Public Disclosure Authorized

PROGRAM INFORMATION DOCUMENT (PID)

APPRAISAL STAGE
Report No.: AB3007
Operation Name Punjab Education Development Policy Credit - IV
Region SOUTH ASIA
Sector General education sector (70%); Sub-national government
administration (30%)
Project ID P101243
Borrower(s) GOVERNMENT OF PAKISTAN
Public Disclosure Authorized

Implementing Agency DEPARTMENT OF EDUCATION, GOVERNMENT OF

PUNJAB
Date PID Prepared April 3, 2007
Date of Appraisal March 20, 2007
Authorization
Date of Board Approval June 7, 2007

1. Country and Sector Background

Pakistan’s social indicators compare poorly with those of other countries with similar levels of per
capita income. Only half of Pakistan’s adult population is literate. The situation is worse for women
with only about a third of adult females literate. Despite rapid progress in increasing primary enrollments
across region and gender, only one out of every two children age 5-9 years is enrolled in primary school
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in 2004/05, and less than half of those who enroll actually complete Grade 5. Enrollment at elementary
and high school levels is extremely disproportionate to primary school rates. Gender, inter-provincial,
regional and urban/rural discrepancies are glaring in all education indicators. With sustained focus on the
reform agenda, the outlook is promising, but Pakistan still has a long way to go before meeting the MDGs
relating to achieving universal primary enrollment and gender parity in education.

Punjab, like other provinces, has shown improvements in key education indicators over the past
few years. At the time of the launch of the Punjab Education Sector Reform Program (PESRP) in 2003,
Punjab had been witnessing insignificant improvements in the education sector with net primary
enrollments rates stagnating at only 45% over a decade long period. Since the start of PESRP, several
improvements have been achieved in expanding access (public sector enrollments have increased during
the past three years by over 2.4 million, up from 8.8 million to 11.25 million; primary net enrollment has
increased from 45% to 58% between 2002 and 2005). With a population of 80 million, the Punjab
province comprises almost 60% of the total population of Pakistan. Therefore, any changes in Punjab are
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likely to have substantial impact on the national indicators. During this same period, Punjab also put into
place institutional changes to address quality issues and to support the large low-cost private sector.
These reforms were accompanied by fiscal reforms to enhance the education sector budget (which has
seen a sustained increase), and fiduciary reforms to improve financial management and procurement
practices.

Despite these initial improvements, several challenges continue to confront the education sector in
Punjab. These include: (a) access (keeping in view that about 40% of Punjab’s primary school-aged
children are still out of school) – sustaining the growth in enrollments; improving retention and reducing
drop outs; responding to supply side constraints for all levels of education in light of the enrollment
growth; and reducing gender and regional disparities; (b) quality: the institutional changes are yet to be
transferred at the school and classroom level, and have yet to translate into improved learning outcomes;
there has been an absence of a comprehensive strategy for improving learning outcomes; and a lack of
systematic measures to evaluate the impact of interventions on improving student learning; and (c)
governance and management to make districts and schools more effective.

2. Operation Objectives
The proposed Fourth Punjab Education Sector Development Policy Credit (PEDPC IV) would be the first
operation of a series of three development policy credits designed to support the on-going Punjab
Education Sector Reform Program (PESRP) which is entering its second phase. This proposed Credit
would provide continued support to PESRP after the successful completion of Phase I reforms from 2003-
2006 (which were supported by a successfully completed series of DPCs from FY04-06), and would
support the Phase II PESRP (FY07-FY09). The objectives of Phase II PESRP are to continue with the
fiscal and fiduciary reforms, to further improve access, deepen the quality reforms, and improve the
management and monitoring of the education sector. The proposed operation is based on reform
program’s three pillars: a) enhance fiscal sustainability and improve the fiduciary environment; b)
increase equitable access to education and improve the quality and relevance of education; c) improve
public education sector governance and management.

