DOCUMENT OF THE WORLD BANK
FOR OFFICIAL USE ONLY Public Disclosure Authorized
REPORT NO: 52703-YE
PROJECT APPRAISAL DOCUMENT
ON A
Public Disclosure Authorized PROPOSED GRANT
IN THE AMOUNT OF SDR 8.5 MILLION (US%13MILLION EQUIVALENT)
TO THE
REPUBLIC OF YEMEN
FOR A Public Disclosure Authorized HIGHER EDUCATION QUALITY IMPROVEMENT PROJECT
March 26,2010
Human Development Sector Middle East and North Africa Region
This document has a restricted distribution and may be used by recipients only in the performance of their
Public Disclosure Authorized official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 15,2010) Currency Unit = Yemeni Rial (YER) YERl = US$0.0046 US$1 = YER216.15 FISCAL YEAR January 1 - December 3 1
ABBREVIATIONS AND ACRONYMS AFMlS Accounting Financial Management Information System MoHESR Ministry of Higher Education and Scientific Research CAS Country Assistance Strategy MoPlC Ministry of Planning and International Cooperation CBY Central Bank of Yemen MoTEVT Ministry of Technical Education and Vocational Training CFAA Country Financial Accountability Assessment NCB National Competitive Bidding CPAR Country Procurement Assessment Report NPM National Procurement Manual CQ Consultants' Qualification NS National Shopping cso Civil Society Organization NSDHE National Strategy for the Development of Higher Education CSR Country Status Report PA Performance Agreement DA Designated Account PAD Project Appraisal Document DFID U.K. Department for International Development PDO Project Development Objective DP Development Partners PFS Project Financial Statement EFA Education for All PHRD Japan Policy and Human Resources Development Fund EMP Environment Management Plan PIRC Program Identification and Review Committee FBS Fixed Budged Selection PMU Project Management Unit FM Financial Management POM Project Operations Manual FOE Faculty of Education PP Procurement Plan FTI Fast Tract Initiative PPA Project Preparation Advance GCC Gulf Cooperation Council PSC Project Steering Committee GER Gross Enrollment Ratio QA Quality Assurance GDP Gross Domestic Product QAC Higher Education Quality Assurance Council GNI Gross National Income QAU Quality Assurance Unit . GOY Government of Yemen QBS Quality-based Selection HE1 Higher Education Institution QCBS Quality- and Cost-Based Selection HELP Higher Education Learning and Innovation Project QIF Quality Improvement Fund HEMIS Higher Education Management Information System QIT University Program Quality Improvement Team HEQIP Higher Education Quality Improvement Project QPR Quarterly Progress Report ICR lmplementation Completion Report SBD . Standard Bidding Document ICT Information and Communication Technology SCEP Supreme Council for Education Planning IDA International Development Association scu Supreme Council of Universities IFR Interim Financial Report SIL Specific Investment Loan 1SA International Standards on Auditing SOEs Statements of Expenditure KPI Key Performance Indicator sss Single Source Selection LCS Least Cost Selection STR Student to Academic Staff Ratio M&E Monitoring and Evaluation SWOT Strengths, Weaknesses, Opportunities and Threats MDGs Millennium Development Goals TA Technical Assistance MENA Middle East and North Africa TEVT Technical Education and Vocational Training MIS Management Information System TIMMS Trends in International Mathematics and Science Study MM Mitigating Measures TOR Terms of Reference MoE Ministry of Education WA Withdrawal Application MoF Ministry of Finance YER Yemeni Rial Vice President: Shamshad Akhtar Country Director: A. David Craig Country Manager Benson Ateng Sector Manager: Mourad Ezzine Co-Task Team Leaders: Ayesha Vawda and Lianqin Wang .. 11 FOR OFFICIAL USE ONLY Contents
I . STRATEGIC CONTEXT AND RATIONALE ...... 1 A . Country and Sector Issues ...... 1 B . Rationale for IDA Involvement ...... 2 C . Higher Level Objectives to which the Project Contributes ...... 3 I1 . PROJECT DESCRIPTION ...... 3 A . Lending Instrument ...... 3 B . Project Development Objectives and Key Performance Indicators ...... 3 C . Project Components ...... 4 D . Lessons Learned and Reflected in the Project Design ...... 7 E . Alternatives Considered and Reasons for Rejection ...... 8 I11 . IMPLEMENTATION ...... 9 A . Partnership Arrangements ...... 9 B . Institutional and Implementation Arrangements ...... 9 C . Monitoring and Evaluation of Results and Outcomes ...... 10 D . Sustainability ...... 10 E . Critical Risks and Possible Controversial Aspects ...... 10 F . Project Conditions and Covenants ...... 12 IV . APPRAISAL SUMMARY ...... 12 A . Economic and Financial Analysis ...... 12 B . Technical ...... 13 C . Fiduciary ...... 14 D . Environment and Social ...... 14 E . Safeguard Policy ...... 15 F . Policy Exceptions and Readiness ...... 15 Annex 1: Country and Sector Background ...... 16 Annex 2: Major Related Projects Financed by the World Bank and/or other Agencies ...... 24 Annex 3: Results Framework and Monitoring ...... ;...... 25 Annex 4: Detailed Project Description ...... 31 Annex 5: Project Costs ...... 43 Annex 6: Implementation Arrangements ...... 44 Annex 7: Financial Management and Disbursement Arrangements ...... 49 Annex 8: Procurement Arrangements ...... 59 Annex 9: Economic and Financial Analysis ...... 68 Annex 10: Safeguard Policy and Issues ...... 81 Annex 1 1: Project Preparation and Supervision ...... 82 Annex 12: Documents in the Project File ...... 84 Annex 13: Statement of Loans and Credits ...... 85 Annex 14: Country at a Glance ...... 86 Annex 15: Country Map ...... 88
This document has a restricted distribution and may be used by recipients only in the performance of their official duties . Its contents may not be otherwise disclosed without World Bank authorization .
REPUBLIC OF YEMEN HIGHER EDUCATION QUALITY IMPROVEMENT PROJECT PROJECT APPRAISAL DOCUMENT Middle East and North Africa Region MNSHD ~-~~~ Date: March 26, 201 0 Co-Team Leaders: Country Director: A. David Craig Ayesha Vawda, Lianqin Wang Sector Director: Steen Jorgensen Sectors: Tertiary Education (1 00%) Sector Manager: Mourad Ezzine Themes: Education for Knowledge Economy (1 00%) Project ID: P110733 Environmental screening category: C Lending Instrument: Specific Investment Loan
[ ] Loan [ ] Credit [XI Grant [ 3 Guarantee [ ] Other For Loans/Credits/Others (US$m.): 13.0 Total Bank financing (US$m.): 13.0 Proposed terms: Standard IDA Grant
Republic of Yemen 0.0 0.0 0.0 International Development Association 4.3 8.7 13.0
I-- ~ ~ ~ Total I 4.3 I 8.7 I 13.0 1 Recipient: Republic of Yemen Responsible Agency: Ministry of Higher Education and Scientific Research (MoHESR)
Project implementation period (Six Years): September 1,2010 - August 3 1,2016 Expected effectiveness date: September 1, 201 0 Expected closing date: August 3 1, 20 16
Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO Ref: PAD I. C Does the project require any exceptions from Bank policies? Ref: PAD IKG [ ]Yes [XINO
iv
Have these been approved by Bank management? Is approval for any policy exception sought from the Board?
Does the project include any critical risks rated ?substantial? or ?high?? [XIYes [ ]No Ref; PAD III.E Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Ret PAD IV. G Project development objective Ref; PAD ILB, Annex 4 The project development objective is to create enabling conditions for the enhancement of the quality of university programs and graduate employability.
Project description Ref; PAD ILC, Annex 4
Component 1 - Quality Improvement for University Programs: This component will raise the quality of selected priority undergraduate programs in established public universities through a Quality Improvement Fund (QIF). Component 2 - Quality Assurance: This component will contribute to the development of quality assurance instruments and procedures and to the promotion of a quality assurance culture. Component 3 - Institutional Capacity Development: This component will (i) build the planning and monitoring capacity of the MoHESR; and (ii) develop the fiduciary capacity of Taiz University. Component 4 - Monitoring and Evaluation and Project Management: This component will support the Project coordination, implementation, management, and monitoring and evaluation.
Which safeguard policies are triggered, if any? Ref; PAD IKF Annex 10 None
Significant, non-standard conditions, if any, for: Ref; PAD III.F
Board presentation: None Conditions for Effectiveness: None. Covenants applicable to project implementation: i. At all times during the implementation of the Project, the MoHESR shall maintain the Project Steering Committee (PSC), the Project Management Unit (PMU) and the Project Identification and Review Committee (PIRC), all with a composition, resources, and terms of reference satisfactory to IDA. ii. The PSC shall have overall responsibility for Project oversight and policy guidance of the Project as set out in the Project Operations Manual (POM).
V
I. STRATEGIC CONTEXT AND RATIONALE
A. Country and Sector Issues
1. Yemen faces critical challenges in achieving adequate economic growth. Yemen is one of the poorest countries in the world, with a Gross National Income (GNI) per capita of US$870 (in 2007). Under the pressure of a record 3 percent annual growth, the population of 23 million (in 2007) is expected to more than double by 2040, placing additional strain on the already low and depleting resources. Currently, as many as 67 percent of this population are less than 25 years old. Yemen ranked 140th of 182 countries on the 2009 Human Development Index. Health indicators (life expectancy, mortality rate, malnutrition prevalence) are on the low side by the Middle East and North Africa Region (MENA) and Sub-Saharan Africa standards. Many of the poor are located in rural areas that are often difficult to reach. Recent increases in food prices have exacerbated conditions for the poor and increased pressure on internal stability. The average annual Gross Domestic Product (GDP) growth rate averaged 4.1 percent between 1997 and 2007, and hovered at 4 percent in 2008, in contrast with the regional average of 6.1 percent. Agricultural production is low due to scarce water and arable land. There is an urgent need to diversify the economy as Yemen is a labor-surplus country with sluggish employment creation due to the small private sector and the difficult environment for investment. The vast majority of the labor force (90 percent) work in the informal sector. 2. The higher education sector is expanding, but its quality and relevance lingers at low levels. In 2006/2007 the primary and secondary education Gross Enrollment Ratios (GER) reached 87 percent and 46 percent, respectively, following steady increases in enrollments. Extensive gender inequalities are present, exacerbated by high rates of early marriage. Student learning achievement ranked the lowest in MENA participating countries in the Trends in International Mathematics and Science Study 2007 (TIMSS 2007). There are currently 8 established public universities and 13 private universities, which in 2006/2007 enrolled 230,000 students (of whom approximately 80 percent are in public universities). Enrollments in higher education have grown rapidly in recent years due to the establishment of new private universities and the introduction of fee-paying parallel programs offered by public universities to students who do not qualify to enter regular programs. Inheriting the legacy of low quality at the primary and secondary education levels, higher education institutions in general offer a low standard of education services, and do not equip their students with relevant employment skills. Student learning achievements are not high. In addition, enrollments are disproportionately concentrated in social science streams with little relevance to either local or regional labor markets. 3. The physical, pedagogical, managerial, human and financial conditions needed to improve the learning environment are largely missing. The necessary conditions for a higher education system of high quality and relevance are currently absent due to: (i) absence of quality assurance systems at either the central or institutional level; (ii) poor teaching and learning environment including outdated curriculum, shortage of library resources and laboratories, and lack of electronic infrastructure which limits university students’ ability to access global resources; (iii) low qualifications of faculty members; (iv) low internal efficiency; (v) limited financial autonomy in public universities due to control of expenditures by the Ministry of Finance (MoF); and (vi) weak capacity to undertake sector planning, monitoring and evaluation. 4. The low academic standards achieved by students do not make them easily employable. Graduate unemployment is high and increasing (54 percent in 2005) and there is evidence that the majority of employers are dissatisfied with the skills of the graduates coming out of universities. Even the most basic skills expected from graduates are often missing, making them unfit to perform in the work place either in Yemen or in the region. The high rate of graduate unemployment, together with negative feedback from employers indicates that the higher education system in Yemen is not producing graduates with market relevant skills.
1 5. The Government is conscious of the severe shortcomings of the system, and has developed a Higher Education Strategy to address the identified deficiencies. The Ministry of Higher Education and Scientific Research (MoHESR) has developed a National Strategy for the Development of Higher Education (NSDHE) designed to address challenges faced by the sector. The NSDHE was approved and adopted by the Government in 2006, and a plan of activities was prepared, focusing on the following four areas of reform: (i) quality improvement; (ii) governance and management; (iii) diversification of institutions and programs; and (iv) the management of financial resources.
6. The proposed Higher Education Quality Improvement Project (HEQIP) will contribute to the implementation of the sector strategy. The Project will support the Government’s endeavors to reform the higher education sector by carefully targeting the proposed interventions on selected priority areas, with the potential to demonstrate rapid benefits.
B. Rationale for IDA Involvement
7. Recent initiatives taken by the MoHESR provide a unique opportunity to support the higher education sector. The MoHESR has recently submitted a Higher Education Law to the Parliament. The law will provide the legal framework for implementation of the strategy. The government has already taken a number of steps to develop the sector including restructuring of the Ministry, establishment of a Higher Education Quality Assurance Council (QAC), gradual decentralization of fiduciary responsibilities from the MoF to universities in preparation for longer-term autonomy and accountability at the higher education institutional level, development of a master plan for a management information system, capacity building in the fields of university governance and management, strategic planning, sector financing, quality assurance and quality management.
8. The Government’s commitment to revamp the higher education sector requires a commensurate effort from its development partners. The International Development Association (IDA) is currently engaged in all education sub-sectors in Yemen, with ongoing lending operations in basic and secondary education, as well as in vocational and technical education. The previous IDA-funded Higher Education Learning and Innovation Project (HELP) was implemented with mixed results (2002-2008). The moderately unsatisfactory performance of this project has enabled the identification of the lessons learned and conditions for success in the higher education sector. Meanwhile, the support of the international donor community to the higher education sector remains relatively small, and lacks coordination and a coherent strategic framework.
9. IDA is well-positioned to fill this gap and to use its experience to leverage support to higher education. The lessons of HELP, coupled with: (i) the knowledge gained from the recently completed Yemen Education Country Status Report; and (ii) the higher education global experience of IDA staff, provide compelling grounds for the resumption of IDA support to the sector. Beyond the direct benefits of the proposed project interventions, IDA involvement in response to the Government’s request, will contribute to the holistic and integrated vision outlined in the higher education sector strategy. Despite its relatively small size and scope, the HEQIP will serve as an effective vehicle for a longer term partnership with the higher education sector in Yemen.
10. The aims and interventions of the proposed Project reflect the 2010-2013 Country Assistance Strategy (CAS). The HEQIP’s objectives are congruent with the CAS strategy which aims to: (i) promote human and social development; (ii) build the human capital needed for economic growth; and (iii) improve governance. Worldwide experience suggests that higher education have the potential to bolster economic growth, help deliver basic services and improve the consistency of social fabric. The improvement of the quality of higher education will contribute to unleashing such potential in Yemen.
2 C. Higher Level Objectives to which the Project Contributes
1 1. The HEQIP long-term objectives are aligned with those of the Socio-Economic Development Plan for Poverty Reduction and the National Strategy for the Development of Higher Education. The Project is anchored in the current results-based CAS which aims to facilitate Yemen’s further progress towards the Millennium Development Goals. The Project will contribute to achieving three of the four CAS strategic objectives: (i) fostering human and social development through its focus on quality education; (ii) constituting a building block for the acceleration for economic growth through its emphasis on program relevance and students’ employability; and (iii) enhancing governance through the introduction of performance-based resource allocation mechanisms in higher education. By improving the conditions leading to an enhancement of the quality and relevance of higher education, the Project is expected to have a positive impact on graduate employability and in the longer term, on economic productivity.
11. PROJECT DESCRIPTION
A. Lending Instrument
12. The lending instrument for this Project is a Specific Investment Loan, deemed to be the most appropriate instrument to achieve results on the ground while also supporting the development of a long- term partnership with the government. An IDA grant will finance the Project.
B. Project Development Objectives and Key Performance Indicators
13. The Project Development Objective (PDO) is to create the enabling conditions for the enhancement of the quality of university programs and graduate employability.
14. In the first instance, these conditions include providing Higher Education Institutions (HEIs) with the opportunity to access resources that will allow them to implement specific programs aimed inter alia to improve curricula, upgrade faculty staff professional skills and learning assessment tools, and modernize pedagogic materials and equipment. They also imply that quality assurance mechanisms are in place, implemented and followed up for the qualitative improvement of programs and institutions. The enabling conditions also include facilitating fiduciary management capacity in HEI, and the availability of tools to monitor and evaluate the performance of HEIs and the sector as a whole.
15. Monitoring and evaluation of the Project is critically important but technically challenging as the outcomes of the project may take longer than the project life to materialize. Therefore, the following key performance indicators include both outcome and intermediate outcome indicators.
Proiect Outcome Indicators:
1) Overall satisfaction of students enrolled in the QIF-recipient programs with the quality of their study programs. 2) Overall satisfaction of employers with the quality of QIF-recipient study programs. 3) Overall level of adherence of faculty members to the QIF mechanism.
16. The three outcome indicators are composite indicators. The first two measure multiple dimensions of the enabling conditions, including curriculum, teachindlearning facilities and methods, and academic staffs qualification as well as employability prospects of graduates from QIF beneficiary programs. The third outcome indicator contributes to assessing the extent to which the QIF is likely to be sustainable. In order to measure these outcome indicators, the Project will conduct surveys of students,
3 employers and faculty members regarding their experiences and perspectives on the university programs benefiting from the QIF support at the beginning and end of the Project. Project Intermediate Outcome Indicators:
QIF Performance Agreements successfully implemented by universities. Strategic plan for the Quality Assurance Council formally issued. Number of universities that have carried out a self-assessment following agreed standard procedures. Higher education key performance indicators formally endorsed. Sector-level database developed. Satisfactory results of fiduciary capacity assessment of Taiz University. Quarterly PMU progress reports, reviewed interim financial reports, and annually audited financial statements submitted in a timely manner by the PMU.
Project Components
The HEQP is organized into four components: (i) Quality Improvement for University Programs; (ii) Quality Assurance; (iii) Institutional Capacity Development; and (iv) Monitoring and Evaluation and Project Management.
Component 1 - Quality Improvement for University Programs (US%8.3million total, including contingencies)
18. The goal of this component is to facilitate the establishment of a fully sustainable mechanism that will channel financial resources to higher education institutions in Yemen in order to support program development initiatives leading to significant qualitative improvement in teaching and learning, consonant with the social, economic, and employment priorities of the country. This will be achieved through the establishment of a responsive Quality Improvement Fund (QIF) designed to raise the quality of selected undergraduate programs in the eight established universities. Inputs to this component include goods, consultants' services, and training. Based on the experience, the lessons learned and the success of the QIF, it is expected that the MoHESR will adopt the model for wider application to other program quality enhancement initiatives beyond the life of the Project.
19. The QIF resources will fund up to 12 programs, each with a ceiling of US$650,000. Items eligible for financing include curriculum development and update, professional development of academic staff, visiting professorships, professional internships, acquisition of learning resources, library resources, and program related equipment (see details in Annex 4). Expected outcomes arising from each QIF program will be: (i) enhanced capacity of faculty members and teaching staff; (ii) upgraded curriculum and learning resource materials in the subject area; (iii) definition and adoption of program quality assessment and review procedures; and (iv) development of graduate competencies better aligned with local and regional employment opportunities.
20. During the course of project preparation, each of the public universities was asked to identify up to three priority programs of relevance to the NSDHE, economic priority sectors, and local and regional labor markets, including science, technology, engineering, and management. Priority was also given to the education programs because of their critical role in quality improvement of the entire education sector. Based on these priorities, the Project Identification and Review Committee (PIRC) (established on July 30, 2009) endorsed 12 program areas for development into initial QIF program proposals that could be eligible for financing under the fund using the following criteria: (i) conformity with designated areas of program eligibility; (ii) consistency with the NSDHE; (iii) macro-level assessment of university capacity in the proposed area of program quality improvement; and (iv) macro-level assessment of labor market demand of program graduates.
4 21. During the course of project implementation, final proposals will be developed covering the following topics: (i) self assessment methodology and a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of university capacity relative to development or renewal of the proposed program; (ii) proposed program context, ,objectives and rationale; (iii) detailed QIF program design including required inputs, activities and expected outcomes; (iv) detailed financial proposal; and (v) a monitoring and evaluation plan.
22. Final proposals will be reviewed and endorsed by the PIRC. Following PIRC’s endorsement, QIF programs will be recommended for implementation by the Project Steering Committee (PSC) and approved by the PSC. Proposals will subsequently be incorporated into Performance Agreements between the MoHESR and the Rectors of the implementing university. These Performance Agreements will set out, among other things, the eligibility criteria by which activities and expenditures included in QIF programs are selected for financing, and how University Program Quality Improvement Teams (QITs) will work with the PMU to carry out those activities. QIF program implementation will be undertaken by university Quality Improvement Teams (QIT) with support from the PMU following procedures outlined in the Project Operations Manual while all fiduciary responsibilities will remain with the PMU.
Component 2 - Quality Assurance (US$1.3 million total, including contingencies)
23. The objective of this component is to enhance the credibility and accountability of HEIs by bolstering the development of instruments and procedures for assuring program quality and by contributing to the promotion of a quality assurance culture. This component is the natural complement of the QIF. The concept of applying quality assurance throughout the higher education sector is strongly championed by the leadership of the MoHESR. While the Ministry has previously received support for quality assurance from other bilateral sources, the related practices and procedures have yet to be fully adopted by the academic community. Achievement of the component objective calls for interventions at both the central and the institutional levels. At the central level, a major step was recently taken with the issuance of a Cabinet decree establishing the QAC as a semi-autonomous body. The central role of the Council will be to monitor the extent to which each university has designed, and is implementing, appropriate internal quality assurance procedures. The QAC will facilitate the development of quality assurance processes, and will equally serve both public and private institutions. HEIs will also be empowered to introduce quality assurance procedures as regular internal mechanisms of the academic life.
24. At the central level, the main thrust of project activities will be to support the QAC in the following areas: (i) initial familiarization of the QAC members with the operation of a quality assurance body, and their exposure to the operation of similar agencies functioning in a satisfactory manner; (ii) development of a Strategic Plan and an Operations Manual; (iii) finalization of a Quality Assurance Manual detailing the procedures and criteria for quality assurance in HEIs, including self-assessment and external reviews. The manual will cover both institutional and program reviews, with priority given to the former; (iv) awareness campaigns to increase the academic community’s sensitivity to the criticality of quality assurance, its benefits, and its requirements; (v) mentoring HE1 Quality Assurance Units (QAUs), training of university leadership; and (vi) creation of a pool of reviewers available for quality assessments. These activities will be supported by the Project through training, technical assistance, and targeted study tours to learn from other countries’ successful experience in the establishment of QA systems.
25. At the institutional level, the Project will support the Quality Assurance Units in HEIs to (i) customize the Quality Assurance Manual to their own needs, and (ii) undertake internal institutional and program reviews complying with approved standards outlined in the Quality Assurance Manual. Priority
5 will be given to undertaking institutional reviews designed to assess institutional policy and practices in relation to quality, including governance and management, development of academic staff, quality of curriculum, adequacy of learning materials and facilities, and methods of learning assessments. The Project will provide training, technical assistance, and targeted study tours for QAU members to give them exposure with similar entities in foreign universities with good practice in Quality Assurance.
Component 3 - Institutional Capacity Development (US$1.4 million total, including contingencies)
26. This component has a dual objective: (i) to foster the planning and monitoring capacity of the MoHESR; and (ii) to nurture the capacity of Taiz University, regarding its fiduciary management to enhance accountability. 27. MoHESR Capacity Development. The Ministry is currently in the process of bolstering its capacity to undertake strategic planning, monitoring and evaluation (M&E) for the higher education sector. The HEQP will support this effort through training of selected staff, and technical assistance (including knowledge transfer by teams from countries having recently established similar systems) for MoHESR. In addition, the Ministry has developed a master plan for a higher education management information system (HEMIS). Implementation has already begun with the identification of key performance indicators (KPIs) at the sectoral level and the design of the architecture for a higher education database. Simultaneously, a computerized Student Affairs Module of the university information system has been developed through the Higher Education Learning and Innovation Project (HELP) closed in 2008. The HEQIP will contribute to the finalization of the KPIs and to the development of the higher education database at the central level. The Project will also contribute to the deployment of a Faculty Module and a Finance Module of the information system at the university level. Data from these three modules will feed into the sector database through a user-friendly interface. 28. Capacity Development of Taiz University Fiduciary Management. Currently, procurement and financial management at the university level in Yemen are the responsibility of the finance department headed by a representative of the Ministry of Finance, and supported with staff from university. The long- term aim in the context of decentralization is to make universities fully responsible for fiduciary functions. However, the low capacity of most universities does not allow such a transfer of responsibilities to take place in the short term, and in consequence, fiduciary capacity needs to be developed. Taiz University, which has shown under HELP Project a higher planning and budgeting capacity than the other public universities, has been selected to implement this sub-component. Under the subcomponent, Taiz University will be provided with goods, consultants’ services and training to build their fiduciary management capacity with the objective of meeting IDA’S standard for fiduciary capacity which will be further assessed by IDA before the end of the Project. 29. The Project will contribute to this end by supporting the establishment of a core fiduciary team at Taiz University and building the capacity of this team. The core team will be composed of selected university staff in charge of accounting, financial management and procurement. The Project will support the provision of necessary training for the core fiduciary team of Taiz University as well as other university staff involved in fiduciary tasks at the faculty level, who will be selected against specified criteria. It is expected that during the course of the project life, Taiz University will have demonstrated the viability of the experiment, and its readiness to be scaled up to other public universities.
