o f Return (IRR). The ability o f the CBA to
convert outcomes into a common unit o f value, typically expressed in dollars, provides a useful
summary o f overall benefits. In the case o f education projects, costs are easily identified but
benefits are harder to measure.

Summary o f Costs and Benefits. The preliminary estimations considered t w o sources o f direct
benefits. The first one i s associated with the savings to the education system from the reduction o f
repetition rates in rural areas. (The latest survey conducted by the Ministry o f Education shows
that the repetition rate for EGB 1 and 2 i s 9.8 percent for the rural population while 6.1 percent
for the whole country). The second benefit considers the reduction in dropout rates that implies an
amount o f monetary resources saved to the system. Dropout rates among the rural population are
considerably higher than for the urban population: 9.95 percent for EGB 1 and 2, and 26 percent
for EGB 3 in the rural areas, compared with 2.2 percent and 8 percent respectively for the whole
country.

The unit costs per student in EGB are assumed to be US$ 413 per year. (This figure actually
corresponds to the urban population, but data for the rural sector i s not available). I t i s important
to project the project’s benefits derived from the reduction in repetition and dropout rates.’ The
other source o f direct benefits i s the increased future earnings o f EGB3 graduates as opposed to
non-graduates in rural areas. A 5 percent marginal return per additional year o f schooling i s
assumed, a conservative figure, in light o f the earnings regression reported in Table 1 above (OLS
coefficient for Primary Education completed was 7.8 percent).

The direct investment costs are distributed over a five-year period and it i s assumed that the
Government would have an additional recurrent cost t o continue the benefits achieved after the
final year o f the project. This recurrent cost was assumed to be similar to the recurrent cost during
the project (around US$20 millionlyear). F r o m this perspective, the two critical indicators that are
evaluated include the net present value (NPV) o f all benefit and investment flows and the internal
rate o f return (IRR).

The direct costs are the U S 3 5 0 million investment costs associated with all components o f the
project (the real costs to be incurred during the five years o f the project are US$250 million).
Given the expected disbursement profile, the present value o f the future investment i s US$235
million when discounted with a ten percent discount rate.

In the absence o f the project, a total o f 670,000 students would repeat a course and 400,000
would dropout of school during the 10 year period (assuming that the repetition rate and the
dropout rate among the rural population observed in 2003 remain constant during the time

7 High repetition and dropout rates imply that enrollment rates in higher grades are progressively reduced,
w h i c h indicates a deficiency in the efficiency o f expenditures. See “Enfoques sobre l a Eficiencia del Gasto
en Educaci6n BBsica en l a Argentina” W o r k i n g Paper N.6/03, W o r l d B a n k Regional Office for Argentina,
Chile, Paraguay y Uruguay. June 2003.

73
horizon o f the project). Finally, considering a marginal return to schooling equal to 7 percent, it i s
estimated that in the absence o f the project, annual income would be US$468 lower.

The expected benefits o f successful project implementation would be:

The number o f repetitions would be reduced to an estimated 370,000 students. I t i s this

reduction o f an estimated 300,000 repetitions that constitutes one o f the main benefits o f
the project. This reduction in the number o f repetitions would allow for the reallocation
o f US$124 million;

Potential dropouts reduced by the project would be about 40,000 students;

An increment o f 20 percent o f the student population graduating from EGB3 with

incremental yearly earnings o f US$468.

The ratio o f benefits to costs, considering the full cost o f the project, would yield nearly
1.8 dollars o f benefits for each dollar invested. The project would yield a NPV, after
investments, o f US$195.5 m i l l i o n over ten years and produce an internal rate o f return
(IRR) o f 14.3 percent.

Table 4: Summary o f Cost-Benefit Analysis

Year Investments Total Benefits Net Benefits

1 30,727,273 0 -30,727,273
2 44,462,810 0 -44,462,810
3 47,032,307 0 -47,032,307
4 41,254,013 34,073,246 -7,180,767
5 24,464,300 65,215,248 40,750,948
6 11,289.479 70,783,264 59,493,785
7 10,263,162 69,582,975 59,319,813
8 9,330,148 66,784,423 57,454,275
9 8,48 1,952 64,03 1,167 55,549,2 15
10 7,710,866 60,061,705 52,350,840
Total 235,016,309 430,532,028 195,515,720
IRR 14.3
Source: own calculations based o n data from MCEyT

Results o f Part 111: Fiscal Impact

This third sections analyzes the fiscal impact o f the project, based on the calculation o f
counterpart costs and the implicit additional fiscal costs to sustain project investments and
outcomes (for example higher enrollments generated by the project; maintenance o f
infrastructure, equipment and materials; other recurrent costs).

The first step in the analysis for the sustainability o f the project was to establish the base level
expenditures prior to the implementation o f the project.

The total costs o f the project, including investments and recurrent costs, represents less than 9
percent o f the Education Ministry Expenditures, which indicates that the implementation o f the
project i s viable.

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 Also, the higher provincial expenditure associated with the project i s minor with respect to the
actual level o f total provincial resources allocated to the educational sector.

Table 5: Summary o f Fiscal Impact

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Education Ministry Expenditure
without Higher Education (EME) 695 702 710 742 775 810 846 884 924 966
(millions o f US$)
Rural Education Improvement
-
Project PROMER
33.8 53.9 62.6 60.4 39.4 20.0 20.0 20.0 20.0 20.0

Investments 7.0 14.0 21.0 21.0 7.0

Goods and services 13.0 25.0 25.0 19.0 13.0 6.8 6.3 6.1 6.1 6.1
Recurrent Costs 13.8 14.9 16.6 20.4 19.4 13.2 13.7 13.9 13.9 13.9

EME increase as a 'Onsequence Of 4.9% 7.7% 8.8% 8.1% 5.1% 2.5% 2.4% 2.3% 2.2% 2.1%
Project

Provincial Education 5,119 5,171 5,229 5,465 5,711 5,968 6,236 6,517 6,810 7,117
(millions o f US%)
Provincial Education Expenditure
Increase by Rural Enrollment 0.27% 0.29% 0.32% 0.37% 0.34% 0.22% 0.22% 0.21% 0.20% 0.19%
Expansion (Pre-school and EGB3)
Source: own calculations based on data from MCEyT

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 Annex 10: Safeguard Policy Issues
Argentina: Rural Education Improvement Project - PROMER

This Annex presents the details regarding the Safeguard Policies triggered by the Project and the
criteria and instruments to implement them, including: (i)Environmental (OP/BP 4.01) and (ii)
Indigenous Peoples OP 4.10.

Environmental

The project has been classified as Category B. Although it would not support the massive
construction o f new schools, i t would finance small c i v i l works activities for the repair and
rehabilitation o f existing schools. Given that i t i s not clear what specific infrastructure
interventions would be supported, an Environmental Management Framework (EMF) has been
prepared, w h i c h includes:

a. Existing mechanisms for school infrastructure programs financed by the MECyT.

b. Participating bodies, including the National Ministry o f Education, the Provincial
Coordinating Unit (UCP) and the Local Executing Unit (U.E.L.), and the responsibilities
and functions o f the different bodies.
c. Operational Guidelines for M i n o r and Major Works, approved by the M E C y T Regulation
N o . 1120/02.
d. Basic services provision and emergency work execution.
e. Basic Criteria and regulations for school architecture.
f. Environmental Impact and Risk Template. Procedures and verification list.

The above environmental guidelines would be used by contractors for all rehabilitation works
under the project

Social

Desk Review and Informed Consultations

The social assessment was carried out by local teams in two parts: (a) A nationwide qualitative
assessment titled “Study o f Social Demands” was carried out from November 2004 to February
2005 to provide inputs into the project design on aspects related to rural, technical and vocational
schools in project areas. A purposeful sample selected by the Ministry o f Education included
provinces located in the six major regions o f the country: Mendoza, R i o Negro, Salta, Misiones,
Catamarca and RosarioEanta Fe. Teachers, parents, students, social communicators, education
specialists, secondary school authorities, potential employers and representatives o f the industrial
sector shared their perceptions, views and expectations o f the current educational system, and the
constraints and challenges o f the labor market for high school graduates. The methods used to
collect information were focus groups and interviews. T o complement the above assessment, a
desk review o f secondary sources carried out between April and June 2005 analyzed institutional
and political issues o f supply and demand o f education in Argentina.

(b) A desk review o f existing information o n the status o f education among indigenous peoples
was carried out in June 2005. I t was based o n the 2001 Census, documents and studies by the
Ministry o f Education, Science and Technology MECyT (1997-2005), the Center for Legal and
Social Studies (CELS), the International Federation o f Human Rights (CAREF), and other
sources. The desk review was complemented by consultations with Government officials and

76
stakeholders at the central level (INDEC; the National Institute o f Indigenous Affairs-INAI; the
M E C y T ) and at the provincial level. The assessment concentrated on the Northeastern (NEA),
and Northwestern (NOA) regions, which include some o f the poorest provinces in the country,
with the highest student dropout, repetition and over-age rates, and therefore, the highest demand
o f support. Coincidently, these provinces are home to the largest majority o f indigenous students.

