Report No. AAA27-MG Madagascar Post Primary Education Developing the Workforce, Shaping the Future: Transformation of Madagascar's Post-Basic Education September 3, 2008 AFT: Human Development AFRICA Document of the World Bank ACKNOWLEDGEMENTS This study was prepared by SajithaBashir (Senior EducationEconomist, AFTH3), with key contributions from Jamil Salmi (Lead Education Specialist, HDNED) on higher education andPatrick Ramanantoanina (Senior Education Specialist, AFTH3) on secondary education. Backgroundpapers for the study were commissionedby the World Bank and the Ministryo f Educationand Scientific Research, Government o f Madagascar (Ministire de 1'EducationNationale -MEN) .These include papers by Gerard Lassibille (consultant on education and labor market analysis, World Bank), David Stifel (consultant for household survey analysis, World Bank), Sam Mikhail (consultant on higher education, World Bank), Richard Johanson (consultant on technical andvocational educatiodtraining, World Bank), S.N. Prasad (consultant for study of curriculum development and textbooks inIndianstates, World Bank), Rohen d'Aiglepierre (consultant onprivate sector education, jointly financed by World Bank andAgence Frangaise de DCveloppement), John Middleton (consultant on secondary education, MEN) andHafedh Zaafrane (consultant on higher education costs and financing, MEN). The report also draws on analyses done by the MENteam on the Country Status Report on Education(inprogress), supported by the Bank team ledby Mamy Rakotomalala (Senior EducationSpecialist, AFTH3). HopeNeighbor (consultant, World Bank)prepared the first draft o fthe Executive Summary and designed final charts, diagrams andtables. Chie Ingvoldstad (consultant, World Bank)provided valuable researchassistance andproofing o fthe report. The final formatting was done by Norosoa Andrianaivo (Program Assistant, AFTH3). The findings o fvarious backgroundpapers were discussed with the MENteam at various stages. The study benefited from these discussions, specifically with HajaNirina Razafinjatovo (Minister o f Finances and Budget and former Minister o fEducation and Scientific Research), Andriamparany BenjaminRadavidson(former Minister o f Education and Scientific Research), Ying Vah Zafilahy (Vice-Minister o f Education, in charge o fhigher education and vocational training), Harry Serge Raheriniaina (former General Secretary, Ministry o f Education), Ridjanirainy Randrianarisoa (former General Secretary, Ministry o f Education), Minoson Rakotomalala (Director o f Cabinet, Ministry o f Education), Romain KleberAndrianjafy (General Secretary, Ministryo f Education), Tahinarinoro Razafindramary (Director-General o f basic education, Ministry of Education), Christian Guy Ralijaona (Director-General o f higher education andresearch, MinistryofEducation), HarisoaAndriamihamina Rasolonjatovo(Coordinator ofthe Technical Working Group, Ministry of Education), Josoa Ramamonjisoa (Director o f Higher Institute o fTechnology) and Josiane Rabetokotany (Technical Coordinator o f Education for All). Onthe Bank side, the study benefited from comments and guidance from Laura Frigenti (Country Director, Central America), Robert Blake (Country Manager, Madagascar), RitvaReinikaa (Sector Director, MNSED), Jee-Peng Tan (Education Adviser, AFTHD) and Ganesh Rasagam (Senior Private Sector Development Specialist, AFTFP). The two peer reviewers, ShahidYusuf (Economic Adviser, DECRG) andJuan Manuel Moreno ... 111 (Senior Education Specialist, ECSHD), provided comments on the ConceptNote and the final draft of the report. Financial support from the Norwegian Post Primary EducationFundfor various background studies is gratefully acknowledged. iv ABBREVIATIONSAND ACRONYMS AESPHM LYssociation desEtablissementsSupkrieurs Privks Homologuks (The Association ofthe Approved Private Higher Establishments) ASET Applied ScienceEngineering andTechnology CFP Centres de FormationProfessionnelle (Vocational Training Centers) CISCO Circonscription Scolaire (School District) CNEP CommissionNationale de 1'EnseignementPrivk (National Commission of Private Teaching) CNTEMAD Centre National de Te'lk-enseignementde Madagascar (Madagascar Distance Learning Center) COE Coll2ge d 'excellence(Junior Secondary School) CP Centre Professionnelle (Vocational Center) CROU CentresRkgionaux des (Euvres Universitaires (Regional Centers of UniversityWorks) CNFTP Conseil National de la Formation TechniqueProfessionnelle (National Council of Technical andVocational Training) DN DirectionNationale (National Direction) D E N Direction Rkgionale de 1'Education Nationale (Regional direction ofNationalEducation) EFA Education for All ENS Ecoles Normales Supkrieures(Higher General Education) FDI Foreign Direct Investment FRAM Fikambanan 'ny Ray Aman-drenin 'ny Mpianatra (Parents Students Association) GCI Global Competitiveness Index GDP Gross Domestic Product GEETP Groupement des Etablissementsd'Enseignement Technique et Professionnel (Technical and Professional Educational EstablishmentsGroup) GER GrossEnrollment Ratio HE Higher Education HE1 Higher Education Institution ICA Investment Climate Assessment ICT Informationand Communication Technology IDA International Development Association INFOR Institut National de Formation (National Instituteof Training) INSTAT Institut National de Statistiques (National Instituteo f Statistics) INTH Institut National de Tourisme et d'H6tellerie (National Institute of Tourism and Hotel Trade) ISCAM L 'Institut Supkrieure de la Communication, desAffaires et du Management (The Higher Institute of Communication, Businesses and Management) V IST Institut Supe'rieurede Technologie(Higher Instituteof Technology) JSE Junior Secondary Education KAM Knowledge Assessment Methodology LMD Licence-Maitrise-Doctorat (Bachelor's/Master's/Doctorate) LTP Lyce'e TechniqueProfessionnelle (TechnicalNocational High School) MAP MadagascarAction Plan MEN Ministire de 1'EducationNationale (MinistryofNationalEducation) NIOS National Instituteof Open Schooling NTA National Training Authority ODL Open and Distance Learning ONEP Office Nationale de 1'EnseignementPrive' (National Office of Private Education) R&D Research andDevelopment SADC SouthernAfrica Development Community SSA Sub-SaharanAfrica SSE Senior SecondaryEducation TVET Technical and Vocational Education and Training UNESCO UnitedNations Educational Scientific and Cultural Organization USPTO UnitedStates Patentsand Trademarks Office WEF World Economic Forum Education and Training Qualifications BAC Baccalaure'at(SSE final examination) BACPRO Baccalaure'atProfessionnel (Professional SSE final examination) BEP Brevet d 'EtudeProfessionnelle (Professional StudyDiploma) BEPC Brevet d'Etudes du Premier Cycle (JSE final examination) BT Baccalaure'atTechnologique(Technological SSE final examination) BTS Brevetde TechnicienSupe'rieur(High-level Technician Diploma) CAP CertiJcat d'AptitudeProfessionnelle (Vocational Aptitude Certificate) CEPE Certijkat d'EtudesPrimaires et Ele'mentaires(Primary School Leaving Certificate) CFA CertiJcat de Fin d'Apprentissage(Endof Training Certificate) DEA Dipldme d'EtudesApprofondis (Doctoral Qualifying Degree) DESS DiplGme d'EtudesSupe'rieuresSpe'cialise'es(Diploma of Higher Education Specialist) DEUG Dipldme d'Etudes Universitaire Ge'ne'rale (BAC+2) (Diploma of GeneralHigher Education) DIIST Dipl6me d'Inge'nieurde 1'IST (Engineer DiplomaofIST) DTS DiplGme de TechnicienSupe'rieur(High-level Technician Diploma) vi DTSS DiplGme de Technicien Supe'rieurSpe'cialise'(High-level SpecializedTechnician Diploma) DUT DiplGme d 'Etudes Technologiques (Diploma inTechnology) LP Licence Professionnelle (Professional Bachelor's Degree) vii TABLE OF CONTENTS ACKNOWLEDGEMENTS............................................................................................... ... 111 ABBREVIATIONSAND ACRONYMS............................................................................ v EXECUTIVESUMMARY................................................................................................. 1 9 2. 1. INTRODUCTION........................................................................................................ 15 24 4. 3. EDUCATION-LABORMARKETLINKAGES.................................................... TRENDS INENROLLMENTAND COMPLETION............................................... SKILLSFORTHE LABORMARKET:IMPROVINGRELEVANCEAND QUALITYINPOST-BASICEDUCATIONAND TRAINING............................... 37 5. ACCESS AND EQUITY INPOST-BASICEDUCATION...................................... 57 6. PARTNERSHIPSFOR GROWTH:INNOVATIONAND ON-THE-JOB TRAINING................................................................................................................. 72 7. ADAPTING TO CHANGE:ISSUESAND REFORMS INPUBLIC EXPENDITUREAND FINANCEMANAGEMENT............................................... 83 8. STEERINGCHANGE: REFORMSINMANAGEMENTAND GOVERNANCE.............................................................................. 97 9. A STRATEGIC FRAMEWORKFORPOST-BASICEDUCATIONIN 104 REFERENCES................................................................................................................ MADAGASCAR...................................................................................................... 113 APPEND1X:THEREFORMOF BASICEDUCATIONINMADAGASCAR:LESSONS AND IMPLICATIONSFORPOST-BASICEDUCATION................................... 116 Tables Table 1. Table 2. Madagascar-Net Enrollment Rates per Income Level in2001 and 2005 (%) ..........23 Growth sector skillneeds and labor supply................................................................. 39 Table 3. Types of public financing for private schools ............................................................. 69 Table 5. Table 4. Madagascar's Global Competitiveness Indexrankings. 2007-8 ................................. 73 Madagascar's GCIrankings for higher education and training. 2007......................... 73 Table 6. Table 7. Madagascar's GCIrankings for innovation. 2007....................................................... Innovation indicators for Madagascar's formal sector manufacturingfirms. 2005.....74 76 Table 8. Determinants ofthe decision to train employees inthe formal manufacturingsector. Table 9. Table 10. Allocation of public education expenditure by sub-sector, 2002 -2007 .................... Determinants of training and impact on earnings, formal industry sector 2005..........79 2004............................................................................................................................ 80 Table 11. Allocation of public capital expenditures ineducation by sub-sector, 2002-2007 ......84 85 Table 12. Per student public recurrent expenditureby level of education, constant 2006 prices 86 Table 13. Two scenarios for government regulation................................................................. Table 14. Framework for Strategic Development of Post-Basic Education.............................. 103 110 ... Vlll Figures Figure 1. Educationand the commitments o fthe MAP ............................................................... Figure 2. Students in higher education. 1969-2006 ................................................................... 10 11 Figure3. Plannedreformto basic education curriculum.............................................................. 12 Figure4a Primary enrollment. 1997-2007.................................................................................. 15 Figure4b Junior secondary enrollment. 1997-2007..................................................................... 15 Figure 4c SSE, TVET and HEenrollment, 1997-2007.............................................................. 15 Figure 5. Internationalcomparison of gross enrollment rates, secondary and higher education, Figure 6. Share of private sector inenrollment by sub-sector, 1997 - 2007................................. 2005 ............................................................................................................................ 16 17 Figure7. Entryinto highereducation by baccalaure'atseries, 2005-06....................................... 18 Figure 8 Firstyear university drop out ratesby university,2004 2005..................................... . - 19 Figure 10.Distribution ofthe populationby highest educational attainment and income, 2004 ..21 Figure 9. Student survival, JSE to HigherEducation................................................................... 22 Figure 11.Madagascar - Labor Status ofthe Population, 2005 (millions) .................................... 25 Figure 12. Cross-country comparison of adult educational attainment, 2001-2005...................... 26 Figure 13.Average years of education by age group, employed labor force, 2001 and 2005 .....27 Figure 14.Educational attainment of employed labor force participants underage 30, 2001 and Figure 15. Shareof populationthat has attained at least grade 5 by age group, 2005...................27 2005............................................................................................................................ Figure 16a.Share ofpopulationthat has attained at least grade 9 by age group, 2005................28 29 Figure 16b Share ofpopulationthat hasattained at least grade 12by age group, 2005...............29 . Figure 17. Distribution of employed labor force by highest qualificationobtained and annual Figure 18.Educationalattainment of employed labor forces byregion, 2005.............................. educatiodtrainingawards (estimated), 2005.............................................................. 30 31 Figure 19.Education levels inMAPtarget regions, 2005............................................................. 32 Figure21.Typology o ftechnological occupations inthe knowledge economy ........................... Figure20. Returnto education by educational level, wage and salary earners, 2005 ...................34 40 Figure 23. Structure of MadagascarTVET system, 2007 (pre-reform) ........................................ Figure22.Madagascar's Senior SecondaryEducation(SSE) Cycle ............................................ 42 Figure 25.NIOS processfor learningsystem development .......................................................... Figure 24. Graduates of applied science, engineering andtechnology programs, 2005-2006 ......46 50 62 Figure 26. Private education inMadagascar................................................................................. Figure 28. Distribution of private school enrollment by type of institution, 2005-06 ..................66 Figure 27. Share of private sector in secondary education institutions, by region....................... 65 67 Figure29. Madagascarknowledgeindicators -innovation systems............................................ Figure30. Select knowledge indicators - Madagascar and middleincome SADC countries ......75 75 Figure31.Total public education expenditure as percent o f GDP, 1996-2006.......................... 83 Figure 32.Investment spending inSSE, WET andhigher education, by source of financing, Figure33 Compositiono frecurrent public expenditure by education sub-sector, 2007..............87 2006............................................................................................................................ 86 . Figure34.Composition oftransfers for higher education by category o fexpenditure, 2006 .......88 Figure 35.Composition of recurrent expenditure inhigher education, 2006................................ 88 Figure36. Supplementary hours as percent oftotal universityteaching hours, 2006...................90 Figure 37. New structure of basic education .............................................................................. 117 Figure 38. Proposed curriculum, grades 1- 10.......................................................................... 118 ix Boxes Box 2.Alternative models for secondary education...................................................................... Box 1.Observations on the availability of middlemanagersand skilled technicians...................36 Box 3. Strategiesfor shifting to LMDinselectedEuropean countries ......................................... 45 52 63 Box 5.Ten characteristics of successful open universities............................................................ Box 4.Main Featuresofthe National Institute of Open School. India ......................................... Box 6.Modelfor a Post-Basic EducationReform Commission................................................... 64 98 X EXECUTIVESUMMARY Demandfor Reformof Post-BasicEducation The transformation o f education is one o fthe eight pillars of the 2007 -2011Madagascar Action Plan (MAP), the country's new development strategy. Consistent with this focus, the Government announced a major re-structuring o f school education in2005 and has completed a planfor basic education reform, covering 7 years o fprimaryand 3 years o f junior secondary education. The Government is now startingto prepare a strategy for post-basic education. The mainpurpose o fthis report is to provide analytical inputs for the development ofpost-basic education reforms. Specifically, the report identifies and prioritizes: (i) need for change inthe structure, content and delivery o f Madagascar's the post-basic education and training system, and (ii) the key reforms infinancing, governance and sub-sector management requiredto support changes to the structure, content anddelivery o fthe post-basic system. Madagascar's challenges are enormous. Education indicators at the post-basic level rank itamongthe lowestperforming countries inthe world. The gross enrollment ratio in senior secondary education (SSE) isjust 10percent, and intertiary education less than 3 percent. Public resources are limited, especially at the post-primary level. The tax:GDP ratio i s about 11percent, one of the lowest insub-Saharan Africa. The government budgetis highly dependent on donor funding. Withinthe education sector, bothdomestic allocations and donor fundingare heavily biased towards primary educationinorder to ensure universal primary completion, which is currently less than 60 percent. The M A P outlines an ambitious development strategy, focusing onpromoting investment inhighgrowth sectorsandregional development. Ifsuccessful, itwill change the demand for skills infundamental ways. Since 2005, foreign direct investment has increased rapidly. Unless the post-basic education system adapts to the changing demand for skills andother services, it may hinderMadagascar's ability to meet the objectives o fthe MAP. CoreChallengesfor Reform At present, Madagascar's post-basic education andtraining system is not able to meetthe demands o f a changing economy for five core reasons. These reasons include: (i) poor quality and relevance; (ii) low attainment and inequityinaccess; (iii)internal inefficiency o fthe education system; (iv) financial inefficiency (under-funded, highcost); and (v) a weak enabling framework (financial management, governance). Poorquality andrelevance. Madagascar's post-basic education andtraining system does not provide graduates with skills that are relevant intoday's - or tomorrow's -labor markets. Madagascar's secondary education curriculum was last reformed inthe 1970s. Its curriculum structure i s highly academic and overloaded: the series inthe general and technological/technical baccalaure`ats do not correspond to the disciplines and skills that 1 are now important inthe economy. Both technical/vocational education and training and higher education have inflexible long duration courses. The former provides a limited range o ftechnical skills for narrowly defined occupations. Inhigher education, Madagascar has not introduced the bachelor 's-master's-Ph.D system to which most European countries have transitioned over the last 10 years, although the plans for implementingthis system have beendeveloped. Boththe curriculum and curriculum structure contribute to highrates o f exam failure, repetition and drop out. Equally importantly, the curriculum fails to build flexible `employability' skills that graduates can apply to problem solving inmany areas. Linkages between education andtraining institutions and industry/employers inthe private sector are limited, both inresearch and inenterprise-based training. As aresult, Madagascar ranks lowininternational competitiveness (the Global Competitiveness Indexranks Madagascar 118 out o f 131 countries ranked overall, and 121 on higher education and training). Internalinefficiency. The education systemis inefficient at all levels, starting with primary education. Highrates o fdrop out, repetitionandexam failure meanthat very few students complete each cycle. As a result, although grade 6 enrollment i s currently 189,000, Madagascar producesjust 4,200 higher education graduates per year. The pass rate for the baccalaur6atexamination i sjust over 40 percent. The pass rate for first year universityexams isjust 50 percent, contributing to highdrop-out. Repetition rates average 14 percent inpost-basic education. These rates imply a very highwastage o f resources that Madagascar can illafford, andresult ina growing number o f out-of-school youth with limitededucational attainment. Low attainmentandinequityinaccess. Madagascar's humancapital stock i s very low, reflecting the cumulative effect o f years o f low enrollment andhighrates o f drop- out, repetition, and exam failure. One measure o f humancapital is the educational attainment o fthe labor force. In2005, the average years o f education was 4 years. Only 1.7 percent o fthe working age population hadpost-secondary education, and only 9 percent had secondary education. Moreover, investment inhumancapital has not followed a steady upwardtrend. The proportion o f the populationthat had attained grade 12peaked about 20 years ago, at 6 percent, but had dropped to 3 percent by 2005. Labor marketindicators suggest that there is no immediate nationalskillshortage, dueto the small size of the formal sector. Nonetheless, upgrading the skill composition of Madagascar's labor force i s a strategic imperative, necessary for supporting the government's growth strategy o fpoverty reduction andregional development. Inequityinaccess is relatedto bothincome levels andregionaldisparities.The secondary net enrollment rate for childrenfrom the poorest 60 percent o f households is less than 8 percent. Only 1percent o f children from the poorest 20 percent o fhouseholds is enrolled intertiary education. Only two regionshave close to 10percent ofworkers withat least senior secondary education. Only one o f the eight regions targeted by the MAP- Analamanga -has a level o ftertiary education o f more than 5 percent. Because Madagascar has poor quality infrastructure, internal migration cannot compensate for the lack o f local skilled labor supply. 