Component 4 - Monitoring and Evaluation and Project Management (US$2.0 million total, including contingencies) 30. The purpose of this component is to support project management, including monitoring and evaluation of the project activities. Staff salaries, staff training, and incremental operational cost for the Project Management Unit (PMU) are included in the component.
6 3 1. Monitoring and Evaluation (M&E). One of the important lessons learned from the HELP Project is that monitoring and evaluation should play a central role during project implementation. Hence, the proposed Project will systematically document all inputs, processes and outputs to detect in a timely manner whether implementation is on track and whether project revisions and restructuring are needed. The Project will also devote sufficient resources to assess the extent to which the Project has achieved the intended results. The tools and data sources that will be used for monitoring and evaluation include regular progress reports on all project activities, quarterly and annual financial reports as well as reports on procurement and disbursements, and data arising from the project results framework (see Annex 3). In addition, three specific evaluation mechanisms are planned: (i) Student Satisfaction Survey will be carried out to assess the impact of the QIF on students’ perspectives in relation to their study programs; (ii) Employer Satisfaction Survey will be conducted to assess the impact of QIF on employers’ perspectives regarding the QIF supported university programs; and (iii) Faculty Member Survey will be implemented at the end of the project in the QIF-recipient faculties in order to assess the level of support for the QIF mechanism and hence provide lessons leading to improved design and sustainability of the QIF funding approach. An Implementation Completion Report will be produced by the PMU. 32. Pro-iect Management Unit (PMU). The PMU has been established during the project preparation phase and has gained experience through managing the resources of the Japan Policy and Human Resources Development Fund (PHRD Grant) and Project Preparation Advance (PPA). It will play an important role during the project implementation in terms of project coordination, management, and M&E. The PMU, led by a Project Director, will include the following full-time members during the project implementation: Procurement Officer, Finance Officer, QIF Coordinator, M&E Officer, Accountant, Procurement Assistant, and Administrative Staff. Among them, the Project Director, Procurement Officer and Finance Officer are core members of this team, and have already worked in the PMU since April 2009. Other officers will be appointed to the PMU as and when they are needed. The PMU is responsible for all fiduciary (procurement and financial management) activities of the Project as well for the coordination of all project implementation and M&E activities. Inputs to the PMU include staff salaries, incremental operational costs, and staff capacity building investments. Outputs from the PMU include a functional implementation team, operational support to universities, and a well-managed project with a solid M&E system. Detailed project implementation arrangements are in Annex 6. D. Lessons Learned and Reflected in the Project Design 33. Several important lessons have informed the design of the HEQIP. These have been drawn from the experience gained with the previous IDA-supported HELP Project, closed in 2008, and from other World Bank-supported higher education projects bearing similarities with the objectives of HEQIP. The Project focuses on simplicity and realism, and hence does not emphasize either institutional or policy reform. Instead, it will set the stage for the pursuit of future reform. Simplicitv of design is a key ingredient for success of a project in countries such as Yemen where capacity is still fragile, and there is a clear need to establish a solid base for future interventions. Hence, the Project PDO focuses on creating enabling conditions with a direct impact on quality and relevance aspects rather than adopting a reform-oriented agenda. The scope of the intervention is well-targeted towards core activities within the Higher Education System. Implementation arrangements have been streamlined so as to expedite project execution. Reform activities should not be scaled up without firm evidence of their success. This lesson is reflected in the proposed Project where only Taiz University was selected for building capacity in support of the longer term objective to progressively decentralize fiduciary responsibilities to the university level. Objectivity and transparency are prerequisites for responsive funds to be credible, successful, and sustainable. For this reason, the QIF is built on clearly established guidelines, procedures, and evaluation criteria for each stage of QIF program design and implementation. Reviews by an independent Project Identification and Review Committee will contribute to the objectivity of the
7 process. The use of Performance Agreements with specific indicators to monitor the activities, together with the potential for discontinuing funding to QIF programs showing sub-optimal performance, will contribute to credible and rigorous implementation of the QIF component. Monitoring and Evaluation are central ingredients without which implementers, supervisors and decision makers are unable to perceive actual or likely departures from initial design and objectives. This lesson is fully integrated in the HEQIP and reflected in the Results Framework which covers every component of the Project. M&E activities comprise an integral element of the project design and will be coordinated by a dedicated staff member at the PMU. 0 Implementation readiness. All recent portfolio review exercises have pointed to the necessity of minimizing delays in implementation by developing projects that can begin implementation immediately upon effectiveness. Recognizing this fact, the QIF programs will have been pre- selected, preparation of final proposals initiated, and training of university QITs completed prior to effectiveness.
0 A proiect implementation unit must be staffed and operationally ready before project effectiveness and if possible, before negotiations. Recognition of this important lesson is reflected in the HEQIP through recruiting the core PMU team early in the project preparation period, and engaging the team in all project preparation activities. This has led to the development of familiarity with Bank policies and procedures, together with a clear understanding of the project objectives and implementation modalities. Intensity, continuity and qualitv of Bank implementation support are essential in the context of the Yemeni higher education sector. To overcome the shortfalls of the HELP Project resulting in part from a less than adequate level of Bank supervision, a team with strong implementation experience and technical skills has been mobilized for the HEQLP. Close follow-up from the Bank Country Office and regular supervision missions undertaken by the Task Team will need to be exercised during project implementation (see Annex 6). E. Alternatives Considered and Reasons for Rejection 34. Three alternative designs were considered but were dropped. They relate to: (i) the reform content of the Project; (ii) the QIF funding modality (responsive versus competitive); and (iii) the approach to project management. 35. Firstly, a project focused on higher education sector-wide governance and financing reforms was considered. It was later concluded, however, that introducing such reforms without: (i) a clear endorsement by the Ministry of Finance; (ii) a solid quality assurance mechanism in place in universities; and (iii) a demonstrated technical capacity at both the central and institutional levels, would have made the project too risky. Consequently this approach was abandoned in favor of supporting the establishment of a Quality Assurance system, while building the capacity of the Ministry together with capacity- building activities at Taiz University. In addition, during the course of project implementation, the Bank team will continue its dialogue with the Government regarding the necessary conditions for introducing wider governance and financing reforms. 36. Secondly, a competitive scheme for university programs to access the QIF was considered at the early stage of project design. This option was later rejected mainly due to concerns regarding the weak capacity of universities in preparing proposals for QIF funding. The competitive element would have made the process more complicated and the implementation too risky. In addition, with a competitive fund, a large number of universities would have seen their proposals rejected, which, in the Yemeni context would have incurred a high political risk. Consequently, it was decided instead to adopt a simple two stage responsive approach by which: (i) universities identify priority programs for quality improvement; and (ii) priority programs are endorsed and financed based on proposals in compliance with nationally established criteria.
8 37. Thirdly, based on the experience of countries such as Sri Lanka, Chile and Vietnam, a decentralized procurement and financial management system executed by universities was initially considered for this Project. However, readiness assessments undertaken during project preparation have clearly shown that most universities in Yemen do not currently have the capacity to undertake fiduciary responsibilities independently. Hence, it was deemed that a fully decentralized approach incurred an unacceptable level of risk in the Yemeni context, and in consequence it was decided that the procurement and financial management of the QIF and other project activities should be centrally managed by the PMU. In the longer term, however, the goal of giving universities fiduciary responsibility in the future is not abandoned. Building the fiduciary capacity of Taiz University will support achievement of this goal. 111. IMPLEMENTATION A. Partnership Arrangements 38. A number of countries and agencies support higher education in Yemen. Gulf Cooperation Council (GCC) countries and the Islamic Development Bank are by far the largest contributors, and focus principally on the provision of infrastructure and civil works. Other donors such as the Governments of the Netherlands, the United Kingdom, France, Germany and China have been increasingly involved in the sector. In addition, a number of agencies have recently started to support capacity development for Quality Assurance primarily through workshops and training events. These various donor efforts remain uncoordinated and fragmented, and IDA is still considered to be the most significant contributor based on of its sector-wide interventions towards building systems and developing the capacity to sustain such interventions. 39. Greater coordination and harmonization of strategies and technical assistance are needed and the MoHESR is encouraged to play a more active role in bringing together all its Development Partners (DPs) to support the higher education sector strategy with consistent and complementary programs. Based on the adoption of a more holistic approach, it is expected that HEQIP will contribute to the Government’s efforts to coordinate DPs’ interventions, resulting in more efficient use of the resources provided by Yemen’s partners. The Bank team will organize regular consultations with DPs to that effect. In addition, the PMU will develop and maintain a web-based Project Portal which will allow the public to have access to comprehensive information regarding the project activities and progress. B. Institutional and Implementation Arrangements 40. HEQIP will be implemented by the MoHESR through a PMU. A Project Steering Committee (PSC) was established on August 18, 2009 to provide overall guidance to, and oversight of, the Project. This committee is chaired by the Minister of MoHESR and comprises five to seven members, including at a minimum: (i) Vice Minister of Higher Education and Scientific Research; (ii) representative from the Ministry of Planning and International Cooperation; (iii) representative from the Ministry of Finance; and (iv) PMU Director (ex oflcio). See Annex 6 for the PSC’s specific responsibilities. 41. The PMU will carry out project management responsibilities, including coordination, FM, procurement, and M&E. It will meet all fiduciary reporting requirements of the Bank. 42. Regarding the QIF (Component l), each university will establish a Quality Improvement Team (QIT) that will implement the QIF program(s) in accordance with the terms of a Performance Agreement entered into between the university and the MoHESR. All QITs will report to the Ministry through the PMU. The PIRC was established on July 30, 2009 to be responsible for identification, selection and monitoring of projects to be funded under the QIF. The PIRC is chaired by the Vice-Minister of MoHESR, and comprises of three to five members, including (i) representative from employers of the private sector; (ii) representative from private universities; (iii) PMU Director (ex ofJicio); and (iv) QIF Coordinator (ex oflcio). See Annex 6 for the PIRCs specific responsibilities. Communications between the PIRC and universities will be processed through the PMU.
9 43. All activities implemented under Component 2 that are related to universities, as well as those activities implemented under Component 3 relating to Taiz University, will be coordinated through the Office of the President of the respective universities. The PMU will act as liaison with the QAC and the MoHESR with respect to other activities under Components 2 and 3 of the Project. Within each university, the Quality Assurance Unit will liaise directly with the QIT and these two units will closely coordinate their activities. 44. Intensive implementation support will be provided by the IDA team. Three supervision missions will be carried out each year. A joint review will be conducted at the end of the first year in order to verify the need for any corrective action (See Annex 6 for the implementation support plan). C. Monitoring and Evaluation of Results and Outcomes 45. The PMU will be responsible for all the M&E activities from the design stage through project implementation. An M&E officer will be recruited under the PMU to design and implement the M&E functions, including: (i) monitoring the implementation progress of each activity of the project (in coordination with the QIF coordinator and university QITs); (ii) flagging immediate or potential implementation issues that need to be addressed; (iii) assessing the outputs and results achieved under each component; and (iv) evaluating the overall outcomes of the Project against the PDOs. 46. The M&E Officer will work closely with university personnel and the PMU’s QIF Coordinator to collect data and information on the progress made in the implementation of the QIF programs. The M&E officer will also work with the QAC, the MoHESR and Taiz University to gather data and information on their respective activities under the second and third components. D. Sustainability 47. Project sustainability is classically recognized as being rooted in: (i) a sound technical design based on relevant experience and analytical work; (ii) a financial impact that can be absorbed by the public budget after project completion; and (iii) institutional mechanisms in place to ensure the capacity for replication of project outcomes. The technical dimension is dealt with in the Appraisal Summary Section and in Annex 6. The economic and financial dimension is analyzed in the Appraisal Summary Section and in Annex 9. A fourth dimension is also required to maximize project sustainability, namely a strong ownership by stakeholders, which itself presupposes a strict alignment with national and sectoral priorities.
0 Strong Government and University Ownershig The MoHESR has indicated its willingness to carry over the QIF mechanism beyond ,the project life through budget reallocation, should the mechanism demonstrate its benefits. The proposed Project has been designed through extensive consultation with stakeholders including policy makers, university leaders, faculty heads, the academic community, donor organizations, and civil society organizations (CSOs), the private sector, and student representatives. In addition to regular dialogue with the direct beneficiaries of the Project during project preparation, a consultation workshop was conducted during project pre- appraisal, which allowed gathering feedback and suggestions from a wider audience. Reflection ofsector Priorities. The undergraduate programs that will be supported by the QIF are fully aligned with the Government’s priority programs in the eight established public universities. The activities focusing on Quality Assurance and capacity building under Components 2 and 3 are high on the Government agenda while MoHESR together with other development partners have already started to invest in these areas. Consequently, there are strong political commitment and consensus in the sector to support the core activities of the proposed Project. E. Critical Risks and Possible Controversial Aspects 48. The key project risks, and risk mitigation measures, are presented in the table below:
10 Table 1: Critical Risks and Mitigation Measures
Risk Rating Risks Risk Mitigation Measures with Mitigation Key Sector Issue: Over :i) The Project focuses on improving quality and relevance of university Production of HE Graduates, programs rather than on expanding access to higher education particularly in Social Sciences institutions. Substantial with Limited Potential for [ii) Selection criteria for QIF programs put emphasis on alignment with Emp loyabi 1ity national economic priorities and labor market demands. Technical Design: (i) Project design has incorporated lessons learnt from the previous project Overestimatingthe Realistic (HELP) in terms of simple design and realism. Pace of Implementing (ii) Project design does not aim for either institutional or policy reform, but Institutional and Policy to set-the stage for forthcoming reforms. Moderate Reforms (iii) The fiduciary capacity building will be undertaken in Taiz University in order to create a replicable and sustainable model for eventual decentralization. Insufficient Capacity in the :i) The PMU has already been in place during project preparation, and is MoHESR for Project fully staffed. Implementation (ii) The PMU will receive extensive technical support that is embedded in Substantial the project activities. (iii) The Bank team will provide the PMU with on-going support as reflected in the supervision plan. Insufficient Capacity at the {i) The University project-related teams will receive extensive technical University Level support that is embedded in the project activities. [ii) The Project will build the fiduciary capacity of Taiz to test the feasibility of financial autonomy at the university level. (iii) The MoF has been involved in project preparation and is expected to Moderate play a key role in fiduciary decentralization to universities. Universities Lack Experience in (i) A simple and clear Project Operations Manual has been developed and Implementing QlFs is being used to train university teams. (ii) Capacity is being built through technical assistance helping universities prepare realistic proposals; Ciii) Universities will continue to be supported through technical assistance, Moderate including a full-time QIF Coordinator at the PMU. (iv) The IDA team continues to provide substantial support to the PMU and QITs. Insufficient Financial (i) The PMU Finance Officer will receive extensive training in the early Management (FM) Capacity phase of the project. (ii) The Project’s FM policies, procedures, controls and safeguards to be applied during the Project implementation will be documented in the Project’s FM Manual which will be part of the Project OM. Substantial (iii) A high level of FM supervision will be provided on an on-going basis through the Bank’s country-based FMS. Inadequate Procurement (i) The PMU’s Procurement Officer has worked on previous World Bank- Capacity at the PMU and financed Projects. Further training will be provided. University levels (ii) Extensive procurement supervision will be provided by the Bank on an Substantial on-going basis. (iii) Procurement function is supported through a donor-funded international procurement expert Absence of Effective (i) At project preparation, donors active in the HE sector were consulted to Mechanisms for Donor ensure that synergies were developed and overlap avoided. Coordination Activities within (ii) The Bank Team is supporting the MoHESR efforts to continue to lead Low the Agreed HE Strategy. sector level donors activities in a strategic manner. Overall Risk Substantial
11 F. Project Conditions and Covenants
49. There are no conditions for Board presentation or Project Effectiveness.
50. The covenants are as follows:
0 At all times during the implementation of the Project, the MoHESR shall maintain the Project Steering Committee (PSC), the Project Management Unit (PMU) and the Project Identification and Review Committee (PIRC), all with a composition, resources, and terms of reference satisfactory to IDA.
0 The PSC shall have overall responsibility for project oversight and policy guidance of the Project as set out in the Project Operations Manual (POM).
IV. APPRAISAL SUMMARY
A. Economic and Financial Analysis
Economic Analysis
51.' The analysis starts with the rationale to support the Government's investments in higher education, and emphasizes the potential contribution of the sector to economic development and poverty reduction. It posits that without incremental public intervention, the level of investments in higher education will remain sub-optimal and the sector would not be able to play its assigned role in building the human capital base of the country. It proceeds with an analysis of the linkages between higher education and the labor market, and concludes with an identification of the positive impact of university education on private returns.
52. A study has been conducted to analyze the costs and benefits of the interventions to be financed under the HEQIP. The gains to be expected from the Project interventions and the costs associated with them are computed over a 15-year period following project closing, which remains a long-term horizon beyond which attribution of benefits becomes difficult to trace. Under the Base Case Scenario, the benefits associated with the Project investment will offset the costs by a ratio of 1.7. A sensitivity analysis was also completed in order to verify the robustness of the estimates. On the one hand, a Low Case Scenario assumes more stringent maintenance and operational costs associated with Project interventions on the cost-side and lower efficiency gains on the benefit-side. On the other hand, a High Case Scenario assumes lower costs combined with higher gains. The results of the sensitivity analysis indicate that under most scenarios, the costs will be largely covered by the expected gains. In conclusion, under most predictable circumstances, positive dividends may be expected from implementing the HEQIP. See more details in Annex 9.
Financial Analysis
53. The impact of the Project on the fiscal situation is based on the assumption that the sector budget increases as a function of enrollment growth and the speed of extension of the QIF. Low, base, and high cases are built with alternative assumptions on enrollments and on the extension of the QIF. Regardless of which assumption is considered, the impact of HEQIP on the sector budget remains limited, within a range of 1 to 4 percent of projected expenditures. The sensitivity to the alternative assumptions is low. This suggests that the HEQIP, which is expected to yield substantial benefits, may be financially sustainable in the future, provided institutional sustainability is guaranteed and the Project is successfully implemented.
12 B. Technical
54. The HEQIP is aligned with Yemen’s Higher Education Strategy. The overall design of the proposed Project is based on the Government’s policy framework outlined in the NSDHE and other relevant documents. The technical design of the HEQIP reflects: (i) the lessons learned from the previous Bank-supported higher education project; (ii) the experience drawn from Bank-supported higher education projects in other countries with a similar level of cultural and economic development as Yemen; (iii) the analytic results from the Yemen Education Status Report 2009, a collaborative work undertaken between the Government and the World Bank; and (iv) the implementation capacity of the MoHESR and universities.
55. The HEQIP is adapted to the Yemeni Context. (i) While the QIF follows good practice gained from similar responsive or competitive funds in countries such as Egypt, West Bank and Gaza, Bangladesh and Ghana, it has also been designed within the unique context of Yemen. Hence priority has been given to science, technology and education programs, and the competitive feature has been omitted in order to make the process more manageable, operationally achievable and politically acceptable. Consequently, the QIF has been designed as a “responsive fund” and not a “competitive fund” in order to encourage public universities to become eligible for support once they fulfill an agreed set of criteria as outlined in the POM (including QIF manual); (ii) Quality Assurance (QA) activities proposed under the .. HEQIP are based on needs identified by the Government and higher education institutions to adopt good international experience in the quality assurance field; and (iii) While recognizing the lack of necessary environment for a full-fledged financial management reform in all universities at the present time, Taiz University has been selected for capacity-building activities with respect to procurement and financial management, with a view to building capacity in the sector for future reform.
56. HEQIP Technical Design. Two key concepts have been adopted during the design of the Project and will be reflected in the POM (including the QIF Operations Manual), which is an integral part of the project’s manual: simplicity and feasibility. This has translated into the following aspects of the project design: (i) a substantial measures of institutional capacity building have been included as an integral part of the support provided to key stakeholders at the levels of QIF programs, the Quality Assurance Council, Universities Quality Assurance Units, Taiz University capacity-building, and the MoHESR (policy and development functions); (ii) monitoring and evaluation is a core pillar of the Project; (iii) objective and transparent implementation arrangements have been adopted for the review and selection of the universities’ initial and final proposals for the QIF; (iv) a “QIF Coordinator” position will be created within the PMU to ensure close follow-up between the MoHESR and universities; and (v) the QIF programs will be executed based on the clauses of a “Performance Agreement” to be signed between the Rectors of the Universities and MoHESR following the endorsement of final proposals by the PIRC.
57. Technical assistance. In addition to the technical support provided by the Bank task team during the project preparation, the following technical assistance has been deployed: (i) local consultants have been recruited to support the PMU’s efforts in supporting the development of universities initial and final proposals; and (ii) the QIF Operations Manual, which is part of the Project Operations Manual, dated February 20, 201 0, has been developed with extensive technical support from the Bank in collaboration with the PMU. Such technical assistance will continue throughout the project implementation.
13 C. Fiduciary
Fin an cia1 Management (FM)
58. The PMU will be responsible for handling all project financial management activities, keeping the project accounts and reporting on the Project’s financial position, including the preparation of the project’s annual financial statements. The PMU (already in place and responsible for both PHRD grant and PPA activities) is staffed with a Finance Officer and an Accountant (being recruited, since the Accountant is not a core member of the PMU). The financial staff will receive training on Bank Guidelines to better manage and control the flow of information and requests between the QIF program level and the PMU. The PMU will be responsible for preparing and submitting to IDA: (i) the Project’s quarterly Interim Financial Reports (IFRs) that will be reviewed quarterly; and (ii) the project annual financial statements that will be audited annually by an independent external auditor. The project FM adopts a centralized approach. The Project has a “Substantial” FM risk rating after implementing the mitigation measures, while the initial overall project FM risk was assessed as “high”. The proposed overall financial management procedures and practices are satisfactory to meet Yemen’s and LDA’s fiduciary requirements. See more details in Annex 7.
Procurement
59. The PMU will be responsible for handling all project procurement activities, including those at QLF program levels. The PMU is already staffed with a Procurement Officer who has been assessed as capable of carrying out the Project’s procurement function. A Procurement Assistant will also be recruited within a year (since it is not a core member of the PMU).
60. The Project has a “Substantial” procurement risk rating after the mitigation measures, where the initial overall project procurement risk was assessed as “High”. All procurement activities for the proposed Project will be carried out in accordance with the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants known as the 2006 “Anti-Corruption Guidelines” and the “World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits”, dated May 2004 (revised October 2006), and it is open to all bidders from eligible source countries as defined in the guidelines. Consultants will be selected in accordance with “World Bank’s Guidelines: Selection and Employment of Consultants by the World Bank Borrowers” dated May 2004 (revised October 2006) and the Financing Agreement. See Annex 8 for details.
D. Environment and Social
61. The project is classified as Category “C”. The proposed Project will focus principally on the provision of technical assistance, together with teaching and learning resources and facilities. There will be no new construction, no major physical expansion, and no acquisition of land. Hence, the Project will not acquire new land, and will not trigger relevant environment and social safeguard policies.
62. Should there be potential minor environmental and safety issues related to the proposed QIF program activities under the first component (QIF), all final proposals prepared under the science and technology disciplines will be required to submit an Environment and Safety Checklist (the form is included in the QIF Operations Manual). The applying university will complete the form, which will be submitted to the PIRC and PMU as an annex to their proposal. If the checklist shows potential negative environmental impacts, the university will submit a separate sheet for time-bound mitigation measures. It is anticipated that the university proposals under other disciplines will not have any environmental impact and thus the proposals under these disciplines will not be required to include the checklist unless the review committees request such a checklist.
14 63. The Project does not anticipate any negative social impacts. The Bank team has carried out extensive consultations with various stakeholders since the very early stages of project design. Although the early policy discussions were carried out with the Minister and Vice Minister of Higher Education and Scientific Research, the team adopted an extensive participatory approach during the development of the project components. It consulted University Rectors, Deans of Faculties, and faculty members as well as representatives of private universities, the civil society and development partners. This approach is also apparent in the composition of the PSC and the PIRC.
E. Safeguard Policy
Safeguard Policies Triggered Yes No TBD
~~~ ~~ ___~ Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X I Forests (OP/BP 4.36) I 1x1 I Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.1 1) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X
F. Policy Exceptions and Readiness
65. No policy exceptions are sought. The proposed Project complies with all applicable IDA policies, including the Regional criteria for readiness for implementation. The Project is in a state of readiness for implementation: (i) the PMU is fully operational; (ii) the Project Operations Manual is completed; (iii) eight initial QIF proposals are in good quality and endorsed by the PIRC; and (vi) the automated accounting software has been purchased and is operational.
15 Annex 1: Country and Sector Background
YEMEN: Higher Education Quality Improvement Project
I. Country Background
1. Yemen is the poorest country in the MENA region and one of the poorest countries in the world with a GNI per capita of just US$870 in 2007. The recent global economic downturn and increases in food prices have exacerbated the problems of poverty and increased internal instability. The majority of the population of 22.3 million resides in rural areas (approximately 70 percent) and is scattered across varied terrain, making service delivery difficult. There are a few cities, with the largest, Sana’a, experiencing rapid population growth due to rural-urban migration. The population of Yemen is predicted to increase dramatically, more than doubling to 47 million by 2040. This is a particularly daunting prospect given the limited and depleting natural resources and slow economic growth.