(i)Issues in Rural Education

The poor quality o f education in disadvantaged rural areas in Argentina affects over 12 percent o f
the total school-age population. Some reasons cited are: (a) The application o f universal urban
education norms and curriculum to rural settings; and (b) Poor planning and lack o f continuity o f
teachers and school administrators in rural areas which results in disruptive turnover, rotation and
instability o f educators and administrators. The rural indigenous peoples are even more affected
for being rural, poor and indigenous, with subsequent problems o f identity, discrimination and
exclusion. The need for intercultural education surfaced over the years while seeking solutions to
rural education problems. For example, the "Program for the Strengthening o f Rural Education
and Teacher Training" in indigenous regions, i s a result o f that effort.

Illiteracy. There i s a high correlation o f illiteracy with poverty, living in a rural location and
being indigenous. The illiteracy rate for the country i s 2.6 percent. However, the NEA and NOA
regions have an average illiteracy rate o f 6.77 and 4.33 percent respectively. The situation i s
worse in indigenous communities o f the provinces o f Formosa, Salta and Chaco. For example,
although Formosa has an average illiteracy rate o f 5.98 percent, some communities, such as
Ram6n Lista have a rate o f 22.7 percent. There i s a similar situation in Salta where the average
rate i s 4.66 percent, but Santa Victoria has a rate o f 21.17 percent and Rivadavia has a rate o f
16.67 percent.

Access to p r i m a r y and secondary schools. According to the 2001 Census, in the three age
ranges (6 to 11, 12 to 14, and 15 to 17 years), the provinces o f Misiones, Chaco, Santiago del
Estero, Tucuman, Corrientes and Formosa register the lowest percentage o f registration in school:
94 to 97 percent; 92 to 86 percent; and 72 to 59 percent for the three respective ranges, compared
to 99 percent for Patagonia and Cordoba.

Access to Pre-school.
According to the M E C y T data, almost one m i l l i o n children in the country are not in pre-school.
The pre-school level consists o f two cycles: one with children fi-om 45 days to 2 years o l d and
another one with children between 3 t o 5 years old.

There i s correspondence between school success during the first years o f primary education
(EGB) and enrollment in pre-school. At pre-school level, valuable intellectual, physical,
emotional and social learning takes place. In addition, it i s important to consider that the pre-
school level for 5 year olds i s compulsory as established by the Federal L a w o f Education (1993)
and therefore, it i s also a right.

Also, there are inequalities between the different regions o f the country that are hidden in these
numbers. The center and southern regions have the highest enrollment rates, while the NOA and
NEA have the most worrying coverage indicators.

Inequality i s deepened in poor rural areas and worse in indigenous communities.

77
There have been some diverse experiences in offering educational services by the Government
and by non-Governmental organizations where it has been difficult to achieve coverage. One
such experience i s the “Madres cuidadoras” (Mother Caregivers) in the Quebrada and Puna areas
o f the provinces o f Salta and Jujuy, where the main objective i s that mothers help children to
learn h o w to read and write. The important thing about these experiences i s that they include
direct participation o f the communities involved, the families and the respect for cultural patterns
and the values. That i s why regulations and research about i t s development are needed. Besides,
trained human resources and physical resources in context are needed.

Primary school attendance. About 3.7 percent o f the total population has never attended a
school. The NOA and NEA provinces exhibit the lowest indicators o f school attendance. About
8.65 percent o f Chaco, 7.1 percent o f Formosa, 6.7 percent o f Corrientes, 6.3 percent o f Misiones,
6.1 percent o f Estero and 5.5 percent o f Salta has never attended a school

Population with maximum educational attainment of sixth grade. For 27.98 percent o f
Argentineans, the maximum educational attainment i s only sixth grade, as compared with Buenos
Aires (18 percent). However, in the poorer provinces, such as Formosa, Corrientes, Chaco,
NeuquCn, Salta and Jujuy, between 20 and 26 percent o f population have only a maximum
educational attainment o f sixth grade.

(ii)Indigenous Peoples in Argentina

The exact number o f indigenous peoples in Argentina i s not known. The 2001 Census included a
question o n ‘self-identification,’ which created resistance from the indigenous organizations. A
general estimate i s between 1.5 and 2.7 percent o f the total population (see Table 1). There are 20
different groups and the most numerous are the Colla, Diaguita, Mapuche, W i c h i and Toba.
According to the Census, there are 281,959 homes with at least one member self-identified as
indigenous. One third o f those homes are located in the Province o f Buenos Aires. A
complementary Household Survey module tracing the 2001 households inhabited by one or more
indigenous person i s expected to be available in late 2005.

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 I

Table 1: Indigenous Population in Argentina, by ethnic group and estimate source

Ethnic group Provinces National Indigenous Guillenno ENDEPA INCUPO

Indigenous Affairs Magrassi 1987 2003*
Census Service 1986
1968 1974
Colla Jujuy, Salta, 1,012 35,340 180,000 138,000 170,000
Catamarca;
Slums o f Bs.As
and Cordoba
Mapuche Neuquen, Rio 27,214 21,637 60,000 60,000 90,000
Negro, Chubut,
L a Pampa,
Bs.As.
Wichi Salta, Formosa, 10,022 21,884 20,000 60,000 80,000
Chaco
Toba Chaco, Salta, 17,062 32,639 36,000 50,000 60,000
Formosa, Sta
Fe, Slums
Bs.As. Rosario
Chiringuano- Salta, Jujuy 14,506 24,680 25,000 21,000 22,400
Chane
Mocovi Santa Fe, 2,876 8,945
Chaco
Diaguita Tucuman, dd dd

;ource: MECyT. Social Education Plan. “Compensatory Policy and Intercultural Bilingual
Education”. 1998
“Compliance Report o f the Argentine Government with L O Agreement 169,2003.

According to the 2001 Census, 58.4 percent o f indigenous peoples live in urbanized areas, such as
the Pampeana Region (Buenos Aires, Santa Fe, Cordoba, Entre Rios and L a Pampa) and Gran
Buenos Aires. The other 41.6 percent live mostly in rural areas, distributed among the N O A
region (15.1), Patagonia (13.5), NEA (7.3) and Cuyo (5.7). Nevertheless, as can be seen in Table
2, the largest number o f indigenous communities i s found in the NOA (451) and the NEA (275)
regions respectively.

Mapping of Indigenous Peoples and Unsatisfied Basic Needs

The largest number of households with unsatisfied basic needs (UBN) corresponds to the NEA
and the NOA, including Formosa (28 percent); Salta (27.5 percent); Chaco (27.5 percent);
Santiago del Estero (26.2 percent); Jujuy (26/1 percent); y Corrientes (24 percent), compared to
the Buenos Aires Province (1 3 percent) or Cordoba (1 1 percent). The provinces with the highest

79
indigenous population also have the highest UBN, such as Formosa, Salta and Chaco, where
some o f the departments may reach up to 79.3 percent o f UBN.

According to the National Registration o f Indigenous Communities (RENACI), about 867

indigenous communities are legally constituted at the national and provincial levels, and many
others in the process o f acquiring legal personality.

Table 2: Indigenous Communities registered in RENACI per province

Province Number o f Province Number o f

Communities Communities
Buenos Aires 14 Chaco 89
Chubut 24 Formosa 103
Juj uy 162 L a Pampa 2
Mendoza 13 NeuquCn 51
R i o Negro 13 Santiago del 13
Estero
Santa Fe 18 San Juan 2
Salta 28 1 Tucuman 8
Tierra del Fuego 1 Misiones 83
TOTAL 867

Indigenous Languages

There are thirteen indigenous languages: Quechua-Aymara, Quichua-Santiagueiio, Mapuzungun

(Mapuche), MbyCGuarani, Wichi, Pilaga, Qom (Toba), Guarani-Yopara, MOCOV~, ChanC,
Chorote and Chulupi. None o f these languages has an official grammar or dictionary. Language
coverage may go beyond race, as i s the case o f Corrientes, where Guarani i s spoken by non-
indigenous people. In addition, some indigenous groups are bilingual and in process o f
recuperating their indigenous language, such as the case o f the Huarpes (Milcayac-Spanish) and
Diaguitas (Kakan-Spanish),

The homogenization o f the population through the “castellanizaci6n” (Spanish enforced and
indigenous languages shunned) has been the n o r m in the education system. That, together with
the gradual loss o f ancestral territories, has contributed to the loss o f identity.

There are ten live languages: Mapuzungun (Mapuche), Mbyi-Guarani, Wichi, Pilaga, Qom
(Toba), Guarani-Yopara, Mocovi, ChanC, Chorote and Chulupi. Neither language has an official
grammar and dictionary. Language coverage may go beyond race, as i s the case o f Corrientes y
Santiago del Estero, where Guarani y e l quichua santiaguefio i s spoken by non-indigenous. On the
other hand, some indigenous groups are bilingual and in process o f recuperation o f their
indigenous language, such i s the case o f the Huarpes (Milcayac-Spanish) and Diaguitas (Kakan-
Spanish). Quechua and Aymara language are not spoken by indigenous communities but i t i s s t i l l
spoken in some areas o f the Province o f Jujuy.

Legal Framework

The National Constitution as well as legislation at the provincial level protects the right o f
indigenous peoples to education.