2 Financialinefficiency. Post-basic education is under-fundedandhighcost. The share o f public education expenditure allocatedto post-primarysub-sectors is low inabsolute terms (SSE: 5.5 percent; TVET: 2.3 percent; tertiary, 15.6 percent), and when compared francophone and anglophone SSA countries. Furthermore, the curriculum structure and specialization drive highcosts by increasing teacher and classroom requirements. Finally, the remainingresources are usedinefficiently. Spending on post-basic is largely committed to teacher salaries, inlarge part due to low `regular' teaching loads. Indicatively, 98.7 percent o f SSE and 78 percent of TVET recurrent expenditure i s allocated to personnel costs and other staff payments. Inhigher education, faculty members are paid supplementary hours for teaching more than five hours a week, which creates a strong incentive for faculty to teach additional hours. Supplementary teaching hours now exceeds regular teaching hours by a factor o f 4:1and result inhighlevels o f spending on supplementary payments to teachers. This, inturn, limits fundingavailable for teacher training, curriculum, or materials development - investments that would help to improve educational quality and outcomes. Weak enabling framework. A weak enabling framework, including poor governance andbudgetmanagement, presents the final challenge to improvement o fMadagascar's post-basic education andtraining system. Interms o fgovernance, the biggestissue hasbeenthe lack ofeffective leadership and vision insteering the post-basic education sector. Highlevelpoliticalleadershipand broad-based consensus are criticalto successfuleducation reform. Insteadof creatingthe stabilityrequiredto undertakechange, the Ministry of Educationhas frequentlychanged itsorganizationalstructure. The Ministryhas limitedprofessional capacity to develop policy, operational strategies and implementationplans. Finally, there is no `feedback loop' between MENandthe economic sector, meaning that post-basic education i s not responsive to current or future economic needs. Despite the recent move to `program' budgets,there i s a lack o f capacity to prepare budgetsaccordingto strategic priorities. Separate preparationand reporting is still requiredfor the three mainparts o fthe budget (personnel, non-personnel, andpublic investmentprogram expenditure). Delays inbudgetexecution are frequent and budget reporting i s extremely weak, with virtually no oversight o f expenditures ineducational institutions. Priorities for Action Madagascar's `core challenges' andthe window o f opportunity provided by the implementation o f basic education reform imply that reform must improve the quality andrelevance o fpost-basic education, while puttingcost-effective mechanisms for expanding access inplace. Post-basic reform should not focus exclusively on a massive expansion o fthe existing post-basic system. Instead, successful reform will: (i) focus first on improving educational content (structure, curriculum, teaching, and process) and linkages with the economy; (ii) increase coverage, cost-effectively; and (iii) strengthen the enabling framework for reform (governance, finance, and sub-sector management). 3 Improve educational content and linkages with the economy Reforms aimed at improving educational content must accomplish three objectives: (i) meet the skilled labor requirements o fthe economy's key growth sectors, inthe short to medium term; (ii) gradually buildprofessional capabilities inthe key growth sectors, also inthe short to mediumterm; and(iii) youth to develop the knowledge, skills and help attitudes - `employability skills' -that will allow them to participate inand adapt to the changing labor market over time. Senior secondary education. Senior secondary reform should focus on two pillars. The first pillar would focus on incremental, school-based reforms. The main change would be to simplify the curriculum, andto make it more relevant to labor market needs. This could include reducing subject overload; re-organizing the baccalaurkats into more relevant tracks; andupgrading curricular content to include employability skills and knowledge incore subjects. These changes could be accompanied by changes to teacher training (teaching practices) and learning materials. Reforms aimed at improving teacher quality could include school-based in-service teacher development; design o f a teacher certification that could be open to all bachelor's or master's degree holders, not only those who have studied pedagogy at the university level; and expansion o f tertiary institutions' capacity to train teacher educators. A second pillar would introduce newtypes o fsecondary andvocational schools, more closely aligned with labor market needs inMAP priority sectors. Measures to improve economic andregional equality would be built into each pillar. These measures would include a new school development fund, targetingdisadvantaged regions, and equity- focused criteria for scholarship programs and school construction or renovation. TVET. Six reforms are importantto enablingTVET to train studentsonrelevant, in- demand labor market skills. These reforms include: (i) beginning vocational training after 10years o f basic education; (ii) expanding technical training at the senior secondary level (and scaling back training at the junior secondary level); (iii)involving regions and communes intraining decisions, to balance the distribution o ftraining across regions and to ensure that training responds to local labor market needs; (iv) introducing new courses for priority sectors; (v) enhancing subject-area learning; and (vi) improvingthe quality o f instructionthrough pre- and in-service teacher training. Tertiary education. Reforms to improve the quality o f higher education could include: (i) selection o f undergraduate courses and disciplines that are important to Madagascar's economic development; (ii) expansion o f short courses for training higher level technicians; (iii) accelerated introduction o fthe shift towards a progressive bachelor 's- master S-PhD system; and (iv) partnership with foreign universities to build local institutional capacity and to leverage international experience. 4 Reforms inhigher education can also encourage research. On-going research i s critical to innovation and growth, but has beenneglected inrecent years. Research can be spurred by: (i) a cadre o fyoung researchers inpriority fields; (ii) building fundingresearch competitively and selectively, to solve problems that are important to national and regional economic development; and (iii) encouraging contract research, particularly for foreign firms operatinginMadagascar. Changes to faculty hiringanddevelopment are critical to improving both quality and research capabilities at the university level. Madagascar must develop clear standards for recruiting the requirednumbers o f highquality faculty, estimated inthe hundreds. Selection criteria should include expertise ina key growth discipline, such as math, science or language; PhD candidacy or completion; significant time remaining inthe career; and successful completion o f a trial teaching or research period. Faculty development might include workshops designedto upgradefaculty skills inthe short term, andresearch support inthe long term. Increasing coverage, cost-effectively There are four viable channels for expanding enrollment inpost-basic education. These include: (i) more effective cost management; (ii) equitable, efficient scholarship programs; (iii) open and distance learningprograms; and (iv) greater private sector provision o f education. Cost management. A short list o finitiatives will help Madagascar to use its post-basic education budget more efficiently. InSSE, teacher utilization could be improved by reforming the curriculum; planningnew school locations carefully; and increasingthe size o f urbanschools. A school construction strategy, buildingon the experience o f national school construction strategy for basic education, could create clear norms for the location and technical quality o fnew schools. InTVET, resources could be used more efficiently by shortening the lengtho ftraining. Intertiary education, MENmight evaluate the feasibility o f expanding enrollment to 5,000 students or more per university. MENmightalso consolidate post-graduate programsto 1-2universities, to achieve economies o f scale. Equitable,efficient scholarshipprograms. Madagascar's existing university-level scholarships were originally designed to help the neediest students. By 2006, 83 percent o ftertiary students were grantedscholarships. Because almost all tertiary students are from the top income quintile, tertiary scholarships effectively provide an income subsidy to this quintile. There are no scholarships at the senior secondary level. To enhance poor students' access to higher education, the Government might: (i) provide scholarship amounts that meet the actual living costs o f those who are not able to pay; (ii) define stricter, more needs-based eligibility criteria; (iii) consider needs-based scholarships to private universities; (iv) link scholarship renewal to academic performance; and (v) undertake a feasibility study on the establishment o f a student loan system. Scholarships should also be introduced at the secondary level, to improve equity by increasing 5 secondary enrollment among rural students and those from educationally under-served districts. Openanddistancelearningprograms(ODL). ODL programs expandaccess at the secondary and tertiary levels by introducing flexibility for those who have been unable to continue their formal education. Madagascar i s actively considering creation o f ODL programs. The first step inintroducing O D L programs should be a feasibility study, to decide on the appropriate O D L model for Madagascar interms of programs, learners, delivery mechanisms, tech platforms, and business model. Features o f successful ODL programs include relevance, self-financing over a few years' time, and clear, professional management structures. Expandedprivatesector provisionof education. Private education provides a fourth means o f cost-effectively expanding access to post-basic education. Private institutions enroll a significant proportion o f students inpost-basic education. In2006-07, the private sector share was 54 percent o f SSE, 39 percent o f JSE, and 64 percent o f technical/vocational. Further expansion could be encouraged inurbanareas, which would allow the Government to concentrate public resources on improving access to under-served areas and groups. The regulatory framework for private secondary schools i s relatively clear, but the framework for private technical/vocational and higher education institutions i s not well-defined. Finally, existing subsidies to private institutions benefit mainly the primary level, and are not well targetedand do not have clear objectives. To support increased private sector participation inpost-basic education, the Government might: (i) clarify andcommunicate procedures for establishing andrecognizing schools; (ii) rationalize subsidy programs for secondary schools; and (iii) buildcentral and local capacity to develop private education. In technical/vocational and higher education, the priority should be on finalizing and approving the procedures for private schools' recognitionand accreditation. Strengthen the enablingframework for reform Reforms insystem governance, financial management andpost-basic sub-sectors will enable the Government to buildthe capacity to carry out post-basic reform more effectively. Governance. Governance reforms might focus onthe following areas: (i) building mechanisms for political leadership o fthe reform; (ii) re-defining the role o f the Ministry o f Education; and (iii) creating a National Qualifications Framework. Many countries have found it usefulto create mechanismsfor strongpolitical leadershipof the reform. Madagascar could consider establishing a commission for post-basic education, to buildhigh-levelpolitical support andbroad-based consensus for change. To re-definethe role of Ministry of Education,the Government might carry out an institutional assessment o fkey structures inthe Ministry. It might also identify capacity 6 buildingmeasures for key functions such as planning,budgeting, humanresource management, andproject management. Creation o f a National Qualifications Framework would ensure that post-basic education and training reflects current and future labor market needs, andthat post-basic credentials are recognized andrespected inthe labor market. A National Qualifications Framework could provide a hierarchy o f educational qualifications that clearly describes the knowledge and skills gained from eachpost-basic degree, andthe equivalency between degrees. Itcould serve as a consistent framework that employers could use to identifyprospective employees' knowledgeand skills. Itwould also allow educational institutions to target program admissions, curriculum and exams to different skill standards. Common elements o fthis framework mightinclude: industryidentification o f relevant occupations, and skills andknowledge requiredto be trained for those occupations; curriculum, teacher training and learning materials requiredto meet the skills standards; accreditation o f eachprogram, to ensure that skill standards are met; and definition o f a hierarchy o f qualifications, based on stakeholder input and designed to determine equivalence and progression. Financial management. There are three areas where the Ministry o fEducationmight enhance financial management. First, it might explore means o f increasing cost-sharing, particularly infinancing o ftextbooks and learning materials (to be off-set by measures for poor children). Second, intechnical/vocational and higher education, resource mobilization from employers and students should be encouraged. The Ministry o f Educationshould provide public institutions, particularly universities, with clear rules that govern how private resources are mobilized, used and accounted for. Third, MEN mightexplorethe development o fmechanisms that link increases inpublic fundingo f higher education to performance improvements. These mightinclude output-based fundingformulas, linking funding to indicators o f institutional performance; performance contracts; or competitive funds, awarded to peer-reviewedproposals for improving institutional performance, innovation andmanagement. Sub-sector reforms include reforms specific to SSE, TVET and highereducation. At the SSE level, schools lack the autonomyto makedecisions or allocate budget against school needs or priorities. These gaps cannot be effectively filled by MENcentrally. School development funds and/or scholarship programs would allow schools to address their own needs directly. InTVET, there i s limitedopportunity for employers to provide inputonpost-basic education. The Government mightcreate mechanisms to facilitate thiscommunication, including nationaltraining authorities, `sector councils' inkey sectors, or training needs assessmentscarried out inconjunction with investment promotion. There are four reform priorities for higher education. First, MENmight move from direct management functions to a more strategic role (e.g., vision-setting, medium-term planning). Second, MENcould grant increased managerial authority to the public tertiary institutions under its authority, accompanied by agreed performance objectives. Third, the composition and powers o f university boards could be re- structured, so that boards combine supervisory and executive responsibilities. Fourth, the 7 Government might move aheadwith its accreditation system for public and private institutions. Cost of reform. Post-basic educationreform must also be realistic and financially sustainable. The Ministry needs to develop alternate scenarios for reform, and cost each alternative. This will make trade-offs betweenthe scope and cost o fthe reform explicit, allowing the Ministry to identifythe best possible reform alternative. A Timeframefor the ReformProgram The following timeframe is suggested for designingand implementing reforms: Shortterm (1-2 years): (i) determine strategic policy choices; (ii) the cost alternative reform scenarios, to assess the financial sustainability o f each scenario; (iii) areformscenario,toguidebudgetallocationandadditionaldonor choose funding; (iv) design new governance structures and financing instruments, to orient the system towards labor market needs and to improve equity; (v) launch investment on a modest scale for quality improvement inselected institutions andprograms, devolving greater autonomy to institutions, and (vi) diversify types o f programshnstitutions Mediumterm (3-5 years): (i) establish a National Qualifications Framework; (ii) revise the regulatory framework for the private sector, accreditation and other system level structures; (iii) increase the use o fperformance-based financing instruments to reinforce reforms at the institution level; and (iv) expandthe investmentprogram to upgrade quality, create some model new institutions, and enhance access Longterm (beyond5 years): (i) the National Qualifications Framework, update based on feedback from employers, educational institutions and end beneficiaries; (ii) create governance systems for permanentinteractionbetweenMENand employers, andsustainable financingmechanisms; (iii) all education andtraining ensure institutions are accredited and become autonomous; and (iv) roll out quality improvement reforms throughout the system and expand access rapidly. 8 1. INTRODUCTION ObjectivesandBackground The main aim o fthe study is to provide analytical inputs for the development o fthe policy framework and strategy for post-basic education inMadagascar. Itidentifies and addressesthe constraints inre-orienting the post-basic education andtraining system towards meetingmedium-term labor market needs, supporting growth inboththe formal andinformal sectors o fthe economy andthe longer-term development needs o fthe country. The transformation o feducationis a pillar o fthe Madagascar Action Plan(MAP), the second-generation poverty reduction strategy plano fthe Government o f Madagascar (GOM), covering the period 2007-20011. Consistent with this goal, the President announced a major re-structuring o f school education in2005. The reform o fprimary education andjunior secondary education (JSE), which will be launched in2008, i s detailed inthe new Education for All (EFA) Planprepared by the Ministry o fNational Education(Minist2re de 1'EducationNationale -MEN), covering the period 2008-2011. The EFA Plan (MEN, 2008a) was endorsed by the education partners inFebruary 2008 andhas received funding support from the Educationfor All-Fast Track Initiative (EFA- FTI) global partnership. While concentrating its efforts onpreparingthe reformo fbasic education, the MENsimultaneously began preparatory work to design the reform o fpost- basic education. This study was designed to assist the MENinthis process The study incorporates analysis and findings o f elevenbackground papers commissioned bythe World Bank, the MENandAgence Francaisede De'veloppement(AFD).The complete list i s given inthe references. Ambitionsof the MAP and an EducationSysteminCrisis The M A P envisages a structural change inthe economy o f Madagascar and lays out ambitious targets for growth, investment and exports. Whether they can be realized in their entirety or not, the orientation o fthe MAP i s to significantly increase domestic and foreign investmentand recent trends suggest anupturninthe latter. Ifsuccessful, the implementation o f the MAP will change the demand for skills and knowledge in fundamental ways. First, the sectoralhegional composition o f newjobs will change as the priority sectors identified inthe MAP grow. Second, as new technology is introduced, the skills content o fjobs will increase. Third, the adaptation o ftechnology to local needs will require trained specialists andresearch workers. The education andtraining system will affect all the other pillarso fthe MAP (see Figure 1). Education and training can contribute to growth inMadagascar by (i) providing more humancapital, specifically the skills andknowledge that current andnew workers needto work productively and (ii) increasingthe stock o f businessand technological knowledge usedinproduction. Technological knowledge is here used inthe broadeconomic sense 9 as comprising feasible ways to produce desiredgoods and services from available inputs, andincludes scientific andmanagerial knowledge andpractices that may have been created and applied elsewhere. These two factors are distinct though, inpractice, complementary and both complement investment inphysical capital. Firmscan also augment humancapital and technological knowledge through training andresearch and development; inmany countries, however, this is only possible through collaboration with education andtraining institutions. Madagascar's education indicators show how far the education system is from playing the requiredrole insupporting growth. The primary completion rate increased rapidly from below 35 percent in2002-3, but in2006-7, it was still under 60 percent. The gross enrollment ratio (GER) in2006-7 was only 32 percent inJunior Secondary Education (JSE) and around 10percent inSenior Secondary Education (SSE). These figures are lower thanthe SSA averages o f 30 percent and 13 percent, respectively. Only two percent o funiversity age students are enrolled inuniversities- one o fthe lowest participation rates inthe world. Additional data provides further evidence that Madagascar's post-basic education system is incrisis. Out o fthe approximately 900 universityfaculty member, only 2 percent (16 people) are under40 years, 92 percent are over 45 years, and 3 1percent are 55 or older. Facultypublicationrates are very low, with most not publishinganything over the last three years. In2005,just one percent o fthe faculty publishedinjournals tracked inthe IS1Web o f Science by ten scholars. Moreover, there has beenno major curriculum reform for decades. University level education operates withinthe framework o f an antiquated francophone model, 10 years after France and the majority o f European 10 countries started moving to the three tier system o f bachelor's, master's and doctoral level programs. The envisaged reformo f basic education, comprising primary andjunior secondary education, i s the first major reform o fthe system since independence. Itbuilds on the successeso f increasing primary enrollment and completion since 2003, when fees for primary education were abolished. Primary education will be re-structured from 5 to 7 years, andjunior secondary education will be changed from grades 6-8 to grades 8-10. The government's targets are to ensure that all children complete 5 years o f primary education and 65 percent o f children complete 7 years o f education by 2015. Junior secondary education will be gradually expanded.The lengtheningof the primary cycle and the move towards a basic education cycle o f 10 years are consistent with international trends to ensure that childrenreceive an adequate foundation o fknowledge and skills for the future. PolicyDilemmasinPost-BasicEducationanda Window of Opportunity Madagascar's education system has operated ina policy vacuum for a longtime. Each new government, and sometimes eachnew Minister, has introducedad hoc changes or initiatives, leaving the basic system untouched. Sometimes these changes have added to the problems. Figure 2 shows how enrollments inhigher education have beenaffected by government directives. Enrollment expanded dramatically inthe 1980s, to an average o f 35,000, with an equally dramatic fall inthe 1990s to about 22,000. This decline was due to drastic measures adopted by the government to regulate enrollment, including the elimination o fmake-up session for the baccalaure`atexamination and changes to student scholarship policies. After 2003, enrollments started increasing again, regaining the level o ftwo decades ago. Similarly, this increase inenrollment was due to more liberal policies on access and student scholarships. Small-scale initiatives to increase enrollment were introducedfrom 2000 onwards, ina limitednumber o funiversities and TVET institutions.'