2. Yemen ranked 140th out of 182 countries on the Human Development Index published in 2009. It is unlikely that Yemen will achieve key Millennium Development Goals (MDGs), including universal primary education, by 2015. The primary education completion rate was 60 percent in 2007, despite large increases in primary school enrollments (from 2.2 million in 1997 to 3.3 million in 2007). Gender inequalities are extensive: Yemen ranked lowest of all 130 countries on the 2009 Global Gender Gap Index. There are high rates of early marriage - half of all females were married before the age of 15, contributing to early dropouts from school - and 20 percent had their first child before 18.
3. After the 1990 unification of North and South Yemen, there was reasonable economic growth for the next seven years (around 5.2 percent per year). However, economic growth slowed: between 1997 and 2007, the GDP growth rate averaged 4 percent per year. Oil and gas production currently represents a third of GDP, 65 percent of government revenues, and 90 percent of exports. However, oil reserves are depleting and are expected to be exhausted in the next 10-12 years. Agricultural production suffers from problems of limited arable land and scarce water. The production of qat (a stimulant plant) exacerbates this problem. Qat production uses a third of extracted groundwater and takes over land that was used for other agricultural purposes. Qat poses problems for Yemen at other levels, including poor health and productivity of individuals, and loss of resources for households. However, qat production accounts for one-third of agricultural GDP and is the main source of employment for 14 percent of the population.
4. There is an urgent need for Yemen to diversify its non-oil economy, as recognized in the Government’s “Strategic Vision 2025”. The vision looks to rejuvenate coastal regions; accelerate industry, particularly mining; enhance development of agriculture and fisheries; invest in tourism and the environment; and develop the export sector through the creation of free trade zones. This envisioned new economy will require a capable, productive, proactive and adaptable labor force with strong leaders. The higher education sector will play a central role in the development of such a labor force.
5. Currently, the supply of labor does not meet the demand of the labor market. On one hand, there is an excess supply of university-educated workers. The premium of having a university degree, especially in the public sector, has encouraged people to over-invest in education. However, the vast majority of the labor force is employed in the informal sector,’ and half of the labor demand in the formal sector is for basic skills not requiring university degrees. Moreover, the difficult environment for private sector investment has led to a low level of job creation. As a result, many university graduates are waiting
1 According to the 2005 Household Budget Survey, 90 percent of Yemeni workers are employed in the informal sector.
16 to be recruited to civil service posts which are already overstaffed. The 2005 Household Budget Survey found that unemployment rates actually increased with higher levels of education, peaking at 54 percent for university graduates. On the other hand, there is some evidence that the majority of employers, particularly in the field of science and technology, are dissatisfied with the education system in general and do not feel that it adequately prepares students for the workforce.* This leads to employers’ preference for hiring non-Yemeni professionals rather than hiring local Yemeni job seekers, For instance, the dominant oil and gas sector employs relatively few Yemenis. The high graduate unemployment rate and the dissatisfaction of employers points to the need for higher education institutions to produce better quality graduates with the appropriate skill mix for Yemen’s development and future employment needs. Furthermore, while the emigration rate of skilled workers from all other MENA countries is higher to OECD countries than to non-OECD countries, the vast majority of skilled emigrants from Yemen find jobs in low-wage economies, but not in OECD countries that offer high-wage and competitive markets, The lack of competitiveness of Yemeni workers in the global market reduces the potential gains from skilled emigration.
11. Sector Background
6. Education is seen by the Yemeni Government as crucial for the growth of all economic sectors and for the improvement of socio/economic conditions in the country. This priority has been continuously emphasized from publication of the first five-year development plan in 1996. There are currently three ministries with responsibility for education in Yemen: (a) the Ministry of Education (MoE) is responsible for pre-basic, basic and general secondary education; (b) the Ministry of Technical Education and Vocational Training (MoTEVT) is responsible for post-basic and post-secondary technical education and vocational training (TEVT); and (c) the Ministry of Higher Education and Scientific Research (MoHESR) is responsible for university education. At least five strategies guide the work of the three ministries and some of these key strategies cut across the responsibilities of more than one ministry. There is, however, no comprehensive or coordinated vision for education policy and planning, resulting in duplication, an absence of systemic coherence, and no mechanisms for the rational allocation of financial resources.
11.1 Basic and Secondary Education
7. The formal education system in Yemen consists of nine years of compulsory basic education and three years of general secondary education. In the final two years of secondary education, students choose either the science or literary tracks; however, in practice,, many rural schools do not provide both options. A Secondary Education Certificate is issued to students who successfully complete secondary education.
8. Learning achievements in basic education in Yemen are low. This is evidenced by Yemen’s poor results in international learning assessments, including the 2007 Trends in International Mathematics and Science Study (TIMSS) where Yemen ranked the lowest at the fourth grade level, both in mathematics and science, among 36 participating countries. In addition, basic education and secondary education have high repetition and dropout rates. The quality of higher education graduates is dependent on the aptitude of the entrants to universities. Therefore, in order to improve the outcomes of higher education, improving teaching and learning at the basic and secondary education levels will be necessary. Key to this improvement will be the reform of pre-service teacher training.
* World Bank. 2008. Project Appraisal Document: Yemen Secondary Education Development and Girls Access Project. Washington, DC: World Bank.
17 9. Low quality of teacher education means that Yemen does not currently produce graduates with the necessary skills to teach effectively in basic and secondary schools. Teaching qualifications are achieved by graduating from university faculties of education (FOEs). These courses are highly theoretical, concentrating on the history and philosophy of teaching and including no practical content or time in the classroom. FOE courses also do not include training in multi-grade teaching which is an essential skill for the many teachers needed to serve the scattered rural population of Yemen. In fact, FOEs train subject specialists, not general teachers for the primary grades, even though only 15 percent of new teaching posts require a subject specialty. The FOE courses do not cover the MoE curriculum in use in schools, nor do they use the teaching and learning materials that are currently applied in Yemen’s schools. All of these issues need to be addressed to improve the ability and suitability of new teachers for Yemen’s basic and secondary schools. Ultimately, improving Yemen’s teaching workforce will improve the quality of entrants to universities and the workforce.
10. There is also a mismatch between the choices students make in secondary education and the subjects taught in higher education. A growing proportion of secondary students are enrolled in the science track (42 percent of grade 11 and 12 students in 1997-98 and over 80 percent in 2007-08). However, only 33 percent of university students are currently enrolled in science, engineering or technology programs, with the majority of students enrolled in social science programs. The main reason for secondary students preferring the science stream is that science graduates are allowed to apply to more faculties (such as science, humanities, and TEVT) than graduates of the literary stream who can apply only to humanities subjects. On the other hand, universities offer more seats in humanities because they incur lower investment and operational costs. This has an impact on the skills available for the labor market. The foregoing inconsistencies are well-recognized by both the MoE and the MoHESR and measures are being progressively introduced to bring improved alignment and system rationalization.
11. While there have been impressive increases in female access to both basic and secondary education, the gross enrollment rates (GER) of female students are still lower than that of males. From 1998/99 to 2007108, girls’ GER increased from 42 percent to 64 percent in basic education and from 16 percent to 23 percent in secondary education. On the other hand, boys’ GERs were higher than that of girls, but their changes in the same period were more modest or even negatives3Addressing gender access inequality is a priority in the National General Secondary Education Strategy endorsed by the Government in 2007. In a major externally-financed secondary education project, the Secondary Education Development and Girls Access Program, the MoE has committed to ensuring a minimum of 15 percent female representation in new teaching posts for basic and secondary education in the light of the difficulty in deploying female teachers to rural areas. It should be noted that regional disparity in access to education is a challenge for girls. While boys’ enrollment rates in age 6-14 are similar across governorates, the difference in girls’ enrollment rates between the governorates with the highest and lowest enrollments is 52 per~ent.~
12. Learning outcomes of girls are higher than those of boys. Girls outperformed boys in both the 2002 and the 2005 Monitoring Learning Achievement surveys. Furthermore, girls outperformed boys in both mathematics and science tests in TIMSS 2007 at the fourth grade. The difference between the scores of Yemeni boys and girls in TIMSS (22 points for mathematics and 21 points for science) was one of the largest seen among all participating countries.
From 1998/99 to 2007/08, the GERs of males increased from 80 percent to 84 percent in basic education, but declined from 46 percent to 43 percent in secondary education. The range is from Sana’a City with 84% of girls enrolled to Saadah with 32 percent. The national average is 56 percent.
18 11.2 Higher Education
13. After graduating from secondary school, students must wait a year before applying to universities. This is a legacy from the past when students had to join the army for a year after completing secondary education. Entrance to university is restricted by regulations that are aimed at limiting the number of students entering higher education. The Secondary Education Certificate used for entrance to university is only valid for four years. This limits the opportunities for older professionals to enhance their skills or change careers in response to market needs.
A. Enrollments
14. Higher education enrollments have increased rapidly in recent years; from 2002-03 to 2006-07 enrollments grew by 26 percent (Table 1.1). The private sector accounted for 73 percent increase in enrollments and made up 5 percent of all university enrollments in 2002-03 and 19 percent in 2006-07 (Table 1.1). Parallel programs in public universities accounted for most of the remaining increase in enrollments over this time period (25 percent). These increases highlight the rising demand for higher education in Yemen, but place further pressure on the already high graduate unemployment rates.
Table 1.1: Enrollment in University Education (2002/03 and 2006/07)’
I 2002-03 I 2006-07 I 2002103-2006/07 Contribution Number Number (%) Increase to increase enrolled ‘%’ enrolled f%) I . ”, University 190,201 100 239,984 100 49,783 100 Studying abroad 4,806 3 5,867 2 1,061 2 Public 176,303 93 188,557 79 12,254 25 of which regular program 176,303 93 161,576 67 -14,727 of which parallel program 0 0 26,981 11 26,98 1 Private 9,092 5 45,560 19 36,468 73
15. The GERs for both males and females increased as the system expanded, with an overall GER for higher education in 2006-07 of 13 percent. Yemen’s GER for higher education was greater than the average of low-income countries in 2004-05, although the GER for females was at the same level as the low-income country average (Table 1.2). Despite modest increases in their participation over the last 10 years, girls remain vastly underrepresented in higher education. For a large part, however, this situation is not created by the higher education system, but is the mechanical result of girls’ lower access to basic and secondary education. Therefore, there is more margin for maneuver at these upstream levels than at the university level to reduce this gender discrepancy. It should also be noted that discrimination worsens when women enter the labor market, where their qualifications do not ensure them equal treatment with men.
__~~ ’ There were eight established public universities and 13 private universities in 2006-07.
19 Table 1.2: Gross Enrollment Ratios (GERs) in Higher Education (%)
Total Males F e m a I e s 1998-99 2006-07 1998-99 2006-07 1998-99 2006-07 Yemen 9 13 15 18 4 8 International comparison 2004-05 All students Females Yemen 12 6 Low-income average 6 5 MENA average 25 30 World average 25 26
Source: SCEP and EdStats 16. In 2004-05, given the growing demand for higher education, public universities began to accept students into parallel programs. These fee-paying programs are offered in the afternoons to students who do not qualify to enter the regular programs. Most of these programs are in the humanities. Limits have been set by the Supreme Council of Universities on the proportion of students in parallel programs (5 percent in 2004-05). However, these limits have not been adhered to, and across all public universities in 2007-08, 14 percent of enrollments were in.paralle1 programs. This figure has been reported as high as 58 percent in some faculties in Sana’a University. Students in parallel programs have fewer teaching and learning materials available to them because most facilities on campus are closed in the afternoons.
B. Quality and Relevance
17. The rapid increase of enrollment in public universities has hampered the already poor quality and relevance of the higher education sector. In particular, the expansion of parallel programs has caused a severe deterioration in the quality of higher education. The quality of teaching and learning in parallel programs is often less than that offered in regular programs in terms of class size, availability of resources and learning environment. In addition, limited and unbalanced program offerings in public universities is creating an excess supply of graduates in social science and a shortage of science and technology graduates, which makes it difficult to meet the human resource needs of the economy and the society. For instance, the share of students in social sciences increased from 30 percent in 2003-04 to 67 percent in . 2006-07. This is far greater than the proportion found in most countries in the region and has caused high rates of unemployment among those with social science degrees.
18. Poor quality and relevance in the higher education sector are indicated by the following facts: (i) low internal efficiency (as evidenced by high repetition rates); (ii) a lack of competitiveness among Yemeni university graduates and employers’ dissatisfaction with them; (iii) insufficient quality assurance system in universities; (iv) a dearth of teaching and learning resources in universities; (v) high academic staff-student ratios and low qualification levels of academic staff; and (vi) a poor work environment, non- merit-based career ladder, and limited professional opportunities for academic staff in universities. These issues are outlined in detail below.
19. Internal efficiency is low in universities in Yemen. Repetition rates are high in both public and private universities (Table 1.3). This is particularly the case for males and students in humanities subjects. In Sana’a University, for example, 37 percent of male humanities students were repeating a year. The reasons for high repetition are likely to be symptoms of poor quality of teaching and learning. Another contributing factor may be the inclusion of correspondence students who can stay on the university registers for decades without any follow up.
20 Table 1.3 Percentages of Repeaters in Public and Private Universities, 2006-07
Humanities Applied sciences ~ Males Females Total Males Females Total Public universities 30 15 26 18 12 16 ~~ ~ Private universities 14 7 12 18 9 16 Source: SCEP
20. Graduate unemployment is high in Yemen: 54 percent of university graduates were unemployed in 2005. At the same time, there are unfilled vacancies in the formal sector which is attributed to the low quality of university graduates. Although the growth of employment opportunities is low, it is nevertheless difficult to fill even the limited vacancies given the low quality of the pool of qualified applicants, Non-Yemeni workers are selected over Yemeni workers in the formal labor market in many cases, indicating that Yemeni higher education graduates are less competitive. Therefore, improving the quality of the higher education programs that are central to Yemen’s development and employment needs is essential. 21. Across university faculties, there have not been any systematic reviews or developments in curricula. The curricula are highly theory based with very few opportunities for practical application or field training. There is little funding or human capacity within universities to carry out research in Yemen’s public universities. Most of the research is undertaken by self-motivated individuals and is not aligned with the nation’s social and economic development plans. Furthermore, there is no systematic quality assurance system for higher education in Yemen. Recently, the Cabinet decided to establish a quality assurance and accreditation body. Embedding a culture of quality assurance in higher education institutions will be necessary to improve the value and worth of university degree courses. 22. Resources for public universities are directed more to construction of new buildings than to staff, equipment or teaching and learning resources such as library books. Of particular concern (given the limited knowledge creation in Yemen) is the lack of electronic infrastructure for both academic staff and students which limits access to global resources. In public universities, there are 400 students for every computer. In the Sana’a University Education Faculty, only the head of the department is provided with a computer. The MoHESR plans to reduce the student to computer ratio to 40 and have all staff fully computer literate, as articulated in the national ICT policy. 23. The student to academic staff ratio (STR) is particularly high in humanities faculties of public universities despite decreases in the past few years. STRs in humanities faculties range from 22 to 75, while those in science faculties range from 15 to 30. The qualification levels of academic staff are lower than international standards. Just over half of the academic staff in Yemeni universities holds a Ph.D. degree (58 percent). The proportion of professors or associate professors in public universities is quite low (approximately 13 percent on average). Furthermore, the teaching methods used by academic staff are generally traditional: lecturers give lectures and students take notes. The test items for students continue to require more memorization skills than analytical and problem-solving skills. 24. There is a shortage of Yemeni qualified academic staff in public universities, particularly in the subjects of science and technology. As a result, non-Yemenis make up 13 percent of employees in public universities, are over-represented in science and technical subjects, and generally are paid higher than their Yemeni counterparts. The work conditions in most universities are not satisfactory: few faculty members have their own offices and many have to share offices. Faculties also do not have adequate teaching, research, and communication facilities. In addition, since they are teaching both regular and parallel programs, teaching staff do not have time to conduct other critical activities for maintaining the quality of teaching and learning, such as research, curriculum development, and in-service training.
21 25. University careers bear little relationship with merit. In Yemen, a university career remains an attractive and prestigious profession. While highly qualified people are usually appointed, the hiring system is not always merit based. In some cases, the best candidates are overlooked, and less qualified candidates who have better social networks are recruited. The current staff promotion system weighs heavily on years of service, although the number of publications is taken into account for promotion to associate and full professorship.
26. Professional development opportunities among academic staff remain limited. Providing staff members with professional development is often an effective way to attract and keep academic staff in service and to enhance their skills to suit the changing needs of the education system. Most universities in Yemen already provide some training, but it tends to be on an ad hoc basis. A staff development framework will need to be established to outline the training modality and to identify the skills ’and preparation most urgently required to improve the teaching skills of staff.
C. Financing6
27. Between 1997 and 2007, total government spending in Yemen more than doubled in real terms (from YER 743 billion to YER 1,755 billion).’ In line with this increase in overall spending, government expenditure on public education increased by 125 percent (from YER 11 1 billion in 1997 to YER 251 billion in 2007). However, the share of total government spending that went to education fell from over 19 percent between 1998 and 2004 to 16 percent in 2007, which is below the 20 percent reference point set in the Education for All (EFA) Fast Track Initiative (FTI) Indicative Framework.
28. Approximately 12-1 7 percent of public education expenditure was allocated to higher education and research between 1997 and 2007. During this time, there was an almost 4-fold increase in recurrent expenditure on higher education and research (Table 1,4), representing 10 percent of public education expenditure in 1997 and 17 percent in 2007. However, the share of capital education expenditure that went to higher education decreased from 40 percent in 1997 to 16 percent in 2007. This was due to the heavy investments in TEVT during this time period.
Table 1.4: Recurrent Government Expenditure on Education by Level, 1997-2007 (Constant 2007 YER million)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Basic and secondary 79,101 89,182 108,822 139,410 127,795 144,505 133,256 134,421 150,900 154,218 172,816 Basic 67,221 75,788 92,479 118,474 108,603 122,803 113,243 114,234 128,238 131,057 146,863 Secondary 11,879 13,393 16,343 20,937 19,192 21,702 20,012 20,188 22,662 23,161 25,954 TEVT 927 987 1,126 1,521 1,770 2,189 2,934 2,673 3,575 3,963 4,135 Higher education 9,153 11,340 13,528 15,309 15,151 24,305 24,648 25,845 27,129 30,337 35,291 and research Total 89,181 101,509 123,476 156,240 144,716 170,998 160,837 162,939 181,604 188,517 212,243
Source: Authors’ calculations using MoF .Final Account data from 1997-2007 Governance
29. Public universities in Yemen are independent of the MoHESR in most respects, with the exception of financial management, whereby the Ministry of Finance (MoF) exerts line item control over university expenditures. This is a key factor that can explain the unresponsiveness of Yemen’s universities to amend their programs due to changing needs. This system prevents strategic planning at
For more details, see Annex 9. ’ MoF final account data.
22 the university level, perpetuates bureaucratic rigidity and offers little incentive for innovation or improving efficiency.
30. The MoF is the primary decision maker regarding the amount and purpose of all allocations. Each public university negotiates its annual budget directly with the MoF and decisions are based primarily on the level and patterns of expenditure in the previous year, within the MOF’s stated ceiling. MoF staff in each university control expenditures on a strict line item basis. Across universities, allocations are highly inequitable with student unit costs varying considerably for the same discipline in different institutions.
3 1. Universities in Yemen are generally isolated from the employer community. There is increasing awareness of the need to enhance employer community relationships, particularly given the stark graduate unemployment statistics. In 2008, the MoHESR held a conference to explore possible linkages and review international experience. At the university level, however, there are few incentives to create such links.
National Strategy for the Development of Higher Education
32. Through the World Bank-funded Higher Education Learning and Innovation Project (a US$5 million Credit), the MoHESR developed the National Strategy for the Development of Higher Education (NSDHE) which was endorsed by the Yemeni Government in 2006 following extensive stakeholder consultation. The NSDHE aims to address many of the weaknesses outlined above through the following four pillars or strategic objectives:
1) Governance and management: Establish, at the national and institutional levels, a governance system that ensures accountability and transparency in decision making and implementation. 2) Diversity of institutions and programs: Link the higher education sector development with the labor market demand, thereby promoting diversification of the structures and programs of higher education institutions vertically and horizontally, and stimulating equity of access. 3) Resources: Provide additional resources (government and non-government) with a focus on enhancing the capacity of higher education to increase self financing and creating partnerships with the private sector to finance and develop higher education institutions. 4) Quality: Improve the quality of teaching and learning, research and services to enable higher education institutions to produce, adapt and disseminate knowledge for the resolution of social and economic issues.
33. A plan of activities for 2006 to 201 1 was prepared and published and further disseminated at a higher education conference in Sana’a in March 2008. The strategy and supporting activities reflect sound international practice in the sector. The goals of the strategic plan are, however, highly ambitious in terms of available resources and implementation capacity. It will therefore be important to prioritize and suitably sequence implementation of the strategic development plan. The major challenges at present are to define and coordinate the piloting, capacity building, legalhegulatory and policy actions that are needed to accomplish the proposed reforms for university governance and finance. The benefits of further investment in the sector are likely to depend on these reforms and the associated incentives to improve quality and efficiency. The proposed Higher Education Quality Improvement Project will support the achievement of the NSDHE objectives in a number of ways. In addition to the Quality Improvement Fund, the Project will also assist public universities in building the capacity of their staff to fully integrate the fiduciary and procurement functions with their strategic planning. In addition, it will enable MoHESR staff to enhance their skills to develop, interpret and monitor higher education indicators to ensure that future policy and planning decisions are based on sound evidence.
23 Annex 2: Major Related Projects Financed, by the World Bank and/or other Agencies YEMEN: Higher Education Quality Improvement Project
Latest Supervision (ISR) Ratings ICR Outcome (Bank-financed Rating Sector Issue Project Projec onlv) (IEG Rating) Implementation Development Progress (IP) Objective (DO) Bank-financed education projects: Secondary Teacher Training NA NA S Project (P005832) 1. Improve student learning (USS10.4m, 1991-98) outcomes, with special emphasis on science and Education Sector Investment MS MS MS mathematics education, by Project (PO0591 1) improving teacher (US%33m, 1994-04) training, increasing girls’ Vocational Training Project access to basic education S S S with increased community (P005912) (US%24.3m, participation; establishing 1996-2003) labor market-oriented, Basic Education Expansion MS S S two-year, secondary Project (PO43255) education programs (USrS56, 2000-07) covering business, commerce and industry. Basic Education MS MS ongoing 2. Increase access to Development Project education services in rural (PO761 85) areas and strengthening of (US%65m,2004-10) capacities at the sub- Second Vocational Training U U ongoing national level. Project (P086308) 3. Increase quality of higher (US$lSm, 2007-12) education output and Child Development Project rationalize spending on MU MU U higher education (P050483) (US%28.9m,2000-05) 4. Expansion and improvement of school Higher Education Learning MU MU MU buildings and facilities for and Innovation Project basic education (PO76 183) (US%5m,2002- 08) Social Fund for S S N/A Development I11 (P082498) (US$60m, 2004 -09) **Satisfactory (S); Moderatel) jatisfactory (MS), Moderately nsatisfactory (M 1, Unsatisfactory (
Other major dev. agencies Area-based programs: Community school projects UNICEF Basic Education Improvement Project Germany: GTZ Literacy USA Expand basic education and decentralized management Social Fund for Development Raising the Secondary School enrollment of 15-17-year- olds; narrowing the gap of enrolled boys and girls in Secondary and Basic Education, and creation of model schools
24 Annex 3: Results Framework and Monitoring
YEMEN: Higher Education Quality Improvement Project
1. Monitoring and evaluation (M&E) activities under the Project are to: (i) monitor the implementation progress of each activity of the project; (ii) flag implementation issues or potential issues that need to be addressed; (iii) assess the extent to which the outputs and results are being achieved under each component; and (iv) evaluate the overall outcomes of the Project against the Project Development Objective.
2. The results framework includes the key indicators that will systematically and continuously measure inputs, processes, outputs and outcomes of the Project. The results framework provides implementing agencies (e.g., MoHESR and universities) with tools and information to demonstrate results and to undertake corrective actions needed during the course of implementation.
3. M&E activities will be carried out at both the central level and the institutional level. The PMU, with technical support from the IDA team, will develop an M&E system (including data collection tool) to monitor project progress against its respective agreed targets; it will also regularly collect and analyze data for updating the results framework. The universities, MoHESR, and QAC, with technical support from the PMU, will track their implementation progress and results for their respective QIF programs, Quality Assurance, and Capacity Development sub-components. Both levels are highly interlinked as the central level reporting will also reflect progress at the institutional QIF program level.
4. The PMU will be responsible for submitting quarterly progress reports to PSC and IDA. Such quarterly progress reports will be prepared by the PMU’s M&E Officer in close coordination with the QIF Coordinator and institutional QIF program teams. The University Quality Improvement Team (QIT) is responsible for submitting regular progress reports to the PMU as set forth in the Performance Agreement; these reports will then be further consolidated by the PMU and submitted to the PSC. The Project Operations Manual will include the templates for all progress reports to ensure standardization and simplification of procedures. The Project will extensively support the M&E activities to ensure the creation of M&E culture at the university level.