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 The National Constitution, Art 75, paragraph 17 states: “To recognize the ethnic and
cultural pre-existence o f Argentinean indigenous peoples. Guarantee respect for their
identity and their right to an intercultural bilingual education.. .”
Integrated L a w of the Aborigines o f the Province o f Formosa N o . 426/84, followed by
National L a w 23.302/85 that grants indigenous communities statutory rights to
participate in socio-economic and cultural processes. The same l a w decrees that the first
three years o f education should be in mother tongue, and the years thereafter should be
bilingual.
In 1992, National L a w No. 24.071 ratified ILO Agreement 169 o n “Indigenous Peoples
and Tribal Groups in Independent Countries.”
Federal Education L a w 24.195/93 recognizes “...the right o f indigenous communities to
preserve cultural traits, the right to learning and teaching in their language, with the
participation o f the elders o f each community in this process. Chapter VII, Art 34
establishes: “... the National Government would promote programs to rescue the cultural
heritage and strengthen indigenous languages and cultures. ..”
In 1996, the National Registry for Indigenous Communities (RENACI) was created under
the Ministry o f Social Development.
Resolution 107/99 o f the CFCyE created the title o f “Intercultural Bilingual Teacher” for
EGB1, EGB2, EGB3 and ‘Polimodal’.
The presentation before the Racial Discrimination Committee (CERD), July 2004, reads:
“Indigenous peoples receive minimal education assistance and the Government has not
been able to implement an educational policy which takes into account the cultural
identity and educational and linguistic characteristics o f indigenous peoples at the Federal
level. I t has also failed to implement the urgent necessary reforms t o the contents o f the
Education Plans addressed to all the society at large”.
Argentina has also ratified the UN Declaration o f the Rights o f the Indigenous Peoples,
Resolution 1994/45, and the O A S Declaration o f the Rights o f Indigenous Peoples, A c t
1333, Art E,which states: “(1) Indigenous Peoples would have the right to: (a) define
and apply their own programs, institutions and educational facilities; (b) prepare and
apply their own plans, programs, curricula and learning materials; (c) train and accredit
their teachers and administrators. (2) When indigenous peoples so desire, education
programs should be carried out in the indigenous languages. Training for mastering o f the
indigenous language and official languages. (3) The States would guarantee that the
educational systems for indigenous are the same in quality, efficiency and access to those
offered to the mainstream population. (4) The States shall include in their education
systems, contents that reflect the pluri-cultural nature o f their societies. And, (5) The
States would provide the financial assistance to set forth those provisions

The National Intercultural Bilingual Education Program (PNEIB)

The National Intercultural Bilingual Education Program (PNEIB) was launched in 2003 and i s
just starting to be implemented. The PNEIB i s located at the MECyT, under the National
Directorate o f Compensatory Programs.

The experimental phase o f PNEIB initiated in 1997, when the MECyT launched “Project 4”
within the framework o f compensatory policy o f the Social Education Plan, “to respond to the
needs of schools with indigenous students”. Some o f the initial actions included:

e The identification o f 800 schools that registered indigenous students;

e Salient initiatives were identified and a network was formed;

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 0 Guidelines and pedagogical strategies were applied in five schools in five provinces with
five different language groups;
0 Support was provided for the production o f teaching materials: bilingual sets with ten
titles in Toba and W i c h i languages;
0 PNEIB training for education staff, teachers and auxiliaries;
0 International Integration agreement o f PNEIB to PROEIB-Andes;
0 Legal framework for the generation o f EIB norms. Resolution 107/99 regulates ED3 and
teacher training.

In 2000, this program was renamed the “Project for the Improvement o f Educational Quality for
Indigenous Peoples” and expanded to more schools. In 2001, an agreement between the MECyT
and PROEIB-Andes was made official allowing for the expansion o f the EIB network to sensitize
the education community to the special needs o f PNEIB.

The National Intercultural Bilingual Program (PNEIB) at the M E C y T began operations in mid-
2004, with the objective to provide an Intercultural Bilingual Program to all the indigenous
students who may demand such program. The PNEIB plans include:
(a) The inclusion o f EIB Units in the structure o f provincial MECyT offices;
(b) The promotion and cooperation for the making EIB norms official and including it in the
school year;
(c) The definition o f a teacher profile for schools with indigenous population;
(d) The design o f basic pedagogical strategies beyond the typical Identity-Language-Culture
scheme present in the current curriculum;
(e) Strengthening statistics and data o n the education status o f indigenous students, and
reinforcing the links with data sources;
(0 The systematization o f national EIB experiences and learning f r o m international
experiences in Latin America;
(g) The promotion o f socio-linguistic research;
(h) The creation o f monitoring and evaluation mechanisms that isolate the ethnic variable to
trace progress o f vulnerable ethnic groups;
(i)The inclusion o f indigenous participation in the decision-making processes o f educational
policy; and
(‘j)T o contribute to the cultural and linguistic enrichment o f indigenous society at large.

Issues in Intercultural and BilingualEducation

Despite i t s conceptual framework and sound legal basis, the PNEIB i s not pedagogically
regulated, fully developed and operational yet, but sound steps are being taken.

Education Census. The ethnic variable was incorporated in the education census by the Ministry
of Education’s National Directorate o f Data and Evaluation o f Education Quality (RA-DINIECE)
in 2005, and the results are expected soon. In 2004, the PNEIB began t o collect data o n
enrollment o f indigenous students, and languages spoken. Apart f r o m that, the criterion to
identify indigenous people i s not uniform in the country. Consequently, data o n enrollment,
retention, achievement, or over-age status o f indigenous students i s scarce or unreliable.

According to the 1998 Survey to Detect the Needs o f Aboriginal Population and the
Systematization of EIB Experiences, there were approximately 2,7 11 schools serving indigenous
students in 2001. The current estimate i s 3,000 schools.

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Pedagogical Framework. Although valuable pedagogical experiences have been systematized in
the past few years, there i s not a specific pedagogical EIB model. For example, there i s n o official
intercultural or bilingual curriculum. Local programs have developed their own Education Plans
based o n their local context and needs.

Indigenous Teachers. The intercultural team formed by “a regular teacher and an Auxiliary
indigenous teacher (MEMA, ADA, non-official)” was a breakthrough in the system, which
recognized the need for intercultural exchange and teacher complementarity in the classroom.
However, unofficial indigenous educators that have been in the system as Auxiliary teachers for
the past 20 years are demanding professionalization and regularization. The intercultural teacher
team i s found in some schools mostly in grades 1 through 3, but not in all schools. A common
scenario encountered in schools visited in indigenous communities showed a one-teacher multi-
grade school where the teacher has not received intercultural education and i s unable to
understand and respond to socio-cultural and socio-linguistic complexities.

Teacher Training to teach in Indigenous Schools, and to teach under the PNEIB. Although
the Resolution 107/99 o f the Federal Council o f Education created the title o f “Intercultural
Bilingual Teacher” for EGB1, 2, 3 and Polimodal, such a Training Program does not exist. T w o
efforts are noteworthy. In Formosa (1997), the first 195 MEMAs were trained to teach pre-school
and EGBl in Indigenous Schools and were incorporated in the system. In Chaco, there are
Aboriginal Auxiliary Teachers (ADAs) and the unofficial teachers (‘maestros idheos’), but the
number i s uncertain. In general, there are at least 500 aboriginalhon-aboriginal teachers
demanding professionalization and official recognition.

There i s neither an institutionalized modality to prepare teachers to teach in rural schools in

indigenous communities, nor a professionalization program for Auxiliary indigenous teachers
working in schools with indigenous student population. However, there i s an Indigenous Teacher
Training Program run by the Center for Research and Aboriginal Teacher Training (CIFMA) in
the Chaco Province.

A series o f three workshops were conducted in 2004-2005 o n “Teacher Training, Interculture and
Bilingualism in Education” by the PNEIB in coordination with the Teacher Training Unit o f the
National Directorate o f Curriculum and Teacher Training. The objective o f these workshops was
to formulate a Proposal for Teacher Training in Intercultural Education and Intercultural
Bilingual Education, to be submitted t o the Federal Council o f Education for the discussion o f a
Federal Policy for Intercultural and Bilingual Education. The workshops took place in Bariloche
(for Patagonia region, Central Argentina, Mendoza and Federal Capital), Formosa (for NEA and
Federal Capital), and San M i g u e l de Tucumhn (for NOA and Federal Capital). The results are
reflected in the recommendations o f this Annex.

Educational and reading materials in indigenous languages. With some exceptions, many
materials used in the PNEIB are translations o f materials used in regular schools with
monolingual Spanish-speaking students.

Grammars, dictionaries and reading materials in indigenous languages. The only existing
grammar i s Guarani. Other grammars in planning stage are Wichi, Qom (Toba), M a p u z u n g h ,
Mocovi and Quechua.

Scholarships for indigenous students. In coordination with INAI, according to the MECyT, the
National Scholarship Plan assigned 8,000 scholarships to indigenous students in 2005 in 1,286
schools (6,000 from the MECyT, 1,300 from Social Development Plan and 700 from other

83
sources) for E G B 3 and Polimodal. According to INAI two problems remain: (a) lack o f data to
identify ethnic background o f recipients; and (b) lack o f tracing studies to monitor results. There
i s n o data o n scholarships for indigenous students for pre-school, EGB 1 and EGB2.

Recommendations o f the Social Assessment

F o r Rural Education

1. Regionalization and diversification o f the curriculum. The curriculum for rural schools
should be adapted to the learning needs o f rural areas, based, however, o n the national
curriculum, so that indigenous students can compete at the national level.