. Nonetheless, there was no overall policy goal for the development o f higher education. Figure2. Students inhigher education, 1969 -2006 1 Source: Zaafiane (2008) analysis of MENdata. Excludes students enrolled indistance education. 11 Currently, the mainpressure is to increase access and enrollment at the post-basic level. This pressure is generated by the internal dynamics o fpopulation growth andbasic education reform. Specifically, demographic growth and the increasingnumbers o f primaryschool completers are generating strong private demand for secondary education. Further,becauseitwill take time to achieve universalcompletion o fprimary education, there will continue to be a large pool o fprimary school leavers who not only do not gain access to formal post-primary education, but also do not have the literacy and numeracy skills to compete inthe labor market or to become effective membersof society. Hence, alternative avenues to post-primary skill development, outside the formal education system, will be needed. While the government cannot be impervious to increasing social andpolitical pressures on this count, it will be important to improve educational quality before massively scaling up access. There is little point inscaling up access when educational quality remains poor. Doing so could also be detrimental, both socially and economically. Further, improvements inquality could also increase the supply o fplaces, byreducing repetitionandthe time takento complete a cycle. The reform o fprimary andjunior secondary education creates another set o f internal pressures for reform. First,post-basic education reform must ensure continuity inthe curriculum across education cycles. Plans for basic education reform include reform o f primary andjunior secondary curriculum to focus on core knowledge and skill acquisition (Figure 3). Curriculum reform is complemented by changes to teacher training that will focus on active, participatory teaching methods. Figure3. Plannedreform to basic education curriculum ,-------------- I Languages: j I Grades 1- 7 Social Studies 1------------- -1 Secondary: Grades 8-10 Grade 10, 2ndTerm: Choice of Project-Based Electives Key 1-1 - - 1 -_I Strongeremphasisinupper primary (Grades6-7) Second, the expansion o fprimary education andjunior secondary educationdemands large number o fnew, higher quality teachers. This need can be met only by reforms at the tertiary level, to train a largernumber ofteachers andto teach effective teaching methods. The external pressure from economic changes and internationaltrends ineducation is primarilyon another front -to upgrade quality andthe content andprocess o f education, 12 so that graduates have the skills required by the labor market and the education system can generate and adapt knowledge requiredby the economy. As Madagascar's economy integrates into regional and global trade - it i s a member o fthe South African Development Community (SADC) -the pressures from employers and from the labor marketwill increase. The problem is that the educationandtraining systemin Madagascar i s still largely insulatedfrom these external pressures, due to its governance and financing mechanisms andthe absence o fa policy that links educationdevelopment to economic and social development. A deliberate policy, backed up by appropriate instruments, i s requiredto make the education system more outward oriented and more accountable for its performance. Finally, resources are limitedand will continue to be so over the medium-term.The economy has recoveredfrom the 2002 political crisis. The M A P projects an increase in the growth rate to 7-12 percent per annum, substantially higher thanthe historical 3.5 percent average annual growth realized during the period 1996-2006. It also projects an increase ininternal revenue generation to about 14 percent o f GDP, from the historical average o f 11percent. Even ifthese targets are realized and the government allocates 25 percent o f its budget to education (as stated inthe EFA plan), resources will be well below "needs". This will be especially critical for the post-basic education, giventhe priority for primary education. Hence, the challenge is to manage the unavoidablepressures to expandthe post-basic education system while upgrading its quality and changing its orientation, which i s the real necessity. This can be done by seeking new solutions to the problems o f investing in quality improvement and expandingaccess. The next few years provide a window of opportunity for the post-basic education system to put inplace the reforms requiredto respond to these pressures. They should be firmly inplace by2011, when the surge o fprimaryeducationandjunior secondary education completers will begin to be felt, ifthe reforms at those levels are successfully implemented. LessonsLearnedfromBasicEducationReform As noted earlier, Madagascar is undertakingmajor reform o fits basic educationsystem. Changes have been underway since 2003, and will be largely completedby 2011. The reform has been widely recognizedfor its progress thus far, and several lessons can be appliedto post-basic reform. First,the implementationo freforms beyondthe primarylevel is best done through their voluntary adoption by individual institutions, encouraged by incentives and technical support, rather than through launching system wide changes inone go. This i s best exemplified by the proposed reform o fjunior secondary education, where the strategy is to introduce new "colZ2gesd'excellence" that are networked with existing schools. Existingschools gradually adopt new curriculum and teaching methods withthe guidance 13 o f the colliges d'excellence. Complicated reforms with too many elements are difficult to manage, especially ina low capacity environment. Second, reforms focusing on improving quality and relevance need to cover an entire package - curriculum, teachers, learning materials, financing andmanagement - ifthey are to bringabout desired changes inthe classroom. Major cost reductions can be realized through curriculum re-organization, utilizingteachers and classrooms more effectively. Careful planningandrealistic phasing are important. Finally, basic education reform has enjoyedtremendous ownership and leadership by the Ministry. High-level leadership andbroad-based political ownership arebothcriticalto the success o fpost-basic education reform. ContentandStructureof the Report This study makes a contribution to the development o fa coherent strategy for post-basic education. Itpresents findings and suggests priorities for reform, structured around three broad topics: (i) improving the quality andrelevance o fthe post-basic education and training system, with a focus on skill development and knowledge transfedcreation ina changing economic environment; (ii) identifyingcost-effective measures for increasing access to post-basic education, including greater equity inparticipation; and (iii) proposingkey reforms ingovernance, financing and management, to enable the post- basic education and training system to respond to external changes and shape the future. Chapters 2 and 3 analyze the current status inenrollment trends and completion rates in post-basic education and education and labor market linkages, respectively. Chapter 4 presents the issues andpriority actions to improve quality and relevance, focusing on changes indesired outcomes, the curriculum structure andduration o f cycles, teachers and learning materials ineach sub-sector. Chapter 5 presents options for increasing access and equity ina sustainable manner. Chapter 6 describes the degree to which the education systemand firm-based training initiatives contribute to growth, and how they could be modifiedto become stronger drivers o f growth inthe future. Chapters 7 and 8 present findings relating to costs and governance, respectively, indicating the main reforms infinancing, management and governance that are required. Chapter 9 concludes the report, reviewingthe report's findings and outlining the reforms implied by the report's analysis. 14 2. TRENDS INENROLLMENTAND COMPLETION EnrollmentTrends Madagascarhasmadeimpressivestrides inprimary enrollment,but enrollments at other levelsare still low. Primary enrollment more than doubled between 1997 and2006-7, withover 3.8 millionstudents.About halfamillionchildrenjoined in2003-04, after the abolition ofprimary school fees (Figure 4a). Since 2002, the growth injunior secondary and senior secondary has also beenvery rapid, growing at anannual rate of 16and 12 percent, respectively (Figures 4b and 4c). The 1997- 2007 growthrates for JSE and SSE are 11percent and 9 percent respectively. Total enrollment insecondary education was only about 890,000 students(660,000 inJSE and 128,000 inSSE). While enrollments have increasedinTVET and higher education, total enrollment is still relatively small: about 53,000 students inTVET and 58,000 inhigher ed~cation.~ Figure 4a Primary enrollment, 1997 -2007 igure 4b Junior secondary enrollment, 1997-2007 Source: MEN, administrativedata. Source: MEN, administrativedata. Figure 4c SSE, TVET and HE enrollment, 1997 - 2007 &HE T VET Source: MEN. administrativedata. Enrollment data are based on the existing structure of education, comprising 5 years of primary, 4 years of junior secondary and 3 years of senior secondary. Enrollment inTVET here refers to the school level, which starts after the primary cycle and covers the vocational centers and technical schools. While the number of private TVET institutions is known, enrollment data are not available. 15 Populationcoverageat the post-basiclevelsof educationis extremelylow by international and SSA standards, and hashardlyincreasedinlastdecade. The GER insecondary education (junior and senior) was about 24 percent in2006-7. This compares with about 50 percentinSouthAsia and over 70 percent inmost other regions (Figure 5). Mauritius and Botswana, two middleincome countries inSADC, have a secondary GER of approximately 90 and 75 percent, respectively. Madagascar'sjunior secondary GER which grew very slowly between 1996 and2000 increasedrapidly thereafter from about 20 percentto 32 percent in2006-7. Coverage at the senior secondary level was stable at 5 percent before 2000 and i s still below 10percent. Inhigher education, the gross enrollment rate was about 2.5 percent. The number of students per 100,000 population was about 264. By comparison, the value ofthis indicator for SSA countries was 334 in 2005, and 435 for Anglophone SSA countries. Figure 5. International comparisonof gross enrollment rates, secondary and higher education, 2005 Tertiary GER (YO) 30 1I LahnOplencaand thecabbean +CentralAsia +East Asia andthe Pacific +Arab States I +Maunuus +Nigeria +Southand West Asia + C y o o n * N m b i a Cape Verde Sub-SaharanAfnca +Bouwana 0 1 I 0 10 20 30 40 50 60 70 80 90 100 Secondary GER (%) Sources: 1. UNESCO Institute for Statistics (httD://stats.uis.unesco.orq). 2. World Bank EdStats (http:Nsima.worldbank.ordedstatsl) The privatesector hascontributedsignificantly to the expansion of secondary education. Bothinjunior and senior secondary, over 40 percent of enrollment has been inprivate institutions. In2006-7, private senior secondary schools enrolled morethan halfthe students. According to the most recent registration, private TVET institutions of all types enrolled 34,250 students in350 institutions, or about two thirds of total enrollment. By contrast, the private sector share inhigher educationwas less than 10percent, having risen rapidly from a negligible share at the beginning of the decade (Figure 6). 16 Figure 6. Share of privatesector in enrollment by sub-sector, 1997 2007 - Source:MEN. administrativedata. Notes: See Annex Table 1. InternalEfficiency and Transition Between Cycles Drop out levelsare highwithin and at the end of each school cycle. About halfthe children who enroll ingrade 1leave without completing the primarycycle, for public and private institutions combined. Clearly, ensuring universal completion o fprimary education is the mainway to increase enrollment at higher levels. Despite increases inenrollment, the reduction inthe drop out rate has been relatively low and constitutes one o fthe main policy priorities inprimary education, reflected inthe new EFA plan.Only two-thirdso f grade 5 children who appear inthe end o f cycle examination get the primary school leaving certificate. The transitionrate to JSE for primarycompleters is relatively high.About 70 percent o f children who get the primary certificate enter junior secondary education. About 4 out o f 10 students who enter grade 6 (first year o f JSE) drop out duringthe four year cycle. This indicator has not improved significantly inthe period 2000-2006. About 60 percent o fthose who sit for the junior secondary final examination do not pass. Student retention within the senior secondary level i s higher, with almost 85 percent o f studentswho enter ingrade 9 reaching grade 12. This partlyreflects the highdegree o f selectivity at the senior secondary stage. A similar situationprevails inTVET. Inthe first year of study inLTPs(senior secondary), about one-third o f students drops out (27.2 percent and 35.2 per cent, in 2002-03 and 2003-04, respectively). Vocational training centers exhibit similar wastage: 30 percent o f students dropped out after the first year oftraining in2002-03, 19percent in2003-04. Less than 45 percentof grade 12 students pass the baccalaurPat after senior secondary education and about halfof thosewho pass enter tertiary education. The passrate inthe baccalaure!atexaminationhas improved from about 30 percent inearly part ofthe 17 decade. Not all students who passthe baccalaure'atenter the university - this i s a significant departure &om the French system, where baccalaure'atholders, by law, are entitled to enter university. InMadagascar, approximately 54 percent o f those who pass the baccalaure'atentered tertiary education in2005-06. There are differences inthe entry rates into higher education, depending onthe option chosen insenior secondary education. Inthe academic series, tertiary education entry rates are very highin who passthe baccalaure'atinthe arts series ("Lettres '7 enter tertiary education. The mathematics (95 percent), science (80 percent). By contrast, only 45 percent o fthose technical series, which enroll less than 15 percent o f SSE students, have lower entry rates, partly because more students take upjobs after passing the examination (Figure 7). Figure7. Entryinto highereducation by baccalaurt?atseries, 2005-06 Average Technology * Industrial techniques* 0Distance education Agricultural techniques* Civil engineeringtechniques* Arts Technical services* Science Math 0% 20% 40% 60% 80% 100% % baccalaureate holders Source: Zaafrane (2008) analysis of MENdata Nearly 40 percent of studentswho enter universityeducation dropped out after the first year in 2004-05, for publicand privateinstitutionscombined. The drop-out rate has been as highas 70 percent insome years, and is largely due to the highfailure rate on lSt year examinations (close to 50 percent). Itmeans that students lose a year and leave without any additionalqualificationbeyondthe baccalaure'at. The highdrop out rate i s due to bothinternal and external factors -including overcrowded classes, inconsistent disbursement o f external scholarships, or lack o f studentclarity about their professional ambitions, and other socio-economic causes. Whether drivenby internal or external factors, the highdrop out rate represents an enormous waste o f resources for both universities and students. There are also significant variations across universities. Effectively, the first year o f tertiary education represents another selection mechanism after the baccalaure'at and means that only 30 percent o f baccalaure'atcandidates really continue into tertiary education (Figure 8). 18 Figure 8. First year university drop out rates by university,2004 2005 - Fianarantsoa 28% Toamasina II, 19% Source: MENdata, Zaafrane (2008) analysis. Significantly,the first year drop out rate is muchlower in the short-duration courses of non-universityinstitutions. Compared to a drop out rate o f 15 percent inthe short- duration courses, the drop out rate inthe long duration courses is 38 percent. This i s related to the superior pass rate for end-of-year exams inshort-duration courses, where 70-90 percent of students passthe first year. By contrast, low pass rates inuniversity long-duration courses contribute to highdrop out rates. The drop out rate is especially highinthe sciences, at 49 percent, while inthe arts itis 41 percent. Inmedicine, examinations at the end o fthe first year contribute to a close to 60 percent drop out rate. Such highlevels o f drop out, especially inthe first year, despite the rather stringent selection mechanisms inplace, indicate inadequate preparationfor the course o f study, or student interest. Ineither case, there is a gross wastage ofresources. Passrates on national examinations inTVET were about 70 percent for thejunior secondary vocational training certificate (BEP) and 53 percent for the senior secondary technological baccalaure'at.In2005, there were significant differences across regions, withpassrates rangingfrom 29 percent to 70 percent. Repetitionratesare also very highand representanother source ofwastage. This i s another feature common to francophone systems, where repetition i s used both as a pedagogical method and as a method o f selection. The average repetition rate injunior secondary education was 10percent and 14percent insenior secondary education in 2005. Repetition rates are typically highinthe first year andfinal year o f the cycle, reflecting students re-taking courses to passthe final examination. For example, the repetitionrates ingrade 9 (last year o fjunior secondary) and ingrade 12 were 21 percent each. InTVET, the repetition rates ranged from 22 to 62 percent in senior secondary technical/vocational schools (Lyce'esTechniqueProfessionelk- LTP) and 12-25 percent 19 injunior secondary vocational trainingschools (CentredeFormation Professionnelle - CFP). Intertiary education, the repetition rate was about 14 percent inthe long duration courses and 2-3 percent inthe short-durationcourses. Internationally, there i s no evidence that repetition improves learningoutcomes. On the other hand, repetition can encourage drop out, especially for poor students who are unable to bear the cost o f an additional year o f schooling. Many countries, including France, have made systematic efforts to eliminate repetition inthe school cycle, either through administrative measures or through changes inpedagogicalpractices. Takentogether, the highdrop out andrepetition rates indicate a very highlevel o f inefficiency that a country with limited resources can illafford. Graduates The cumulativeeffect of high dropout, repetitionand failure is the very small numberof graduates from each level. At the apex o fthe education system, tertiary education producedabout 4,200 graduates in2006, o f which 2,351 had bachelor's degrees and another 1,000 had master's degrees. There were only 380 graduates beyondthat level in university education. About 25,000 students passed the baccalaure'atand 41,000 passed the junior secondary certificate. Figure 9 shows that a significant proportion o f those who enter are not able to continue through. The highfailure rates inBEPC and the B A C and incompleting higher education are responsible for this, though drop out withinthe cycle (due to failure on end o f year examinations) also contributes. Zaafiane, 2008. Background studies to the Rapport d'e'tatsur le syst2me e'ducatifnational (RESEN) 2001 de Madagascar (2001 Country Status Reporton Education) drew similar conclusions. 