5. In addition to the indicators in the results framework, in-depth analysis of the three surveys on students, employers, and faculty members will assess the extent to which the QIF mechanisms contributed to the creation of the enabling conditions leading to enhanced university program quality and graduate employability.
25 Results Framework
PDO Project Results Indicators Use of Project Results Information
To create the enabling conditions 1) Overall satisfaction of students enrolled in the The outcome indicators will measure overall for the enhancement of the quality QIF-recipient programs with the quality of their project performance towards achieving the of university programs and graduate study programs. PDO. employability. 2) Overall satisfaction of employers with the These three indicators are composite quality of QIF-recipient study programs. indicators. The first two indicators measure multiple dimensions of the enabling 3) Overall level of adherence of faculty members to conditions including curriculum, the QIF mechanism. teachingllearning facilities and methods, and academic staff qualifications. The third indicator assesses the extent to which the faculty members are willing to adopt the QIF mechanisms to finance quality enhancement related university programs beyond the life of the project. Intermediate Outcomes Intermediate Results Indicators Use of Intermediate Results Monitoring Component 1: Quality Improvement for The indicators will measure progress towards University Programs achieving performance targets of the 1) QIF Performance Agreements successfully components. Indicators will inform the Satisfactory implementation of QIF implemented by universities progress and flag issues as they arise. Performance Agreements Component 2: Quality Assurance 2) Strategic plan for the Quality Assurance Foundation of quality assurance Council formally issued mechanism and practice established. 3) Number of universities that have carried out a self-assessment following agreed standard procedures Component 3: Institutional Capacity Development
MoHESR: Development of tools to 4) Higher education key performance indicators Support planning and monitoring in formally endorsed. the higher education sector. 5) Sector-level database developed. raiz University: Nurturing the 6) Satisfactory results of fiduciary capacity :apacity to undertake financial assessment of Taiz University. nanagement and procurement Functions consistent with the *equirementof QIF. Component 4: Monitoring and Evaluation and Project Management
Effective implementation, 7) Quarterly PMU progress reports, reviewed nanagement, monitoring and interim financial reports, and annually audited :valuation of the proposed project. financial statements submitted in a timely manner by the PMU.
26 NI-
M M 0. 0. U% I I
Annex 4: Detailed Project Description YEMEN: Higher Education Quality Improvement Project
I. Project Development Objective
1. The project development objective is to create the enabling conditions for the enhancement of the quality of university programs and graduate employability. The Project will build these enabling conditions through two main interventions. First, it will establish a Quality Improvement Fund (QIF) to provide resources to upgrade selected undergraduate programs in public universities using quality-based criteria. These selected programs are aligned with the national priorities for economic development and with the demand of the labor market. Second, it will institutionalize the quality criteria introduced by the previous IDA-funded higher education project (HELP) and will support the Higher Education Quality Assurance Council in the formulation of national Quality Assurance (QA) procedures and program quality standards. While the primary beneficiaries of project activities will initially be the eight public universities and the Higher Education Quality Assurance Council, all public and private universities will benefit in the longer term through the development and adoption of consistent national QA procedures and program quality standards. In addition, the Project will support capacity development for monitoring and evaluation in MoHESR. It will also build the fiduciary capacity of Taiz University in order to demonstrate the long-term feasibility of decentralization of these functions to universities, and will eventually contribute to the sustainability of the QIF mechanism beyond the project period. It is expected that the combination of these interventions at the central and institutional levels will trigger a steady improvement in the quality and relevance of university programs, and will therefore ultimately help students to become more employable.
11. The Project by Component
2. The HEQIP is organized into four components: (i) Quality Improvement for University Programs; (ii) Quality Assurance; (iii) Institutional Capacity Development; and (iv) Monitoring and Evaluation and Project Management.
Component 1: Quality Improvement for University Programs (US%S.3 million total, including contingencies)
A. Objective
3. The objective of this component is to raise the quality of selected higher education programs in Yemen’s universities in fields that are particularly critical to the country’s national development and employment needs. This will be accomplished through the establishment of a Quality Improvement Fund (QIF), a responsive fund’ that will support capacity building in the universities, and provide financing for upgrading programs or for introducing new undergraduate programs, based on international standards. These programs will be designed to prepare graduates in identified priority fields contributing to national or regional economic priorities, and the needs of private and public sector employers. A secondary objective of the component is to facilitate the establishment of a fully sustainable responsive fund that will serve as a continuing mechanism for program quality enhancement. The input to the QIF includes the provision of goods, consultants’ services and training. Expected outcomes arising from the achievement * The “responsive” approach has been selected against a “competitive” approach, as being more appropriate in the current context of higher education in Yemen. Competitive funds may encounter resistance both before and during implementation, since they generate (by design) a group of losers. Hence, responsive funds are a more acceptable form of innovation funds and are considered as a safe first attempt to introduce the concept of performance-based resource allocation. 31 of the foregoing objectives will be: (i) a series of undergraduate programs exhibiting a significant qualitative improvement when compared to other university programs; (ii) a recognition by MoHESR and MoF of the utility and effectiveness of responsive funding mechanisms to address qualitative improvement of higher education programs; and (iii) the inclusion of such mechanisms in subsequent budgetary allocations for higher education.
B. Context
4. Design of the QIF builds on a series of initiatives undertaken by the MoHESR during the past four years that have been designed to build capacity, and increase internal and external efficiency of the system. These initiatives include: (i) undertaking a review of international experience relating to university governance and management; (ii) formulating a sector strategy; (iii) building capacity for university personnel in strategic planning, sector financing, quality assurance and quality management; (iv) building the first elements of a higher education management information system; and (v) introducing enhanced procedures for program development, review and renewal. The purpose of the QIF is to support moving program quality issues from process to practice, while also complementing and aligning program upgrading activities with procedures that will be introduced by the recently established Quality Assurance Council.
C. Activities Completed during Preparation
5. During the course of project preparation, the MoHESR identified the following fields as priority sectors of focus for the introduction or renewal of university programs:
Science and Technology Programs Computer Science Environmental Science and Agriculture Marine Biology Veterinary Science Physics Horticulture Food Science Geology Hydrology Materials Science
Management Programs Business Administration Finance Management Accounting Commercial Law Human Resource Management Project Management Marketing Information Management
Engineering and Technology Programs Mechanical Engineering Electrical Engineering Electronic Engineering Chemical Engineering Civil Engineering Materials Engineering Water Technology Information Technology
Educafion Programs Early Childhood Education Basic Education Secondary Education Special Needs Education
32 6. Building on the above sector priorities MoHESR initiated a two-phase process leading to the formulation of QIF programs that could potentially be funded under the QIF. Phase 1 includes the identification of priority programs and the formulation of initial proposals. Phase 2 comprises the preparation of more detailed final proposals that will be completed following project effectiveness.
7. In order to initiate Phase 1, the following activities were undertaken: (i) the Office of the Minister issued a call for the identification of candidate programs for funding to the Rectors of the eight established public universities; (ii) each university Rector convened an internal executive or management level committee charged with the identification of a maximum of three candidate programs for quality improvement within their respective universities that will meet the criteria established by the proposed project; (iii) on July 30, 2009, the Office of the Minister established a Program Identification and Review Committee (PIRC) having a mandate to select a maximum of two programs per university that will subsequently be eligible for funding support; and (iv) the PIRC issued a letter of endorsement to the Rectors of the respective universities, identifying those programs approved for development into Initial Proposals for QIF programs.
8. Based on the above process steps, guidelines for the formulation of Initial Proposals were circulated to universities, together with the identification of activities eligible and ineligible for funding. Universities then prepared Initial Proposals addressing: (i) the context, objectives and rationale of their proposed QIF programs; (ii) the proposed QIF program activities and outcomes; and, (iii) identification of the proposed QIF programs implementation team. These proposals were reviewed by the Program Identification and Review Committee, resulting in the selection of the following university programs that will be eligible for funding under the QIF, subject to the submission of acceptable final proposals following project effectiveness. Most proposals are of a high quality, and meet standards beyond those which could have been expected from academic teams lacking experience in this type of exercise.
University Program
Hadramout University 0 Marine Biology and Applied Fisheries Science 0 Chemical and Petroleum Engineering
Aden University 0 Marine Engineering 0 Clinical Laboratory Science Taiz University 0 Industrial Chemistry 0 Computer Networks and Distributed Systems Sana'a University 0 Education for Basic Education Teachers 0 Mechatronics
Amran University 0 Computer Science
Thamar Un'iversity 0 Chemistry
Hodeidah University 0 E-learning
Ibb University 0 Applied Physics
9. A series of capacity building activities designed to enable the university QIF programs preparation teams to prepare final proposals following project effectiveness is ongoing.
33 D. Activities to be Undertaken during Implementation
10. Following project effectiveness, the QIF will become operational and MoHESR will initiate the . call for submission of final proposals. The Call for Proposals will reiterate the objective of the program and identify eligible and ineligible expenditures together with the requirement for university contribution to project costs. The call for final proposals will require universities to detail the following: (i) self- assessment methodology and a SWOT analysis of university capacity relative to development or renewal of the proposed program; (ii) proposed program context, objectives and rationale; (iii) activities and expected outcomes; (iv) QIF program implementation team; (v) financial proposal; and (vi) a monitoring and evaluation plan. Detailed requirements for the content of each section of the proposal, together with the proposal evaluation criteria, are provided in the Project Operations Manual (including the QIF Manual).
1 1. Recognizing that QIF programs will have different values depending upon the scope and level of . investment in equipment, together with the overall scope of the QIF programs, the call for development of final proposals provides guidance to university QITs that eligible proposals will have a financial ceiling falling in the range of US$350,000 to US$650,000 subject to analysis of required inputs and expected outcomes. Similarly recognizing that QIF programs will have differing levels of requirement for capital investment to achieve the intended learning outcomes, the call for development of final proposals includes an indicative ceiling on equipment of 40 percent of the approved total QIF program cost. In order to ensure the availability of funds to offset the cost of QIT members who will have a reduced teaching load during the project implementation period as well as providing incentive compensation relating to incremental activities and responsibilities, universities will be required to make a financial contribution directly, equivalent to either 10 percent or 15 percent of the approved QIF program total cost dependent upon the size of the university and availability of discretionary financial resources.
12. Items eligible for funding under the QIF will include but will not be limited to: Development of new curricula or upgrade of existing curricula Overseas fellowships and internships Visiting scholars to assist with program development Institutional twinning or partnership arrangements Local consultants Employer community participation in program development Instructional equipment Scientific journals and books International consultants Staff training Consumable materials for program delivery Minor laboratory or workshop upgrade
13. Items ineligible for funding include: Civil works Long term scholarships Vehicles
14. Final proposals submitted by the universities will again be evaluated by the PIRC in accordance with the criteria outlined in the Project Operations Manual (POM), and those universities meeting the
34 minimum requirements will enter into a Performance Agreement with the MoHESR. A template of the Performance Agreement is provided in the POM.
15. Under the Performance Agreement, each university will establish a University Quality Program Improvement Team (QIT) comprised of the faculty members identified in the QIF program proposal. This team will assume responsibility and be accountable for all QIF ,program technical, coordination, implementation and reporting responsibilities with the exception of financial management and procurement. The QIT will also be responsible for liaising with the university Quality Assurance Units to ensure that results arising from the implementation of QIF programs are disseminated, and consonant with quality-related procedures recommended by the Quality Assurance Council.
16. The PMU will appoint a QIF Coordinator who will provide coordination, facilitation, advisory services, and capacity building for the Improvement Teams, while also ensuring effective liaison with the Project Management Unit, during Project implementation. The QIF Coordinator will be a member of the PMU and will be accountable to the PMU Director. Recognizing the limited capacity of the universities with respect to financial management and procurement, responsibility for these QIF-related functions will be vested in the PMU. The PMU will also assume responsibility for all monitoring and evaluation functions as detailed in the Project Operations Manual. This will be supplemented during the initial phase of implementation by the engagement of local consultants who will provide guidance to university QITs in terms of completing Final Proposal submissions. All IDA supervision missions will similarly include technical support and capacity building dimensions.
17. Principal outputs and outcomes arising from Component 1 of the Project are expected to include the following:
The eight participating public universities have completed a rigorous, quality-focused program review or program development process. Quality-focused program development and review procedures consistent with those recommended by the Quality Assurance Council have been institutionalized in participating universities. University programs of an international standard are being delivered in areas of national social and economic priority. All curricula, teaching and learning resource materials, learning assessment tools consonant with the program requirements are in place. Teaching staff have developed the academic knowledge and sectoral competencies necessary to ensure program quality and relevance. Student and employer satisfaction levels with learning outcomes from the QIF target programs have increased. e Benefits documented by the QIF M&E function provide evidence for the establishment of the QIF as a sustainable mechanism for qualitative improvement of university programs on a system- wide basis.
18. Recognizing that the QIF is a mechanism that has not previously been adopoted by the higher education system in Yemen, a progressive approach to capacity building has been adopted during project preparation and will continue during project implementation. Four intensive workshops were held during project preparation. The first workshop was targeted at university Rectors, Vice-Rectors and Deans in order to build understanding and support for the QIF objectives and procedures at the executive level of the universities. The second and third workshops provided guidance and templates to proposal preparation teams regarding the purpose and formulation of initial and final project proposals. These workshops were supplemented by individual guidance sessions to each university project preparation team. The fourth
35 workshop convened during the project preparation period was with the PIRC in order to ensure clarity of proposal evaluation procedures.
E. Implementation Arrangements
19. QIF programs will be formulated and implemented by university QlTs in accordance with guidelines, procedures and criteria established by the PIRC, together with technical support, procurement and financial management provided by the PMU. University accountability for the achievement of QIF program outcomes will be monitored through a Performance Agreement signed between the University Rector and the Minister of MoHESR. Full details regarding implementation arrangements, including procurement and financial management, are provided in Annexes 6-8.
F. Monitoring and Evaluation (M&E)
20. The template for preparation of Final Proposals submitted to the QIF requires the adoption of a results-based approach to QIF program design, including the articulation of inputs, activities, outputs and expected program quality improvement outcomes. The call for proposals similarly calls for the preparation of a QIF program monitoring and evaluation plan that will be adopted by the implementing university. The approved final proposal, including the M&E plan, will subsequently be incorporated into the Performance Agreement signed between the university and MoHESR. Performance Agreements will detail the requirements for reporting implementation progress, together with data relating to the M&E plan. The data will be forwarded to the PMU which will consolidate it into an overall progress report for the HEQP QIF Component. All M&E activities will be designed and implemented in order to measure the results specified in Annex 3.
Component 2 - Quality Assurance (US$1.3 million total, including contingencies)
A. Objectives
21. This component has a twofold objective: (i) to bolster the development of instruments and procedures for quality assurance; and (ii) to contribute to the promotion of a quality assurance culture in higher education institutions (HEIs). Achievement of these objectives will contribute to establishing the foundations of quality assurance mechanisms and practices in the Yemeni Higher Education (HE) Sector. HEQIP will provide goods, consultancy services and training to help the MoHESR achieve these objectives.
B. Context
22. Quality assurance is currently not a widely accepted concept in the university community in Yemen. Similarly, the instruments necessary to ensure quality of program design, delivery and outcomes have yet to be developed. While the concept of applying quality assurance throughout the HE sector is strongly supported by the leadership of the MoHESR, it has yet to trickle down to the lower levels of the administration, and the academic community at large. At the institutional level, quality assurance initiatives are currently limited to those undertaken by individual faculty members who have been exposed to similar experiences in foreign universities and who recognize the benefits of such an approach. There are, however, no systematic, organized quality assurance schemes currently in place at the university level.
23. Quality of university study programs comprised the focus of the third component of the Higher Education Learning and Innovation Project (HELP). Under this component, assistance was given to all
36 universities to initiate a process of self-assessment, and to develop specific standards for self assessment, as a basis for future accreditation. Guidelines for preparing self study were not developed. Standards were drafted, but neither finalized nor endorsed. However, a major step was taken, namely the development of a proposal to establish a Higher Education Quality Assurance Council (QAC). Establishment of the Council was approved by the Republican Decree No. 21 0/2009 of August 26,2009, thus opening the way for the development of an institutional quality assurance function at the national level. The Council will be established as a legal entity and will enjoy both financial and administrative independence from either the ministry or the universities. As such, the Council will be established as a semi-autonomous body, which is generally considered to be a prerequisite for the effective operation of such an entity. The Council will be responsible for: (i) developing quality awareness among public and private HEIs; (ii) disseminating information to students and employers; (iii) developing quality assurance procedures; (iv) supporting HEI’s efforts to organize quality assurance units; (v) creating a pool of reviewers; and (vi) ultimately engaging in accreditation.
24. The situation left by the HELP, together with the opportunity created by initiatives recently taken by both MoHESR and the universities’ call for a follow-up project that is specifically focused on the issue of program quality improvement. Building on these initiatives, the HEQIP will enable the momentum gained during the implementation of the HELP and will permit some of its foregone benefits to be achieved, Establishing the instruments for quality assurance and promoting a culture of quality improvement are logical and indispensable complements to the QIF component. Providing financial support to universities to implement innovative programs without accompanying these with an emphasis on building quality assurance at the systemic level will seriously limit the potential of the QIF and will put the sustainability of the mechanism at risk. Therefore, recipients of QIF funding will be required to comply with the national standards developed by the Quality Assurance Council.
25, Achieving the above objectives calls for interventions at the central and institutional levels. While championing and facilitating processes and procedures are typically the responsibility of the central level, universities are to ultimately implement, as well as benefit from, a nationally established quality assurance system covering both public and private HEIs.
26. Echoing activities initiated at the central level, quality assurance structures at the HE1 level do nominally exist, but are not yet operational. Several public universities have a Quality Assurance Unit (QAU) but even when such a unit exists, it frequently remains largely dormant or inactive.” Quality assurance activities will not be mandatory, and instead, will be conducted on a voluntary basis, with the assistance of the QAUs which will encourage departments to undertake internal reviews” complying with approved standards, and ensure that such reviews will be followed up by actions to remediate weaknesses identified by the reviews. Departments having received a funding through the QIF will be required to use the criteria and standards developed by the Council. QAUs and QITs will closely coordinate their activities.
27. While action has to be taken simultaneously at both ends of the HE spectrum, some principles have to be followed when designing the component in order to maximize its potential for success. The overarching principle drawn from experience is that a top-down approach is not appropriate to the development of a quality assurance culture. This is especially the case in Yemen where quality assurance is not a common practice and is still frequently regarded with circumspection by the members of the
9 DFID is also providing training in the area of quality assurance. IO The Council requires that all universities -including the private ones- establish such units. 11 Internal reviews constitute an intermediary step before external reviews, which they prefigure. They allow HEls to set up their own program goals and educational objectives and to establish assessment techniques to determine the extent they are being achieved. 37 academic community. Quality assurance requires a cultural shift, and entails abandoning the paradigm according to which academic freedom equals being immune from accountability. To be successfLI1, the development of a quality-oriented culture requires ownership by the academic community, together with strong support from the institutional leadership, coupled with extensive training and professional development. All these ingredients are built into the proposed activities to be financed under this component.
C. Activities Central Level
28. At the central level, the main thrust of activities will be to support the Council during its initial stages of development. While the Council'' has yet to be staffed and tasked, the nine members constituting the Council Board will be selected on a competitive basis (mostly amongst university professors). The chairperson of the Board will be chosen from the Board members. A compact team of full-time staff will be serving administrative functions.
29. Support to the Council will focus mainly on five sets of activities, with each activity comprising a building block towards the effective operation and the capacity of the Council to fulfill its mandate. Activities will include:
(a) Initial familiarization of the Council members and core administrative staff with the operation of a quality assurance body, coupled with exposure to the operation of similar, well established buffer bodies. Experience will be built in all dimensions of quality assurance from internal review to international peer reviewing, licensing and accreditation. The Project will sponsor a study tour in two or three countries (preferably in the Middle East, South Asia or East Asia Regions). (b) Development of: (i) a Strategic Plan including the establishment of a vision, mission, objectives and long/mid-term strategy in the area of quality assurance and accreditation; and (ii) a detailed Council Operations Manual describing the tasks to be undertaken by the Council together with an action plan showing time-bound activities and performance indicators. Combined national and international Technical Assistance (TA) will be provided by the Project to support development of the Strategic Plan and the Council Operations Manual. (c) Finalization of a Manual of Procedures detailing the standards and criteria of quality assurance in HE, including self-assessment and external reviews. The Council Operations Manual will cover both institutional and program reviews, with priority given to the former. As the Council will eventually cater to both public and private institutions (e.g., licensing), the Manual will also deal with specific characteristics of the latter. The Project will support the development of the Manual through international and national TA. (d) Launching an awareness campaign to increase the academic community's understanding of the criticality of quality assurance, its benefits, and its requirements. The campaign will be designed to inform all HE sector stakeholders regarding the forthcoming activities, including those which will be performed at the HE1 level, and those to be undertaken by the members of the community themselves. The advocacy campaign will also aim to instill a culture of accountability and to make the university administrative and teaching staff the main actors of the change that quality assurance entails. Activities will commence in Sana'a and will subsequently be extended to each individual university. The Project will support national TA to perform this task. l2 The Council will have 5 departments: Academic Accreditation and Licensing, Quality Assurance, Training and Monitoring Assessment, Certification and Equivalencies, and Administration and Finance. 38 30. Once well established and fully operational, the Council will be in a position to mentor university quality assurance units and help them grow. To that end, the Council will organize sessions to train university leadership (e.g., presidents, department heads). It will also constitute a pool of expert reviewers who will be available to HEIs for their own assessments. Both activities will be supported by the Project through provision of international and national expertise.
Institutional Level
3 1. The Project will support activation of the university QAUs and will build their capacity to fulfill their functions and establish quality assurance as a normal element of university life. This support will focus mainly on: (i) QAUs staff training, and study tours to gain exposure to similar entities in universities outside of Yemen; and (ii) development of Quality Assurance Operations Manuals. These manuals will be based on the generic manual prepared by the Council and customized to the specific requirements of each university. l3 National and (limited) international TA will be procured for the preparation of manuals as well as for undertaking self-assessments and peer reviews.
D. Implementation Arrangements
32. Activities to be performed by the QAC will be directly managed by the Council itself. However, fiduciary activities will be undertaken by the PMU, as the Council currently lacks the capacity in this area. Similarly, at the university level, university rectors will be responsible for the activities to be implemented by the QAUs, while fiduciary responsibilities will be assigned to the PMU, considering the lack of experience of these units in this area.
E. Monitoring and Evaluation
33. The Council and QAUs will develop their own database and prepare templates to monitor the progress of their activities, and the follow up of the reviews. Each training session will be evaluated by participants. The results indicators for this component are included in Annex 3.
Component 3 -- Institutional Capacity Development (US$1.4 million total, including contingencies)
A. Objectives
34. The main objectives of this component are: (i) to foster the development of tools to support the planning and monitoring capacity of the MoHESR, and (ii) to start nurturing the capacity of public universities with respect to fiduciary management. Inputs to this component include goods, consultancy services and training.
B. Context
35. This component is concerned with capacity building at the two ends of the higher education spectrum: the central level and the institutional level. Both levels need reinforcement so that in the future, universities can use their resources in a responsible and effective manner to achieve their own, self- defined objectives and the MoHESR can fully play its oversight role.
l3 In the case of Taiz University, each of the 8 Colleges has created its own quality assurance unit in addition to the central university QAU. Furthermore, there is a plan to equip each of the 58 Departments of the university with a quality assurance committee. In such cases, and to adhere to the “grass root” approach, it will be the responsibility of each QAU to make sure that the Project support will trickle down as much as possible at least to the College level, and, selectively, to the Department level. 39 MoHESR Capacity Development 36. This component aims to develop capacity in the Ministry to formulate policy as well as monitor and analyze the impact of existing policies in the sector. This objective matches two initiatives recently taken by the MoHESR: (i) the Ministry is undertaking a holistic restructuring and development initiative. In this context, a new Sector is being established, that will be dedicated to policy development, planning, M&E and research; (ii) the Ministry has completed a master plan for development of a higher education management information system (HEMIS). A pool of basic data and performance indicators on the higher education sector is being developed. The HEMIS will allow the Ministry’s vision and decisions to be based on facts and documented evidence. Such data and indicators are not systematically gathered at present, and their availability is urgently needed if the Ministry is to play its proposed role in policy formulation and performance assessment. 37. The Project will contribute to developing the Ministry’s capacity in strategic planning, monitoring and evaluation for the higher education sector, and in implementing of the master plan for HEMIS. Implementation has already begun with the design of the architecture for a national HEMIS, and the pre-identification of performance indicators at the sectoral level (with Dutch Government’s assistance). Simultaneously, a computerized Student Affairs module has been developed at the university level. Ultimately, a reliable network will be in place that will allow communication between all HEMIS users, including the central unit. Capacity Development of Fiduciaw Management in Taiz University 38. It was expected that, with the HELP Project, foundations will be laid for increased autonomy and accountability of HEIs in the use of their resources. This expectation turned out to be premature, and that project did not succeed in implementing new funding mechanisms or in having the two pilot universities (Sana’a and Aden) link their 5-year development plans with faculty budget plans. Hence, by the end of the HELP, as observed in the project Implementation Completion Report (ICR), “the actual practice of budgeting and financial management was not substantially changed”. The ultimate objective, however, remains valid in the longer term. The new higher education law (and the MoHESR by-laws) to be passed is expected to provide a platform to re-ignite the initiative to grant increased autonomy to universities while confirming the role of the Ministry as a policy body responsible for developing a vision for the higher education sector. 39. Currently, procurement and financial management at the university level are the responsibility of the finance department headed by a representative of the Ministry of Finance, and supported with staff from the university. The long-term aim in the context of decentralization is to make universities fully responsible for fiduciary and procurement functions. However, the low capacity of most universities does not allow such a transfer of responsibilities to take place in the short term, and in consequence such fiduciary capacity needs to be developed. Taiz University, which has shown under the HELP Project a higher planning and budgeting capacity than the other public universities (even though its capability in the fiduciary area remains limited), has been selected for the fiduciary capacity development.