2. Accelerated learning for over-age students. Support the accelerated learning programs for
over-age students in rural areas, with the help o f itinerant teachers and extra-curricular
activities. Community-based efforts are vital to support students going f r o m 6th to EGB3
level, and through high school.

3. Teacher Training. Specialized training to teach in rural areas should be provided t o

teachers. A Module o n Intercultural Education i s recommended for all teachers working
in rural areas.

4. Strengthen Parents’ Associations and other community-based organizations supporting the

schools.

F o r the NationalInterculturalBilingual Education (PNEIB)

1. Diagnosis. Carry out a diagnosis o f supply and demand o f schools’

infi-astructure/conditions, and educational resources in indigenous regions (urban and
rural). The diagnosis should determine the demand for strengthening existing EIB Units
at the Central and Provincial level, and the creation o f new ones in provinces lacking an
EIB Unit. Staffing those units with Education Anthropologists, curriculum designers and
EIB materials design specialists would be a key to the development o f a sustainable EIB
Program. EIB Units in Provinces should provide technical assistance to schools in
pedagogical and administrative matters.

2. Data collection. Ensure proper data collection in the Education Census (Relevamiento
annual) including the ethnic variable and language spoken at home.

3. Homogenize criteria for the definition o f a “school with indigenous population” in order
to classify them as those needing a full EIB, or classes t o strengthen the local indigenous
language.

4. Teacher profiles. Define profiles o f (a) rural teachers capable o f teaching intercultural
students, and (b) “rural Ell3 teachers.”

5. EIB Curriculum. Develop an Intercultural and Bilingual Curriculum (based o n the

Regionalized Curriculum for rural schools), but likely to be adapted to respond to the
needs o f rural indigenous schools, which enables students t o cross-over f r o m 6th to 7th
grade and to complete high school, while preparing them either for the workforce or
tertiary education. This curriculum should include fluent reading and writing skills,
primarily in Spanish.

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 6. Teacher Training Programs. Three programs are needed: (a) A professionalization
program for 500 current ‘auxiliary’ teachers M E M A S who wish to specialize in EIB
(Post Diploma); (b) An on-the-job training program o n “Intercultural and bilingual
education” for rural teachers currently teaching in rural schools with indigenous students;
and (c) the incorporation o f a Module o n “Intercultural and bilingual education” for
regular teacher training programs in general. Also, training on “Intercultural and bilingual
education” to academic staff in rural schools with indigenous students and to
administrative staff o f those schools.

7. Institutional Pedagogical Plans. Support the Institutional Pedagogical Plans submitted

annually by schools to the MECyT for funding.

8. Intercultural Teaching-learning materials. Carry out an inventory o f teachingAearning

materials in schools with indigenous population. Provide support to the development o f
grammars, dictionaries and educational materials for the teaching o f EIB in rural schools.
Support the production and reproduction o f teaching materials for EIB schools.

9. School Networks. Support the formation o f ‘school networks’, t o share facilities,

materials and experiences and to improve monitoring o f those schools.

10. The concept o f “intercultural education” in Argentina should permeate all subjects:
technical, social and arts sciences in education. This concept should guide research with
pedagogical purposes to capture valuable traditional knowledge and cultural identity
(Bariloche, Formosa, Tucumhn Workshops).

11. Formulate a set o f administrative norms to: (a) flex the school calendar to accommodate
seasonal needs in rural areas; and (b) reform teacher statutes to include considerations for
rural teachers in indigenous schools.

12. Systematize best pedagogical practices in EIB and intercultural education in rural areas o f
Argentina. Support best practices and initiatives in different regions o f the country.

13. M&E programs should include variables to identify coverage o f schools in indigenous
regions.

Goals and Action Plan of the National InterculturalBilingual Program (PNEIB) at the
MECyT.

Seven lines o f action are included in the PNEIB 2005 Plan:

1. Teacher Training. PNEIB seeks to incorporate EIB in a l l Teacher Training Programs for
pre-school, EGB1, 2, and 3 and to promote the professionalization o f all indigenous
auxiliary teachers (MEMAs, ADAs, informal, etc.) and to promote consultations and
participation o f formal and informal educators presently working with aboriginal
students.

2. Production o f Teaching Materials. The introduction o f intercultural concepts into existing

materials being used in multi-cultural and multi-lingual contexts, as well as the
development o f new materials.

85
 3. Institutional Pedagogical Projects. Respond to the particular needs o f schools and
jurisdictions serving indigenous peoples by supporting their institutional pedagogical
plans, Also, in coordination with the jurisdictional level, provide technical assistance to
schools for the promotion and strengthening o f significant EIB experiences.

4. Scholarships for indigenous students in EGB3 and Polimodal. In coordination with INAI,
provide 10,000 scholarships per year to students in EGB3 and Polimodal. Likewise,
coordinate with the Scholarship Program for Tertiary Education (under the Secretariat o f
Tertiary Education Policy) to provide scholarship support for students wishing to
continue their studies at the university.

5. Formation o f a Federal EIB Network. PNEIB seeks to support the creation o f a

permanent federal network that facilitates the communication among provincial teams for
a coordinated participatory decision-making process with regard to EIB policy. I t also
aims at participating in the PROEIB-Andes program with the purpose o f strengthening
the articulation among the provincial Ministries o f Education, the universities and the
indigenous peoples in the country.

6. Systematization o f data and information on education o f indigenous peoples, and proper

Monitoring and Evaluation o f EIB experiences. PNEIB seeks to generate an accurate
diagnosis and baseline capable o f reflecting the education reality o f indigenous students,
and adequate instruments to monitor changes in each jurisdiction.

7. Educational research and participation in regional research projects. Also, the

incorporation in the network o f Document Centers o f PROEIB-Andes through the
National Teachers' Library, which allows access to EIB materials produced in other
countries.

The Indigenous Peoples Plan

Given the presence of indigenous peoples in Argentina, and consistent with the Bank Policy 4.10
o n Indigenous Peoples, the proposed project would include an Indigenous Peoples Plan (PP)
which would support ongoing Government o f Argentina programs addressed t o improve the
education conditions of rural schools attended by indigenous students. The GOA counterparts
have proposed the IPP below to support the action plan o f PNEIB for (2005-2010).

Table 3: Indigenous Peoples Plan

Project I Activities to be financed from Loan Proceeds I CostUS$

Component
A. Improving Professionalization (a) Workshops with technical teams in four 604,700
Quality and o f Auxiliary country regions to discuss elements o f Plan;
Coverage o f Aboriginal (b) EIB Teacher Professionalization Plan
Rural Teachers (Curriculum);
Education (MEMAs and ADAs) (c) Production and distribution o f Teaching
Manuals to support professionalization;
I I I

86
 Support for (d) Promotion o f projects in schools; and !,507,460
Institutional (e) Training workshops on EIB and participation
Pedagogical o f school community in the formulation o f
Projects in the institutional pedagogical project to
3,000 schools respond to specific needs.
serving
indigenous
students in four years
Inventory, revision, (a) Inventory o f existing resourceslmaterials; 1,083,000
elaboration, (b) Quality review and assessment o f utilization
production, o f materials;
reproduction o f (c) Reproduction o f approved materials; and
teachingllearning (d) Development o f new teachingllearning
intercultural materials
and bilingual (e) Production o f materials.
materials
Informatioddata Diagnosis/mapping/censuso f state o f education 116.200
Systematization. among indigenous and non-indigenous peoples
Monitoring and residing in indigenous regions in Argentina (rural
Evaluation o f EIB in and urban) which indicate the following
four years quantitative and qualitative information, as
follows:
(a) Demographics: students: number o f school-
age indigenous children and youth, number o f
those matriculated and those without access
to a school;
(b) Infrastructure: Physical condition o f schools
in indigenous regions (as part o f the Annual
Census under DINIECE-MECyT);
(c) Studies o f rates and perceptions in education:
access, repetition, over-age, drop-out,
completion in pre-school, EGB1, EGB2,
EGB3, number o f teachers with different
types o f specialization trained to teach
intercultural education; number o f teachers
speaking indigenous languages and level o f
education. Reasons for the above rates.
Peoples’ perceptions and preferences;
(d) Language(s) o f instruction;
(e) Pedagogical materials and tools used:
universal Spanish, intercultural, bilingual;
(9 School organization, participation: School
Council, decision-making schemes;
opportunities for participation o f parents’,
business community, civil society; and
(g) Monitoring and Evaluation: (i) Students’
evaluation. Standardized and non-
standardized tests. (ii)Teachers’ evaluations.
Strengthening o f the Strengthen existing provincial EIB teams; 68 8,640
Federal Network for Install EIB teams in provinces where they do not
Intercultural and exist yet; and
Bilingual Education Annual workshops to train provincial and regional
I
teams in four years.
Total 5,000,000

87
 Annex 11: Project Preparation and Supervision
Argentina: Rural Education Improvement Project PROMER -
Planned Actual
P C N review 02/08/2005 08/08/2005
Initial P I D to PIC 0211412005 02114l2005
Initial ISDS t o PIC 02/14/2005 02/24/2005
Appraisal 09/15/2005 10/28/2005
Negotiations 11/7/2005 11/16/2005
B o a r d R V P approval 1211512005
Planned date o f effectiveness 0311412006
Planned date o f mid-term review 0111512008
Planned closing date 10/31/2011