20 Figure 9. Student survival,JSE to Higher Education. Students(000s) % of exam Incycle passers who 0 so 100 150 200 retention -- Pass advance to the P rate rate next cycle 70% Pass BEPC 38% 95% 1styr SSE 85% EndofGrade 12 PassBAC 44% 70% lstyrHE 24% GraduateHE Sources: MEN, 2008b, inprogress; Zaafrane, 2008; and World Bank,2007. Notes: 1. In-cycleretentionratesare calculated usingasemi-longitudinalmethodandexcludingrepeaters. See MEN2008b. 2. '% ofexampasserswho advance to the next cycle' is calculatedas the number ofchildrenwho enroll inthe first year of acycledivided by the number ofchildrenwho have passedthe qualifying exam at the endof the previouscycle. Out-of-SchoolChildrenandYouth The corollary of the inefficient education system is a large number of out-of-school children and young adolescents with low levelsof education. Household data show that in2005 about 850,000 youth aged 11to 18 years had dropped out of school after receiving some educationand another 500,000 hadnever beento scho01.~Providing alternative, flexible learning opportunities for some of these childrenwould helpto raisethe educational attainment of youth. The breakdownofthis group by age and education level would enablethe design of targetedinterventions. Specifically, about quarter o f a million children inthe age group 11-15 years hadno education; possibly, the only realistic approachfor this group would be to provide community-based basic literacy programs, if resourcespermitted.Another 220,000 childrenhadnot completed primaryeducation and could betargetedfor primarycompletion. About 61,000 had completed primary educationand could therefore be enrolled inpost-primary courses. Inthe older age group (16-18 years), about 250,000 youth hadno education, 330,000 youth hadsome primary educationand 176,000 had completedprimary education. The latter group could conceivably betargeted for completing primarylevel courses combined with skills training for the labor market. A differentiated approachfor these different sub-groups would be better thanprovidinguniformprograms delivering basic literacy skills to all. This age group correspondsto the theoretical age group for junior and senior secondary education in Madagascar. 21 Equity Regionaldisparities inaccessand completionare pronounced,andthey startat the primary level. About 30 districts haveprimary completion ratesthat are below30 percent and these are mostly inthe coastaland southernareas. There are partsofMadagascarwhere the supply ofjunior andsenior secondarygraduatesis insufficientto meet the demandfor primary/junior secondary school teachers, perpetuating low educational attainment. Inequalityinaccessandcompletion isvery highbeyondthe primarylevel.Only 9percent of children fromthe lowest income quintilereachedlower secondary education, and only 1percentreachedsenior secondaryeducationin2005 (World Bank, 2007). As Figure 10indicates, post-primary education isvirtually the preserveo fthe richest segments. The figure shows the educational attainment ofthe population by quintile level in2004, reflectingthe cumulative effect o f investment ineducation over several generations. About 10percent o fthe richest quintilehadhigher education andanother 23 percent secondary education. At the other endofthe spectrum, less than 1percent ofthe poorest three quintiles (hence, 60percent o fthe population) hadtertiary education, andonly 3-8 percenthadsecondaryeducation. The disparities ineducational attainment betweenthe richest andpoorest quintiles are caused by a shortageinpublic secondaryschool places, where fees are lowest, andthe concentration ofpublic secondary schools inurbanareas; the direct cost o f secondary educationinprivate schools, which i s prohibitivefor manypoor families; andthe opportunity cost of enrollment for poor children, especially as children grow older and if they must repeat years inschool. Figure 10. Distributionofthe populationby highesteducational attainment and income, 2004 100% 90% 80% 70% 60% Tertmy 50% 0Secondary 40% Primary 30% No schoolmg 20% 10% 0% Poorest 2nd 3rd 4th Richest Averas Income Quintile I Source: INSTAT, DSM,andEnqu&tePrioritaire auprk des Me'nages,2004. Dataon current enrollment rates show amarkedimprovementinthe participation ofpoor children inprimary education andsome improvement injunior secondary education. 22 However, there has been virtually no change insenior secondary education. For the lowest quintile, the net enrollment rate increased from 45 percent to 71 percent between 2001 and 2005. Inthe top quintile, there i s universal enrollment. InJSE, the enrollment rates for the bottom three quintiles were 9, 11and 18 respectively in2005. These had risen from 1,3 and 8, respectively in2001. The enrollment rate inSSE amongst the poorest income groups was between 1and 2 percent in2005, reflecting no change over the period. Undoubtedly, equity at higher levels will increase as more children complete primary education. However, this will take a long time ifthe normal selection mechanisms o fthe education system continue to operate. IfMadagascar wishes to rapidly improve the participation o f poorer children inpost-basic education, targeted interventions will be requiredto offset the direct andindirect costs o f education for the poor andto bringthe supply of schools closer to the rural population. Il 2001 45 56 62 76 85 1.9 62 Primary I I 1 I J S E 2005 71 79 84 92 99 1.4 83 2001 1 3 8 15 44 1 2 0 0 5 11 9 I l l I1 18 I 2 2 I 3 8 11 44'0 4.2 1I 19 l2 I SSE 2001 1 0 2 3 14 14.0 4 2005 1 1 2 6 14 14.0 4 Conclusion Madagascar's education system suffers from serious inefficiencies, while participation in post-basic educationis extremely inequitable. These issues require supply side interventions, to improve the distribution o f schools, but also to reduce repetition and drop out. The latter are linked to pedagogical methods as well. They may also require demand side interventions to enable children frompoor families to participate inpost- basic education. 23 3. EDUCATION-LABORMARKETLINKAGES Educationand training contribute to economic growth intwo critical ways. They can raise the stock of human capital and, hence, labor productivity andincrease the stock of scientific/ technological knowledge applied to productive uses. Many factors, such as health, nutrition and education, contribute to humancapital. However, education and training contribute most directly to the creation o f skills and knowledge o f the workforce and is often usedas the proxy o fhumancapital. Bothpre-employment educationand training(provided by schools, universities andtraining institutions) andpost-education training provided to employees by firms are important. Clearly, the mere availability o f a skilledandknowledgeable workforce is insufficient to raise growth; a favorable macroeconomic environment, functioning labor and credit markets and other factors are also necessary. The growth strategies o f the M A P will create new demandsfor skills andknowledge. As Madagascar's economy integrates with the global economy and trade increases, labor will be re-allocated, with new skills being required for employment innew industries or sectors and re-training o fthe labor force required inindustries that will decline. Foreign direct investment(FDI) has increased rapidly inrecent years. Between 2002 and 2005, FDIinflows rose from US$ 15 millionto U S $ 85 million; in2006, the inflow rose to US $294 million and in2007 to close to U S $ 1billion, or 13 percent o f GDP.6 Mucho f this FDIis inmining, butthe government's policy is to attract investmentinother sectors as well. Agricultural growth andregional development are keypillars o fthe MAP. Education and training can play a key role inincreasing labor productivity inagriculture and ensuring the more balanced distribution o f a skilled labor force. This chapter examines the stocks and flows o fhumancapital inthe labor force. The most widely usedmeasure i s the education attainment o fthe population or the labor force, as measured by the years o f education. Although this i s a crude measure o fthe skills, knowledge and competencies o fthe workforce, it provides a broad indication o fthe humancapitalbaseandenables comparisonwith other countries. The nationalanalysis is complemented by an analysis of the distribution o f humancapital indifferent regions. The chapter also presents recent changes inthe structure o f employment andthe labor marketandhow they have affectedprivate rates o freturnto education. The two main sources o f data are the 2005 household survey (EnquztePrioritaire auprBs des Me`nages, 2005) andthe InvestmentClimate Assessment (ICA) Survey o f 2005. Labor Statusof Population O fthe estimated 19.1 millionpeople inMadagascar (2005), 9.17 million were o f working age (15-64 years), 4.78 millionwere children aged 6-14 years and the remainder was Data for 2002 to 2005 are from the World Bank's World Development Indicator database and are net flows basedon balance ofpayments data. For2006 and 2007, the data are from the Central Bank o f Madagascar. 24 either less than 6 or more than 65 years old. Although some children under the age o f 15 also work, we restrict the labor force analysis to those betweenthe ages o f 15-64 years. Approximately 7.87 millionwere inemployment; o fthe 1.3 millionout of employment, 83 percent reported themselves as economically inactive. The labor force, comprising those inemployment and those seeking work (unemployed), consisted o f 8.08 million individuals, representing a rise o f 11percent over 2001. Open unemployment, as inmany agricultural economies, i s low at about 2.6 percent o f the labor force (Figure 11). Figure 11. Madagascar Labor Status ofthe Population,2005 (millions) - Source: Adapted from Stifel et a1(2007) analysis ofEnqu&tePrioritaire aupris des Me'nages 2005 data. The primary sector accounted for 80 percent o fthose inemployment and services account for another 17 percent. The share o fthe industrial sector i s miniscule (2.5 percent). Between2001 and 2005, employment inthe primary sector increased by 1.2 million. Even its share intotal employment rose from 72 percent. Employment inthe industrial sector fell, driven byjob losses inmanufacturing, with a shift to agriculture. EducationalAttainment of the Population-Stocks andFlows The humancapital stock i s proxied by the education level o fthe population aged 15 years or more. The following education levels have been used: (i) less thanprimary education (comprising those with no education and those that have not completed grade 5) (ii) primaryeducation complete (iii) secondary education complete and (iv) and post- secondary education. (The highest education level attained i s used to determine the percentage shares of the population). Figure 12 shows the distribution o f Madagascar's working age population (15-64 years old) by education level, and incomparisonto the population aged 15 and above inlow- income countries in South Asia. The base o fthe pyramidi s wide inMadagascar, reflecting the large proportion o fthe population which has less thanprimary education. The pyramidtapers to a very narrow point, with only 1.7 percent o fthe age group having 25 post-secondary education. As a country accumulates human capital, the middlelevel widens. This is shownby Sri Lanka where, by 2000, 50 percent o fthe populationhad secondary education. Madagascar's humancapital distribution in2005 approximates most closely that o f Pakistan in2001, where over 60 percent o fthe population was illiterate. Equally noteworthy are the facts that evenPakistanhas a higher share o fthe populationwith secondary and post-secondary education - andthat Madagascar's current level o f secondary attainment i s comparable to that o f Sri Lanka forty years ago (not shown infigure). Inshort, the educational attainment of Malagasy adults seriously lags that o f other low income countries. Figure 12. Cross-countrycomparisonof adult educationalattainment, 2001-2005 II Madagascar (2005) I Pakistan (2001) 67 5% 61% I Bangjadesh (2000) 50% Sri Lanka (2000) India (2004) 50% 47% I' Sources. Madagascar : World Bankanalysis ofEnqudte Prioritazre ai4prt.s des Me'nuges 2005 data. Other countries: Riboud et al, 2006. Note, Madagascar data is population 15-64years old; other countries' data i s population 15 years and above. Data is for the following years: Madagascar-2005; Pakistan-2001; Bangladesh-2000; India- 2004; and Sri Lanka-2000. Madagascar has extremely low levels of educational attainment of the labor force and that of the younger age groups has been declining. The average years o f education o fthe employed labor force remained constant at about 4 years between 2001 and 2005. The average years o f education reflects cumulative investments ineducation. A striking feature o fthese data are that the human capital stock o f the cohorts aged 20 years and more has actually declined in2005 compared to 2001, reflectingthe neglect o f education over a period o f several decades. One positive development i s the slight increase in average years o f education o f the youngest cohort (15-19 years), by about 0.6 years in thisperiod, which reflectsthe recent upswinginprimaryeducation enrollment (Figure 13). 26 Figure 13. Average years of education by age group, employed labor force, 2001 and 2005 +zoo1 +2005 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 Age group Source: Adapted from Lassibille(2007) analysis ofEnqultePrioritaire aupris des Menages 2001and 2005 data. The proportionof young employedworkers with less than primary education has increased, while the proportionwith more than post primary education has declined (Figure 14). In 2001,63 percent o fthe labor force under 30 years old had less thanprimary education (some primary or no education at all). In2005, this proportionwas 68 percent. This group must be considered functionally illiterate. The decline over time inattainment at higher levels o f education i s more striking and worrisome. The percentage o f workers under 30 with senior secondary or higher educationdeclined from 5 percent in2001 to 3.7 percent in2005. This trendmustbereversedifMadagascar isto upgrade the skilllevelofits labor force. Figure 14. Educationalattainment of employed labor force participantsunder age 30,2001 and 2005 80% 70% 2001 60% 02005 ,g 50% B 40% $ 30% 20% 10% 0% Less than primary Primary JSE SSEIuniverrity Level o f educational attainment Source: Adapted from Lassibille(2007) analysis ofEnqultePrioritaireuupris des Me'nuges2001and2005 data. 27 Investmentin humancapitalsuffered a sharp setback from the 1970s to early 1980s, and Madagascarhas to still re-gainthis lost ground. Usingthe household survey dataof 2005, we examine the educationalattainment of different age groups. This gives an idea of investment over time: those aged45-49 years in2005 were bornbetween1955-60, while those aged 15-19years in2005 were bornbetween 1985-1990.For the oldest generation, bornbetween1940-1945, the share ofthe population with at least grade 5 education attainment was 15 percent. This proportion peakedat 30 percent for the generationborn in1965-70.Thereafter, the proportion actually declined, resuminga slow growthonly over the last 10years. The grade 5 attainment ofthe youngest generationhas onlyjust surpassedwhat hadbeenattained two decades ago. Moreover, there i s no evidence as yet o f any increaseinthe pace of investments the slopes are roughly constant evenduring - the periods of improvement (Figure 15). Figure 15. Share of populationthat has attained at least grade5 by age group,2005 400/0 - 35% - m 5z.-B*30%- P 0 25%- 20%- El 15% - oo/o 5% i 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 Age W"P Source: World Bank analysis of EnquZte Prioritaire auprks des MPnages 2005 data This stands incontrastwiththe trendinother regions, whichalso started with very low educationalattainment a few decades ago. InSouthAsia, for example, the pace has clearly acceleratedover the last two decades. Evenarelatively poor performer such as Pakistanincreasedthe proportion attaining grade 5 by 20 percentagepoints over the last two decades. Smaller countries, such as the Maldives and Bhutan,havemade spectacular advances, the former reaching 90 percent grade 5 attainment inthe same period. Beyond primary education, the trend is alarming and shows that Madagascar has been disinvestingin post-primary education.About 14percent o f a generationhadattained at least grade 9 ('junior secondary) about 20 years ago, following a slow but steady increase over the preceding two decades. However, the most recent generation (20-24 year olds) has not regainedthat level after the steep decline inthe 1980sand 1990s. The proportion o f a cohort that had attained grade 12hadnever exceeded6 percent inMadagascar, but thishadbeenhalved for the most recentgeneration(Figures 16aand 16b). 28 Figure 16a. Share of populationthat has attained Figure 16b. Share of populationthat has at least grade 9 by age group, 2005 attainedat least grade 12 by age group, 2005 6% u 5% 3% O%/ 0% 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 Age gmuP Source:World Bank analysis ofEnqulte Prioritaire auprBs Source: World Bank analysis ofEnqulte Prioritaire auprBs des Me`nages2005 data. des Me`nages 2005 data. Figure 17 shows the stock o fthe employed labor force by highest educationalkraining qualification received and the estimated annual education and training awards in2005. Many o fthose who receiveanaward will go onto receive higher awards andnot all will join the labor force or employment. Therefore, the annual awards do not represent the flow o fnew entrants into the labor force. However, they can be usedto assess the magnitude of new qualifications inrelation to the existing skill distribution o f employed persons. Awards o f primary school andjunior secondary certificates in2005 represented only 14 and 8 percent o fthe stocks of employed persons who had these respective qualifications. New vocational training awards represented less than2 percent o fthe employed labor force with this qualification (even though the stock itself i s very small). Inother words, the skills upgradingofthe labor force at the baseofthe system is occurring at a very slow rate. On the other hand, the number of baccalaurkat,bachelor's andmaster's level awards represented 18,4 and 7 percent o fthe employed labor force withthese respective qualifications. Newawards represent a higher proportionofthe employedpersons with these qualifications because the number o fthe latter is so little. Butitcan also indicate that, for example, students try to obtain a master's qualification becausethe lower qualification (bachelor's degree) i s not valued inthe market. The important policy issue i s that the current situation does not result o f conscious and strategic choices. It i s the result o f m a n a g e d student flows, the long duration o f the post primarycycles andthe irrelevance o fqualifications, which forces students to continue with education. Madagascar would needto review these trends andset appropriate targets for student flows. 29 Figure 17. Distribution of employed labor force by highest qualificationobtainedand annual educatiodtraining awards (estimated), 2005 Highest qualification Education trainindawards (stock) (awarded annually) 207 N o quat I I 4000 3000 2000 1000 0 50 100 150 200 250 Thousands (000s) Source: World Bank analysis ofEnqugte Prioritaire auprks des MPnages 2005 data,MENdata. Regionaldisparities ineducationalattainmentare extremely large,and could impedethe goalof promotingregionaleconomicdevelopment. The region o fAnalamanga (near the capital Antananarivo) i s the most educated. Five percent o fthe labor force had higher education, 41percent had secondary education, and 12 percent had primary education. About 41 percent had less thanprimary education. At the other extreme, the region of Androy had 97 percent with less thanprimary education (53 percent with no education), only 2 percent with primary education, 4 percent with secondary education and 0.1 with highereducation (Figure IS). As discussed inthe previous chapter, educational disparities are strongly influencedby poverty. Analysis has also shownthat low educational levels are strongly correlated with low population den~ity.~ Efforts to address regional disparities should therefore recognize the root causes o f different levels o f education and, as appropriate, develop policy measures to address them. 7Lassibille,2007. InCISCOs with primary completionrates ofunder 30%, populationdensity is 18people perkmversus a nationalaverage of200 peopleperkm. 