3. Rationale for Bank Involvement

By providing continued financing for the Government’s medium term sector reforms, this proposed
operation will assist the province to sustain the reforms initiated in the first three-year PESRP.
Specifically, Bank’s continued involvement will help to increase access to and improve quality of
education from primary to secondary levels. It will contribute to Pakistan’s goal of moving closer to
meeting the Millennium Development Goals (MDGs) related to achievement of universal primary
enrollment, improvements in primary completion rates, and improvements in gender parity. This
proposed credit will contribute to improving student learning outcomes by focusing on quality of teaching
and school performance. It will assist Government in the establishment of systems to undertake
evaluations to measure the impact of the program interventions on learning outcomes. Support to this
program will help the Bank to transfer lessons of implementation and results to other provinces where the
Bank is also supporting system-wide education reforms.

4. Financing
Source: ($m)
BORROWER/RECIPIENT 900
INTERNATIONAL DEVELOPMENT ASSOCIATION 100
Total 1000

5. Institutional and Implementation Arrangements

The implementation of the reform program will continue to be overseen by the Provincial Education
Department through its Program Monitoring and Implementation Unit (PMIU), which has been working
closely with district governments. Many of the systems and databases developed by the PMIU have been
transferred to the Department and districts to strengthen the capacities of the mainstream institutions for
implementation. The Provincial PESRP Steering Committee will remain the overall policy guidance
forum under the leadership of the Chief Secretary of the province, reporting directly to the Chief Minister.

6. Benefits and Risks:

Benefits: This operation has several inter-linked benefits:

• It will maintain the reform and implementation momentum in Pakistan’s largest province
contributing to further improvements in access to and quality of education. This would assist
Pakistan in progressing towards the Millennium Development Goals (MDGs).
• By continuing the already successful interventions, such as girls’ stipends and free textbooks, it will
continue to create to provide much needed support to poor and rural households.
• The benefits of this operation are expected to extend beyond Punjab. The Program has already
provided valuable lessons, and paved the way for similar reforms in other provinces of the country.
The instruments introduced under PESRP are being replicated in the Sindh DPC and the NWFP
Human Development DPC. The Program is expected to continue to have a country-wide impact.
• It will provide support to the province’s fiscal reforms and its debt reduction strategy. It will also
foster the Bank’s work with the province on financial management and procurement reforms.
• It will support donor harmonization in the sector. Already, since its inception, the program has
generated interest and support from development partners, based on the reform priorities identified
by Government.
• It will continue to strengthen the decentralization process through the performance-based conditional
grant mechanism.
• This operation will support all levels of school education – from pre-primary to higher secondary
levels. The experience gained through this operation and the DPC series would provide lessons for
initiating sector-wide improvements in other provinces of the country.

Risks: The proposed operation will provide continued support to an ongoing reform program that has
demonstrated a good track record in performance and government commitment. This provides an
assurance of reduced risks. However the following are the major risks:
• Loss of credibility and public support if the government cannot keep pace with rising public
expectations and is unable to deliver on the quality side.
• The program has become a flagship program of the current government. There could be a risk that
successive governments may not give it the same attention due to shifting priorities.
• Change of status quo through deeper sector reforms could affect several interest groups. There is
always an inherent risk that the system may not be able to sustain such reforms due to external
pressures.
• Finally, budget support operations require a strong national macroeconomic framework. Any
weakening of the macroeconomic framework, due to rising fiscal and trade deficits, could pose a risk
to this or any other budget support operation.

7. Poverty and Social Impacts and Environment Aspects

Policies and programs supported by this operation are pro-poor and aim at reducing gender inequities.
The program seeks to provide access to schooling for poor and underserved areas, with emphasis on girls.
The program is environmentally benign, and will not have significant effects on the environment, natural
resources, or forests.

8. Contact point
Contact: Tahseen Sayed Khan
Title: Lead Education Specialist
Tel: 5722+166
Fax: (92-51) 2822396
Email: tsayed@worldbank.org
Location: Islamabad, Pakistan (IBRD)

9. For more information contact:

The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500
Email: pic@worldbank.org
Web: http://www.worldbank.org/infoshop