Key institutionsresponsible for preparation of the project:

National Ministry o f Economy and Production; National Ministry o f Education, Science and
Technology (MECyT); and Provincial Ministries o f Education

Bank staff and consultants who worked on the project included:

Name Title Unit

Suzana Campos August0 Lead Operations Specialist LCSHD
Daniela Pena de L i m a Operations Analyst LCSHD
Luis M. Schwarz Sr. Fin. Management Specialist LCOAA
Gaston Mariano Blanco Operations Officer LCSHS
Antonio Leonard0 Blasco Financial Management Specialist LCOAA
Cecilia Maria Balchun Finance Analyst LOAGl
Marta Elena Molares-Halberg Lead Counsel LEGLA
Sergio Espaiia ET/ Education Consultant LCSHD
Maria L u c y Giraldo Sr. Procurement Specialist LCOPR
Tania Gomez Language Team Assistant LCSHD
Jesko Hentschel Country Sector Leader LCSHD
Febe Mackey Program Assistant LCSHD
Claudia Nin Team Assistant LCC7C
Robert O’Leary Sr. Finance Officer LOAGl
Suhas Parandekar Sr. Education Economist (TTL) LCSHE
Reynaldo Pastor Sr. Counsel LEGLA
Mariana Montiel Sr. Counsel LEGLA
L u z Meza-Bar!xina Sr. Counsel LEGLA
Natalia Moncada Sr. Program Assistant LCSHD
Martha P. Vargas ETTI Program Assistant LCSHD
Gabriela Falconi Language Program Assistant LCSHD
Susana Ferrari Consultant LCSHE
Irene Kit Consultant LCSHE
Cecilia L’Avena Consultant LCSHE
Federico Mejer Consultant LCSHE
Lucas Ronconi Consultant LCSHE
Juan Sanguinetti Consultant LCSHE
Ximena B. Traa-Valarezo Consultant LCSHE
Peer reviewers: Madalena dos Santos (LCSHD); Barbara Bruns, Paul Gertler (HDNVP); and
Elizabeth K i n g (DECRG).

Bank funds expended to date on project preparation:

1. Bank resources: US$ 299,302.57
2. Trust funds: US$ 472,178.96
3. Total: US$ 771,481.53

Estimated Approval and Supervision costs:

1. Remaining costs to approval: U S $ 30,000.00
2. Estimated annual supervision cost: US$87,880.

89
 Annex 12: Documents in the Project File
Argentina: Rural Education Improvement Project PROMER -
Documents Submitted by Government

Ministerio de Educacih, Ciencia y Tecnologia. Informe de l a Rep6blica Argentina.

Seminario “Educaci6n de l a P o b l a c i h Rural en AmCrica Latina: A L I M E N T A C I O N Y
E D U C A C I O N PARA TODOS”. UNESCO- FA0 Santiago de Chile, 3, 4 y 5 de Agosto
de 2004.
0 Ministerio de Educacion, Ciencia y Tecnologia. Programa EMER. 1992. Informe final.
Evaluacion ex - post. Programa de expansi6n y mejoramiento de l a educaci6n rural.
Torno I.
0 Ministerio de Educacidn, Ciencia y Tecnologia. S/f. Programa EMETA. Informe sobre
10s alcances nacionales.
Ministerio de Educaci6n, Ciencia y Tecnologia. DGUFI. Junio de 2005. Estudio de
Demandas Sociales. Documento Preliminar.
0 Ministerio de Educacion, Ciencia y Tecnologia. DGUFI. Junio 2005. Capacidades
Institucionales Relevadas de las jurisdicciones: Documento Preliminar.

Other Reference Documents

Provincial Fact Sheets: Contents: Geographic characteristics, population characteristics,

infi-astructure conditions, social conditions (NE31 and poverty indicators), agriculture
activity, manufacturing sector, service sector, labor force, macroeconomic indicators,
political situation, institutional context, technical education and rural education.
Ministerio de Educacibn, Ciencia y Tecnologia. 2004. DINIECE. M a p a educativo.
“Aqui se cuenta”. Revista informativa del Censo 2001, Ministerio de Economia. INDEC.
N6mero 11. Enero 2004.
“Aqui se cuenta”. Revista informativa del Censo 2001. Ministerio de Economia. INDEC.
N6mero 10. Diciembre 2003.
“Aqui se cuenta”. Revista informativa del Censo 2001. Ministerio de Economia. INDEC.
N6mero 7. Septiembre 2003.
Blanco, Mariela y Jimenez, Dora. “La insercion ocupacional de jovenes rurales”. Trabajo
(s). Publicacion trimestral del CEI1-PIETTE CONICET. N r o 3- invierno 2001,
Cao, H Rubins, R Vaca, J (2003) “Clasificaciones y agrupamientos de Provincias y
Territorios de l a Rep6blica Argentina” - Cuadernos de Investigacibn CEPAS No 14,
Centro de Estudios en Politica, Administracih y Sociedad, Buenos Aires.
Cao, H y Vaca, J (2004) “Divisi6n regional del trabajo: Nuevos elementos y tradicionales
desequilibrios” en: Revista Realidad Econ6mica No202 - Instituto Argentino para e l
Desarrollo Econ6mico (IADE), Buenos Aires febrero - marzo 2004.
CPPEC. Centro de Implernentacion de Politicas Publicas para l a Equidad y el
Crecimiento. Proyecto “Las provincias educativas”. Estudio comparado sobre e l Estado,
el poder y l a Educacion en las 24 provincias argentinas. Director: A x e l Rivas. 2003.
Informe de 24 jurisdicciones.
Hu, S. (April 29, 2003). Educational aspirations and postsecondary access and choice:
Students in urban, suburban and rural schools compared. Educational Policy Analysis
Archives, 11 (14). Retrieved from http://epaa.asu.edu/epaa/vl ln14/.
Ministerio de Economia. Secretaria de Politica Econ6mica. Subsecretaria de
Programaci6n Econ6mica. Monitoreo Sectorial. M a y o 2003.

90
Ministerio de Educacibn, Ciencia y Tecnologia. D i r e c c i h de Informaci6n y E v a l u a c i h
de l a Calidad Educativa. Sistema Nacional de Indicadores Educativos.
Ministerio de Educacion, Ciencia y Tecnologia. Direcci6n de I n f o r m a c i h y E v a l u a c i h
de l a Calidad Educativa. Informes Analiticos. Irene Oiberman y Maria Ester Arrieta. Los
cambios en el sistema educativo argentino entre 1990 -2000.
Ministerio de Educacih, Ciencia y Tecnologia. D i r e c c i h de Informacion y E v a l u a c i h
de l a Calidad Educativa. Informes Analiticos. Documento de Sistematizacih de
Informacion Basica del M6dulo de Educaci6n de l a E P H 1998. Diferenciales por
regiones. Documento N"10. 1999.
Ministerio de Educacih, Ciencia y Tecnologia. Direcci6n de Informacion y Evaluaci6n
de l a Calidad Educativa. Informes Analiticos. PERUSIA, Juan Cruz. EVOLUCION DE
LOS RESULTADOS DE L O S O P E R A T N O S DE EVALUACION DE LA CALIDAD
EDUCATNA. 1995 - 1999. Puntuaciones equiparadas de las pruebas de lengua y de
matemhtica. Documento No13.
Ministerio de Educacih, Ciencia y Tecnologia. Direcci6n de Informacion y Evaluaci6n
de l a Calidad Educativa. Informes Analiticos. TURULL, Francisco. LA MATRkULA
DE E D U C A C I O N CO-: Analisis de su evoluci6n en 10s primeros afios de l a
implementacih de l a L e y Federal. 1996 - 2000. Documento N"14.
Ministerio de Educacibn, Ciencia y Tecnologia. Direcci6n de Informaci6n y E v a l u a c i h
de l a Calidad Educativa. Informes Analiticos. Roggi, Carlos. N i v e l EGB 1 y 2 -
Primario. Cohorte Te6rica 1997/98 - 1998/99. Rendimiento cuantitativo del sistema
educativo de Argentina. Documento N"16. 2001,
Ministerio de Educacih, Ciencia y Tecnologia. Direcci6n de I n f o r m a c i h y Evaluaci6n
de l a Calidad Educativa. Informes Analiticos. Roggi, Carlos. N i v e l EGB 3 y Polimodal.
Cohorte Te6rica 1998/99. Rendimiento cuantitativo del sistema educativo de Argentina.
Documento No17.200 1.
Ministerio de Educacihn, Ciencia y Tecnologia. Direcci6n de I n f o r m a c i h y Evaluacidn
de l a Calidad Educativa. Informes Analiticos. Roggi, Carlos. N i v e l Primario y Medio.
Cohorte Te6rica 1998/99. Rendimiento cuantitativo del sistema educativo de Argentina.
Documento N"18.2001.
Ministerio de Cultura y Educaci6n de l a Naci6n. Secretaria de Programacih y
E v a l u a c i h Educativa. D i r e c c i h de Informacibn y E v a l u a c i h de l a Calidad Educativa.
Informes Analiticos. Cervini, Ruben (Coordinador). Factores asociados a1 l o g o escolar 1.
El Alumno del filtimo aiio de N i v e l Medio: Caracteristicas, context0 y rendimiento. 2"
Censo Nacional de F i n a l i z a c i h del N i v e l Secundario (V/ V I afio, Nov. 1998).
Ministerio de Cultura y E d u c a c i h de l a Naci6n. Secretaria de Programacih y
E v a l u a c i h Educativa. Direccion de Informacion y Evaluaci6n de l a Calidad Educativa.
Informes Analiticos. Cervini, Ruben (Coordinador). FACTORES ASOCIADOS AL
LOGRO E S C O L A R / 2. Caracteristicas del alumno y rendimiento escolar en Matemhtica.
Alumnos de 7" afio - Escuela urbana - 1995/1997.
Ministerio de Cultura y E d u c a c i h de l a Naci6n. Secretaria de Programacih y
Evaluacidn Educativa. Direcci6n de Informaci6n y E v a l u a c i h de l a Calidad Educativa.
Informes Analiticos. Cervini, Ruben (Coordinador). FACTORES ASOCIADOS AL
L O G R O E S C O L A R / 3. Caracteristicas institucionales y rendimiento escolar en
Matembtica Alumnos de 7" afio - Escuela urbana. Operativo Nacional de E v a l u a c i h
1995-1997.
Ministerio de Cultura y Educacibn de l a N a c i h . Secretaria de Programacih y
E v a l u a c i h Educativa. Direcci6n de I n f o r m a c i h y Evaluaci6n de l a Calidad Educativa.
Informes Analiticos. Cervini, Ruben (Coordinador). FACTORES ASOCIADOS AL