30 Figure 18. Educational attainment of employed labor forces by region, 2005 0HigherEducation Atsmo Andrefana 0% 20% 60% II I YOcompleted Source: Adaptedfrom Lassibille(2007) analysis ofEnquCtePriorituire auprbs des MPnuges 2005 data Regionalvariations inthe sectoral distribution o f employment are also quite pronounced. The proportionemployed inthe primary sector varies from 46 percent (Analamanga) to 96 percent (Androy). Industryi s heavily concentrated inAnalamanga, but even here it contributes only 8 percent o f employment. Inmost regions, the share o f industryi s less than0.5 percent. The regionswith ahighshare ofemployment inagricultureare also those with a highshare o f people with less thanprimary education. These regions are characterized by a low skill equilibrium, where there is no incentive for individuals to invest ineducation and no pressure for small scaleproducers inagriculture to upgrade productivity. The MAP identifies some regions for targeted investment and growth inkey sectors. These include: Diana inthe north and Anosy inthe south for tourism; Alaotra Mangoro and Menabe and Varinankaratra for agri-business, Anosy andAtsinanana for mining; and Analamanga for services and agro-industries. Apart from the latter, all o fthe others have between 4-7 percent o fthe labor force with more than senior secondary education and less than 2 percent with higher education (Figure 19). 31 Figure 19. Education levels in MAP target regions, 2005 SSE andabove Alaotra Mangoro iotes: MAP KeyRegionsfrom MEN. Educationlevelsadapted. Source: Adapted from Lassibille, 2007. GivenMadagascar's size, the lack o ftransportation, housing and schooling facilities, normal labor market adjustments, such as internal migration, cannot correct these regional imbalances inthe supply o f skilled labor. Hence, even ifthe national supply were seemingly adequate at the aggregate level, itwould be insufficient to support the country's regional development strategy. Ifthe industry i s capital intensive, with limited backwardlinkages, foreign investors can meet critical shortages o f highly skilled labor through importing foreign workers. However, labor intensive sectors such as tourism and agri-business will need to depend on local labor ifthey are to be competitive. LaborMarket Changes andReturnsto InvestmentinEducation Between2001 and 2005, highqualityjobs and wages declined, probablydue to the crisis of 2002 and its after-effects. The share o fwage and salary employees fell from 18.2 percent to 14.8 percent, with an absolute reduction inthe number o fjobs. The absolute loss o f jobs amongthe highly skilled category was substantial -about 77,000 jobs, which resultedinabout 40 percent reductioninthe number o f workers inthis category. The majority o f non-wage workers were employed inagriculture. Close to halfthe working population (48 percent) was classified as family helpers, a 10percentage point increase over 2001. The formal manufacturingsector seems to have reboundedafter the crisis, butjob creation trends indicate a major restructuringof manufacturing.Data from World Bank's 32 Investment Climate Assessment survey (2005) shows that overall the netjob creation between2002 and2004 was 20 percent. The survey covered226 firms inthe formal manufacturing sector. However, this representedpartly a large rebound after the crisis of 2002. Job creation and losses varied widely across industrial sectors. There was a net loss o fjobs inwood and furniture, paper, non-metallic andplastics. This was compensated by an increase o f 21percent injobs intextiles, 13 percent inmetallurgy and 11percent in agro-industry and chemical products. Job creation was significantly higher inlarge enterprises, export oriented firms andthose inexport zones and foreign firms. By contrast, firms orientedto the domestic market created significantly fewer jobs -just over 6 percent -while public enterprises inthe sample destroyedjobs (Lassibille, 2008). Realwages ofwage and salary earnersin2005 were one-third lower than in2001.' However, there were significant differences by type ofjob. The wages o f skilled and unskilledworkers declinedby 43 and26 percent, respectively. Earnings o fmiddle level professionals (cadresmoyens) declinedby about 83 percent. The highly skilled category (managers) saw their real earnings rise by 22 percent. Real earnings by level o f education declined most substantially for those with secondary education (33 percent), compared to 6 percent for those with higher education. Regardingthe latter, it seems that while real wages inhigher skilled occupations rose, many o fthose who hadhad higher education were inoccupationwith lower earnings. Nevertheless, disparitiesbetweenwages and salaries at different levels of education continue to be highand havewidened. In2005, a personwith higher education earned 2.4 times more than a personwith secondary education. A personwith secondary education got 1.9 times more than a personwith primary education, while the differential between the latter and a personwithout any education was small (6 percent). The overall rate of return to education for wage and salary earners declined but with substantialdifferences across levels of education.The rate o freturn in2005 was estimated to be 6.4 percent in2005, compared to 8.7 percent in2001, reflecting the performance o f the economy. The decline was very pronouncedfor primaryand secondary education. The 6 additional years of investmentinsecondary education gave a private rate o freturn o fjust 5 percent in2005, compared to 8 percent in2001. Investment injunior secondary education gives a rate o f return o fjust 1percent. Higher education has a very highrate of return which apparentlyincreased between2001 and 2005. The rate o freturnto highereducation increasedto 13 percent from 8 percent. In2005, itwas almost 50 percent higher thanthe rate o freturnfor senior secondary education (8 percent) and 13 times higher than for someone with lower secondary education. These trends reflect the increase inrelative salary differentials discussed earlier. The I C A survey for manufacturing firms inthe formal sector shows an even higher rate (23 percent). Vocational andtechnical training have a higher rate ofreturn (9.6 and 6.4 percent) compared to general secondary education (2 per~ent).~ (Figure 20) Usingearningsofwage andsalary earners inthe principalemploymentonly andindex ofinflation publishedby INSTAT. For specificationofmodelsusingboththe householdsurvey dataandICA data, see Lassibille, 2007. 33 However, the analysis is limitedby the fact that wage and salary earners constitute a relatively small proportion o fthe workforce. Education and training can also improve the productivity and earnings o fworkers inagriculture andthe informal service sector. Given the huge numbers o f those employed inthese sectors, the effect on incomes andpoverty reduction could also be substantial. :::F, Figure 20. Return to education by educationallevel, wage and salary earners, 2005 All Secton FormalIndustrialSector PrimaryCompleted Zndaty techmal 1-1 Zndaty vocational - - , 2ndary general' - Secondaryaverage Zndary - average HigherEducation HgherEducation 0% 5% 10% 15% 0% 5% 10% 15% 20% 25% Return ("YO) Return ("YO) Notes: 1. `All sectors' figure is calculated from Enqu2te Priorituire uupr2s des MPnuges 2005 data. It relates only to wage and salary earners. `Formal industrial sector' figure i s calculated from I C A survey data. 2. Inthe `all sectors' figure, the rate o f returnfor each level o f education is calculated usingthe coefficients o f education estimated inwage regression models and the duration o fthe cycle. For example, the rate o f returnto JSE education i s calculated by subtracting the coefficient for primaryfrom the coefficient for JSE anddividing by 4 years (the duration o fthe JSE cycle). 3. Inthe `formal industrial sector' figure, the rate o f return o f the higher education is calculated by comparing all individuals with secondary education. For model specifications and coefficient estimates, see Lassibille, 2007. Skilled Labor Availability The I C A survey also provided firms' perceptions about the most important constraints to growth. Lack o f credit and its highcost and macro-economic instability were reportedas more significant problems than the unavailability o f skilled labor. Only 4 percent o f employers indicatedthat this was the most important factor. Giventhe timing o fthe survey (2005), when the economy was just recovering from a crisis, the small size o fthe formal manufacturing sector inthe country and its concentration inlarge urbanareas, this i s not a surprisingresult. The average time for filling vacancies for skilled labor was estimated to bejust two weeks. At current levels o f operations, about 23 percent o f firms reported a shortage o f labor (while 11percent reported a surplus). Labor shortages were more severe in some sectors such as textiles industry (33 percent), wood (29 percent) and furniture (38 percent) and inmedium and small firms (25 percent). The overall shortage o f labor was estimated to about 15 percent o fthe workforce while 35 percent o f workers were considered surplus, suggestingthat re-allocation o f labor across firms and sectors i s a major issue. However,these findingsdo not indicatethat thereare no problemsrelatedto the availabilityofskilled labor.Among firms that said that the size o f their workforce was sub-optimal, 53 percent said that inability to find skilled labor for the position was the most important reason, far out-ranking other reasons. Moreover, 60 percent o f firms also 34 reported that skilled labor availability was a "moderate" to "very severe" obstacle for their future operations. Largescalesurveys often fail to capturecriticaldeficits in key sectors. Madagascar lacks surveys or studiesthat examine skill needs at the micro level that affect competitiveness and costs inkey sectors. The lack o fthreshold levels o fkey humancapital skills may preventthe emergence of a competitively viable industry.These include skills such as those requiredto acquire newtechnology andmachinery; design efficient lay out o f plants; repair andmaintain equipments; use quality control mechanisms anduse industrial engineering. Further, surveys, by definition capture only the perceptions o f existingfirms. They cannot capture whether the constraint prevented new firms from being created. In the textileand garment industry,the non-availabilityof middlemanagersand skilled techniciansis cited intwo recent studies. Such shortages can erode Madagascar's main competitive advantage - low wages o f unskilled workers - by lowering technical productivity and raisingthe unit cost o f labor. Further, with many countries competing in the global market, low costs are no longer the sole competitive advantage. "Companies that outperform their competitors inthe clothing business are those that have adopted newinformation systems andmanagement practices.. .What drivescompetitiveness inthe clothing markettoday i s the ability to bringproducts to market...just intime." (Salinger, 2003). The mainrequirementi s not to increase the overall availability o f graduates, but the righttype of graduates with the competencies required by enterprises (Box 1). 35 Box 1.Observationson the availabilityof middle managers and skilled technicians "The most critical skills shortage is for middle management and fiontline personnel where the current employees are mainly expatriates. There appears to be a large number o f `middle-management' positions filled by expatriates. This i s due to the shortage o f local personnel with the necessary competency. Havingto resort to expatriate middle-management has increased the cost o f operations inMadagascar. The middle-management shortages are inthe technical, administration and management areas. Insofar as industry-specific middle management skills are concerned, these include chemistskolorists and technicians intextile technology andappareltechnology. The othermiddlemanagementskills requiredto supportthis industry can be generic innature and these include productionplanning,manufacturing operations, mechanicaVelectrica1 engineering, administration and management, and entrepreneurship." Source:Shah and Baru, 2005. "Most f m s use expatriate managers, quality control experts, supervisors, and technicians.. . Eventually, a . shortage o f skilled workers will drive up wage costs and limit the industry's ability to move up the value chain. Madagascar needs to expand its supply o f mid-level managers intechnical and business areas, e.g. fiber andtextiles engineering, technical support personnel, skilled assembly operators, textile arts and fashion design, international branding, market analysts, international sales and contracting, and logistics managers. Inthe longer run,Madagascar's cotton-textiles-clothing value-chain will needthe support o famore fully developed cluster to succeed. Madagascar lacks the presence o f equipment designers and manufacturers, spare parts providers, repair companies, trims manufacturers, training institutes, technical and market research f m s , industry-specific marketing and advertising firms, and stronger linkages to end-consumers and clients. ... Madagascar needs to expand its supply o f mid-level managers intechnical and business areas, e.g. fiber and textiles engineering, technical support personnel, skilled assembly operators, textile arts and fashion, international branding, market analysts, international sales and contracting and logistics managers." Source: Salinger, 2003. Implicationsfor Post-BasicEducation Despite the apparent lack o f aggregate shortage o f skilled labor inthe short or medium- term, Madagascar needs to re-orient its post-basic education system for several reasons. The first reason is strategic. Inorder to compete with other countries, even inlabor- intensivemanufacturing industries but also to develop agriculture, Madagascar needs to raise the stock of humancapital. As the analysis of investment by generations shows, decisions taken regarding education take two or three decades to have a perceptible impact on the stock o fhumancapital. Madagascar needs a long-term and consistent policy to expand coverage o fprimary andjunior secondary education at a rapid pace, as well as to gradually expand coverage ofpost-basic education. The secondreason is that eveninthe medium-term,Madagascar has to addresstwo problems: (i) the regional availability o fskills, to complement its regional development program and (ii) ensuring the type of skills required by the labor market inkey growth sectors. The responsiveness o f the education system to these challenges will partly determine the ability o f Madagascar to compete ina global economy where technology andskills are constantly being upgraded. 36 4. SKILLS FOR THE LABORMARKET: IMPROVING RELEVANCEAND QUALITYINPOST-BASIC EDUCATIONAND TRAINING Madagascar's post-basic education system will have to adapt to the new demands o fthe labor market and the changes induced by the reform o f basic education. The aims of education andtraining at this level are two-fold: (i) meeting the skilled labor requirements o f key growth sectors ofthe economy inthe short and medium term, and (ii)preparing for future changes by ensuring that students have a sound foundation o f knowledge, skills and attitudes. A feature o fglobalizationis that the changes intechnology andwork organization are quickly transmitted across the world. The idea of a single life-timejob or even occupation for each worker will soon become a thingo f the past, even inMadagascar. Moreover, the rate o f obsolescence of skills i s more rapid now, with the growth o f knowledge and its applications to production. The post-basic education system must not only equip students with current knowledge, but also with the tools to continue their learning.This includes language skills, specific subjects such as mathematics and science, use o f information and communicationtechnologies (ICT) as well as learning to learn, reason and apply knowledge. Countries are often faced with the difficult choice between expanding the supply o f education and investinginquality.For Madagascar, this i s not really a trade-off. Improving relevance and quality i s an imperative. Ifinvestments inquality also lead to reduction inrepetition and failure rates, they will also increase the supply o fplaces by allowing more students to graduate. This chapter begins with an analysis ofthe main growth sectors identifiedinthe MAP, the likely skills requirements o fthese sectors andthe ability o f the education and training system to meet these needs. This i s followed by a presentation o fthe features o fnewly emergingtechnological occupations and generic skills that are increasingly demandedin the labor market. The chapter thenreviews the current status relating to structure, curriculum, teachers and learning materials ineach o fthe sub-sectors -general senior secondary education, TVET andhigher education -andpriority areas o f reform. Skill Needs inthe Growth Sectors of the MAP The mainsectors identifiedby the MAP may face criticalskill shortages. There are few courses ineducation and training institutions for these new sectors (Table 2). This i s due to a lack o f a mechanism for employers to express demand for skills to education and training institutions and, inthe case o f universities, the rigidity inintroducing new courses. There i s only one miningtechnical school, despite this beinga highpriority sector which has attracted considerable foreign direct investment inrecent years. Agriculture andtourism, bothpriority sectors with the potential of absorbing labor, enroll 37 less than 500 students inTVET courses. The textile and garment industry is the largest employer inthe formal sector, accounting for a major share o f exports. However, there are no courses at the secondary level and a diploma course intextile engineering was introduced only recently as part of the World Bank's Growth Poles project. Skills constraints can causewages to rise and erode the competitive advantage of lowlabor costs. Ina skill-intensive sector such as IT, the lack ofundergraduates with basic training can prevent the sector from growing. Foreign firms meet these skills needs partlybe importing expatriate skilled staff and managers or by sending employees abroad for training. 38 Table 2. Growth sector skill needsand labor supply 1.1 Textilesand . Technician Mechanic supervisor courses .Production planner - Diploma inTextile Garments Pattern maker ....................................................................... Engineering: 44 students, 2007 Computer support ProjecUprogram System analyst 178 students enrolled technician manager Programmer inthe Ecole 1.2 ICT Data entry operator Computerhnformati Computer/informati Nationale on systems manager on scientist d 'Informatique' ....................................................................... Software engineer Food prep worker Food service NA INTH, ISCAM2offer Waiter manager vocational 2 yr Housekeeper First-line supervisor degree courses Few 1.3 Tourism Customer service - graduates CFPs enroll -200 ....................................................................... students Maintenance Minemanager * Geologist 1mining technical 1.4 Mining personnel Hydrologist school Equipment operator * Engineer Manuallaborer Manager Civil engineer Equipment operator * Site or first-line 2.1 Transport Surveyor supervisor Skilled trades: 5000 (Roads) enrolled inLTPs, -----__--_-------__-------------------------------------. 2000 enrolled in Manual laborer Manager Civil engineer CFPs Q Carpenter Site or first-line Civil engineering Ironworker supervisor programs offered at most vocational or 2.2 Construction Mason Equip. operator technical schools, Electrician ISTs and universities * Plumber 9 Largely self-employed small scaleproducers Technical and vocational: 500 3. Agriculture enrolled Tertiary level: -1350 enrolled Source: World Bank analysis o f Johanson, 2006; Zaafrane, 2008; and MENdata. Notes: 1. Ecoles Nationales: highly selective institutions that train engineers and applied scientists. 2. INTH:Institut National de Tourisme et d'H6tellerie. INSCAM - L 'Institut Supe`rieure de la Communication, des Affaires et du Management 39 upations inthe Knowledge Econo y and Science and Technology Technological occupations will become more widespread as Madagascar's economy start integratingtechnology into productionand management across a broad spectrum o f economic activity. Such occupations are no longer confined to manufacturing, mining or infrastructure industries; they are found inmany sectors, including agriculture and food, tourism, financial services, transportation and supply chains, education and health. Figure21illustrates a simple typology o foccupations positioned ontwo education- related dimensions: the theoretical knowledge and analytical skills dimension and the technological skills and competencies dimension. Figure 21. Typology of technological occupations in the knowledge economy F Technological Skills & Competencies Source: Mikhail, 2007. Inthe initialphasesoftransfonnation ofthe economy, the vocational andmiddlelevel occupations will require greater numbers o ftrained specialists. However, buildingup the core o fprofessionals and scientists is necessary inorder to create the capacity for technology absorption and application to the local economy. Applied Science, Engineeringand Technology (ASET) courses play an important role in preparing the workforce for these emergingoccupations. Madagascar's ASET system i s weak, even at the vocational andmiddlelevel, butalso at the tertiary level. It is further analyzed later inthe chapter. 