40. The Project will support the constitution of a core fiduciary team in Taiz University and strengthen the capacity of this team. The core team will be composed of selected university staff in charge of accounting, financial management and procurement. The HEQIP will provide training to the core fiduciary team as well as other university staff (selected against precise criteria) involved in fiduciary tasks. In addition, necessary goods and consultants’ services will be provided to Taiz University in relation to this subcomponent. The results of the capacity development will be assessed by IDA during the Project life. It is expected that before the end of the project, Taiz University will have demonstrated the viability of the longer term decentralization experiment, and its readiness to be scaled up to other public universities.
40 41. The successful experiment of Taiz University will establish a technical foundation for the possible future decentralization of fiduciary responsibilities to universities, and will contribute to the sustainability of HEQIP activities, especially the mechanism introduced by the QIF.
C. Activities 42. Two distinct sets of activities will be supported by the HEQIP. While the first one will be developing capacity concentrated on the performance of fiduciary tasks at the university level, the second set of activities will be carried out at the central level of the Ministry, and will have the potential to cover the whole sector.
Ministry
43. The Project will contribute to the development of a simple HEMIS at the central level (National HEMIS) and to the deployment of a Faculty module and a Finance module of the HEMIS at the university level. It will also contribute to the capacity of universities to collect the data which will feed into the National HEMIS. l4 HEQIP’s support to the MoHESR will materialize through training of selected staff, and technical assistance (including knowledge transfer by teams from countries having recently established similar systems). Universities 44. The Project will support the provision of necessary training to the core fiduciary team of Taiz University as well as other university staff involved in fiduciary tasks at the faculty level, selected against precise criteria.” It will also support the development of a manual of financial and procurement procedures and accounting systems. D. Implementation Arrangements 45. The MoHESR will be responsible for implementing the training and Technical Assistance plan, while the PMU will take on the fiduciary responsibilities for the technical assistance.
E. Monitoring and Evaluation 46. The MoHESR’s PMU will report on the progress of this component, including the development of the Higher Education performance indicators and HEMIS. It will also monitor and assess the Taiz University fiduciary capacity development activities. The results indicators for this component are included in Annex 3.
Component 4-M&E and Project Management (US%2.0 million total, including contingencies)
A. Objective
47. The objective of this component is to support project management, monitoring and evaluation in relation to the activities undertaken under the other three components. Inputs to the PMU include staff salaries, operating expenses, and staff capacity building investments.
14 It will not, however, support the development of the HEMIS itself, which remains the Ministry’s responsibility. Is In addition to the current financial department located at the central level of the university, most faculties and departments have their own accountant(s). Many of these are actually cashiers and do not have the technical background to fulfill real fiduciary functions. Training will be provided only to those accountants who have the minimum competencies required to benefit for skill upgrade and to become financial managers. 41 B. Activities Monitoring and Evaluation
48. The purpose of the Monitoring and Evaluation (M&E) program is to: (i) systematically document all inputs, processes, outputs, and outcomes of HEQIP; and (ii) link project interventions with outcomes to indicate the extent of progress and achievements of objectives. A comprehensive and integrated data monitoring system managed by PMU will be in place to ensure that all project inputs, processes, outputs, and outcomes are tracked. The tools and data sources include quarterly progress reports and unaudited interim financial reports, which include the progress of disbursement, procurement, and financial management, as well as the progress of indicators and baselines mentioned in the results framework.
49. In order to assist the PMU in developing and implementing the M&E system for HEQIP, an M&E officer will be deployed before the effectiveness of the HEQIP. The M&E system will cover the following scope of work: (i) the progress of the indicators and the achievements of target values in the results framework at the central level; (ii) the implementation progress of QIF supported programs and development of Quality Assurance manuals at the university level; and (iii) the progress of capacity development at the MoHESR (regarding higher education performance indicators and HEMIS) and Taiz University (regarding financial management and procurement).
50. In addition to the above-mentioned M&E activities, three specific evaluation mechanisms are planned. A student satisfaction survey will be carried out to evaluate overall satisfaction of students enrolled in QIF-recipient faculties with the quality of their study programs. In addition, an employer satisfaction survey will be conducted to study overall satisfaction of employers with the quality of QIF- recipient study programs. A faculty member survey will be conducted at QIF-recipient universities in order to assess the level of support by faculty members to the QIF mechanisms. For the first two surveys, the baseline survey will be conducted during the first year of HEQIP; a second survey will be conducted at mid-term; and the final survey will be conducted at the end of the Project. As for the Faculty members? survey, there shall be one survey at mid-term and another one at the end of the Project. While these surveys will be outsourced, the PMU will manage these contracts, monitor their progress and report their developments to IDA.
Proiect Management
5 1. A PMU, acting as Secretariat for the Project Steering Committee, was established during the project preparation phase and has already coordinated and managed the PHRD Grant and the PPA. The PMU will play a continuing role during project implementation in terms of project coordination and management. The core team of the PMU staff members has been recruited including: (i) a Project Director, (ii) a Procurement Officer, and (iii) a Finance Officer. An administrative staff person has also been recruited. In addition to the foregoing, the PMU will also recruit an M&E Officer, a QIF Coordinator, an accountant, and a Procurement Assistant as and when they are needed. The PMU is responsible for all fiduciary (procurement and financial management) activities under the project, including assisting universities, QAC and MoHESR with the procurement of goods and services and maintaining required financial records. The PMU is also responsible for the coordination of project implementation activities, and overall monitoring and evaluation. Inputs to the PMU include staff salaries, operating expenses, and staff capacity building. Outputs from the PMU include a functional implementation team, diligent monitoring and evaluation activities, operational support to universities, and a well managed project.
42 Annex 5: Project Costs YEMEN: Higher Education Quality Improvement Project (US$ million)
1) Cost table: Base Cost
Project Cost by Component and/Activity Local* Foreign Total
Component 1. Quality Improvement for University Programs 1.56 6.24 7.80
Component 2. Quality Assurance 0.10 1.07 1.17
Component 3. Institutional Capacity Development 0.55 0.7 1 1.26
Component 4. Monitoring and Evaluation and Project Management 1.76 0.20 1.96
~ ~ ~ ~~______~ Total Baseline Cost 3.97 8.22 12.19
Physical and Price Contingencies 0.27 0.54 0.81
Total Project Costs 4.24 8.76 13.00
~~
2) Cost table: Totals including contingencies
Project Cost by Component and/Activity Local* Foreign Total
Component 1 . Quality Improvement for University Programs 1.65 6.60 8.25
Component 2. Quality Assurance 0.16 1.18 1.34
Component 3, Institutional Capacity Development 0.63 0.76 1.39
Component 4. Monitoring and Evaluation and Project Management 1.80 0.22 2.02
Total Project Costs (including contingencies) 4.24 8.76 13.00
* Local costs include taxes. Note: (1) Total Amount has been rounded. (2) See Annex 7 for the allocations of the grant proceeds.
43 Annex 6: Implementation Arrangements YEMEN: Higher Education Quality Improvement Project
I. Implementation Arrangements: Government
1. While the MoHESR is responsible for all aspects of project implementation, overall project oversight and policy guidance will be provided by the Project Steering Committee. Responsibility for providing project implementation support and project management will be assigned to the Project Management Unit (PMU) under the MoHESR.
2. The Project Steering Committee (PSC).I6 The PSC, chaired by the Minister of Higher Education and Scientific Research, comprises five to seven members, including at a minimum: (i) Vice Minister of Higher Education and Scientific Research; (ii) representative from the Ministry of Planning and International Cooperation; and (iii) representative from the Ministry of Finance. The PSC will include from time to time additional members. The Project Director of the PMU will serve as the Secretary. The PSC: (i) reviews and endorses annual work plans and budgets for the Project; (ii) reviews semi-annual progress reports to ensure that the Project is meeting the established project development objective; (iii) facilitates the resolution of institutional constraints that may be inhibiting implementation progress; and (iv) provides a forum for continuing dialogue with the World Bank in terms of continuing development of the higher education sector. The PMU Director will assume the role of the PSC Secretary, to carry out the following roles and responsibilities: (i) prepare the Committee’s Agenda, (ii) draft the minutes of meetings; (iii) develop regular and ad hoc progress reports on overall project activities, including each university program’s achievement and issues arising; and (iv) follow-up on Committee decisions in relation to its various activities pertaining to the university-based QIF Units, university-based Quality Assurance Unit, capacity building of Taiz University and of MoHESR’s policy and development functions.
3. The Project Management Unit (PMU). The PMU will be assigned responsibility for planning and implementation management of all project components, including all fiduciary (procurement and financial management) functions. It will also coordinate and provide technical support to QIT’s. Details of PMU functional responsibilities will be provided in the Project’s Operations Manual. The core team of the PMU has been recruited and includes: (i) a Project Director; (ii) a Procurement Officer; and (iii) a Finance Officer. An administrative staff is also already on board. The PMU will also recruit an M&E Officer, a QIF Coordinator, an accountant, and a Procurement Assistant as and when they are needed. Annexes 7 and 8 describe in more detail the requirements to further strengthen the PMU in order to carry out its envisaged administrative and fiduciary control tasks posed by the HEQIP in an effective and timely manner. The institutional set-up of the project is shown in Figure 6.1,
4. Project Operations Manual (POM). A Project Operations Manual has been developed, which outlines key activities and procedures in compliance with IDA fiduciary requirement and Financing Agreement. This is a dynamic document that will be subject to continuous revisions and updates as needs arise. Responsibility for updating and revising the POM lies with the PMU, subject to IDA’S No Objection and the PSC’s approval. The POM is comprised of two main parts: (i) the PMU manual; and (ii) the QIF Manual. The PMU manual addresses the PMU responsibilities and functions, while the QIF Manual delineates the responsibilities and functions of the Project Identification and Review Committee and of the university Quality Improvement Teams (QITs) during implementation of the QIF.
16 The PSC was established in August 18, 2009. 44 Figure 6.1: Project Institutional and Implementation Set-up
Project Steering Committee - - I (PSC) I m I
MoHESR I I Project Identification & - - - Review Committee (PIRC)
I Proiect Management Unit I IA
V V V EIGHT Public Universities Quality Assurance Council Policy and development (Component 1 and 2:AII) (Component 2) function of MoHESR (Component 3: Tau University) (Component 3)
5. The PMU manual provides: (i) an overall description of project objectives and project activities; (ii) HEQIP’s Institutional Arrangements that will outline key project stakeholders at both levels of oversight and implementation, together with their responsibilities and accountabilities; (iii) HEQIP’s Implementation Arrangements describing the relevant steps to carry out project activities; (iv) Fiduciary Requirements and Procedures, whereby the manual will also detail IDA’S procedures as adapted to the specific needs and requirements of the Project; (v) Monitoring and Evaluation (M&E) system, including results framework, data collection methods and tools, progress report templates; and (vi) Administration Arrangements, describing human resources and administrative procedures adapted to the project needs. All relevant templates will be attached to the manual to facilitate implementation and tracking of processes.
6. The QIF Manual describes: (i) the organizational structure through which the QIF will be implemented; (ii) distribution of funds and eligible categories of expenditure; and (iii) the QIF programs (at the university level) contracting and implementation procedures. Annexes to the manual provide templates relating to all project implementation and management procedures, including the Performance Agreement that will be signed between the ministry and the engaged universities to govern the QIF related processes.
7. Project Portal. In order to facilitate communication and implementation, the PMU will develop and maintain a web-based Project Portal that will include information on project progress (e.g., quarterly PMU project progress reports, timely updated project indicators, and semi-annual QIF program progress reports), project technical documents (e.g., Project Operations Manual), and .planned events and activities.
Component 1: Quality Improvement for University Programs
8. Component 1 of the Project will comprise a series of QIF programs designed to improve the quality of selected university programs. In order to select, endorse, and provide oversight of QIF
45 programs, MoHESR has established a Project Identification and Review Committee which will ensure alignment of the HEQIP investment with the National Strategy for Higher Education, together with sectoral objectives relating to rationalization of the higher education system. QIF programs in each of the eight participating public universities will be implemented by a Quality Improvement Team established by the respective University President to design, manage and be accountable for the implementation of QIF programs. Meanwhile, the PMU will provide both the Universities and the PIRC with coordination and support services, including all fiduciary functions. Responsibilities of the respective parties will be as follows:
Project Identification and Review Committee (PIRC). Under the PSC’s overall policy guidance, the PIRC’s responsibilities are to: (i) select QIF programs for the development of initial proposals from the list of candidate programs submitted by universities (concluded during the project prepmation); (ii) review initial proposals submitted by universities and endorse those that meet the criteria outlined in the POM for further development into final proposals (concluded during the project preparation); (iii) review final proposals submitted by universities and endorse those that meet the criteria outlined in the POM to enter into a Performance Agreement between MoHESR and the implementing university; and (iv) monitor compliance of QIF program implementation with the terms and conditions of the Performance Agreement. The PIRC is chaired by the Vice Minister of MoHESR and comprises three to five members, including a representative of private sector employers and a representative of private universities at a minimum. The PIRC may include additional members from time to time. The PMU Director and the QIF coordinator will serve ex oflcio. Once Final Proposals have been endorsed and Performance Agreements have been signed between the Universities and the MoHESR, the PIRC will assume an oversight role in monitoring the implementation performance of QIF programs, through the PMU’s regular reporting.
Quality Improvement Teams (QIlJ in universities. Following the signing of a Performance Agreement to implement a QIF program, universities will establish a QIT for each of their QIF programs. The QIT will comprise the faculty members identified in the QIF program proposal. The mandate of the university QIT is to design, manage and be accountable for the implementation of the QIF program in accordance with the Terms and Conditions of the Performance Agreement established between MoHESR and the implementing university. Composition of the QIT will vary dependent upon the requirements of the individual QIF program. The team, however, should be endorsed by the university Rector and the Dean of the responsible faculty in order that the team be empowered to make commitments to implement the QIF programs. QIT membership should include a Team Leader and a maximum of four additional members all of whom should have expertise in the focus area of the QIF programs and a teaching load that enables full commitment to achievement of QIF program objectives. This team will assume responsibility and accountability for all technical, coordination, implementation and reporting responsibilities associated with the QIF programs while the financial management and procurement will be undertaken centrally by the PMU.
0 PMU Responsibilities vis-&vis the QIF. The PMU is responsible for providing coordination and support services to the PIRC and the Universities: (i) during the design phase while universities are developing and finalizing the QIF program proposals; and (ii) during the implementation phase while universities are governed by the terms and conditions outlined in the Performance Agreement signed with the MoHESR. The mandate of the PMU with respect to the QIF is to: (i) ensure the establishment of all procedures and record keeping relating to QLF program development and implementation; (ii) undertake all procurement and financial management responsibilities associated with QIF program implementation; (iii) provide quarterly reports to the PIRC on QIF program implementation progress, together with implementation issues arising; and
46 (iv) implement a QIF monitoring and evaluation program, as set in the Performance Agreements. The PMU will appoint a QIF Coordinator who will serve as the central communication and coordination link between the PMU and university sup-projects, and will provide technical support to the QITs as needed. The PMU M&E Officer, in close coordination with the QIF Coordinator, will aggregate progress reports developed by the universities at the QIF program level and report regularly to the PIRC and PSC within the context of the results framework and the Performance Agreements.
0 Performance Agreements. Following completion of proposal evaluation by the PIRC, universities will be invited to enter into a Performance Agreement with MoHESR to initiate implementation of the respective QIF programs. This agreement: (i) details the responsibilities of the two parties; (ii) describes the scope of work and agreed budget; (iii) describes eligible expenditures under the agreement; (iv) details the reporting procedures; and (v) makes provisions for termination and the settlement of disputes. A copy of the QIF program proposal as approved by the PIRC will be appended to the Performance Agreement in order to identify the project outcomes and implementation timelines that the university has committed to achieve. Both the QIF Coordinator and the M&E Officer will collaborate to ensure that the university QIT teams are implementing the QIF programs as per the Performance Agreements.
Component 2: Quality Assurance
9. Overall policy guidance will be provided by the PSC, while the delivery of all inputs will be coordinated through the PMU either directly to the QAC, or to university Quality Assurance Units (QAUs). (i) At the Central Level: Activities to be performed by the QAC will be directly managed by the Council itself. Fiduciary responsibilities, however, will be undertaken by the PMU, as the Council currently lacks capacity in this area; and (ii) At the University Level: Similarly, the Office of the President will be responsible for the activities to be implemented by the QAUs, while fiduciary responsibility will be assigned to the PMU.
0 Quality Assurance Council (QAC). The Quality Assurance Council has been established but during implementation, membership of the Council will be augmented. The QAC will include 5-9 members who will comprise the Board of the Council. MoHESR will select the members of the Council Board on a competitive basis from among qualified academic staff, and drawn principally from university professors. A compact team of full time staff will undertake administrative functions. All fiduciary activities related to support provided to the Quality Assurance Council and universities’ Quality Assurance Units, under the project will be undertaken by the PMU.
University Quality Assurance Units (QAUs). The QAUs have a mandate to develop internal quality assurance procedures and to provide related professional development to faculty members. As noted above, all inputs, fiduciary responsibilities and M&E functions relating to support for the QAUs will be coordinated through the PMU.
Component 3: Institutional Capacity Development
10. Policy guidance will be provided by the PSC while the delivery of all inputs under this component will be coordinated by the PMU.
a MoHESR. The Ministry will restructure its departments and entrust a new department with the responsibility to strengthen its planning and M&E capacity. All HEQIP related fiduciary
47 activities in relation to the support of planning and M&E functions and of performance indicators development and HEMIS development will be undertaken by the PMU.
0 Taiz University Project Related Core Team The Rector of Taiz University will establish a Project-related core team that will comprise university procurement. and financial staff. The PMU will be responsible for the fiduciary requirements to implement the capacity building activities targeting the core team.
Component 4: Monitoring and Evaluation and Project Management
11. The PMU, through its M&E Officer, is responsible for developing the Project’s M&E strategy, M&E system, and data collection tools. A central function of the M&E Officer is to track implementation progress and to raise flags in a timely manner as issues arise. The PMU is also responsible for sub- contracting the required data collection and data analysis tasks to ensure timely update of results framework (see Annex 3). The PMU is required to coordinate with the QITs, QAC, QAUs, MoHESR and Taiz project related core team in data collection and data analysis, and to ensure timely submission of progress reports in fulfillment of PSC’s and IDA’S requirements. See Paragraph 3 of this Annex for PMU’s respansibilities in terms of project management.
11. Implementation Arrangements: IDA
12. An IDA team will provide implementation support throughout the life of the Project with the following specific arrangements:
The IDA Team will conduct three supervision missions per year. The missions will be distributed evenly over the course of the year to ensure a continuous interactive dialogue with the Recipient’s relevant agencies, inter alia, MoHESR, the PSC, PIRC, and PMU. A joint review will be conducted at the end of the first year in order to assess early progress and verify the need for any corrective action. Extensive Fiduciary Support will be provided through IDA’S Country-based Financial Management and Procurement staff.
0 The IDA Team will be in constant dialogue with the PMU through the Sana’a based staff, email, audio-conferencing, video-conferencing and additional ad hoc missions as needs arise. Tentatively, the Task Team will invite the PMU for at least one audio conference/video- conference per month (and possibly more frequently during the first 12-18 months following Board Approval).
0 The IDA Team will provide extensive support to the PMU M&E Officer to ensure timely and accurate tracking of activities and processes, as well as timely flags to take required risk mitigation measures. PMU will submit quarterly reports that will reflect the progress of each component, particularly the engaged universities’ progress within the framework of the QIF Performance Agreement.
Special attention will be given to the PMU staff assessment outcomes to mitigate unsatisfactory staffing related issues.
48 Annex 7: Financial Management and Disbursement Arrangements YEMEN: Higher Education Quality Improvement Project
A. General
1. Implementation will be based on the ring-fencing method and will be managed by a newly established PMU located at the MoHESR. This PMU is already in place (see Annex 6).” The Bank’s grant proceeds will finance all project activities, including the PMU costs. The Government and the Universities will be required to make available additional local financial contributions to fund expenditures that are not covered under the IDA Grant. The PMU will be responsible for implementing the Project on behalf of and under the guidance of the MoHESR through the PSC. Procurement and contract management, including payments and financial management, will all be centralized at the PMU.
2. The overall project FM risk was assessed as high, mainly due to: (i) the institutional structure of the system where universities are independent entities thus reducing the coordination between the MoHESR and the eight public universities. This reduced coordination may impact the implementation pace of the Project; (ii) limited knowledge at the eight public universities about Bank guidelines and procedures and limited human capacity for implementation of such projects; (iii) the lack of defined procedures of communication and flow of information between the PMU and the final beneficiaries, the universities, under the project activities; and (iv) the eight public universities not having the adequate accounting software to facilitate the timely generation of financial reports to be used for monitoring and decision making. The FM risk will be reduced to substantial after implementation of the mitigation measures as described below.
3. Measures mitigating the above risks have been defined and agreed upon with the recipient. These measures include: (i) clarifying the roles and responsibilities of the PMU and the eight public universities as well as defining the communication flow and reporting mechanisms to be followed. These arrangements are documented in the Project Operations Manual (POM); (ii) each public university appointing an authorized Officer (QIT team leader) from its own staff, with authority to issue acceptance reports of the work delivered at the universities level and payment requests addressed to the PMU, and similar arrangements will be adopted in (policy and development function) and QAC; (iii) delivering training workshops to staff involved in the Project on Bank guidelines and procedures; and (iv) the PMU ’ having procured and installed a ring fenced accounting software package, prior to negotiations.
4. The PMU will manage all the financial aspects of the Project (e.g., accounting, recording and reporting through the use of an automated accounting system and based on an acceptable manual of procedures and management of the disbursement process). The PMU will prepare and submit to IDA the Project’s quarterly unaudited IFRs and annual audited financial statements. The PMU’s Finance Officer will receive extensive support and training and will be supported by an accountant who will be recruited after effectiveness to support FM internal controls.
5. An external independent auditor, acceptable to IDA, will be engaged by the PMU to review the quarterly IFRs and to perform the annual audit and issue an independent opinion on the Project financial statements. The audit report with audited financial statements should be submitted to the Bank no later than six months following the closing date of each fiscal year being audited, while the reviewed quarterly reports should be submitted to IDA no later than 45 days after the end of each quarter.
The PMU is presently entrusted with the implementation of a PPF and PHRD Grant made available by the IDA to facilitate the project preparation. 49 B. Risk Assessment
Country Risks
6. As reported and outlined in the Country Assistance Strategy (CAS) of 2009, poor governance remains a critical issue to be faced in Yemen. The Country Public Expenditure and Financial Accountability report (PEFA, 2008) indicated that there had been some progress in the fiscal area, particularly in terms of budget expenditure classification and consolidation of investment. However, a lack of progress was observed on achieving budget comprehensiveness and implementing a broader fiscal framework based on multi-year expenditures framework. Efforts to move forward in reforming budget implementation, cash management, accounting and reporting have been pinned on the design and implementation of the IDA-supported Accounting Financial Management Information System (AFMIS), which has been experiencing significant delays, but such efforts will continue under IDA’S current project pipeline supporting Public Financial Management, with expected delivery in FY 1 1. These factors, as well as the poor quality of education and training in accounting, have contributed to the generally observed insufficiencies of the financial reporting and auditing systems in the country. The above Country Risks result in having higher potential exposure to corruption, which is mitigated through the Project’s design which follows the ring-fencing approach based on the PMU structure. In addition, this structure is the result of the Government not achieving budget comprehensiveness.
Inherent Risks Risk Risk Issue / Risk Mitigating Measures (MM) Before MM After MM The findingsOf the various country High Country systems need to be thus, Substantial assessments conducted recently the Project design follows the ring-fencing indicated lack of progress on method based on the PMU structure which
~ achieving sufficient public financial will be managing all the FM activities management reforms including governance, accounting and including preparing and submitting to the Bank quarterly IFRs and annual financial auditing systems in the country. statements, reviewed and audited by an Donor’s hnds are disbursed as off external auditor, respectively. budget funds.
Project Financial Management Risks Risk Comments/ Risk Issue / Risk BZ 1 1 Mitigating Measures (MM) After MM
The Project will be implemented following the ring-fencing method by the newly The PMU, financed by the grant High established PMU staffed with a Project Substantial proceeds, is responsible for Director, a Finance Officer, Procurement implementing the Project on behalf Officer, and other Technical and support of the MoHESR and under their staff. The PMU will manage all the guidance through the Project Steering financial aspects of the Project (e.g., Committee (PSC). accounting recording and reporting through the use of an automated accounting system and based on an acceptable Project Operations Manual).