91
LOGRO ESCOLAR / 4. L a Instituci6n Educativa de N i v e l Medio y e l Rendimiento en
Matemhtica. Directores del N i v e l Medio - 1997/1998.
Ministerio de Cultura y Educaci6n de l a N a c i h . Secretaria de Programacih y
E v a l u a c i h Educativa. D i r e c c i h de Informaci6n y E v a l u a c i h de l a Calidad Educativa.
Informes Analiticos. Cenini, Rubtn (Coordinador). FACTORES ASOCIADOS AL
LOGRO ESCOLAR / 5. Calidad y equidad en l a E d u c a c i h Bhsica de Argentina
Alumnos de 7" afio - Escuela urbana Rendimiento en Matemhtica Operativo Nacional de
E v a l u a c i h 1997.
Ministerio de Educacih, Ciencia y Tecnologia. Secretaria de Educaci6n. Subsecretaria
de Calidad y Equidad. Direcci6n Nacional de I n f o r m a c i h y E v a l u a c i h de l a Calidad
Educativa. Informes Analiticos. Judengloben, Mirta; Arrieta, Maria Ester y Falcone,
Julihn. BRECHAS E D U C A T I V A S Y SOCIALES: UN PROBLEMA VIEJO Y
VIGENTE. 2003.
Ministerio de Educacibn, Ciencia y Tecnologia. Secretaria de Educaci6n. Subsecretaria
de Calidad y Equidad. Direcci6n Nacional de I n f o r m a c i h y E v a l u a c i h de l a Calidad
Educativa. Informes Analiticos. Relevamiento de l a Normativa en materia de Evaluacion,
A c r e d i t a c i h y Promocion para 10s Niveles Inicial y EGB. Diciembre de 2003.
Ministerio de Educacih, Ciencia y Tecnologia. Secretaria de Educaci6n. Subsecretaria
de Calidad y Equidad. D i r e c c i h Nacional de Informacion y E v a l u a c i h de l a Calidad
Educativa. Informes Analiticos. L a Evaluaci6n de l a Calidad Educativa en Argentina.
Experiencias Provinciales.
Ministerio de Educacibn, Ciencia y Tecnologia. Secretaria de Educaci6n. Subsecretaria
de Calidad y Equidad. Direccidn Nacional de Informaci6n y E v a l u a c i h de l a Calidad
Educativa. Informes Analiticos. Monseur, Christian. 2000. ACER. A U S T R A L I A N
COUNCIL FOR EDUCATIONAL RESEARCH TRENDS I N D I C A T O R S OF
S T U D E N T ACHIEVEMENT ITEM RESPONSE THEORY S C A L I N G OF LITERACY
AND M A T H E M A T I C S A C H I E V E M E N T DATA. FROM 1995 TO 1999 IN FIVE
GRADES. Documento N"12.
Ministerio de Educacih, Ciencia y Tecnologia. Secretaria de E d u c a c i h . Subsecretaria
de Calidad y Equidad. Direcci6n Nacional de Informaci6n y Evaluaci6n de l a Calidad
Educativa. Informes Analiticos. PROGRAMME FOR INTERNATIONAL STUDENT
ASSESSMENT. INFORME NACIONAL. R E P b L I C A ARGENTINA. JUNlO 2004.
Ministerio de Educacibn, Ciencia y Tecnologia. Direcci6n de I n f o r m a c i h y Evaluacidn
de l a Calidad Educativa. Informes de Investigacibn. Ministerio de Educacibn, Ciencia y
Tecnologia. D i r e c c i h Nacional de I n f o r m a c i h y E v a l u a c i h de l a Calidad Educativa.
Grustchesky, Mariano y Serra, Juan Carlos. 2003. Unidad de Investigaciones Educativas.
Estado del arte sobre l a implementacih del Tercer Ciclo de l a Educaci6n General Bhsica.
Ministerio de Educacih, Ciencia y Tecnologia. D i r e c c i h de I n f o r m a c i h y Evaluaci6n
de l a Calidad Educativa. Informes de Investigacibn. Galarza, Daniel. INFORME DE
INVESTIGACI~N. LA ESTRUCTURA CURRICULAR BASICA DEL TERCER
C I C L O DE LA EGB EN OCHO JURISDICCIONES. 1999.
Ministerio de Educacih, Ciencia y Tecnologia. Direcci6n de Informaci6n y Evaluacion
de l a Calidad Educativa. Informes de Investigacih. Estado de situaci6n de l a
Transformacih Curricular e Institucional. Investigacih. Informe de 10s primeros
resultados para el afio 1998. 1999.
Ministerio de Educacih, Ciencia y Tecnologia. D i r e c c i h de I n f o r m a c i h y Evaluaci6n
de l a Calidad Educativa. Informes de Investigacih. Estudios y documentos 1. Educaci6n
General Bhsica. Investigaciones sobre e l Tercer Ciclo. Diciembre de 2000.
Ministerio de Educacidn, Ciencia y Tecnologia. Direcci6n de I n f o r m a c i h y Evaluacibn
de l a Calidad Educativa. Informes de Investigacibn. IMPLEMENTACION Y

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 L O C A L I Z A C I O N DEL TERCER CICLO DE EGB. Las prescripciones y s u impact0 en
10s actores institucionales. REP-LICA ARGENTINA. 2000.
0 Ministerio de Educacibn, Ciencia y Tecnologia. D i r e c c i h de I n f o r m a c i h y E v a l u a c i h
de l a Calidad Educativa. Informes de Investigacih. EL TERCER C I C L O DESDE LA
MIRADA DOCENTE: avances y desafios fiente a l a extensi6n de l a obligatoriedad
escolar. 2000.
0 Ministerio de Educacih, Ciencia y Tecnologia. Direcci6n de Informacion y Evaluaci6n
de l a Calidad Educativa. UNTREF. Informes de Investigacibn. L A S D I F I C U L T A D E S
EN L A S TRAYECTORIAS ESCOLARES DE L O S A L U M N O S . Un estudio en escuelas
de nuestro pais. 2004.
0 Romhn, Marcela. Los j6venes rurales en Argentina. Elementos para una estrategia de
desarrollo rural. Ministerio de l a Produccih. Secretaria de Agricultura, Ganaderia, Pesca
y Alimentos. D i r e c c i h de Desarrollo Agropecuario PROINDER.
0 SITEAL. Sistema de Informacion de Tendencias educativas en America Latina. D e l
trabajo a la escuela: Equidad y exclusion entre 10s adolescentes urbanos de cuatro paises
de America latina. Boletin N r o 1.
0 Verner, Dorte. 2004. Alleviating Poverty and Increasing Incomes in Rural Argentina;
L i k e Shooting Fish in a Barrel? World Bank. Draft version.
0 Ward, James. 1994. “Looking at rural schools and communities in the 21st century: The
impact o f changing demographics and economics”. In:Toward the 21st century: A rural
education anthology. Rural School Development Outreach Project. Volume 1. ED 401
074.