40 Prioritiesfor CurricularReform-Focusingon EmployabilitySkills Employers consider that employability skills are as important asjob-specific or technical skills. These skills cannot be taught as a separate subject. They are increasingly embeddedacross the curriculum andteaching-learning processes.These generic skills are often classified into eight broad areas": Takinginitiative identifyingopportunities not obvious to others; translating ideas - into action; generatinga range of options; being resourceful; initiating solutions Communication understanding what others are tryingto communicate; - speakingclearly and directly; writing to the audience's needs; persuading effectively; speakingand writing inmore than one language Teamwork- working as an individual and as a memberof ateam; working with people of differentbackgrounds; defining a role as part of ateam; identifying strengths ofteam members; coaching, mentoring, and giving feedback Technology having a rangeofbasic I T skills; applying IT as a management - tool; beingwilling to learnnewI T skills; having the health and safety knowledge to use technology Problemsolving developing creative, innovative or practical solutions; applying - arangeof strategiesto problemsolving; applying problem-solving strategies across a range of areas Self-management having a personal vision and goals; evaluating own - performance; articulating own ideas and vision; taking responsibility Planning-managing time andpriorities; establishing clear project goals and deliverables; allocating people andresourcesto tasks; planningthe use of resourcesincludingtime; collecting, analyzing, and organizing informationto use incontinuous improvement andplanning Learning managing own learning; contributing to the workplace learning - community; using a range of mediumsto learn -mentoring, peer support, networking, IT, courses; applyinglearningto technical issues andpeople issues Generalemployabilityskills should be centralto the reformof curriculum,teaching practicesand learningmaterialsat the SSE, TVET and highereducationlevels. Madagascar's existing systemi s highly academic, inthe case of SSE andhigher education, or narrowly specialized and trade/occupation oriented, inthe case of TVET. In terms of subjects, the reform should concentrateon the teaching of languages, mathematics, sciences, economicshusiness anduse of IT. loThis illustrativelist of"employability skills" was developedbythe DepartmentofEducation,Science andTraining (DEST), the AustralianChamber of Commerce andIndustry(ACCI) andthe Business CouncilofAustralia (BCA).Source: http://www.dest.gov.au/archive/ty/publications/ employability%5Fskills/ 41 Senior Secondary Education Structureand curriculum.At the SSE level, students may choose between general or technical streams, which are provided inseparate schools. At the end o fthe three year cycle (existing duration), students can acquire the baccalaure`atby examination, required for entry into tertiary education. The general stream leads to the baccalaurdat gkne`ral (general baccalaureate); the technical stream leads to the baccalaurkat technologique (technological baccalaureate) or the baccalaure`attechnique (technical baccalaureate). Although modeled on the French system, the award does not enable automatic entry to university education.l1Additional selection mechanisms (review o f applications and/or entrance examinations) are applied. Students inthe first year o f SSE follow a common curriculum (Figure 22). For the final two years, they choose among three streams: (i) the "Se`rieA" for Arts (54 percent o f SSE students), (ii) "Se`rie Cyfor Mathematics, Physics and Chemistry (14 percent o f SSE the students), and (iii) "Se`rie D" for Life Sciences (32 percent o f SSE students). This the grouping has not been revised since the 1970s(World Bank, 2007). As an example, there is no series for economics and social sciences, despite the growing importance o f these disciplines for the economy.l2The technological and technical streams present a similarly outdated structure, with five streams that are not relatedto technological occupations. Again, as an example, there are no specific technological/ technical baccalaurkat inhotels or tourism or mining.13 Figure 22. Madagascar's Senior Secondary Education (SSE) Cycle I - T e c h n i c a l S S E S c h o o l s I U N I A g r i c u l t u r e V T e c h n o l o g i c a l T e c h n o l o g y B a c c a l a u r e a t e E R S I I G e n e r a l S S E S c h o o l s I T cE A r t s a n d l a n g u a g e s Y - ; N- E a r t h a n d l i f e s c i e n c e s G e n e r a l A B a c c a l a u r e a t e L M a t h e m a t i c s , P h y s i c s a n d c h e m i s t r v - I G r a d e s 1 0 1 1 1 2 wrce: World Bank. 2007. l1 The French baccalaurdat i s legally a qualifying degree for entry into university. l2Madagascar's curriculum follows the old French curriculum. InFrance, the curriculum has beenrevised continuously. There are three types o f general Baccalaurdat: BAC L (literary - main subjects are French, philosophy and modem languages), BAC ES (economic and social sciences), andBAC S(scientific - main subjects are mathematics, physics and natural sciences). l3Again, inFrance there are four types o f technological Baccalaurdat :BAC STT (tertiary sciences and technology), BAC STI (industrial sciences andtechnology), BAC STL (laboratory sciences andtechnology), BAC SMS (medical and social sciences); and additional three specific technological Baccalaurkats for the hotel trade, applied arts, andthe techniques o f music and dance. 42 Another issue inthe curriculum structure i s overall class time and core and optional subjects. Madagascar's SSE curriculum i s overloaded with students expected to spend up to 1400 hours inclass (the range is from 1116-1404 depending on specialization). Students have to take 10-15 subjects. The trend inmost countries at the SSE level, as at the JSE level, i s to reduce class time inorder to allow more time for student self-directed learningandindividual support. Inmost Europeancountries, the annual hours o fclass instructionvaries between 800 to 1000 hours. There are usually about 10 subjects, with a compulsory core o f about 6 subjects and an additional four elective subjects. The over-specializationo f the curriculum also has implications for teacher utilization. In contrast to the highstudent time inclassrooms, teachers are expected to teach only 720 hours inclass - the average ina sample o f24 countries, including low, middleandhigh income countries reviewed by OECD/UNESCO was about 910 hours (World Bank, 2007). This is partly due to the fragmentation o f courses andthe requirement for many specialist teachers. The designo fthe SSE curriculum i s to prepare students for higher education. Infact, however, less thanhalfthe students pass the baccalaurkat and only halfo f those who pass gain entry to universities. Hence, less than a quarter o fthose who are inthe final year o f SSE will go on to university.The curriculum overload, outdated teaching methods andperceivedirrelevance o f subjects i s a factor driving drop out withinthe cycle. The internal efficiency o fthe systemi s closely linked with fundamental problems related to the duration and structure o f SSE. As inthe case o fthe Frenchbaccalaurkat,the content o fthe terminal examinations places highdemands on writing, as most answers are given inessay form (except for mathematics and science, even though some o fthe latter may also required long answers). The examination does not include individual research or project work done duringthe course o fthe year. An important issue inthe context o fMadagascar isthat the majority o fstudents who fail to passthe examination do not have a qualification that values the 12 years o f education they received. The student who has failed the `Bac'is little better thana personwho holds a JSE certificate inthe labor market. The additional three (or two inthe new cycle) effectively represents a waste o fresources both for the individual andthe system. Teachers. SSE teachers are recruited either with a general university degree (varying from 2-4 years o f duration) or with specialized teacher training at the EcolesNormales Supkrieures (ENS), university level institutions, where courses last 5 years (theperiod o f practice teaching i s inaddition to this). Only one-third o f SSE teachers have a professional teacher training certificate; the majority have some universitylevel education with no teacher training. The duration o f training inthe ENS is too long and costly for expanding SSE ina cost-effective manner. Further, the rapid evolution o f knowledge and needto upgrade curriculum means that much o fthe knowledge acquired 43 inpre-service training will beobsolete ina few years time. In-serviceteacher training is very limited, especially inpublic schools. Learningmaterials. Madagascar's SSE schools lack almost all learningmaterials, including textbooks. The last World Bank educationproject (which ended in2005) provided mathematics textbooks inthe last grade o f JSE and a minimal library o f reference books for each public JSE school and SSE school. There are neither textbooks nor teacher guides; teachers andstudents rely on teaching notes. The situation is instark contrast to primary education, where donors have financed books and learning materials on a large scale. Prioritiesfor reform. While an overhaul o fthe curriculum structure i s desirable, itposes numerous challenges ina country with limitedtechnical capacity. International experience also shows that system-wide reforms at the higher levels o f education are difficult to implement. Conceptually, the reform could be organized around two main pillars: Pillar 1: An incremental school-based approach to improving quality and efficiency o f the academic secondary education, articulated with the reforms in TVET andhighereducation (see below) Pillar 2: Introducing newtypes o f secondary technical and vocational schools that are more closely aligned with labor market needs inthe priority sectors o f the MAP(see section on TVET) The first pillar would introduce changes inthe curriculum, teaching practices and learningmaterials with technical capacity beingbuilt inthe Ministryandimplementation through voluntary participation o f existing public and private schools ina quality improvement program. The latter could be supported through a school development fund. Changes inthe curriculum structure would focus on reducingthe subject overload andre-organizingthe baccalaurht series andupgradingthe content ofcurriculum to include general employability and skills, focusing on key subjects. To begin with, improvements inlanguage, mathematics and science andtechnology, including incorporationo f ICT, would be essential. Curriculum upgrading would be supported withprovision ofnewteaching-learning materials and school-based in-service teacher development courses inthe schools participating inthe program. Over the medium-term, newshorter duration pre-service teacher training programs couldbe developed intertiary education institutions. Student assessment ingrade 12could also help to certify competencies acquired, independently o fthe terminal examination. The development o f a qualifications framework (discussed later inthis report) will also helpinensuring the acceptability o f such certification. The second pillar would introduce diversity inthe types o f secondary schools and also enable greater access inrural areas. Three models are under consideration by the Ministry:"magnet", career andcomprehensive schools (Box 2). 44 The designo fbothpillars o fthe reform should include a strong component to address equity (bothincome and geographic). This could be done by buildingit into the school development fund, targeted scholarship programs and criteria for buildingnew schools. lox 2. Alternative models for secondarv education M a m e t Schools Usually urban Highquality specialized preparationfor university Science and Technology MS, Mathematics M S ,Foreign language M S Elite -draw best students ffom the systemthrough "examination" and competitive application Highly qualified faculty -the bestteach the best Universitypartnerships Highcost Public and/or private finance Career Secondary Schools Focus on one career path (tourism, textiles, health sciences, computers) Located near employers Motivatedstudents with good general knowledge Core academic curriculum -examined subjects Professional curriculum, taught by professionals More studenttime ina week, more months or years - School/work collaboration through internships Cost dependson the skills demanded inthe career Substantial industryfinancial support Cornmehenshe Schools Oftenrural Several curriculum o Academic for higher education o General education: less demanding, for post-secondary education o Vocational courses for local employment Accept all students inarea with complete JSE Students can choose ffom all curriculum but have to meet graduation requirements -20-30percen electives Strong student guidance counseling Vocational curriculum can be more costly than academic or general ource: Middleton, 2007. TVET Structure and curriculum: Broadly speaking, TVET covers education and training from grade 6 to the tertiary level. However, inMadagascar, there i s little articulation between the secondary level andtertiary level inTVET.Formerly, this was partlydue to the fact that there were separate Ministries for school education, TVET and higher education, but evenwith a single Ministrythe structure is fragmented (Figure 23). Inaddition, other Ministries (Labor, Agriculture, Public Works) runpublic institutions or authorize private training centers for their sectors. 45 Figure23. Structure ofMadagascar TVET system, 2007 (pre-reform) Kev [nstitutions Programs Qualifications ZFP -Centre de Formation FPI-Formation Professionnel CFA -Certificat de Foin Professionnelle Initial d'Apprentissage LTP -Lycee Technique et FTG -Formation Professionnel CAP - Certificat d'Aptitude Professionnel General Professionnelle [ST - Institut Superieur FPQ - Formation Professionnel BEP-Brevet d'Etude rechnologique Qualificant Professionnelle Bac Pro -Baccalaureat Professionnel Bac T - Baccalaureat Technologique Notes : 1. The Institut Supe`rieur echnologiqueoffers three qualii Dpl6me de TechnicienSupe`rieurSpe`cialise`(DTSS) (Bacc + 3 years), and DiplGrned'Ingenieur de tions -DTS (Bacc +2 years), l'IST (DIIST)(Bacc +4.) 2. Short-duration training without a formally recognized certificate - offered inboth CFPs and LTPs -is not shown inthe diagram. 46 TVET should provide trained personnel for the labor marketbutMadagascar's system, despite some positive changes over the last five years, is still not effective inthis respect. The system is characterized by a highly formal structure, with seven types of formal qualifications withrelatively longcourses, 2 to 3 years each, with only one entry point and one exit point. There are two main types o f TVET: CFP (vocational training centers operating atjunior secondary level) andLTP (technicalhocational schools at the senior secondary level). Enrollment inpublic CFPs i s limited, amounting to only 6 percent o f junior secondary enrollments. Enrollment inpublic LTPs accounts for about 10 percent o f enrollment at the SSE level. Most training institutions at LTP level train for a particular sector (industrial, commercial or agriculture) while CFPs enrollments are concentrated injust two broad fields -civil works and industry. There are major gaps inTVET provision. As noted earlier, enrollment i s limitedinthe areas important for the priority sectors o fthe MAP. Training for agricultural occupations andthe informal sector hardly exists. LTPs and CFPs teach only a limitedrange o ftechnical skills for narrowly defined occupation. Students specialize inspecific trades; for example, those enrolled inbuilding trades concentrate on one trade such as masonry, rather thanthe range o f skills involved insimpleconstruction-masonry, framing, roofing, plumbingandelectricity. A broad knowledge o f the industry, general employability skills or workplace competencies for the industry are not built into the curriculum. Although the programs teach only a narrow range o f skills, curriculum and examinations are overloaded interms o fthe number o f subjects, leadingto limitedmastery o f core competencies. The courses tendto be fragmented with students inthe various LTP programs taking 12-14 different classes per week. Insome cases, students take courses in three languages (Malagasy, French, English); the limited exposure o f 2 or 3 hours per week each is insufficient to attain fluency incommunication. A few important innovations havebeen introduced. Public training institutionsare now allowed to provide training according to local needs. Training for in-service employees can be short-term and variable inlength and a diploma for technicians has been introduced. Teaching methods are outdated, emphasizing lecture andnote-taking by students, rather thandiscussion, problemsolvingandgroup work. Examinations andassessmentare based on theoretical knowledge and employers do not participate inthe process. Teachers/Instructors. Between 1998 and 2005, the number o fteachers inpublic CFPs and LTPsremainedconstant at about 1000, due to a hiringfreeze inforce for public sector employees. As a result, most o fthe teaching staff are between 55 to 58 years old, close to the retirement age o f 60 years. Departures due to retirement will cause a drop in teacher availability. Although most o f the staff are qualified, especially inthe LTPs, 47 about 20 percent hadqualifications at the level at which they taught and only 9 percent hadengineeringdegrees. One difficulty inadapting courses to labor market needs is the lack o fteachers inthe required field and the inability to adjust teacher positions as they belong to the civil service. Prior practical experience inindustryi s not required and most do not have any knowledge o f industry operations. There i s no pre-service training for TVET instructors and in-service training i s limited. The mainin-service training institution isthe National Institution for Training (INFOR), which reportedtraining 250 instructors in2005. However, there are no transparent mechanisms for selecting instructors for training and due to limited industryexchanges, instructors cannot remainup to date with technological improvements. Learningmaterials. These are almost universally lacking and students must copy or study teacher notes from the blackboard. Incountries withstrong systems o fTVET, external partiesparticipateinthe examinations to ensure objectivity. The examination load on studentsis heavy, with students inLTPs taking examinations in9-11different subjects (compared with six for students ingeneral lyce'es.) Prioritiesfor reform:The reform o f primaryandjunior basic education is a positive development for TVET andprovides the opportunity to introduce flexibility and relevance o fprograms. Entrantsinto TVET will have more education (at least 7 years o f primary education), and this will allow the general education content to be eliminated from these courses. A major question, however, i s whether to provide vocational training after 7 years o fprimary or after 10years o f basic education. International experience suggests that it i s better to defer specializationuntil students are able to choose their occupations. Employers do not often require long-durationtraining for entry level workers, preferringto train them on thejob. Madagascar's policy i s to move towards provision o f basic education for all children. The policy for junior secondary education also includes the provision o f open schools, which could integrate a highlevel o f vocational content. Lookingto the future, therefore, it seems more appropriate to start vocational training after 10years o f basic education. Ifvocationaltraining isprovidedafter 7years ofprimary,itshouldbepossible to cutthe lengtho fmostvocational training inCFPs to six-nine months -comparedto two -three years at present. This would double or triple the number o f graduates. Inany case, CFPs should not provide a three year program o f studies inparallel with lower secondary education. Technician training at the senior secondary level (LTPs) should be expanded and a more balanced regional distribution should be achieved through the involvement o fthe regions and communes. Introduction o f new courses for the priority sectors should be the focus o freform o f curriculum, teaching and assessment methods. Concentration on fewer subjects, with more emphasis on science and mathematics, would be advisable for quality improvement. 