50 Staffing
~~ ~ The PMU’s Finance Officer will receive High training on Bank guidelines, and will be Staff capacity to manage the supported by an accountant who will be Substantial financial management activities of recruited after effectiveness to support FM the Project. internal controls. FM supervision will be provided on an on-going basis through the World Bank’s field FM Specialist. Information System The PMU has already procured an 1 acceptable automated accounting system which follows cash basis accounting and is Lack of an automated accounting Substantial capable of recording all project activities, Moderate system capable of recording and generating required reports such as the generating required reports. quarterly IFRs, and annual financial statements. The TOR for the accounting system was cleared by the Bank.. The content and format of the IFRs were agreed during Negotiations. Also the documents and payment requests that will be issued by the MoHESR (in relation to the policy and development function), QAC and universities were agreed and incorporated in the Project Operations Manual.
Internal Controls & Accounting Policies and Procedures ~ A Project Operations Manual, which has been completed on February 20, 2010, defines the project’s, policies and Lack of appropriate and High procedures to be followed by the PMU Substantial comprehensive accounting policies during project implementation. These and procedures manual. This risk is procedures are based on having the PMU impacted by the fact that the project applying appropriate internal controls (e.g. will be implemented through a newly segregation of duties, ex-ante reviews, established PMU who have no controls over inventory and fixed assets, procedures and controls to follow etc.) ensuring proper use of funds including during project implementation. safeguarding of original supporting documents. The POM includes: (i) accounting policies, including treatment of expenditures and their classification, treatment of petty cash and advances, inventory and fixed assets management, authorization and payments system; (ii) eligibility of expenditures to be reimbursed from the Grant; (iii) project flow of funds; (iv) PMU staff job descriptions; (v) internal control systems including monthly reconciliations and quarterly reports; and (vi) the flow of information and documentation between the MoHESR (in relation to the Policy and Development function), QAC, and universities and the PMU specially under the QIF component of the project.
51 Flow of Information and Funds Flow of funds and reporting are designed to be simplified and managed centrally by Activities under the project will be High the PMU, utilizing an automated Substantial procured by the PMU while the accounting system that is able of recording output will be at the MoHESR (in and reporting funds by source & use of relation to the Policy and funds and by expenditure category and Development function), QAC, and project activity. Payments will be pending Universities. The advice from the end usersheneficiaries endorsement of the various beneficiaries about goods and services delivered. The grant acceptance of the goods and services proceeds will be channeled through the and authorizing payments to vendors PMU and deposited into a segregated US$ and consultants is new and is not Designated Account (DA) at the Central institutionalized or documented. The Bank of Yemen (CBY) and disbursed in Project funds will be made available accordance with the Bank’s disbursements to the PMU. guidelines. Advances and Reimbursements will be the main disbursement methods, along with Direct Payment and Special Commitments. Requests for receiving grant funds will be initiated through the use of Withdrawal Applications (WAS) and accompanied by Statement of Expenditures (SOE) or Summary Sheets and supporting documents as per the Project’s Disbursement Letter.
External Audit The Bank is working with the audit profession in Yemen to enhance the ,Audit profession in Yemen requires High capacity through various actions including Substantial enhancement. training workshops and audit toolkits for Bank-financed projects. An independent private external auditor acceptable to the Bank will be hired to audit the project accounts according to TOR upon which the Bank will grant No objection. Retroactive Financing The project‘s Financing Agreement is High Training the PMU on such expenditures Substantial expected to have a retroactive financed retroactively and proper financing clause for a portion of the involvement of Bank Procurement activities (US$600,000) which will Specialist through training and monitoring. take place prior to effectiveness. PMU staff are not familiar with Retroactive financing. Overall Inherent Risk Before MM I High I Overall Inherent Risk after MM I Substantial
Overall FM Risk Assessment
7. As detailed above, the inherent risk in the Country is High and the project financial management risk assessment is High. The successful implementation of the mitigation measures, which have been agreed upon with the recipient, will eventually reduce the project financial management risk to Substantial.
52 Financial Management (FM) Assessment of Taiz University
8. An FM assessment was conducted, prior to Appraisal, in accordance with World Bank guidance OP/BP 10.02 and the guidelines to staff for Assessment of Financial Management Arrangements in World Bank-Financed Projects dated October 2003. The objective of the assessment was to determine whether Taiz University has acceptable FM arrangements to manage a World Bank-financed project. The arrangements include the University’s system of accounting, reporting, auditing, and internal controls, including the capacity to properly manage and account for the project proceeds and to produce timely accurate and reliable project financial reports for use by management and submission to the World Bank.
9. The evaluation was performed on site and the field work included discussions with University officials and financial staff, review documents, financial control and related administrative processing documentation; analysis of the accounting, internal controls and compliance systems.
10. The following points summarize the main FM areas for Taiz.University:
0. Lack of any experience in implementing a World Bank-financed project in the past.
Accounting department is headed by a Ministry of Finance (MoF) Director who is in charge of both accounting and procurement functions of the University. The Director is supported by a chief accountant also from MoF and a number of accountants contracted by the University. The staffs capacity is limited and a review of staffs distribution in the sub-departments is required to ensure staff is assigned to departments based on need and relevant qualifications and experience as it was noted that a number of staff were sitting on empty desks while only two accountants were responsible for recording and reporting on the entire university’s transactions. Additionally, there is a need for proper planning and execution of training on national and international accounting and reporting standards in order to improve the staffs overall capacity. Specific training on World Bank financial management and disbursement arrangements will be nepded to prepare them for managing Bank’s projects in the future.
0 There is no documented manual of procedures or well-defined terms of reference for the accounting department and its staff. A consultant should be contracted to develop a clear manual of procedures for the accounting department, including terms of reference for all the staff. The manual should also document the internal controls (eg, segregation of duties, ex-ante reviews, controls over inventory and fixed assets, etc.) and proper safeguarding of original documents. Other aspects to be documented in the manual will be: (i) the University’s accounting policies, including those related to treatment of expenditures, including their classification, treatment of petty cash and advances, inventory and fixed assets management, authorization and payments system; (ii) eligibility of expenditures; (iii) disbursement and flow of funds; (iv) staff job descriptions; (v) internal control systems including monthly reconciliations and reports; and (vi) the flow of information and documentation between the Universities’ internal departments and also with external parties.
An automated accounting system is installed by a local supplier and used by only two of the accountants and it is used in parallel to the manual accounting system. The automated system appears to have good potential but only two accountants are trained on the system and the system is not fully utilized to ensure proper segregation of duties, proper back-up, etc. There is a need for further enhancement of the current automated accounting system and its capacity to be further utilized and able to properly record and generate the required reports for donor-financed projects and the system will be assessed if it can be integrated into the accounting modules of the MIS to be financed under the Project.
53 The current disbursement and approval of payments methods used in the University are too long. Several signatures are required and the approval may not always be based on proper supporting documents, but rather on instructions from certain officials. Proper procedures for approval of payments should be documented in the manual and such documented procedures should be complied with.
The Internal Audit (U) function of the University has limited capacity and its role and structure are not consistent with the standard role of U as to its independence, responsibilities and reporting requirements. The U department should be further assessed and a proper structure should be established along with proper documentation of staffs terms of reference and mandate. The LA staff will need to be trained on international auditing standards and internal audit best practices, including risk-based audits for university operations.
The University prepares monthly and annual financial statements for the MoF which are generated from the automated accounting system.
The University is audited by the Central Organization for Controlling and Auditing (COCA) annually and a number of management letter comments are issued.
Strengths and Weaknesses
1 1. The FM department of Taiz University has a number?of committed and hard working financial staff who are willing to learn and improve. They have established an automated accounting system which is used in parallel to the manual system for the purpose of recording and reporting all University transactions. The University has an internal audit department and is audited annually by COCA. A Project-Related Core Team will be established from within the University?s procurement and financial management to receive extensive capacity development and training activities.
12. The FM department of Taiz University is in need of proper documentation of staff terms of reference, training policies and manual of procedures. There is a need for further enhancement of the current automated accounting system and its capacity to be further utilized and able to properly record and generate the required reports for donor-financed projects. The system will be assessed concerning whether it can be integrated into the accounting modules of the MIS to be financed under the Project. The staff needs to receive training on accounting and reporting standards as well as proper budgeting.
C. Implementation Entities, Accounting and Staffing
13. The PMU, established at MoHESR, will be responsible for the planning, budgeting, overall supervision of the activities, consolidating project information, and reporting on these activities to all stakeholders. A Financial Officer has been appointed to the PMU to follow on project accounts and finances. After effectiveness, this officer will be supported by an accountant to be engaged by the PMU.
14. In parallel, the procurement and financial management will be centralized at the PMU while activities will be implemented at the eight public universities, QAC, and MoHESR (in relation to the policy and development function) benefiting from the Project. The Project Operations Manual defines the flow of information between the PMU and the MoHESR (in relation to the Policy and Development function), QAC, and universities. In order to provide the PMU with assurance that the work has been delivered and accepted by the end usersheneficiaries (e.g., universities, QAC, and the MoHESR?s unit responsible for the policy and development function); it will be necessary to identify an authorized person (a member of QIT in case of Component 1) to issue payment requests addressed to the PMU.
54 15. The PMU has already purchased and installed an acceptable automated accounting system which fo,llows cash basis accounting and is capable of recording all project activities, generating required reports such as the quarterly IFRs, and annual financial statements. The content and format of the IFRs have been agreed during Negotiations.
Flow of Funds
16. A Designated Account (DA) will be opened by the MoHESR and managed by the PMU. The DA will be denominated in US Dollar and will be opened at the CBY. The PMU will be responsible for the project funds. Deposits into and payments from the DA will be made in accordance with the Disbursement Letter and Bank Disbursement Guidelines. The PMU will prepare withdrawal applications with the related supporting documents, signed by the designated signatories. Additionally, a sub-account will be opened by the MoHESR and managed by the PMU. The sub-account will be denominated in Yemeni Rial and will also be opened at the CBY with a ceiling of US$25,000 to be reviewed and adjusted during project implementation as needed. The PMU will fund the sub-account through transfers from the DA based on a request sent to the CBY, reviewed and approved by the MOF and supported by cash forecast. Payments out of the sub-account will be made through checks signed by the PMU Director and Finance Officer and can be replenished as disbursements occur and proper supporting documents are filed. Disbursements out of the sub-account are subject to the Project’s internal controls as per the Operations Manual and will be subject to the annual external audits.
Financial Reporting
17. In line with the Bank guidelines, the following reports will be required under this Project:
Ouarterlv: The Project will be required to generate quarterly Interim financial reports (IFRs), to be reviewed by the External Auditor and submitted to the Bank as part of the Project’s progress report or separately. These reports will consist of the following:
0 Statement of sources and uses of finds by category of expenditure and statement of uses of funds by project component, indicating funds received, quarterly cash forecast, an expenditure report comparing actual and planned expenditures by activity, and DA’s reconciliation statement.
0 Contracts listing: to include a listing of all contracts showing amounts committed and disbursed under each category as of the report date.
These reports will be generated through the accounting system that will be installed and should be remitted to the Bank within 45 days from the end of the quarter as per the Project Financing Agreement. The proposed format of the reports has been agreed during Negotiations.
Annually: Project Financial Statements (PFS) will be prepared annually following the cash basis of accounting with disclosure of the unpaid commitments at the report date, and will be subject to external audit, and the audited PFS will be submitted to the Bank within six months from year-end. The PFS will include:
0 Statement of sources and uses of funds, indicating sources of funds received and project expenditures by category of expenditure; Appropriate schedules’ classifying project expenditures by component, showing yearly and cumulative balances;
0 DA reconciliation statement reconciling opening and year-end balances;
55 0 Statement of payments made using Statements of Expenditures (SOEs) procedures as defined in the legal agreement; and
0 Statement of project commitments, i.e., the unpaid balances under the Project’s signed contracts.
Auditing
18. The Project’s financial statements will be audited by an independent private sector auditor, who will also review the IFRs quarterly. The external independent auditor should be acceptable to the Bank and the COCA; and the TOR will be prepared and submitted for the Bank’s no objection, at least nine months prior to the end of the Project fiscal year. The external auditor report (in English) shall encompass all project components and activities under the Financing Agreement, including activities performed at the universities and shall be in accordance with internationally accepted auditing standards e.g., International Standards on Auditing (ISA). The audit report and opinion will cover the Project’s financial statements, reconciliation and use of the Designated Account (DA), use of direct payments, and withdrawals based on Statements of Expenditure (SOEs). In addition, the auditor is required to prepare a “management letter” identifying any observations, comments and deficiencies in the system and controls that the auditor considers pertinent, and shall provide recommendations for their improvements. The PMU will recruit the external auditor and the audit costs will be financed by the project proceeds. Disbursement Arrangements 19. The proceeds of the grant will be disbursed in accordance .with the Bank‘s disbursements guidelines as outlined in the Disbursement Letter. Transaction based disbursement will be used under this Project. Accordingly, requests for payments from the grant account will be initiated through the use of Withdrawal Applications (WAS) either for Direct Payments, Reimbursements, and Replenishments to the Designated Account, or Issuance of Special Commitments. All WAS will include appropriate supporting documentation, including detailed SOEs for reimbursements and replenishments to the DA. The grant will finance at 100 percent all project activities.
Allocations of the Grant Proceeds
Amount of the Percentage of Expenditures Category Financing Allocated to be Financed (expressed in SDR) (inclusive of taxes)
(1) Goods, consultants’ services, and 5,350,000 100% Training for Component 1 of the Project I
(2) Goods, consultants’ services, Training and Incremental Operating Costs for 2,760,000 100% Components 2,3 and 4 of the Project (3) Refund of Preparation Advance I 390,000 I Total amount 8,500,000
56 Statement of Expenditures (SOE) 20. During implementation, SOEs will be used as supporting documentation for disbursement of all expenditures relating to: (i) goods under contracts costing less than US$250,000; (ii) consulting services under consulting firm contracts costing less than US$lOO,OOO equivalent each and under individual consultant contracts costing less than US$50,000 equivalent each; and (iii) training costs and Workshops, under such terms and conditions as the Bank shall specify by notice to the Recipient. The supporting documentation will be maintained at the PMU and will be made available for review by the Bank supervision missions upon request. Documentation relating to SOEs will be retained for up to one year from the date the Bank receives the audit report for the fiscal year in which the last WA from the Grant was made. Designated Account (DA) 21. One Designated Account (DA) will be opened at the Central Bank of Yemen. The DA will be used to hold the grant?s funds and from which disbursements to vendors, consultants, and other project activities will be made. No payments for goods or services other than those related to the Project will be made from the account. An authorized allocation of US$1,300,000 will be used as the DA?s ceiling. Authorized signatories, names and corresponding specimens of their signatures will be submitted to the Bank prior to the receipt of the first WA. Additionally, a sub-account will be opened by the MoHESR and managed by the PMU. The sub-account will be denominated in Yemeni Rial and will also be opened at the CBY with a ceiling of US$25,000 to be reviewed and adjusted during project implementation as needed. The PMU will fund the sub-account through transfers from the DA based on a request sent to the CBY, reviewed and approved by the MoF and supported by cash forecast. Payments out of the sub- account will be made through checks signed by the PMU Director and Finance Officer and can be replenished as disbursements occur and proper supporting documents are filed. Disbursements out of the sub-account are subject to the project?s internal controls as per the Operations Manual and will be subject to the annual external audits. 22. Chart A below summarizes the flow of funds from the Bank to the PMU?s DA through WAS, to finance the Project?s eligible expenditures. Payment requests from the DA for eligible expenditures will be approved by the PMU?s Finance Officer and Director, and by the unit responsible for the policy and development function of the MoHESR, QAC and QAUs, and Universities for relevant activities where these entities are the beneficiary of the activities, and then the payment requests will be sent to the MoF for approval of payment from the DA at CBY,
USD DA - CBY USD Sub-account - Chart B CJICBY I II J
request for Director* approval CBY Pmt to expenditure apDroval beneficiaries
57 Chart 03) Sub-account Flow of Funds Chart
request for expenditure s
* In addition to the PMU FM Officer and Director approval of payments, MoHESR (policy and development function), QAC, and universities (QITs and QAUs) approval is required for relevant activities where these entities are the beneficiary of the activities. 23. Corruption: Fraud and corruption may affect the project resources. The above fiduciary arrangements, including ring-fencing, reporting and audit arrangements, will reasonably tackle the risk of corruption from a technical perspective through the fiduciary arrangements but may not be effective in case of collusion. 24. Bank Supervision: The financial management of the Project will be supervised by the Bank in conjunction with its overall supervision of the Project. Initially, this supervision will be performed on a quarterly basis and will focus on supporting the installation of the project financial management arrangements at the PMU.
25. Retroactive Financing: Retroactive Financing will be granted to an aggregate amount not to exceed US$600,000 equivalent for Eligible Expenditures under Category (2) to allow covering incremental operating costs and training starting from February 1, 20 10.
26. FM Action Plan
The following FM action plan has been achieved as agreed upon with the Recipient during the Appraisal mission:
No. Action Completed by Responsibility date The FM Manual is drafted to document the FM procedures, controls and safeguards to be applied during MoHESW Negotiations the Project implementation and submitted to the World PMU Bank for its review. MoHESW The automated accounting software is purchased and Negotiations installed. PMU
58 Annex 8: Procurement Arrangements YEMEN: Higher Education Quality Improvement Project
A. General
1. A Country Procurement Assessment Report (CPAR) for Yemen carried out in 2000 concluded that the procurement legislation, Law No. 3 of 1997 concerning Government Tenders, Auctions and Stores, and corresponding Regulations introduced by Decree No. 234 of 1997, was a significant improvement over previous legislation for public procurement but nonetheless is not yet up to acceptable international standards.
2. The CPAR recommended a comprehensive National Procurement Manual (NPM) to support capacity building of the Government of Yemen’s (GOY) public procurement management responsibilities at all levels together with the national Standard Bidding Documents (SBDs) for goods, works and services. The NPM and SBDs for works, goods and consultancy services were endorsed by the Cabinet in April 2006, and preparation and capacity building efforts led by the Technical Committee of the High Tender Board have focused on broad dissemination of these country procurement documents since 2007. 3. In addition, as part of the National Reform Agenda adopted in early 2006, a new reform-oriented public procurement law reflecting international best practice was prepared with the World Bank and USAID support and was subsequently ratified by Parliament as Law 23 on July 24, 2007. More recently, a revised set of Executive Regulations or By-Laws was approved by Cabinet Decree No. 53 in February 2009 as the implementation arrangements of Law 23. The Bank and other Development Partners (DPs) have been engaged in providing capacity building support with the eventual broad based use of country systems in line with the harmonization and aid effectiveness objectives of the Paris Declaration.
4. Procurement under the Project will be carried out in accordance with the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants known as the 2006 Anti-Corruption Guidelines” and the World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits, dated May 2004 (revised October 200@, and it is open to all bidders from eligible source countries as defined in the guidelines. Consultants will be selected in accordance with World Bank’s Guidelines: Selection and Employment of Consultants by World Bank Borrowers dated May 2004 (revised October 2006)-and the provisions stipulated in the Legal Agreement. The time frame agreed between the Recipient and IDA is recorded in the agreed Procurement Plan (PP) signed at the time of Grant Negotiations. The PP will be updated as and when the QIF are finalized in the first couple of years, so as to take into account envisaged procurements under the approved proposals, at least once per year thereafter as agreed.
5. Procurement activities under the Project will be carried out by the PMU which has already been established. The PMU will be responsible for managing procurement for all universities participating in the QIF (Component 1). In addition, the PMU will also be responsible for any procurement which may be necessary at the level of the Quality Assurance Council (QAC) and Quality Assurance Units (QAUs) in the universities, as well as policy and development function of MoHESR (Components 2 and 3).
Procurement of Goods
6. Goods procured under this Project will primarily involve lab equipmendmaterial, teaching aid equipment, computer work stations, as well as office equipment and furniture for program upgrading during project implementation at the eight universities supported by the proposed project. Goods contracts estimated to cost less than US$50,000 equivalent will be procured by the PMU through Shopping
59 procedures--and in cases where the contract packaging involves estimated contract values above the threshold for NS, these contracts will be awarded using National Competitive Bidding (NCB) procedures. Contracts involving goods estimated to cost US$250,000 or more (not currently envisaged in the Procurement Plan) if required may be procured following ICB procedures.
7. The procedures to be followed for NCB under this Project shall be those set forth in Law No. 23 for 2007 concerning Government Tenders, Auctions and Stores, and its Regulations, with the following additional procedures: A Recipient-owned enterprise in the GOY shall be eligible to bid only if it can establish that it is legally and financially autonomous, operates under commercial law, and is not a dependent agency of the Recipient. Bidding (or pre-qualification, if required) shall not be restricted to any particular class of contractors or suppliers, and non-registered contractors and suppliers shall also be eligible to participate. Tenders shall be advertised for at least two (2) consecutive days in two (2) local newspapers of wide circulation. Prospective bidders shall be allowed a minimum of thirty (30) days for the preparation and submission of bids, such thirty (30) days to begin with the availability of the bidding documents or the advertisement, whichever is later. Until national SBDs acceptable to the Association are available, bidding documents approved by the Association shall be used, and may be prepared in Arabic. Registration shall not be used to assess bidders’ qualifications; qualification criteria (in case pre- qualification was not carried out) and the method of evaluating the qualification of each bidder shall be stated in the bidding documents, and before contract award the bidder having submitted the lowest evaluated responsive bid shall be subject to post-qualification. A foreign bidder shall not be required to register or to appoint an agent as a condition for submitting its bid and, if determined to be the lowest evaluated responsive bidder, shall be given reasonable opportunity to register, without let or hindrance; the registration process shall not be applicable to sub-contractors. All bids shall be submitted in sealed envelopes and may be submitted, at the bidder’s option, in person or by courier service; All bids shall be opened at the same time immediately after the deadline for submission of bids in a public bid opening in which bidders shall be allowed to attend. Evaluation of bids shall be carried out in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated responsive bidder, without resorting to the rejection of bids above or below a certain percentage of the pre-bid estimate (bid price bracketing). No bidder shall be requested or permitted to modify its bid after the bid closing date and bids submitted after the bid closing date shall be returned to the bidder unopened. Post-bidding negotiations with the lowest or any other bidder shall not be permitted. Under exceptional circumstances, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids, in which case bidders shall not be requested nor permitted to amend the price or any other condition of their bids; a bidder shall have the right to refuse to grant such an extension without forfeiting its bid security, but any
60 bidder granting such extension shall be required to provide a corresponding extension of its bid security. (xiv) Price adjustment provisions may be included in contracts for works with a duration of more than eighteen months. (XV) Rejection of all bids is justified when there is lack of effective competition, or bids are not substantially responsive; however, lack of competition shall not be determined solely on the basis of the number of bidders. (xvi) Each contract financed from the proceeds of the Grant shall provide that the contractor or supplier shall permit the Association, at its request, to inspect their accounts and records relating to the performance of the contract and to have such accounts and records audited by auditors appointed by the Association.
Selection of Consultants
8. Consultants financed by the Association will be appointed in accordance with the Bank’s Guidelines for the Selection and Employment of Consultants (May 2004 and revised in October 2006). For firms all contracts will be procured using Quality-and Cost-Based Selection (QCBS) as well as Fixed Budget Selection (FBS) procedures will be used except for small contracts of standard or routine nature estimated to cost less than US$lOO,OOO equivalent which may be procured using selection based on Selection Based on Consultant’s Qualification (CQS) and Least-Cost Selection (LCS) methods. Single- Source Selection (SSS) for hiring services that meet the requirements of paragraph 3.10 of the Consultant’s Guidelines may be used on an exceptional basis, with prior agreement of IDA. Shortlist of consulting firms for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. All individual consulting assignments will be on the basis of comparison of qualifications in accordance with Section V of the Guidelines for Selection of Consultants.
9. Consultant services under the HEQIP to be provided by firms and individuals will include but not be limited to: Component 1 (Quality Improvement for University Programs) for: (i) curriculum development and update; (ii) professional development of academic staff; and (iii) professional internships costs; Component 2 (Quality Assurance) for: (a) development of a strategic plan, and a Council Operations Manual; (b) a Quality Assurance Manual; and (c) supporting awareness campaigns to enhance the academic community’s buy in of the benefits from utilizing Quality Assurance (QA) procedures in a systematic manner; Component 3 (Institutional Capacity Development) for development of core elements of HEMIS (sector-level database and university-level core modules of the information system) and capacity building for Taiz University financial and procurement staff; and Component 4 (M&E and Project Management) for Satisfaction Surveys for Students, Employers and Faculty Members; and consultant’s salaries for PMU staff.
Non-Consulting Services
10. Non-consulting services related to the project implementation activities, including training activities, workshops, and study tours will be financed by the Project and procured using IDA procurement guidelines, with IDA’S prior review.
Incremental Operating Costs
1 1, Incremental operating costs will include purchase af office rental, office supplies, per diems for workshops, banking charges, transportation, translation, communication services, and other implementation related expenses. Civil servants will not be eligible for financing by the Project.