93
 Annex 13: Statement of Loans and Credits
Argentina: Rural Education Improvement Project PROMER -
Difference between
expected and actual
Original Amount in US$ Millions disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Ong. Frm. Rev'd
PO88032 2005 AR(CRL1)Buenos Aires Infrastr 200.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00
SIDP(1 APL)
PO71025 2004 AR-Provincial Maternal-Child Hlth Inv 135.80 0.00 0.00 0.00 0.00 132.08 3.03 0.00
Ln
PO72637 2004 AR-Prov. Maternal-Child Hlth Adj 750.00 0.00 0.00 0.00 0.00 150.00 150.00 0.00
PMC HSA L
PO78143 2004 GEF A R Enabling Act. Conv. Climate 0.00 0.00 0.00 1.14 0.00 0.84 0.42 0.00
Cha
PO83982 2004 A R ECONOMIC RECOVERY 500.00 0.00 0.00 0.00 0.00 500.00 250.00 0.00
SUPPORT S A L
PO88153 2004 A R National Highway Asset Management 200.00 0.00 0.00 0.00 0.00 200.00 40.00 0.00
PO73578 2003 Social Protect V I (AR-Jefes de Hogar) 600.00 0.00 0.00 0.00 0.00 5.23 5.23 0.00
PO70374 2002 A R PROFAM LIL 5.00 0.00 0.00 0.00 0.00 2.92 2.92 2.92
PO69913 2002 A R Santa Fe Provincial Reform 330.00 0.00 0.00 0.00 0.00 126.70 126.70 126.70
PO68344 2001 A R Cordoba PRL5 303.00 0.00 0.00 0.00 0.00 75.00 75.00 0.00
PO64614 2001 AR- Second Secondary Education Project 56.99 0.00 0.00 0.00 0.00 18.00 -38.99 0.00
PO44447 2001 A R Catamarca Provincial Reform 70.70 0.00 0.00 0.00 0.00 24.30 25.00 25.00
PO57473 2001 A R INDIGENOUS C O M M U N I T Y 5.00 0.00 0.00 0.00 0.00 3.46 3.46 0.00
DEVELOPMENT LIL
PO49012 2001 GEF AR-Mam.Poll.Prevention 0.00 0.00 0.00 8.35 0.00 8.44 4.81 4.46
PO55482 2000 AR-Pub. Hlth. Sum. & Disease Control 52.50 0.00 0.00 0.00 0.00 10.41 10.41 -24.77
PO57449 1999 A R State Modernization 30.30 0.00 0.00 0.00 0.00 18.17 18.17 0.00
PO45048 1999 GEF AR-RENEWABLE ENERGY IN 0.00 0.00 0.00 10.00 0.00 9.67 8.93 3.61
RURAL MARKETS
PO06043 1999 A R RENEW.ENERGY R.MKTS 30.00 0.00 0.00 0.00 0.00 26.19 26.19 8.35
PO06046 1999 A R WATER SCTR RFRM 30.00 0.00 0.00 0.00 0.00 18.34 18.34 18.34
PO06058 1999 AR-Social Protection 4 90.80 0.00 0.00 0.00 0.00 10.82 10.82 4.16
PO52590 1998 A R N A T H W Y REHAB&MAINT 450.00 0.00 0.00 0.00 0.00 53.42 53.42 53.42
PO50713 1998 A R M O D E L COURT DEV. 5.00 0.00 0.00 0.00 0.80 0.75 1.55 1.55
PO39787 1998 GEF AR-BIODIVERSITY 0.00 0.00 0.00 10.10 0.00 7.08 5.61 2.47
CONSERVATION
PO06041 1998 A R S M A L L FARMER DV. 75.00 0.00 0.00 0.00 0.00 21.99 21.99 3.83
PO05980 1997 A R PROV ROADS 300.00 0.00 0.00 0.00 0.00 60.18 60.18 60.18
PO06010 1997 A R PROV A G D E V T I 125.00 0.00 0.00 0.00 0.00 57.38 57.38 8.24
PO06052 1997 A R FLOOD PROTECTION 200.00 0.00 0.00 0.00 0.00 29.30 29.30 -12.19
PO06059 1997 AR-Maternal & Child Hlth &Nutrition 2 100.00 0.00 0.00 0.00 0.00 11.95 11.95 0.00
PO40808 1997 A R N.FOREST/PROTC 19.50 0.00 0.00 0.00 0.00 8.91 8.71 0.00
PO39584 1997 A R B.A.URB.TSP 200.00 0.00 0.00 0.00 0.00 51.02 51.02 37.52
PO37049 1996 AR PUB. INV.S TRENGTHG 16.00 0.00 0.00 0.00 5.70 0.93 6.63 1.13
PO06040 1996 AR FORESTRYIDV 16.00 0.00 0.00 0.00 0.00 3.16 3.16 3.16
PO06060 1995 AR M U N I C D E V T I1 210.00 0.00 0.00 0.00 4.08 11.82 15.90 11.82
PO06018 1995 AR PROV DEVT I1 225.00 0.00 0.00 0.00 0.00 2.93 2.93 2.93
Total: 5,331.59 0.00 0.00 29.59 10.58 1,861.39 1,070.17 342.83

94
 ARGENTINA
STATEMENT OF IFC's
Held and Disbursed Portfolio
In Millions o f U S Dollars

Committed Disbursed
IFC IFC
FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
2000 ASF 20.00 0.00 0.00 20.50 20.00 0.00 0.00 20.50
1998 AUTCL 3.64 0.00 0.00 0.00 3.64 0.00 0.00 0.00
2002104 Aceitera General 50.00 0.00 20.00 30.00 42.00 0.00 20.00 18.00
1995197199 Acindar 22.02 0.00 0.00 0.00 22.02 0.00 0.00 0.00
1994195 Aguas 18.82 0.00 0.00 44.63 18.82 0.00 0.00 44.63
1999 American Plast 2.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00
2000 BACS 5.58 12.50 0.00 0.00 5.58 12.50 0.00 0.00
1999104 Banco Galicia 7.50 0.00 0.00 0.00 3.75 0.00 0.00 0.00
2000 Bco Hipotecano 1.oo 0.00 14.54 26.10 1.oo 0.00 14.54 26.10
1996 Brahma - ARG 0.00 0.00 8.50 0.00 0.00 0.00 8.50 0.00
1997 Bunge-Ceval 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00
1996 CAPSA 3.04 0.00 2.79 7.49 3.04 0.00 2.79 7.49
1999 CCI 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00
1995 CEPA 3.00 0.00 0.00 1.20 3.00 0.00 0.00 1.20
2000 Cefas 6.1 1 0.00 0.00 0.00 6.1 1 0.00 0.00 0.00
1994 EDENOR 3.75 0.00 15.00 0.00 3.75 0.00 15.00 0.00
1998 F.V. S.A. 4.50 0.00 4.00 0.00 4.50 0.00 4.00 0.00
2000 FAF'LAC 8.98 0.00 5.00 0.00 8.98 0.00 5.00 0.00
1996 Grunbaum 2.50 0.00 0.00 3.33 2.50 0.00 0.00 3.33
Grupo Galicia 0.00 3.06 0.00 0.00 0.00 3.06 0.00 0.00
1998 Hospital Privado 8.48 0.00 0.00 0.00 8.48 0.00 0.00 0.00
1992 Huantraico 0.00 27.00 0.00 0.00 0.00 0.00 0.00 0.00
2004 Jumbo Argentina 0.00 40.00 0.00 0.00 0.00 7.50 0.00 0.00
1992 Malteria Pampa 2.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00
1997 Milkaut 0.00 5.03 0.00 0.00 0.00 3.80 0.00 0.00
1993194103 Molinos 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1995 Nahuelsat 2.05 0.00 0.00 0.00 2.05 0.00 0.00 0.00
1996199 Neuquen Basin 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00
1993 Nuevo Central 0.00 3.00 0.00 0.00 0.00 3.00 0.00 0.00
1998 Patagonia 1.76 0.00 1.oo 0.00 1.76 0.00 1.oo 0.00
1998 Patagonia Fund 0.00 14.97 0.00 0.00 0.00 8.00 0.00 0.00
1999 S.A. San Miguel 5.75 0.00 0.00 0.00 5.75 0.00 0.00 0.00
1995 SanCor 9.10 0.00 20.79 0.00 9.10 0.00 20.79 0.00
1995 Socma 6.26 0.00 0.00 15.00 6.26 0.00 0.00 15.00
1998 Suquia 0.00 0.00 10.50 0.00 0.00 0.00 10.50 0.00
1997 T6 I 5.00 0.00 5.00 9.38 5.00 0.00 5.00 9.38
1997 Terminal 6 5.00 0.00 0.00 4.06 5.00 0.00 0.00 4.06
1995 Terminales Port. 2.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00
1995100 Tower Fund 0.00 5.00 0.00 0.00 0.00 4.15 0.00 0.00
1995 Tower Fund Mgr 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00
1996 Transconor 20.29 0.00 17.87 157.58 20.29 0.00 17.87 157.58
2001 USAL 10.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00
1997103 Vicentin 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1993 Yacylec 0.75 5.04 0.00 0.00 0.75 5.04 0.00 0.00
Total portfolio: 300.88 125.65 129.99 319.27 227.13 52.10 129.99 307.27

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.
1999 American Plast 0.00 0.00 0.00 0.00
2004 Banco Rio TFF 0.02 0.00 0.00 0.05
2004 FIDEX 0.03 0.00 0.00 0.00
2001 Gasnor 0.02 0.00 0.00 0.02
2001 ITBA 0.01 0.00 0.00 0.00
Total pending commitment: 0.08 0.00 0.00 0.07

96
 Annex 14: Country at a Glance
Argentina: Rural Education Improvement Project PROMER -
Latin Upper-
POVERTY a n d SOCIAL America mlddle-
Argentina & Carib. Income 1evelo p m e n t diamond'
2003
P o pu lat io n , m id-yea r (m illio ns) 38.4 534 335 Life expectancy
GNi per capita (Atlas method, U S $ ) 3,650 3,260 5,340
GNI (Atlas method, US$ billions) 140.1 1,741 1,788