48 Reducing the duration o f courses to the time required for teaching the skills, polyvalent training, focus on generic skills and a modularapproach to facilitate easy entry and exit would be highly desirable. A major challenge is to train teachers andprovide in-service training. Dueto limited resources, the focus should be on the new courses. Designing a system of financing in- service training and enabling INFOR to become self-financing would be necessary. Teacher development reforms are discussed more extensively at the end o f the chapter. The most important challenge inimproving quality andrelevance, however, is to involve employers indefining training needs and inexaminingand certifying skills acquisition. This i s dealt with ingreater detail inchapter 8 on governance mechanisms. Tertiary Education Madagascar's tertiary education systemconsists o f six universities, two non-university institutes offering 2-year technological courses, one distance education organization in the public sector, and about 20 non-university institutes inthe private sector. The public universities absorb four-fifths of students and close to 60 percent of them are inthe Universityo fAntananarivo andanother 14percent inthe University ofToamasina. The remaining four universities have between 1,500-4,000 students, far less than the minimumenrollment size for amulti-disciplinary university offering undergraduate and postgraduate courses. Enrollmentindistance education, which operates through 24 regional centers, has been declining continuously for the last 10years, and i s currently at 15 percent o f total tertiary enrollment while enrollment inthe private sector has risen to about 8 percent (starting from 0) inthe same period. Structure and curriculum:Most university programs are still based on a traditional educational model for long courses, which existed before inmost continental European countries and comprisedthree cycles o f varying lengths. The hierarchy of awards is based on the number o f years after the baccalaure'at. The first cycle of two years leads to the DiplGme d'EnseignementUniversitaire Ge'ne'ral(DEUG -General University Diploma, or Bac+2); the second cycle leads to the licence or maitrise, o f 2-3 year duration (Bac+3/4); andthe third cycle leads to a higher level professional degree (Dipldme d'Etudes Supe'rieuresSpe'cialise'es-DESS- in 1year) or a doctoral degree. This structure has beenreplacedinFrance andinmost Europeancountries, which have re-organized university programs to bachelor's-master's-doctoral degrees (Licence- Maitrise- Doctorat or LMD), inline with international trends. The bachelor's degrees are o f 3 years duration and master's o f2 years duration. InMadagascar, the first degree still requires 5 years ofstudy inmanydisciplines. The first two years leading to DEUGemphasize basic theoretical training inmathematics or sciences and are not considered adequate for jobs suitable for undergraduates. The most common award for engineering, for example, is the DiplGme D'Inge'nieur which i s at the 49 level o f BAC+5. The LMDreform hasjust begun, with the publication o f the framework earlier in2008; regulations to guide reform are close to publication. The Malagasy university curriculum structure contributes to the poor internal efficiency noted earlier, with highrates o f failure, drop out andrepetition. For example, inapplied science, engineering and technology courses, Madagascar produces a meager number o f undergraduates and engineers, despite an enrollment o f over 9000 students (about 20 percent o fthe total enrollment). In2005-6, the public institutions produced 508 graduates at the diploma level, and another 334 graduates from the 2 year post-secondary technical program, offered inthe two ISTs (total o f over 842). While most ofthe IST graduates have awards that lead to employment, most o fthe former continue with further studies as their diploma i s not valued inthe job market. There were 583 graduates with Bac+3 and426 with Bac+4. The number o f engineering graduates was only 294 (Figure 24). The ISTs, which have short-duration courses that train higher level technicians, however, enroll less than 1000 students intotal, about 11percent o f enrollment inASET programs and only 2 percent o ftertiary enrollment. - Figure 24. Graduates of appliedscience, engineering and technology programs, 2005-2006 PhD(BAC+10) DEADESS(BAC+6) Engineer(BAC+5) L Masters (BACI-4) DEUG&BTS(BAC+2) 0 100 200 300 400 500 600 700 800 900 Number of graduates I Source: World Bankanalysis of MENdata. Curriculum overload i s evident at the tertiary level as well. InASET programs, students normally attend 40 hours per week o f formal lectures and lab work; this i s well over the average o f 26-30 hours observed inmost o fthe world. Although 16 hours are supposed to be for experimental/practical work, there i s little o fthis due to the dilapidated conditions o f laboratories and workshops and materials. The most common method o f teaching i s lecture, with no written materials. Students have no time for project work, personal study or library work. The legal obligation for university teachers i s only 5 hours a week, an unusually low work load, the rationale for which i s the need for them to devote 15-20hours to research. Inpractice, there is no research work done, and faculty members either teach supplementary hours, paid for by universities, and/or inprivate 50 institutions. Supplementary teaching is a means to addto teacher earnings, and now exceeds official teaching hours by a large margin. This discussed further inthe chapter on costs and financing. Apart from the highcosts this generates, the practice also has perverse effects on teaching quality with little time left for preparation and evaluation. Faculty: The average age o fteaching staff inuniversities is 55. Again, as inTVET, institutions a hiringfreeze on civil servants, inforce for almost two decades (except for priority sectors such as primaryeducation and health) has created this crisis situation, which threatens the very foundation o f the university system. There are no venues for faculty development. Many teachers try, on their own initiative, to secure research projects incollaboration with foreign universities. LearningResources: The quality o f libraries and laboratories i s poor, where they exist at all. Most o fthe five regional universities have virtually nothing. Libraries have not had major acquisitions for more thanten years, ICT infrastructure is either very poor or non- existent, and access to the internet i s slow andunreliable. For applied science and technology courses, the conditions are degraded -there i s little or no equipment or supplies inlaboratories and workshops. Inmost cases, there are no qualified laboratory technicians to repair the equipment or support the practical experiential component o fthe program. Buildings are dilapidated; the University o f Toliara runs the majority o f its courses intemporary structures built for construction workers three decades ago. There are some exceptions to this rule, including ISTs and some quasi-independent bodies withinuniversities. Examplesofthese includeIHSM; ENS,Laboratoire deBiochimie Fondamentale et Applique'e. These organizations are distinguishedby their ability to raise resources, utilize them for improving learning, andmanage their facilities. Priorities for reform: The extremely degraded state o f universities, the cumulative effect o f years o f neglect, means that the needs are enormous. Careful prioritization is required, primarilybecauseresources will be limitedinthe mediumterm. The first priority is to select courses and disciplines, at the undergraduate level, that are important for the economic development o f the country. Courses inapplied sciences, engineering and technology, teacher training, health, communications, economics and managementibusiness studies would be appropriate choices. The second i s to expand the provision o fthe short-duration courses for training o fhigher level technicians, possibly through the creation o f new ISTs indifferent regions, or by enabling universities to offer similar courses withnewarrangements for quality control, employer participation and governance. The thirdpriority reform to improve relevance and quality is to accelerate the introduction o fthe move towards the LMD ina structured manner, targeting specific priority courses at the undergraduate level. This reform, supported by adequate funding for course development, faculty development and additional infrastructure, I C T and materials, would enable revision o f curriculum and teaching methods, including introduction o f generic employability skills across courses. Itwould also vastly improve student flow and internal efficiency. A variety o fmethods have beentried inEuropean countries, including inthe EUaccession countries, some o fwhich may be more relevant to Madagascar (Box 3). 51 ox 3. Strategies for shiftingto LMDin selectedEuropeancountries orway In2003, the Bachelor-Masterstructurewas introducedby law with a specification ofgeneral guidelines for the designofnew study programsand degrees. There is atransition phaseuntil2005, andthereafterall study programs have to be converted. At the universitiesthe boardsare often involved indecision-makingabout the new study programs. etherlands In2002, the newhigher educationlaw establishedthatthe "hogescholen" (colleges andtheir equivalents)as of2002/03 hadto convert their old study programsto correspondwith the new Bachelor-Masterstructures within two years. Newly developedstudy programshadto follow the Bachelor-Masterstructure, while the conversion of existing study programs i s regulatedintothe new structure until2007 as a discretionaryclause. The number ofBachelor andMaster study programsgreatly increasedsince the introduction ofthe higher education law of2002. .ustria With the university law of2002, Austrian universitiesbecame legally independentand are now able to decide themselves about the conversionof existing study programs into the gradedstructure. Some subjects have already completely convertedto the Bachelor-Mastermodel (especially inI T andthe technical disciplines), while the conversioninlaw, theology and the humanitiesand cultural disciplinesespecially i s slow. rance Basedon several ministerialdecrees of spring 2002, the implementationprocess of Bachelor and Master study programstook place inchronologically consecutiveregional waves: + 1stwave 2003 wave to 2006 at 23 universities; +++4th wave 2004 to 2007 at 32 universities; 2nd 3rd wave 2005 to 2008 at 16universities; wave 2006 to 2009 at 17universities. The lengthofthe waves correspondsto the four-year contract regional universities have with the Ministry of Education, which is the basis for negotiatingthe budget. All new study programswill frst be developedat faculty level and thenhave to be passedby the Administration Council andthe Higher EducationCouncil of each institution beforebeing submittec to the Ministryfor approval. .ungary A decree was issued in2004 for the conversionprocess to be followed by a higher educationlaw at the beginning of2005. Within the fiamework ofnational working groups, `educationand competences requirements' are defmed, on the basis ofwhich concrete study programscanbe developed. From2006/2007 comprehensive Bachelorstudy programsare to be set up at all Hungarian universities.The Master study programsare similarly to be developedat a later stage. lbania By way of sub-legalacts, the organizationofthe f r s t cycle studies insome pilot brancheskoursesof study has beenfinalized inaccordance with the "Bologna Declaration". With the signing ofthe "Bologna Declaration" inSeptember 2003, its application hasbeen effective incertainpilot coursesofstudy duringthe academic year 2004-2005 in6 higher schools. Working teams have been set up inorder to oversee the system. mrce: Alesi et al, 2005. and BolognaProcessNational Report on Albania 2005. 52 Inadditionto the LMDreform, faculty developmentincritical areas canbeorganized through multi-day seminars and workshops. These could focus on general capacity buildingtopics such as research methods, ICT utilization for instruction and research, teaching methods and improvement, andpresentations o f overviews o f state-of-the-art researchand literature inspecific priority fields. Further, a program of staff development can be established to encourage students to obtain master's and PhDs inrequired disciplines, to fillthe requiremento fteachers. These would have to be complemented with changes infaculty recruitment andremuneration, which are discussed further inthis report. Madagascarcould also consider makinggreater useof partnershipswith foreign universities. At the moment, there are a few isolated cases o f collaboration, including those that leadto joint degrees. Many developing countries inAsia and Anglophone Africa are systematically using suchpartnerships to buildthe capacity ofpublic and private institutions inselected areas and to create models o f excellence with new curriculum, teaching and assessment methods, student-centered and resource-based learning, and modern methods o f management. Examples o fpartnerships range from franchising andtwinningarrangements,joint degrees andbranch campuses fully owned by foreign universities (Bashir, 2007). The range o fpossiblepartnersis also increasing, withhighquality institutions indeveloping countries competingwith universities from the advanced countries. International experience shows that strong government commitment and leadership, as well as sound technical analysis, i s required to maximize the benefits from such partnerships andto avoid the risk o f "fly-by-night" operators. A clear policy, sound regulatory framework for foreign partners and quality assurance and accreditation measures are essential pre-requisites to reduce risks to both sides. Finally, as inthe other sub-sectors, reforms implementedby institutions have the greatest chance o f success. These would require innovative finding mechanisms, such as competitive grants, and changes to the governance structure o f universities, which are discussed later inthis report. Teacher training, an over-arching reform priority. Teachers are the essential component of any strategy to improveeducational quality. The training and professional development o fteachers should be one o fthe main priorities ofthe post-basic education reform inMadagascar, cutting across post-basic education sub-sectors. Because o fthe specificity of TVET, the feasibility o f expanding INFORto train TVET instructors should be evaluated. This section will focus on SSE teachers and university faculty. The aging o fthe teaching force constitutes both a challenge and an opportunity - a challenge because additional numberswill be required soon, and an opportunity because the whole teaching force can be renewed over a period o f 15 years, provided appropriate strategies are chosen. The precise number o f new teachers required per year will depend on the scale o f the expansion o fpost-basic education, but under all scenarios thousands o f teachers will need to be trained over the next ten years. Specific reformpriorities for SSEand for tertiary institutions are as follows: 53 Senior secondaryteachers. Various strategies will have to be developed, taking into account the availability o f institutions andthe level o fresources. Given limited institutional training capacity, includingthe low number o f current teacher educators, it i s best to consider a two-pronged strategy: 0 Beginwith in-service teacher developmentprograms, which are linkedto reforms implementedat the school level. The focus o f such programs should be to improve classroom instruction, familiarize teachers with new materials and teaching methods, and support teachers inimplementing them. Such methods are not appropriate for deepening knowledge o f subject matter. School-based instructional improvement could therefore be complementedby additional courses for enhance subject mastery, delivered duringholidays. 0 Reform o fpre-service educationhas to addressthe major question o fwhether there should be an integratedteacher education degree, or an additional teacher certification after a bachelor's or master's degree. InMadagascar's context, the latter is probably the best option given the need to rapidly increase the supply o f secondary school teachers. To get new teachers into classrooms as quickly as possible, the designo f teacher certification programs could combine periods o f teaching with periods o f study. Universities' capacity to train additional SSE teachers rapidly will remain constrained. Encouraging the growth o fprivate teacher training institutions, with accredited programs, i s one way to expand supply. The government could support this development through an appropriate regulatory framework, public subsidies for certain categories o f students (e.g., incertain disciplines or for certainregions), and support for curriculum and material development. Another promising avenue i s the use o f open anddistance education, which i s beingextensively used inmany African countries. Finally, a serious effort must be made to reviewthe training o f teacher educators and to expand their supply. Indeveloping strategies, itwouldbestto take the proposed expansion ofjunior secondary education into account, as well as the intended reform o fjunior secondary curriculum. The MENproposes to do a detailed study for planningteacher training injunior secondary education, and this could be extendedto SSE. The study should do the following: (i) estimate the annualized need for teachers, by subject, particularly for science, math and language; (ii) designteacher competencies for each category o f teacher; (iii)develop alternative options for pre-service and in-service teacher education and training, taking into account costs, capacity buildingrequirements, andability to scale upthrough the private sector and/or open and distance learning; and (iv) evaluate teacher compensation and career development opportunities. University Faculty. One o fthe key challenges inpost-basic reform i s the need to develop a dynamic faculty corps who will train new teachers and leadresearch inareas critical to Madagascar's growth economy. Today, many o f Madagascar's university professors are nearing retirement age, creating a window o f opportunity to restructure the faculty corps to meet those needs. 54 Recruitment of newfaculty Although exact numberswill have to be estimated, Madagascar i s expected to need several hundrednew, highquality professors over the next few years. New faculty should be PhD holders inhighpriority disciplines, with a long academic life ahead o f them. A clear recruitment strategy mustbe developed, to ensure that newly recruited faculty meets these requirements. Before launching a major effort to recruit, the Ministry should consider the following critical issues: 0 Method o f allocating positions andpriority areas 0 Quality expectations 0 Additional training for non-PhD holders 0 Contract versus regular appointments Method of docatingpositions. Inorder to re-orient university programs, continuationo f the existing methodo f"automatic allocations" based on unmanaged enrollment growth or university decisions alone should be avoided. Priorities need to be set bothby universities andthe Ministrytaking into account the priority fields of expansion set by the government, based on labor market/economic development needs. The selection o f priority fields should be done by the Ministry,which is the major funder andwhich should steer the universities towards the economic development needs o f the country. The Ministry's criteria for selection ofpriority fields should be based on labor market needs while universities can be invitedto participate by identifyinga few priority fields with ajustification for each. The exact rules for reviewing proposals and allocating positions would need to be developed. Quality expectations. The ideal i s to insist that all new faculty have PhDs, butthis may not be possible inthe short run. Those without should be sent immediately for training for the PhD after beinghired. Those positions should, however, be conditional on completing the PhD inthree years at an approved program. Since domestic research capacity i s limited, the possibility o f Ph.D. training abroad inlow cost locations should be investigated. Since Madagascar is a member of SADC, SouthAfiica is an attractive option but opportunities are also available inAsian countries. Bilateral programs with European countries should also be explored. The Ministry's main role would be identify potential approved programs, secure fundingand agreements, develop regulations and facilitate the rapid training o f young recruits. Age restrictions. The majority o f people should be under forty years o f age with most o f themfreshPhDs intheir late 20s or earlythirties. This would require setting age caps on newrecruitment andthe methodsfor doing this should be investigated. Contract versus regular appointments. The Ministry should consider recruiting all new faculty on some kindo f contract employment with renewal and salary increases contingent o f demonstrated highquality performance. Contracts could be set for an initial period o f three years. Inorder to attract good faculty, and to reflect the lower level 55 of security and higher performance expectations, the original hiringandfirst renewal should be based on higher average salary payments. Further renewals could leadto promotion inrank as well as higherthan average salary increase. Faculty whose positions were not renewedwould not be able to continue after a grace period. Once the broad strategy is adopted, the Ministry needs to prepare detailed regulations andthe process must be implementedtransparently. However, changes to the method o fpaying supplementary hours to existing faculty need to be introduced inorder to ensure that contract teachers are being rewarded for higher performance andincentives are not skewed. Faculty development A strategy for faculty development needsto be developed, taking into account both immediate short-term needs and longer term faculty development. Inorder to address short term needs, a series o f workshops could be organized by the Ministryor one o fthe universities, focusing on upgrading content knowledge incritical areas, improving teaching andlearning(including use o f newmaterials andthe Internet), methods for outcome assessment and research methods to keep up with developments inthe fields o f specialization. While implementation could be decentralized to the universities, the planningand funding is best undertaken centrally inorder to make the best use of resources. Universities could identify lists o fpotential speakers andpresenters, with the Ministryfacilitating the process. Long term faculty development should include the provision of research support. Given the needto concentrate fundingon instruction, the amount allocatedfor research support has to be carefully targeted and monitored. Priority should be givento young scholars supplementedby competitive fundingfor other research. The focus would be initially on applied research. 