61 B. Assessment of the Agency’s Capacity to Implement Procurement
Project Management Unit (€‘MU)
12. A procurement capacity assessment of the PMU’s organizational structure for implementing the HEQIP and in particular the role and interaction between the Procurement Officer in the PMU and management, including core staff, was undertaken during the pre-appraisal mission. The Procurement Officer has had previous experience with the Bank guidelines in another PMU in the education sector where he gained valuable experience, particularly in procurement and contract management of consultancy services contracts. The assessment also confirmed that filing of procurement activities financed by the PPA and PHRD grant for preparation of the Project is being carried out in a satisfactory manner. Nonetheless, given the PMU’s pivotal fiduciary role in procurement and management of QIF- financed contracts for the eight public universities in the near future, the PMU has agreed to recruit a Procurement Assistant (within the first year of project implementation) to support the Procurement Officer’s role in ensuring smooth implementation of QIF-financed procurement activities. The Procurement Assistant will also have primary responsibility for procurement document management at the PMU.
13. In terms of procurement capacity building next steps, the recommendations of the assessment are that the Procurement Officer will benefit from external procurement training (prior to grant effectiveness to be financed under the PPA) for an in-depth exposure to good practice procurement of technical assistance financed in line with the guidelines which will be used extensively by the PMU. In addition, the Procurement Officer will also be benefiting from the on-the-job guidance and mentoring to be provided prior to Project effectiveness by a donor-funded international Procurement Advisor financed by GTZ for PMUs in the education sector on a retainer basis. The above-mentioned procurement capacity enhancement measures are likely to contribute to the PMU’s fiduciary mandate of contributing to overall GOY’Sperformance, building on lessons learned under HELP.
Taiz University Fiduciary Capacity Development
14. The Procurement Unit of Taiz University has a group of four staff focusing on procurement together with an additional 13 staff members responsible for managing the university asset management or stores sub-unit. The acting manager for procurement who reports to the Director Finance & Administration has been exposed to, and is well aware of IDA procurement rules and regulations that the Procurement Unit need to comply with. The IDA team noted that, given the shortage of qualified staff and lack of adequate working space, it will be a challenge to undertake procurement responsibilities satisfactory to IDA, and thus capacity building will be required through a twinning arrangement with the PMU procurement function as early as possible, in addition to procurement training. This arrangement will require regular interaction between the PMU Procurement Officer and procurement personnel in Taiz University (part of the project-related core team).
15. The objective of this sub-component is to transfer knowledge to Taiz University in terms of the procurement guidelines and procedures, including using the Standard Bidding Documents (SBDs) for all procurement methods. Moreover, the IDA Appraisal mission has recommended early initiation of capacity development to ensure that the fiduciary core team in Taiz University will develop the necessary capacity to assume future responsibility for procurement. A formal procurement capacity assessment of Taiz University’s core fiduciary team will be undertaken to establish that a satisfactory level of capacity has been realized in the interim period, enabling Taiz University to take over fiduciary responsibilities from the PMU for implementation of Component 3.
62 Overall Procurement Risk Rating and Action Plan
16. The overall procurement risk for the Project is considered “High” as the PMU is a relatively newly constituted organization implementing to date the PHRD and most recently the PPA. The procurement risk over the first year implementation period is expected to be mitigated and rated as “Substantial” in view of the capacity building measures, including supplementary training, planned for the incumbent PMU Procurement Officer who is already experienced with Bank-financed procurement in other projects supporting the MoE in Yemen.
Procurement Action Plan
IssueProblem Remedial Actions Responsibility Estimated Time frame
Weak capacity of HEQIP Project Operations Manual Universities Quality (including QIF Manual) will provide PMU/IDA The first Improvement Teams generic guidance and templates for use by workshop to (QITs) in writing: (i) the PMU and QITs. be held as TORs, Technical part of the Specifications for bidding QITs will be provided with: (i) periodic Project documents; and (ii) Launch procurement workshops on upstream actions (tech. specs. and TORs) necessary prior to Workshop. implementation preparing and issuing BDs and RFPs by progress/issues for semi- the PMU; and (ii) on-going TA during the annual progress reports for project implementation period. the PMU.
Weak capacity of the A twinning arrangement for procurement PMU/TU Prior to Procurement Unit in Taiz skill enhancement is envisaged to be in project University. place between the Procurement Unit (some Effectiveness of whom will form part of the HEQIP fiduciary core team at Taiz University) and the PMU procurement function in addition to other training activities.
Insufficient procurement The Procurement Officer (PO) who already management capacity at has experience in an IDA-financed Prior to the PMU procurement will take intensive external PMU project training on procurement of consulting Effectiveness services given its prevalence in implementing the project components.
63 Issue/Problem Remedial Actions Responsibility Estimated Time frame
Extensive procurement supervision will be provided on an on-going basis by IDA. IDA Prior to The PO will be provided with “best practice” project procurement documents (from advertisement to Effectiveness Insufficient contract management). procurement On-the-job guidance and mentoring is being provided Ongoing and management by a donor-funded (GTZ) international Procurement IDNPMU Prior to capacity at the Advisor for PMUs in the education sector contracted project PMU on a retainer basis. Effectiveness A Procurement Assistant (PA) will be recruited within the first year to assist the PO. The PO will guide the PMU Soon after PA to eventually become a strong back-up to the PO project in providing procurement support to HEQJP activities, Effectiveness including universities QIF programs.
C. Procurement Plans
17. The PMU, with the assistance of the Bank team, has developed the Project Procurement Plan (PPP) for the first 18 months of the project life. The PPP reflects the major project activities and was finalized and agreed upon at Negotiations. It will provide the basis for the procurement methods and prior review thresholds for each contract. The PPP will only reflect the QIF activities (Component 1) as a line item and major activities to be implemented from Components 2, 3 and 4. The PPP will be updated in agreement with the PMU semi-annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. To better monitor the implementation of QIF activities and ensuring contracts generated by the eight public universities.(Component 1) are tracked effectively, the PMU will: (i) prepare a separate University Procurement Plan (UPP) for each beneficiary university; (ii) up-date the UPP quarterly; and (iii) include it as an annex to the semi-annual PPP. The PPP will be available at the PMU, in the project database and in the IDA external website for this Project.
D. Frequency of Procurement Supervision
18. In addition to regular prior review of contract awards above thresholds indicated in the PPP, Bank supervision missions from Headquarters and the Country Office will take place three times during the first year and twice per year thereafter to review project implementation activities, including post review of 2 out of 10 contracts.
E. Prior and Post Reviews
19. Prior Review and Methods Thresholds. Per the PPP, Bank prior review of only a limited number of goods is expected, while for consultant services assignments, most contracts will involve prior review. In terms of applicable post review, 2 out of 10 contracts under HEQIP will be subject to post review as part of project supervision.
64 T-r
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h E DE E Annex 9: Economic and Financial Analysis YEMEN: Higher Education Quality Improvement Project
I. Economic Analysis
A. Introduction
1. The higher education sector in Yemen is at the crossroads of several paradoxes: it yields substantial social and private returns, but it is also associated with high unemployment; it is caught between rapid demographic expansion and sluggish economic growth; and finally, it has the potential to pull the country out of a largely traditional (although not predominantly agricultural) type of economy to a more modern and diversified economy. However, its many shortcomings prevent it from contributing fully to this transition.
2. Against this complex background, this annex is organized as follows. First, it briefly discusses the justifications for investments in the higher education sector, then, analyses how the higher education sector and the labor market are related in Yemen. Finally, the annex focuses the analysis on the HEQIP itself, and then proceeds to the economic analysis of the respective project components.
B. Rationale for Investing in Higher Education 3. The ultimate rationale for the Government of Yemen to invest in higher education and for the IDA to support such investments lies in the potential contribution of the sector to economic development and poverty reduction. Without incremental public intervention, the level of investments in higher education will remain sub-optimal and the sector will not be able to play its potential transformational role.
4. Public investment in higher education is aligned with IDA'S Country Assistance Strategy (CAS) in several ways. First, it fits directly with the CAS 3'd Strategic Objective to foster human and social development and in particular with the second thematic area under this objective which is to further strengthen delivery of education and health services. Higher education should also ultimately contribute to the first CAS Strategic Objective, namely to help accelerate and diversify economic growth. This objective cannot be fully realized without the availability of a skilled and versatile labor force, and hence without investments in post-secondary education. Finally, such investments are fully consistent with endeavors to enhance governance (the 2nd CAS Strategic Objective) as experience shows that better educated citizens and civil servants tend to be more prone to comply with, and propagate, transparent civil and business rules and behaviors.
5. In its own way, each individual component of the proposed HEQIP has the potential to contribute to one or several of the CAS Strategic Objectives which are themselves a reflection of the government program supported by the CAS. The Quality Improvement Fund (QIF) is a direct input to the first Objective, while contributing to the other objectives. Similarly, the capacity building component of the Project, while focuses specifically on improving the institutional and financial governance of the sector, will also help in the long run the delivery of quality education services (Table 9.1). Obviously, given the modest level of resources mobilized for the latter two components, these contributions cannot be expected to be more than marginal, and their major impact will remain confined to the higher education sector itself.
68 Accelerate Enhance Foster human Manage natural and diversify governance and social resources economic development scarcity and growth natural risks
~~ ~~~ 1. Quality Improvement Fund xxx xxx xx X 2.Quality Assurance X xx X 3 .Institutional Capacity Development xxx X 4.M&E and Project Management xx Source: Team estimates
C. Higher Education and the Labor Market in Yemen: A Distorted Relationship
6. The labor market evolution in Yemen is characterized by some very specific features which reflect both the long-term demographic trends and the current economic situation. To document these specificities, a cluster of countries is constituted to serve as comparators. The cluster is based on the value of the Gross National Income per capita (GNI P.c.) which is currently estimated at US$870. The GNI p.c. of countries selected for the cluster range from about US$500 to about US$1,600. All countries belong to the Low Income Countries group, with the exception of Egypt which is part of the Lower Middle Income Group.
7. First of all, Yemen's economy is not predominantly based on agriculture, as could be expected on the basis of its low GNI p.c. As no recent data exist regarding the structure of the Yemeni GDP, comparisons date from 1997 (Table 9.2). Still, at that time, only in Egypt was the contribution of agriculture to the GDP so low. Conversely, no country matched Yemen for the high contribution of industry to the GDP. In fact, the structure of the Yemeni GDP in 1997 was closer to what was observed in the same group of countries some 10 years later. The room for a further reduction of the agricultural sector in the near future is probably limited, and any further changes will occur mainly within the industry/services set of sectors through an increase of the services sector, and within the industry sector through an increase of the manufacturing sub-sector. As a consequence, in the long run, there will likely be an increased demand for skilled labor in this sector and this sub-sector. Such a demand will be fueled by their gradual modernization. Since as much as 89 percent of the labor force is currently employed in the informal sector which requires mostly basic skills, there is definitively scope for the future enhancement and retooling of workers' skills. This scenario will be a departure from the past trend of employment growth which was driven by the absorption of the surplus of low skilled labor supply by the informal/non-agricultural sector, rather than growth in real demand''. Economic growth was projected by the International Monetary Fund (IMF) to reach 7.7 percent in 2009, up from 3.9 percent last year, suggesting that the Yemeni economy would not be severely affected by the global downturn. This leads to the expectation that such resilience will allow the above scenario to unfold. However, more recent estimates are less optimistic, and recruitments in the private sector in 2009 have sunk.
This is supported by the fact that labor productivity (output per worker) has declined in industry and services between 1994 and 2004 (and has increased in agriculture). 69 Table 9.2: GNI p.c. and Structure of the GDP: Selected Countries (1997)
GNI p.c. Share of GDP (%) (US$) Agriculture Industry Services Bangladesh 470 25.8 25.1 49.1 Vietnam 790 25.8 32.1 42.2 Mauritania 840 33.4 26.4 40.2 Yemen 870 16.3 43.2 40.5 India 950 26.1 26.8 47.1 Nicaragua 980 23.7 26.8 49.6 Egypt 1580 17 31.2 51.8
Source: World Bank, Development Data Platform (DPP): Country At a Glance 8. Secondly, its demographic idiosyncrasy makes Yemen an outlier: its population is 'by far the fastest growing one compared to both low income countries and countries in the Middle East and North Africa (MENA) Region. The share of youngsters is also far larger in Yemen than in other comparable countries (Table 9.3). Even if it is projected to decrease from its current 46 percent as a share of the total population between now and 2030, the 0-14 year group is expected to grow in absolute terms from 10.5 million to 15.4 million during the same period. Even though, in the long run, this peculiarity will definitively present an opportunity for the country to build a solid human capital basis, in the short and medium term, it means a relatively smaller active population, more pressure on the whole education system, and the risk of a disconnect with the capacity of the labor market to create enough employment for those leaving education institutions. Currently, as much as 43 percent of the 15-60 age group population is economically inactive.
Table 9.3: Population Growth and Structure: Selected Countries (2005)
Population Population, Population, annual growth aged 0-1 4 aged 0-24 (% ( %) (% of total) of total) Egypt 1.9 33 53 India 1.4 33 53 Low Income 2.2 39 Mauritania 2.8 41 60 MENA 1.9 33 Nicaragua 1.3 38 59 Vietnam 1.3 29 50 Yemen 3 .O 46 67
9. Notwithstanding the long-term prospects for an increase of demand for skilled labor, the current employment situation is mixed at best. One conventional way to gauge it is to assess the monetary gains associated with various levels of education. Available results suggest that the impact of education on wages is small, with two exceptions: completed primary education (compared to illiteracy) and graduation from university (compared to completed secondary education). The first one increases wages by 13
70 percent and the second one by 34 percent”, making university education by far the most profitable investment compared to the lower levels of education, and indeed to most other types of investment. Using private rates of returns2’, however, gives a slightly different picture. Although still positive, private returns on university investments in Yemen are relatively modest compared to those in other MENA countries.
10. These estimates of monetary gains are based on the assumption that university graduates are employed. This is far from being true of all of them. Actually, in 2005/2006, it was observed that “the unemployment rates increase with the level of education and peak at 46 percent among those with intermediary education and 54 percent among university graduates.yy2’This worrisome figure is to be compared with the (also high) national average of 16 percent.22It is consistent, however, with regional patterns23,and has its roots in both a strong demand and abundant supply. On the demand side, the type of growth path followed by Yemen and most other MENA countries does not promote fast job creation, and on the supply side, university ‘graduates are often willing to postpone employment until they find a secure position in the public sector (a strategy often encouraged by official policies of massive recruitment and hefty advantages in the civil service, and particularly frequent in times of economic downturn^)^^.
11. These patterns are well grounded in both individual and collective behaviors, and could lead to additional graduate unemployment, especially as the global economic crisis is still negatively impacting Yemen and neighboring countries. The risk however, is that these patterns may be interpreted as a sign of structural over-investment in higher education, and ultimately lead to a reduction of the already modest financial effort in favor of universities. That would be an unfortunate interpretation which could mislead policies. In the long run, the Yemeni economy precisely needs a wider base of skilled labor to manage the modernization and upscaling of its large, but still mostly traditional and informal service sector and to develop its nascent manufacturing sector. Counter-cyclical investments in higher education are needed to secure the long-term future of the economy. Fortunately, the above patterns are amenable to changes over time, provided the economy progressively becomes more formal and sophisticated.
12. Even though there is a clear discrepancy at the global level between the arrival of newcomers on the labor market (currently about 220,000 annually, projected to increase to 280,000 by 2020) and the pace of job creation, the mismatch between the demand and supply of labor is as much a matter of quality as it is of quantity. According to the 2004 Census, about 56 percent of the employed population was illiterate or had not exceeded the basic reading and writing skills, leaving 19 percent with a basic education level, 17 percent with a secondary education level and barely 8 percent with a university degree. This is clearly inappropriate for an economy to build up its base.
13. The qualitative unbalance is also demonstrated by the fact that labor surpluses coexist with skill shortages, and that while, on the one hand, some 30,000 university graduates could not find a job in 2004, at the same time, a majority of employers surveyed indicated they had difficulty in finding graduates
World Bank (2009). ’O Rates of returns are highly sensitive to a series of assumptions regarding costs and especially benefits. Estimates of the rates of returns to education are based exclusively on the “quantity” of schooling (years). A growing body of literature is emerging to confirm what common sense suggests, Le., that the quality of education is the main source of higher gains (monetary and non monetary). 21 World Bank (2009). ’* More recent estimates by the Ministry of Social Affairs and Labor put the average unemployment rate at around 35 percent. 23 For instance, in Egypt, while 42 percent of the labor force had a secondary education degree, the proportion of unemployed with the same level of education was 80 percent in 2002. The respective figures were 15 and 40 percent in Oman [World Bank (2008)l . 2.1 By the late ~O’S,unemployment in MENA was the highest in the world.
71 meeting their requirements because they were lacking basic skills as well as foreign language proficiency. Another indication regarding the qualitative dimension of the mismatch can be seen in the fact that the vast majority of unemployed graduates are those who studied in fields such as arts and lawhharia.
14. The public sector capacity of absorption of the graduates--especially those from faculties of humanities--is decreasing. Meanwhile, the local private labor market also has difficulties in finding employment opportunities for these graduates, especially in times of sluggish economic growth. However, it must be noted that the potential labor market for Yemeni graduates is not limited to Yemen but extends beyond the borders of the country, and in particular includes its neighbors from the GCC. The current situation of the labor market in Gulf countries is characterized by a high proportion of expatriate workers, and within the latter, the dominance of workers from Asia who represent globally about 70 percent of the total expatriate employed population. It is expected that the demand for Arab labor force by neighboring countries will increase in the future, opening more opportunities for Yemenis. These opportunities, however, will materialize only if the Yemeni graduates have the skills needed to compete with--and replace-those from other countries. 25 Therefore, the issue comes back to the quality of education which is offered by universities in Yemen.
15. Employment issues will not fade away quickly in Yemen and increasing graduate unemployment is already a reality. It is important to keep a long-term perspective while dealing with the short-terms dimensions of this situation. Employment creation is a key to the long-term future of the country. On the supply side, it imposes the need to improve the quality of university education (and technical education) and to encourage relevant fields of study so that graduates find the jobs for which they have studied and employers find the skilled labor force they are lacking. Growth is indispensable, but growth needs a solid human capital basis.26 Whether for the local or for the regional labor market, universities have to improve the quality of their services and also to acknowledge the gradual shift in employers’ needs, towards general skills, soft skills, language skills and IT practical proficiency .
D. Costs and Benefits of Project Interventions
16. This analysis is conducted by computing the gains to be expected from the interventions financed by the Project and the costs associated with the latter. Both gains and costs spread over long periods of time, and a decision needs to be taken regarding the time horizon in which to frame the analysis and compute the estimates. On the cost side, in the case where a project is financed by a Credit, there is an absolute outer border, defined by the Credit reimbursement period, namely 40 years. However, as the HEQIP is financed by a Grant, there is no repayment and such a limit does not apply. On the benefit side, the limit is the period during which the ultimate beneficiaries of the Project, i.e., the students, will potentially receive its benefits through higher earnings. This limit can be defined by the theoretical period of former students’ active (Le., gainful) life, which again is in the vicinity of 40 years after graduation. However, this is too long a period to make realistic predictions, and it carries too many uncertainties associated with students (on the benefits side), with the education system (on the cost side), or with exogenous factors. Hence, computations are limited to a 15 year period following project closing2’ - which remains a long-term horizon, beyond which attribution of benefits becomes extremely difficult to
25 Several other obstacles which hinder expatriate labor also need to be worked out, such as warranty systems, quota systems and visa restrictions. See MoPIC (2009). 26 It was noted that in most MENA countries, there is a gap between the observed GDP growth and the growth rate needed to match aggregate labor supply (World Bank 2003). In the case of Yemen, and in purely quantitative and global terms, the projected 7.3 percent growth rate should -if confirmed- contribute to bridge the gap, given the labor-intensive nature of most economic activities. 27 This corresponds to a 20 year period starting at project effectiveness. 72 trace. Cutting the computation period by more than half may indeed lead to an underestimate of both costs and benefits, in respective proportions which cannot be easily determined, and hence are assumed to be similar -and mutually offsetting.
17. Costing the Project is straightforward. When a project is financed by an IDA Credit, one part is constituted by the reimbursement of the Credit and the payment of the service charge related to it. Such costs do not occur in the case of the HEQIP which is financed by a non-reimbursable Grant2*.The other part of the costs is composed of the additional charges linked to the project implementation (including amortization). While the first cost element (credit repayment) would have started only 10 years after project effectiveness, the other cost items kick off immediately after the latter, and most of them also continue accruing after project closing, assuming that project interventions are prolonged beyond this closing.
18. Assessing the value of the benefits is more complex. For one, not all benefits have a monetary value, and those which have not may be as important to consider. In particular, the proposed Quality Enhancement Fund (QIF) should bring about positive attitudinal changes within the academic community (especially faculty staff), improved governance and accountability within universities (particularly more transparency in transactions), alignment with strategic objectives, increased student satisfaction regarding the quality of the learning environment, greater employer satisfaction about the quality of graduates, and finally, a diverse set of elements contributing to social harmony, nation building and cohesion. Estimating the value of these positive externalities is indeed very difficult. Similarly, the QIF is expected to enhance the relevance of the higher education sector and to contribute to the development of an environment propitious to the employability of future graduates. The introduction of innovative schemes to strengthen the quality of programs in targeted fields of national importance is expected to make these fields more attractive to students. Hence, the relative share of enrollments in these fields should also increase, while that of disciplines without employment potential should shrink proportionally. However, the foregoing important, albeit indirect, benefits of the Project cannot be easily translated into monetary terms.
19. Purely monetary benefits are more easily identifiable and quantifiable. These benefits mainly consist of the incremental earnings which students are expected to receive as a result of the QIF innovations (Component 1). The other quantifiable benefits derive from the efficiency gains associated with the various interventions under the Quality Assurance, Capacity Building and M&E Components.
20. Three scenarios are developed to estimate the costs and monetary benefits associated with the Project. The main assumptions regarding the projection of both costs and benefits to build the Base Case scenario are summarized in Table 9.4.
In theory, the issue could be framed in terms of opportunity costs, the question being whether alternative uses of the Grant would generate higher benefits than those expected from the proposed project. However, this would be an arbitrary exercise, as the response depends on the priorities given to each sector and sub-sector of the education system. If the question remains asked within the higher education sector, there is no clear better use of the funds. 73 Table 9.4: Project Costs and Benefits: Base Case Parameters and Assumptions
costs Benefits Grant Repayment = 0 Students incremental income attributed to project Implementation = 10 percent of university graduates’ average income for 5 years after graduation and 5 percent thereafter for the next 10 years. Average incomes are based on the current salary scale for civil servants. Beneficiary population = 10 percent of projected student population enrolled in public universities in 2010, assumed to grow at a 5 percent rate p.a. Service charge = 0
Commitment charge = 0 Efficiency gains = Assumed to spread on a 10 year period at 1.5 percent of recurrent budget from year 3 to 7, and 1 percent from year 8 to 12 Replacement costs = 10 percent of expenditures on goods and equipment 3 times during projection period
Additional maintenance and operational costs = 3.5 percent of current withdrawn credit balance
costs Benefits Reimbursement 0 Incremental income 5.3 Service charge 0 Efficiency gains 4.7 Reelacement costs 0.6 Additional maintenance and operational costs 5.4 Total 6.0 Total 10.0 Source: Team estimates
22. The above results are based on middle-of-the-road assumptions reflecting a plausible course of events. However, there are many opportunities for departing from this projected course, and it is necessary to test the sensitivity of the results to such possibilities. The most logical way to undertake the test is to conduct it with the largest items which are the most vulnerable to internal or external shocks because of their sheer size. One item on each side of the equation stands out: the additional maintenance and operational costs associated with project activities on the one hand and the efficiency gains derived from the Project on the other hand. Therefore, they are the ones submitted to the tests. In addition, the sensitivity of assumptions on the proportion of students benefiting from the QIF is also tested. A low case scenario and a high case scenario are conducted, with extreme values for these two items as indicated in
74 Table 9.6. To these middle-of-the-road scenarios, two radical cases are added: in the “pessimistic case”, low benefits are combined with high costs, and in the “optimistic case”, high benefits coexist with low costs. Table 9.6: Project Costs and Benefits: Assumptions under Alternative Scenarios
Low Case Base Case High Case Efficiency gains: 1.5 percent Efficiency gains: 2 percent Efficiency gains: 1 percent of Of recurrent budget from of recurrent budget from recurrent budget from year 3 Year to 7, and Percent year 3 to 7, and 2 percent to 7, and 0 percent thereafter thereafter thereafter BeneJits Number of beneficiaries: 15 Number of beneficiaries: Number of beneficiaries: 10 percent of projected 5 percent of projected student percent of projected student student population enrolled population enrolled in public population enrolled in public in public universities in universities in 201 0 universities in 20 10 2010 Maintenance and Maintenance and Maintenance and Operational Operational Costs: 3.5 Operational Costs: 3 .O Costs: 4.0 percent of percent of withdrawn percent of withdrawn costs withdrawn balance from year balance from year 1 to 5 (to balance from year 1 to 5 (to 1 to 5 (to continue at constant continue at constant rate continue at constant rate rate thereafter) thereafter) thereafter) Source: Team estimates
23. The results suggest that despite substantial shifts in the values, the overall picture is not overturned. While a minor deficit would happen in the low case and in the (quite stringent radical) pessimistic case, the costs would be largely covered in the base case, the high case, and indeed the optimistic case (Figure 9.1). In conclusion, under most predicable circumstances, positive dividends may be expected from implementing the Project.