A v e r a g e a n n u a l growth, 1997-03
T
Population (%) 1.6 1.5 1.2
Laborforce (%) 2.2 2.1 1.8 ;N I Gross
)er primary
M o s t r e c e n t e s t i m a t e (latest year available, 1997-03) :apita nrollment
Poverty (% o f population below natlonalpoverty line) 55
Urban population (%of totalpopulation) 90 77 76
Life expectancyat birth (years) 74 71 73 1
Infant mortality (per 1.000 live births) 16 28 ?a
Child malnutrition (%ofchiidrenunder5) 5 Access to improved water source
Access to an improved water source (%ofpopulation) 94 86 69
Illiteracy (% o f population age 759 3 I1 9
Gross primaryenrollment (%of school-age population) 120 129 m4 -A rgentlna
Male 220 131 n4 -Upper-middle-income group
Female 119 226 n4

KEY E C O N O M I C R A T I O S and LONG-TERM T R E N D S

1983 1993 2002 2003
Economic ratios'
GDP (US$ billions) 104.0 236.5 m2.0 129.6
Gross domestic investment/GDP 20.9 l9.1 12.0 15.1
Trade
Exports o f goods and servicesiGDP 9.2 6.9 27.7 25.0
Gross domestic savingsiGDP 24.2 16.7 26.9 25.9
Gross national savings/GDP .. 15.6 2 1.0 20.7 T
Current account balance/GDP -8.0 -3.5 9.4 6.1
interest paymentslGDP 6.2 1.5 9.8 7.4
Total debt/GDP 44.2 30.6 144.1 113.5
Total debt servicelexports 73.3 35.9 18.4 51.3
Present value o f debt/GDP 237.0
Present value o f debtiexports 439.2
indebtedness
1983-93 1993-03 2002 2003 2003-07
(average annual gro wthl -Argentina
GDP 2.5 1.4 -10.9 8.8 5.2
GDP DercaDita 1.2 0.1 -12.1 7.6 4 .O URRer-middla-inc o ine or0 UR
. .

STRUCTURE Of the E C O N O M Y

(%of G D P )
1983 1993 2002 2003 1 G r o w t h o f i n v e s t m e n t and G D P ( O h )
I
Agriculture 8.7 5.5 10.7 110
Industry 41.6 29.2 32.0 34.7
Manufacturing 30.7 19.5 2 1.3 23.9
Services 49.8 65.3 57.3 54.3

Private consumption .. 69.8 60.9 62.7

General government consumption .. 13.5 12.2 11.4
14.2 -GO1 -GDP
Imports o f goods and services 5.8 9.3 12.8

1983-93 1993-03 2002 2003 G r o w t h o f e x p o r t s a n d i m p o r t s (Oh)

(average annualgrowth)
1.4 3.0 -2.3 6.9 00
Agriculture
2.0 1.1 16.5 40
Industry 43.8
16.0 20
Manufacturing 2.1 0.5 -11.0
2.5 1.6 -9.2 4.2 0
Services
.20
Privateconsumption 0.5 -15.0 0.0 .40
General government consumption 0.7 -5.1 1.5 .BO
Gross domestic investment
Imports o f goods and services
3.7
23.4
1.3
3.7
-36.4
-50.1
38.2
37.6
I

97
 Araentina
PRICES and GOVERNMENT FINANCE

I
1983 1993 2002 2003 I n f l a t i o n (%)
Domestic prices
I 40 T
(%change)
Consumer prices 343.8 m.6 25.9 13.4
implicit GDP deflator 382.4 -
1.5 30.6 m.7

Government finance
(%of GDP, includes current grants)
Current revenue 20.4 18.9 7.6 20.5
Current budget balance
Overall surpiusideficit
-3.1
-5.7
2.6
16
-0.8
-1.5
1.3
0.5
1 -GDPdsflator -CPI I
TRADE
1983 1993 2002 2003
E x p o r t a n d i m p o r t l e v e l s (US$ mill.)
(US$ millions)

I
Totalexports (fob) 13,269 25,709 29,376
Food 1,454 2,273 2,597
Meat 748 913 1,043 30,000
Manufactures 8,603 23,429 15,185
20,000
Total imports (cif) 16,783 8,990 13,813
Food 10,000
Fuel and energy 461 482 544

I
Capital goods 7,773 1,293 2,500 0
97 98 99 00 01
Export price index (1995:X)O) m0 91 99
import price index (995-X)O) m0 87 87 Exports in lrrports
O2 O3
Terms o f trade (1995=X)O) x)O a5 113

e
BALANCE o f PAYMENTS
1983 1993 2002 2003
C u r r e n t a c c o u n t b a l a n c e t o G D P (%)
(US$ millions)
Exports of goods and services 9,288 16,339 28,684 33,231
Imports o f goods and services 5,829 22,026 13,135 18,485
Resource balance 3,469 -5,688 25,548 14,746

Net income -5,921 -2,997 -6,498 -7,425

Net current transfers -5,905 522 576 620

Current account balance -8,357 -8,163 9,627 7,941

Financing items (net) 6,051 3,913 -5,111 -P,493

Changes in net reserves 2,306 4,250 -4.516 4,552 1-10 1
Memo:
Reserves including goid (US$ millions) 1,l72 13,791 %3,489 14,253
Conversion rate (DEC, local/US$) 1.05E-6 10 3.1 2.9

E X T E R N A L D E B T a n d R E S O U R C E FLOWS
1983 1993 2002 2003
(US$ millions) C o m p o s i t i o n o f 2 0 0 3 debt (US$ mill.)
Total debt outstanding and disbursed 45,920 72,425 135,681 146,955
IB RD
IDA
533
0
3,739
0
8,513
0
7,508
0 I A : 7,508

Total debt service 6,805 5,860 5,291 l7,042

iB RD 98 567 1,870 3,350 C 14,752
IDA 0 0 0 0

Composition o f net resource flows

Official grants 2 32 F 40,785
Official creditors 331 2,672 -1850 1.277
Private creditors 1,134 4,397 -3,253 -1,883 9.824
Foreign direct investment 185 2,793 1741 456
Portfolio equity 0 4,979 -27 250
E 4,860
World Bank program
Commitments a0 1,590 250 1,850 A - IBRD E - Bilateral
Disbursements 70 1,507 424 1,963 -
B IDA -
D Other nultilateral -
F Private
P rincipai repayments 40 334 1353 2,988 C-IMF G- Short-term

98
MAP SECTION
 IBRD 33362
70°W BOLIVIA To Tarija 60°W 50°W

JUJUY Pil
co
To
Calama
ma
yo PA RA GUAY
San Salvador De Jujuy
To
S A L TA Salta FORMOSA San Pedro

s
C H ILE To
Cascavel

Salad

y
ua
CHACO

á
Formosa
Formosa

rag

Paran
o
TUCUMÁ
TUCUM ÁN
TUCUMÁN

Pa
To TTucumán
San Miguel De Tucum
ucumá
án
Copiapó d SANTIAGO Posadas ES BRAZIL
CA
CAT
TAMARCA
CATAMARCA Santiago Del Estero
Resistencia
SI ON
Corrientes
MI y
ua
DEL ESTERO ug
n

Ur
Catamarca CORRIENTES To
La Rioja Santa Rosa
A

To
La Serena
LA S A N TA To
Laguna
Mar Chiquita FE Santa Maria
30°S
RIOJA

ná
SAN Cordoba

ra
To

Pa
JUAN San Juan Santa Fe Paraná
Paraná Artigas
30°S
Cerro CORDOBA To
Aconcagua ENTRE
De sa

PACIFIC (6960 m)
RÍOS
Tacuarembó
guader

Mendoza
Rosario
OCEAN
To
Valparaíso
San Luis
To URUGUAY
Montevideo
s

MENDOZA SAN
a

LUIS BUENOS AIRES

p

To
m

Talca
0 100 200 300 400 500 Kilometers
BUENOS
Salado

P a

Santa Rosa
Colo AIRES
rado LA
0 100 200 300 Miles
PA M PA Mar del Plata
To
Los Ángeles
NEUQUEN
Bahía
Bahíía Blanca
Bah
Neuquén
Neuqu
Neuquéén
Ne

gr
o
RIO NEGRO
A

40°S
To Viedma
Viedma
n

Puerto Montt
40°S
d e

CHUBUT
Ch

ARGENTINA
ATLANTIC
ub
ut

Rawson
s

OCEAN
a
co

i
Ch
n i

To
Coihaique Comodoro Rivadavia
P a t a g o

Deseado
C H ILE
S A N TA
CRUZ
Ch

A R GE N TI NA
ica

FALKLAND ISLANDS (ISLAS MALVINAS)

A DISPUTE CONCERNING SOVEREIGNTY OVER THE
ISLANDS EXISTS BETWEEN ARGENTINA WHICH CLAIMS 50°S
50°S THIS SOVEREIGNTY AND THE U.K. WHICH ADMINISTERS SELECTED CITIES AND TOWNS
THE ISLANDS.

Río
R ío Gallegos PROVINCE CAPITALS
Stanley NATIONAL CAPITAL

RIVERS

TIERRA MAIN ROADS

DEL FUEGO This map was produced by the Map Design Unit of The World Bank. RAILROADS
The boundaries, colors, denominations and any other information
Ushuaia 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
PROVINCE BOUNDARIES
endorsement or acceptance of such boundaries.
INTERNATIONAL BOUNDARIES
80°W 70°W 60°W 50°W

SEPTEMBER 2004