Figure 9.1: Total Costs and Benefits under Alternative Scenarios (Million Yemen Rial)
14 - 12 - 10 -
8- costs
6- @ Benefits
4-
2-
Of- 1 I Pessimistic Low Case Base Case High Case Optimistic
75 24. Cost and benefit estimates were also conducted at the private level. At this level (Le., the students), given the fact that public higher education is almost entirely free of charge, the main cost factor is the earnings foregone by students while studying. Those are estimated on the basis of the average wages earned by civil servants with a position corresponding to a pre-university qualification. The gains from attending a university (vs. secondary education) are overwhelmingly larger than the costs incurred.29 The expected incremental gains expected from attending a university which has benefitted from the Project make the differential even larger, and point to substantial private returns on higher education (the results would differ in the case of students enrolled in parallel programs). Factoring in even a long period of unemployment before getting a job (e.g., a three year period) does not affect the general picture (Figure 9.2).
Figure 9.2: Age-earning Profiles (Yemen Rial)
60,000 40,000 - -Direct Employment i ,..*- Delayed Employment 20,000 - j / 0- a I ,
Source: Team Estimates
11. Financial Analysis
A. Introduction
25. This analysis is conducted in two phases. First, it frames the Project within a wider, sectoral perspective, and offers a broadly-based view of expenditures on higher education, while comparing the Yemeni situation with that of a cluster of countries. Then, it analyses the probable budgetary impact of the Project. B. Education Expenditures
26. Total public spending on education represented about 14 percent of the entire public budget and about 6 percent of the GDP in 2007. Total government recurrent expenditures on education have increased by 138 percent between 1997 and 200730.However, the share of these expenditures in the GDP
29 A recent World Bank study concludes that graduation from university (compared to completed secondary education) increases wage by 34 percent in Yemen (World Bank 2009). 30 The execution rate (actualibudget) of recurrent expenditures was 113 and 123 percent respectively in 2006 and 2007, indicating that actual spending has outpaced budgetary allocations. 76 has decreased from a very high 10 percent in 2000 to about 6 percent in 2007. This is still a high figure compared to other low income countries which rarely post a share higher than 5 percent. It is however consistent with the MENA average rates of 5.3 percent observed during the 1995-2003 period and 6.4 percent recorded in 20033'. Education sector spending in Yemen reflects more the high level of total public spending -which accounted for more than 30 percent of the GDP in 2000 (Figure 9.3) - than a real priority for education. In fact, after hovering between 18 and 19 percent between 1997 and 2004, the share of the government recurrent budget allocated to education shrunk to 16 percent in 2007, a low figure compared to the 20 percent reference point of the Education for All's Fast Track Initiative (EFA- FTI) Indicative Framework, and to the MENA average recorded in 2003 (19.5 percent)32.
Figure 9.3: Public Education Expenditure as Percentage of GDP and Government Spending
-Publiceducation expenditure as %of GDP
~ --- Public education expenditure as %of Government spending
Source: World Bank, EdStats Note: Data for Senegal, Pakistan, Egypt, Indonesia, Korea and Kuwait refer to 2005. Data for other countries (including Yemen) refer to 2000
27. In 2007, the recurrent budget for education represented 85 percent of the total budget for the sector, leaving 15 percent for capital expenditures. There are three distinct phases in the evolution of investments in the sector: the years 1997 to 1999 were a period of surge with capital expenditures accounting for 22 percent of the total budget for the sector; this phase was followed by 5 years of modest investments, and finally by an upward trend noticeable since 2003.
28. Against this framework, higher education recurrent spending increased twice as fast as the expenditures for other levels of education, and as a result, its share in total education recurrent expenditure has increased from 14 percent in 1997 to 17 percent in 2007. This evolution is the response of the Government to the large expansion of the higher education sector attested in Yemen since the 1990s. In 2000, there were seven public universities and eight private universities, compared with only two public universities at unification in 1990. This level of institutional growth has led the Government to significantly increase the budget for higher education.
3' World Bank (2008): tables 1 .I and A.6 " World Bank (2008) : table A.7 77 29. In fact, the increase of the recurrent budget has outpaced the slow growth of enrollments in higher education, and as a result, expenditures per student have increased substantially (Figure 9.4). The latter had started at an extremely low level: in 2002 they were just twice as high as the unit costs of basic education, and they are currently a triple of those (Figure 9.9, which make them at par with the MENA average. The reasons for such a trend cannot be identified with certainty. It could reflect an improvement in the learning environment, but a deterioration of internal efficiency cannot be ruled out either. However, the high and rising student: teacher ratio (STR) does not support this interpretation: while the number of students between 2006/07 and 2007/08 had remained almost stable, the pool of teachers shrank, leading the STR to increase from 26: 1 to 28: 1. This ratio largely exceeds the 2002 MENA average (1 6:1) and is hardly compatible with quality teaching at university level.
Figure 9.4: Higher Education Recurrent Expenditures per Student, (2002 - 2007) (Constant 2007 Yemen Rial)
140,000 1
120,000
100,000 '
80,000 i
60,000
40,000 I 1 20,000 i 0,I 'I2002 2003 2004 2005 2006 2007 Source: World.lllll Bank (2009)
Figure 9.5: Per Student Public Expenditures, (2002 - 2007)
Ratio 4.0 1 /lX- ---*"-. - 3.0 - i A/------.,./ / I -___.&-* $econdary/Basic 2.0 -J - - T er ti aq! 5 a sic 1.0 ~ 0.0 2002 2003 2004 2005 2006 2007
Source: World Bank (2008)
30. Per student expenditures decline with the size of universities. They are three times higher in Hadramout University which enrolls less than 9,000 students than in Sana'a University which enrolls 10 times more students. However, these economies of scale do not apply in a systematic way, and other
78 factors such as the concentration in equipment-intensive fields are also important determinants, resulting in some universities recording higher unit costs than expected (Figure 9.6). Although the number of students is the main driver of revenues allocated to universities by the Ministry of Finance, the exact allocation mechanism is not clear. It seems to follow an historical approach, but other factors may be at Play - Figure 9.6: Per Student Expenditures by Size of Universities, 2007
250,000 7 ! Hadramawt l I ;200,000 i E ->. I Aden C! 150,000 U 8 B I c) 1I 100,000 aE j 2 I c) I '08 Tau ~ Sana'a = 50,000 ! --t Per student recurrent expenditures 8 I 50 ,- Linear (Per student recurrentexpenditures)
0 1____ _-______I______-I______I______- lo,ooo 20,OOO 30,OOO Enrollments Source Team computations based on Supreme Council for Education Planning (2007)
3 1. The weight of the salary bill in recurrent budget is also on the high side (78 percent), leaving a meager slice for non-salary items (e.g., pedagogical equipment and material) which play an important role in improving quality at the tertiary education level.
32. Figures recently disclosed by the Ministry of Finance for 2008 and 2009 show a more precise picture of the way total recurrent resources to higher education are spent. They indicate that a high proportion of the MoHESR budget is allocated to scholarships for overseas studies, which leads to the conclusion that the relatively high per student expenditures computed above are substantially overestimated. The Ministry is considering a revision of its overseas scholarship policy which dates back from the time when the supply of higher education was still very limited in Yemen and when young faculty staff had to go abroad to continue their studies and obtain a doctorate. Already, the number of scholarships awarded has halved since 2007.
33. Between 1997 and 2007, capital spending accounted for about 16 percent of total spending in higher education on average (and approximately 12 percent in basic and secondary education). Investments in higher education peaked in the late 1990s and have declined since. However, they have picked up again recently and represented about 29 percent of total spending on public higher education in 2008. The share of higher education in total spending on education (recurrent and capital expenditures) reached 20 percent in 2008. The uneven evolution in the level of spending on higher education over time suggests that long-term planning needs to be reinforced. The restructuring of the Ministry and the creation of a Sector dedicated to policy development is a step towards that direction.
79 C. Project Fiscal Impact
34. In order to gauge the impact of the Project on the fiscal situation, assumptions have to be made regarding the evolution of the sector budget (or, more precisely, on the recurrent part of the latter). A base case is built on the assumption that enrollments will continue growing at the same pace as what has been recorded since 2000, and it is further assumed that the recurrent budget for higher education will grow at a similar rate as enrollments, which means that, other than the Project, no particular measures to boost quality will be taken, and per student expenditures remain constant. On the project side, assumptions are made regarding whether the QIF is being carried over by the Government at the same level of resources or with increasing resources to extend the fund coverage. Assumptions are gathered in a low and high case, as summarized in Table 9.7. Projections are completed on a 15-year period.
Table 9.7: Project Fiscal Impact: Main Assumptions and Results
Sector Budget Project Impact (%)
Enrollments grow by 5.7 percent p.a. Same amounts of QIF are Case Sector budget increases at same rate carried over at the same [0.8 - 2.31 as enrollments (5.7 percent in actual level as during the Project. terms)
Enrollments grow by 3 percent p.a. QIF is extended to 4 High Case Sector budget increases at same rate million p,a. during years 6 as enrollments (3 percent in actual to 10, and 6 million p.a. [1.3 -3.81 terms) during years 11 to 15
Source: Team estimates
35. Regardless of which assumption is considered, the impact of the Project on the sector budget remains limited, within a range of 1 to 4 percent of projected expenditures. This result is consistent with the relatively small scale of the Project in monetary terms. The result of the sensitivity analysis suggests that the Project, which is expected to yield substantial benefits, should be financially sustainable in the future, and that the Government should be in a position to absorb the additional cost of an allocation mechanism of the type introduced by the QIF. Indeed, for this prediction to hold, institutional sustainability is a prerequisite, and the success of the Project a condition.
80 Annex 10: Safeguard Policy and Issues YEMEN: Higher Education Quality Improvement Project
Environment and Social Issues
1. The Project will focus principally on the provision of technical assistance, together with teaching and learning resource and facilities. There will be no new construction and no major physical expansion. Hence, the Project will not acquire new land, and will not trigger relevant environment and social safeguard policies. The Project is classified as category “C”.
2. There are no negative social impacts anticipated under the Project.
Safeguard Policies Triggered Yes No TBD
Environmental Assessment (OPBP 4.01) X Natural Habitats (OPBP 4.04) X I Forests (OPBP 4.36) I 1x1 I Pest Management (OP 4.09) X Physical Cultural Resources (OPBP 4.1 1) X Indigenous Peoples (OPBP 4.10) X I Involuntary Resettlement (OPBP 4.12) I 1x1 I Safety of Dams (OPBP 4.37) X Projects on International Waterways (OPBP 7.50) X Projects in Disputed Areas (OPBP 7.60) X
3. In order to identify potential environmental and safety issues related to the proposed activities under the first component “Quality Improvement Fund”, all the final proposals prepared under the science and technology disciplines will be required to submit an Environment and Safety Checklist for the Proposal (the form is included in the Project Operations Manual). The applying university will fill in the form, which will be submitted to the Project Identification and Review Committee. If the checklist shows potential negative environmental impacts, the University will submit a separate sheet for time- bound mitigation measures for it. It is anticipated that the University proposals under other disciplines will not have any environment impact and thus the proposals under these disciplines will not need to include the checklist unless the review committees request such checklist.
81 Annex 11: Project Preparation and Supervision YEMEN: Higher Education Quality Improvement Project
Planned Actual PCN review 07/09/2008 07/09/2008 Initial PID to PIC 01/13/2009 0 1/ 13 12009 Initial ISDS to PIC 02/05/2009 02/05/2009 Appraisal 02/03/20 10 02/01/2010 Negotiations 03116/20 10 03/15/2010 BoardIRVP approval 04/29/20 10 Planned date of effectiveness 0910 1/2010 Planned date of mid-term review 0910 1/2013 Planned closing date 0813 1/2016
Key institutions responsible for preparation of the project: Ministry of Higher Education and Scientific Research
Bank staff and consultants who worked on the project included: Name Title Unit Lianqin Wang Senior Education Specialist, Co-TTL MNSHE Ayesha Vawda Senior Education Specialist, Co-TTL MNSHE Amira Kazem Operations Officer MNSHE Mikael Sehul Mengesha Senior Procurement Specialist MNAPR Moad M. Alrubaidi Financial Management Specialist MNAFM Roger Pearson Education Specialist Consultant Benolt Millot Education Economist Consultant Abdulrahman AI-Sharjabi Operations Officer Consultant Hiromichi Katayama Education Specialist Consultant Danielle Malek Counsel LEGEM Ghada Youness Senior Counsel LEGEM Shereen Aleryani Operations Analyst Consultant Asma AI-Hanshali Program Assistant MNSHD Afifa Alia Achsien Senior Program Assistant MNSHD Nicola Renison Senior Cofinancing Officer MNADE Brenda Morata Paralegal LEGEM Laura Gregory Education Specialist Consultant Renata Lukasiewicz Program Assistant ,MNSHD
OER Panel Members Peter Materu (Chair) Senior Education Specialist AFTED Andreas Blom Senior Education Economist SASED Xavier Devictor Country Program Coordinator MNCA3 Hoveida Nobakht Senior Operations Officer MNADE
' Jamil Salmi Lead Education Specialist HDNED
82 Peer Reviewers for Decision Meeting Harsha Aturupane Lead Education Specialist SASED Peter Materu Senior Education Specialist AFTED Michel Welmond Lead Education Specialist AFTED
MNSHD OA Team Virginia Jackson Consultant MNSHD Amy Champion Operations Analyst MNSHD
(Until June 2009) Gillian Perkins Senior Education Specialist, TTL MNSHD Thomas Siaw Anang Procurement Specialist MNAPR Christina Djemmal Operations Officer MNSHD William Experton Lead Education Specialist AFTH2 Brigitte Franklin Program Assistant MNSHD
83 Annex 12: Documents in the Project File YEMEN: Higher Education Quality Improvement Project
Bank Staff Assessments and Background Documents
Aide-Memoire. Yemen Higher Education Quality Improvement Project Preparation. October 26- November 7,2009.
Aide-Memoire. Yemen Second Higher Education Project Preparation. July 4- 14, 2009.
Country Assistance Strategy for the Republic of Yemen for the Period FY 2010-2013, April 29,2009.
Implementation Completion and Results Report. Yemen Higher Education Learning and Innovation Project. January 27,2009.
Ministry of Planning and International Cooperation (MoPIC). (2009). A Perspective to Recruit and Absorb Yemeni Labour Force in the Labour Market of the Cooperative Council for the Arab States of the Gulf.
Project Concept Note. Yemen Second Higher Education Project. September 2008. Project Appraisal Document. Yemen Higher Education Learning and Innovation Project. May 28, 2002. Supreme Council for Education Planning. (2007). Annual Report. World Bank. .(2009, forthcoming). Yemen Education Country Status Report. World Bank. (2008). The Road Not Traveled: Education Reform in the Middle East and North Africa. World Bank. (2008). Yemen Development Policy Review. World Bank. (2003). Knowledge Economies in the Middle East and North Africa - Towards New Development Strategies.
World Bank. (2001). Yemen Higher Education Rationalization Study.
Others
Ministry of Higher Education and Scientific Research. October 2009. Project Management Unit Report on the Progress of the Project for Higher Education Development Project I1 for the Period from June to September 2009.
Hiadar, Abdulllateef Hussain. December 2008. “Yemen Accreditation and Quality Assurance System.” Prepared in cooperation with Netherlands Program for Institutional Strengthening of Post-Secondary Education and Training Capacity.
Ministry of Higher Education and Scientific Research. National Strategy for the Development of Higher Education in the Republic of Yemen and Summary Plan of Activities 2006-201 1.
84 Annex 13: Statement of Loans and Credits YEMEN: Higher Education Quality Improvement Project
Expected and Actual
STATEMENT OF IFC’s Held and Disbursed Portfolio (In Millions of US Dollars) Status as of February 28,2010
Committed Outstanding
Comritmnl hstltution Loan Equity Quasi Guarantee ALL ALL Loan Equity Quasi Guarantee ALL ALL
Fmcal Year ShortNam Cntd-IFC Cntd-IFC Cntd-IFC Md-IFC Cntd-FC Cntd-Part Out-IFC Out-IFC Out-IFC out-iFC Out-IFC Out-Part b 1999 ACSM 1.97 0 0 0 1.97 0 1.97 0 0 0 1.97 0.00 2003 Ahlii Water 1.36 0 0 0 1.36 0 1.36 0 0 0 1.36 0.00 ‘2006 Ncc Y emn 35.00 0 0 0 35.00 00 0 0 0 0 0.00 ‘2007 S Y Healthcare 18.95 0 0 0 18.95 0 18.95 0 0 0 18.95 0.00 2007/2008 AY CC 70.00 0 0 0 70.00 55.00 47.60 0 0 0 47.60 37.40 20071 2008/ 2W9/2010 Saba Manic Bnk 0 0 0 1.86 1.86 0 0’ 0 0 1.86 1.86 0.00 5008 AChw arid 8.00 0 0 0 6.00 0 8.00 0 0 0 8.00 0.00 ‘2008 Magrabi Y emn 10.00 0 0 0 10.00 00 0 0 0 0 0.00 Total Portfolio 145.20 0 0 1.06 147.14 55.00 77.00 0 0 1.08 79.74 37.40
85 Annex 14: Country at a Glance YEMEN: Higher Education Quality Improvement Project
Yemen. Rep. at a dance w9/09
M. East POVERTY and SOCIAL 6North Low. Developmntdlmond' Yemen Afrlca Income 2008 Population. mid-year (millions) 22.9 325 973 Life expectancy GNIpercapIta (Atlasmefhod, US$) 960 3 242 524 GNI (Atlas method, US$ billions) 2 19 1053 5a Average annual growth, 2002.08 Population (%j 2.9 19 21 GNI Gross LabOrforce (O%J 4.1 30 27 per primary Most recent estlmate (latest year avallable, 2002-08) capita enrollment Poverty (%of population bel0 w nafional po verly line) Urban population (%oflotalpopuiafion) 29 57 29 Life ewectancyat birth (pars) 63 70 59 I Infant mortalityfper 1000live births) 53 32 76 Child malnutrition (%ofchildren under51 43 28 Access to improved water source Access to an lmprovedwatersource (%ofpopularion) 66 ea 67 Literacy (%of population age Sy 59 73 64 Gmss primary enrollment (%ofschool-agepopulation) 65 06 96 -Yemm, Rep Male 94 09 02 -Lav-mmegwp Female 76 x)4 95 KEY ECONOMIC RATIOS and LONG-TERM TRENDS me8 ms8 2007 2008 Economlcratlo8' GDP (US$billions) 63 217 26 6 Gross capital fonnationIGDP 322 Trade Exports of goods and servicesIGDP 26 6 Gross domestlc SavingslGDP 116 Gross national savingslGDP 29 6 Current account balancelGDP -2 4 Domestic Capital Interest paymentslGDP 12 03 03 savings formation Total debt/GDP 915 26 1 23 5 Total debt servicelexpofts 66 Present value of debtlGDP 91 I49 Present value of debtlaworts Indebtedness 1988-98 mse.08 2007 2008 2008-12 (average annualgroMh) GDP 62 40 33 3.9 -Yemen. Rep GDP percapita 19 10 04 10 Lav-imagoup E@orts of goods and services 200 05 -
STRUCTURE of the ECONOMY IS88 1998 ' 2007' 2008 Growth of cap4td and GDP (X) (%of GDP) I I Agnculture 20 3 Industry 32 5 M anufactunng a1 Services 472 Household final consumption expenditure 73 9 General gov't final consumption emenditure 145 Imports of goods andservices 472
1~88.98 ms.s-08 2007' 2008 Growth of exports and Imports (OX) (average annual groMh) Agnculture 54 19 Industry 63 42 M anufactunng 46 04 Services 55 46 Household final consumption expenditure 36 14 General gov't final consumption expenditure 10 64 "9 nr nr M "7 08 Gross capital formation 159 -07 -Exports -C Imports Imports of goods and sawices 04 34
Note 2008data are preliminaryestimates This tablewas producedfrom the Development Economics LDB database 'Thediamonds showfourkey indicators in thecountry(in bold) comparedwthits incomegroup average If dataare missing,thediamondwll be incomplete
86 PRICES andGOVERNMENT FINANCE 1988 1998 2007 Domestic prices (%change) 25 Consumer pnces 60 20 Implicit GDP deflator -72 1 D9 66 l5 10 Government finance 5 (%of GDP. includes cumnl granfs) 0 Current revenue 25 8 03 04 05 06 07 06 Current budget balance -11 ___ WP deflator CPI Overall surplus/deficit -7 8 I - TRADE 1988 1998 2007 2008 Export and import levels mill.) (US$millions) (US Totalexports (fob) 1504 I 7,000 Crudeoil (government share) 471 6,000 Crudeoil (company share) 758 5,000 Manufactures 43 4.000 Total imports (cif) 2,289 3,000 Food 867 2,000 Fuel and energy 05 i.000 C apit a1 goods 508 0 Export pnce index (ZOOO=UO) 51 02 03 04 05 06 07 Import pnce index (ZOOO=UO) D3 mExpoP Ilmpmir Terms of trade (20OO=WO) 50 I BALANCE of PAYMENTS 1988 1998 2007 (US$ millions) Exports of goods andservices 1678 ImpOrtS Of goods and SeNICeS 2,982 Resource balance -1304 Net income -76 Net current transfers 1330 Current account balance -149 Financing items (net) 459 .1 1 02 03 04 05 Changes in net reserves -30 .: I 06 07 06 Memo: Reserves including gold (US$ millions) ion Conversion rate (DEC locai/uS$) 058 890 897
EXTERNAL DEBT and RESOURCE FLOWS 1988 1998 2007 ' ' Compo~Alonof20Wdebt(USSmill.) (US$ millions) Total debt outstanding and disbursed 5 248 5,778 6 089 6,258 IBRD 0 0 0 0 IDA 5D 1075 2,058 2,lO Totaldebt service 30 87 271 283 IBRD 0 0 0 0 2 113 IDA 6 B 49 55 Compositionof net resource flows Official grants m 05 79 262 E 2.637 Official creditors 52 m 279 153 Pnvate creditors 329 2 -1 -1 95 Foreigndirect investment (net inflows) 8 -2 8 977 1555 Portfolio equity (net inflows) 0 0 0 0 World Bank program Commitments 43 60 30 84 Disbursements 49 121 122 08 A-IERD E - Bilateral Principal repayments 2 n 34 6 - IDA D - Mkrmultlateral F - Private C-IMF G - Short-tar Net flows 47 in 88 ;: Interest payments 5 7 15 Net transfers 43 04 73
Note:This table was producedfrom the Development Economics LDB database. ILI9109
87
MAP SECTION
46ºE 48ºE 50ºE 52ºE 54ºE This map was produced by the Map Design Unit of The World Bank. REPUBLIC OF The boundaries, colors, denominations and any other information 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 YEMEN endorsement or acceptance of such boundaries. 20ºN SELECTED CITIES AND TOWNS 20ºN GOVERNORATE CAPITALS REP. OF SAUDI ARABIA NATIONAL CAPITAL YEMEN RIVERS MAIN ROADS GOVERNORATE BOUNDARIES INTERNATIONAL BOUNDARIES OMAN 18ºN 42ºETo Abha 44ºE
SanawSanaw To Thamarit
HabarutHabarut ThamudThamud M SAADAHS A A D A H a h r To Mirbat SaadahSaadah n a t hu M k AL-A L - t a n s i M . ad AL-JOWFA L - J O W F W MAHRATM A H R AT ZamakhZamakh HADRAMOUTH A D R A M O U T Damqawt - adi Al Jiz Maydi HuthH¸ uth W AlAl HazmHazm ert es Wa Mar’aytMar’ayt Al Ghaydah W D di 16ºN HAJJAHHAJJAH AMRANAMRAN ad n Deser Ha 16ºN i Ja y dr wf ta AlAl GhurafGhuraf am 'a o Nishtun Al Luhayyah HajjahHajjah aab'atab ut S AmranAmran as HawraHawra llatat MARIBM A R I B am Salif AlAl MahwitMahwit MaribMarib R ShabwahShabwah AL- SANAASANAA t Qishn ao u MAHWIT SANA'ASANA'A SHABWAS H A B WA m Sayhut Red Sea a Al Hodeidah NuqubNuqub r Al Gabain HaribHarib d DHAMARDHAMAR a Shihr HODEIDAHDAHDAH (3199(3199 mm)) NisabNisab AtaqAtaq H RAIMHRAIMH DhamarDhamar RRidaida Al Mukalla
W bid AL-BEIDAAL-BEIDA adi Za 14ºN IBBI B B AL-AL- AlAl BeidaBeida AlAl HuwaymiHuwaymi 14ºN IbbIbb DHALE'EDHALE'E Bir Ali (3227(3227 mm)) AlAl Dhale'eDhale'e W TaizTaizTaiz a ABYANA B YA N d i B a
n Ahwar Mocha a TAIZTA I Z Shaqra AtAt TurbahTurbah ERITREA LahejLahej Zinjibar Gulf of Aden At LAHEJLAHEJ Turbah Aden Qalansiyah Qadub ETH. ADEN Socotra 'Abd al Kuri
) IBRD 33513R Samha Darsa E 0 50 100 150 Kilometers AT 12ºN DJIBOUTI R 12ºN ( The Brothers N O MAY 2009 H A D E R R A M O U T G O V 0 50 100 Miles SOMALIA 42ºE 44ºE 46ºE 48ºE 50ºE 52ºE 54ºE