56 5. ACCESSAND EQUITY INPOST-BASICEDUCATION Madagascar's urgentpriority i s to improve the quality and relevance o f its post-basic education. However, it also has to put inplace strategies to expand post-basic education, for several reasons. First, increasing the enrollment ratio inpost-basic education from its current low levels i s a strategic imperative for Madagascar. It is requiredto raise the educational attainment o f its workforce over the next 15-20 years andcreate a threshold ofhumancapital to participate inthe knowledge economy. Second, there is a needto ensure greater participation from low income groups, which are currently virtually excluded from senior secondary andtertiary education. Expanding educational opportunities for the poor will have a tremendous impact on raising incomes and social mobility and cohesion. Another aspect o f equity inMadagascar's context is the regional dimension, especially as promoting regional andrural development i s one o fthe pillars o f the MAP. Third, the government can illafford to ignore the pressure o f increasing numbers generated within the education system, by a combination o f demographic growth and higher completion rates inbasic education. Unless measures to increase access are put inplace soon, there i s a risk that scarce resources will be absorbed by expanding the existingwasteful and inefficient system. The pressure to provide places to thousands o f additional studentseach year cannot be ignoredby political authorities. Instead o f adopting ad hoc measures that can undercut the reforms to improve quality and governance, it is betterto use the coming years to diversifying access and enhancing equity. Policies to improve access and equity can relate to increasingpublic provision, providing public funding to stimulate demand and offset private costs as well as makinggreater use o fnew delivery systems andthe private sector. This chapter considers each o fthese factors inturn. ForecastDemographicBoomto IncreaseDemandfor Post-Basic Education Between2005 and 2015, the age cohorts corresponding to post-basic education, 15-24 year olds, will grow by about 3.3 percent per year. The growth rate will slow downto about 2.4 percent per year between2015 and 2025. Between 2005 and2025, the number o f 15-19 year olds will increase by 60 percent from approximately 2 millionto 3.2 million,; andthe number o f 20-24 year olds by 76 percent from 1.7 million to 2.8 million. Hence, provision must be made to accommodate thousands more students even at current participationrates and inefficiency indicators. An improvement inthe latter would lead to automatically raise the number o f students who wish to go to higher levels o f education. For example, a rise inthe pass rate o fthe baccalaurkat would increase the number o f eligible candidates for higher education. The former may be desirable in 57 itself, yet student flow into universities mustbe managed without denying them opportunities for further learning. IncreasingPublicProvision Madagascar's main constraint inincreasing public provision will be the availability o f public resources. Whatever alternatives are found, public provision will continue to be necessary inrural areas inSSE and TVET, and also intertiary level courses. One way to increase provisionwith limitedresources i s to seek ways to reduce unit costs. Measures to reduce the cost o f inputs into the educational process (such as construction or equipment) are important butthey are not the only way. The cost o fprovision o f a school can be raised because o f an over-specialized curriculum, increasingthe requirements in teachers and rooms. Further,unit costs (of a graduate) can also be substantially increased due to highlevels o f drop out, repetition and failure inthe system. Hence, the reforms o f structure, curriculum, teachingpractices and assessmentmethods discussed inthe previous chapter are necessary not only to enhance relevance and quality. They can contribute significantly to increasingaccess, by reducing the cost o f provision andimprovingthe internal efficiency o fthe system. One implication o fthis is that any new public provision should be integrally linkedto phasinginthe new curriculum structures and quality improvement measures and to improving internal efficiency. The government could take a decision, for example, to establish new public secondary schools only with new curriculum andpedagogic models. This would also be aligned withthe strategy to implementreforms using a school-based model. Pedagogical choices can greatly influence costs o f infrastructure and equipment, which are more important at higher levels o f education than inprimaryeducation. The cost o f a laboratory can increase by a factor o f 5 depending on how experiments are conducted. A demonstration experiment by a teacher i s the lowest cost option (but may have limited pedagogical value). Adding computerized equipment for a teacher will add to costs, but not significantly. However, providing equipment and space for small groups o f students to perform their own experiments greatly raises costs.l4Decisions to provide integrated or separate laboratories for the sciences will also greatly affect costs. Hence, rationalization inthe provision o f expensive facilities and ensuring their full utilization i s an imperative, especially inSSE and TVET. One possibility i s to group SSE schools by "series" andprovide laboratories only for those studyingthe science series to benefit from economies o f scale. Another is to create such facilities inselected l4Basedon informalestimatescollectedinthe context ofthe WorldBank's Secondary EducationinAfrica regionalstudy. A cost of a chemistry laboratory for 40 students where a teacher does demonstration experimentswould be about 10,000 Euros. Ifstudents are divided into 13 groups of 3 with each group providedwithequipment, the cost wouldbe 45,000 Euros. Providingadditional computerizedequipmentto teachers andstudents would raise the costto 55,000 Euros. Costs ofphysics andbiologylabs are estimated to behigher. 58 SSE schools and enable a network o f schools to access them. Suchmodels are more likely to work inurbanareasthaninrural areas, where low population density means that newmodels have to be developed. A variety o fmodels would probably be required, givenMadagascar's diversity and size. Inall cases, the designand implementation challenges demand careful management, experimentation andevaluation before upscaling. Inthe caseo ftertiary education, universitiescould be selected to specialize inparticular disciplines (especially inscience and technology) to ensure economies o f scale. Inorder to promoteregionalequity and greater accessto under-served populations, where public provision would be necessary (sometimes at higher thanaverage cost, due to low density populations), explicit criteria need to be built into the planningand budgeting cycle. At the moment, there are no established planningand allocation criteria. The Ministry could effectively adapt the model developedfor the provision o fprimary schools which balances the needto provide universal access to grades 1-5 within2 kmo f every village withthe needto provide more grades 6 and7 inthe newprimarycycle. T hemodel involves atwo stage allocationprocess. Inthe first stage, the Ministry develops a financial envelope for each district, using a weighted formula taking into account the primaryschool-age population, population densityandthe enrollment ratio. Inthe second stage, each district determines allocation by communes/communities taking into account two priorities: providing a school to villages without any facility and ensuring that schools with incomplete cycles are upgraded. Demand-SideInterventions Between 1960 and 1972, Madagascar had a scholarship program to help students from poor families attend school. Since then there have been no systematic government programs in school education, although tertiary level students continue to get scholarships. While scholarships were theoretically destined to help the neediest students, inpractice they have become an entitlement over the past decade. Today almost all students enrolled in a public tertiary education institution receive a government scholarship. The proportion o f beneficiaries rose from 52 percent in 1993 to 83 percent in2006. The current situation accentuates inequalitiesinaccess to post-basic provision, by giving scholarships to all tertiary level students, almost all o f whom come from the richest 20 percent o f families inMadagascar, while providing none at lower levels. Designing an effective scholarship program to promote participation o fpoor students in SSE and TVET should be a highpriority. A critical issue o fthe designis howto determine transparent eligibility criteria. Inlow-income agricultural countries, determining family income i s not easy. One possibility i s to target students from rural areas or from specific districts with low enrollment ratios, since poverty inMadagascar i s geographically localized. Targeting girls may also be an option; however, one study found that selecting just girls whenbothboys andgirls inpoor families cannot access secondary education 59 posedproblems for15the family. Another important issue i s to lower administration and supervisioncosts. The university scholarship program meets neither equity nor efficiency criteria. First, students enrolled inprivate tertiary education institutions are not eligible for government scholarships and there i s no student loan system in Madagascar. This creates a discriminatory situation from an equity viewpoint and represents a serious constraint to the expansion of the private tertiary education sector which the Government supposedly wants to encourage. Second, although scholarships are provided to all students, the absolute amounts are low as scarce resources are spread thinly. Moreover, there are significant differences in the way each institution, or sometimes even each school / institute within a university, applies the rule. At the University o f Antsiranana, for example, first-year students get a scholarship in the Polytechnic and the Technical Teacher Training School, but only 40 percent o f incoming students get a scholarship at the Faculty o f Science. Students who repeat the year keep only half o f the scholarship, but at the University o fAntananarivo they keep the full scholarship. Studentsenrolled in the new Business Administration Institute are not eligible for scholarships. At the ISTs, students who do not maintain a good attendance record lose their scholarship. Also, the proportion varies significantly fiom one university to the other, with a relative low o f 59 percent at the University o f Mahajanga and a high of 90 percent at the University o f Toamasina. There i s considerable international experience inthe design and implementation o f student aid programs at the tertiary level andthese lessons should be usedindeciding on appropriate options. Both scholarships and loans can be considered, though experience shows that students from the poorest backgrounds cannot rely on loans alone but also require additional fwnding inthe form o f grants. Simplifying the administration o f loans is crucial, including establishing easily verifiable eligibility criteria and reducing the documentationand collateral required for application. Ensuringa highlevel o f collection i s crucial for the long-term sustainability o fthe scheme. The Ministryo fEducationcould review the student aid policy along the following lines: 0 Assess whether current amounts are sufficient for those students who are entirely dependent on the scholarship as their only source o f income, and increase the amounts as needed 0 Define more strict need-related eligibility criteria to ensure proper targeting o f the limitedfinancial aid resources l5 "Feasibility Study on Conditional CashTransfers inMadagascar". World BankConsultantreport. November 2005. The study looked at the U S Ambassador's Girls' Scholarship Program, sponsoredby the USgovernment inMadagascar. The programhas existedfor six years andoperatedinall six Regions. Roughly 1,000 girls benefit from this program and get abursary of 100dollars per year (10 dollars each month during the schoolyear). The money is only meantto support the school expensesfor the girl concernedandupto 30 percent ofthe money canbe usedon food. This rigidity ofthe program and close supervisionentailedconsiderablecosts andtime. (World Bank, 2007a). 60 0 Link the prospects for keeping a scholarship on a continuous basis to the academic performance o f students 0 Undertake a feasibility study for the establishment o f a student loan system 0 Assess the feasibility o f replacing scholarships for first-year students with loans that could be forgiven at the end o f the year for those students who pass onto second year 0 Evaluate the possibility o f granting scholarships to needy, academically qualified students who want to enroll inan accredited private tertiary education institution Open and DistanceLearning Systems l6 Open and Distance Learning (ODL) at boththe school and tertiary level can greatly expand access by introducing flexibility inlearningfor those who are unable to continue long duration studies or those who wishto resume studies, as well as by reducing costs o f delivery. The latter is achieved through usingdifferent settings andthrough use o fpart- time teachers as tutors. Madagascar has some experience inusing distance learningat the tertiary level (CENTEMAD), which got off to a promising start but now is ina state o f decline. Not only have enrollments halvedover the last ten years, but the cost o f producing a graduate i s estimated to be higher than inface-to-face learningdue to high drop out and repetitionrates. Better designed programs are now being launched in primary education (teacher training through radio) and injunior secondary education (open schools). InMadagascar's case, potentialtarget groups are notonly students butalso teachers, healthworkers and others where there i s a needto upgrade qualifications on a large scale and relatively quickly. There are three critical successfactors for using ODL systems. First, the course must be relevant and useful for the beneficiaries and leadto a meaningful qualificationor certificate, accepted by the education system andor employers. This means ensuring quality and equivalence with formal programs. Without this, programs runthe risk o f being seen as inferior education and will face poor demand. Second, to operate on a large scale (i.e. not as experimental or narrowly targeted programs) the business model must be based on the system becoming self-financing over a period o f a few years -this not only leads to sustainability but ensures that there is pressure on managers to reduce costs and be demand-oriented. The selection o f appropriate delivery mechanisms andtechnology platforms are critical. Third, a proper governance structure and professional management are required. Advances intechnology andthe operation o f large ODL programs inmany countries have made it possible to operate suchprograms inlow income countries with limited l6Theterms openlearninganddistanceeducation representapproachesthat focus onopeningaccessto education andtraining provision, freeing learners from the constraints o ftime andplace, and offering flexible learning opportunities to individuals and groups of learners. (UNESCO, 2002) 61 infrastructure. The availability o f learning resources at differentlevels, which can be procured off the shelf, licensed or as open source material, (often indifferent languages) has reduced one barrier -the highdevelopmental costs o f courses. Models operating in other countries can be adapted easily, paying attentionto the replicability o f the design features. School education: A variety o f approaches are available incorporating different types o f technology and delivery systems. Technology varies from correspondence, educational TV andradio, multi-media systems and internet-based systems. Delivery systems either focus on community-based models or school-based models, although the latter i s more appropriate for senior secondary education. The National Instituteo f Open Schooling inIndia (NIOS), the largest open school system inthe world enrolling 2 million students,providesinsightsfor designingand delivering programs. Its mainmission i s to provide education and training to school drop outs and marginalized groups through a flexible system o f open schooling that is an alternative to formal secondary education. Figure25 illustrates the structure o fNIOS' learning system. NIOS stays flexible by identifying the needs of a given student group, designing interactive curriculum targeted to those needs, evaluating student learning, and feeding evaluation back into curriculum design, to further refine the curriculum. Figure 25. NIOS process for learning system development Prt+durtitriiof Uuiti- Iclriitificntion of <'urriculum I'lanning llrdia and Self- Needs lnstructianaf - Radio broadcast - 'Telecast - Internet-bared - Tclr-confrrenciog - Student Certifrcaliun Source: Adaptedfrom NIOS website (www.nos.org). While the school's early focus was to provide secondary level education, it has extended its range from elementary to senior secondary levels, both academic and vocational. It 62 now operates through ten regional centers and 3000 study centers inIndiaand abroad, providing education insix languages with plansto expand to all 18 official languages. (Box 4). Box 4. Main Features of the NationalInstituteof Open School, India Flexible structure. NIOS provides flexibility in the choice o f subjectslcourses, place o f learning, and transfer o f credits from CBSE and State Open Schools to enable the learner's continuation in studies. A learner is given as many as nine chances to appear in public examinations spread over a period o f five years. The credits gained are accumulated till the learner clears the required number o f credits for certification. Variety of learning strategies. The open schooling programs o f NIOS are a mix o f traditional system o f face-to-face learning with substantial non-traditional inputs such as well designed self-instructional materials, audio-video programs (in both broadcast and non-broadcast modes), video- conferencingheleconferencing, films and audio programs covering curricular areas, counseling by tutors during Personal Contact Programs and assessment through Tutor Marked Assignments. In addition, curriculum based audio and video programs in Science, Mathematics, Social Science, Hindi, English, etc., for Secondary, Senior Secondary and Vocational Education courses have also been developed for use by learners. The Secondary Education course material o f NIOS is available both in print form and on the Internet for use by other students and interested learners. A priced C D version is also available. SeZf$nancing. The NOIS which received funding from the Government o f India and technical assistance fiom the Commonwealth o f Learning is now self-financing, relying on student fees. The printedmaterials published by NIOS for the students are not priced. Their production cost is built into the student fee structure. Source: Prasad. 2007. Apart from education for school children, the use o fODL for teacher training has now become widespread. Primary school teachers inBrazilwithout pre-service qualifications are provided training through the national distance education system, PROFORMACAO. The program combines self-study and bi-weekly workshops usingprint- based and video materials. Tertiary level: Worldwide, ODL programs are the most popular at the tertiary level, where students are able to engage inself-directed learningto a greater extent. Following the success o fthe OpenUniversityo fBritain, many countries (includingdeveloping countries) have followed the model of a single mode university usingintegrated multimedia systems. The creationo f an open universityor modern ODL programs inexisting universities is under active consideration inMadagascar. A new initiative to provide distance education through the Francophone UniversitiesAgency is being discussed. Feasibility studies should be undertakento decide on the programs, learners, deliverymechanisms, technology platforms and businessmodel. Itmay be appropriate to start programs in areas where delivery can be cost-effective, e.g. business studies, MBA, languages, accounting etc. Various studieshavehighlighted the ten characteristics o f successful OpenUniversities and the options considered inMadagascar should be evaluated against these criteria (Box 5). 63 Box 5. Ten characteristics of successfulopen universities 1. Organizationalmission e Clarity o f objectives e Communicated to the public at large 0 Strong politicalbacking 2. Programsand coursecurriculum e Should enable students to use their learning for career and social mobility e Ensure program and curriculum equivalence or validation by the education systedemployers 3. Teaching strategies and techniques 0 Largely determinedby the course curriculum, economics and the availability o f delivery vehicles e Science andtechnology courses will require laboratories and workshops for students to performhands-on tasks 0 Technology should not exclude groups that may not have access (e.g. television and computer-based learning systems may not be widely available) 1. Learning materialsand resources 0 The most important element inanopen learning system e Choices regardingthe process o f development are critical (e.g. in-house and centralized course creation, development and production processes; dispersal o f various components to institutional and/or commercial agents; or acquisition o fready made learning materials) Acquisition o f adaptation o fmaterials is becoming cost-effective due to high cost o f course development and variety o f specialized skills required 0 Ownership and quality should rest with delivering institution to ensure accountability 5, Communicationinteraction 0 Effective and timely communication between student and institution on information, counseling, advice on courses and programs, on tuition, examinations etc Students identify strongly with their school, increasing retention 6. Local support systems for learners e Provide access to tutodmentor, library(and labs for science andtechnology courses) and opportunities for interactionwith other students 7. Delivery systems 0 Mechanisms must be established to have the course inthe hands or screens o fthe learner on time and as previously informed or scheduled 0 Use o fthe public broadcast media, the electronic highway or postal services has to be pre-arranged long before launching B. Tutorial assistance e Careful selection, training and monitoringo f course tutors e Assessment ofworkload where tutors are part-time 9. Staffing Differentskillmix fYomthe faculty ofatraditional tertiary institution e Less full-time academics andmore administrative staff e Traditional academicsneedtraining before they can become effective ODL instructors LO. Managementand administration e Committed leadership, effective management, sensible and efficient administration Source: Adapted from UNESCO, 2002. 64 ExpandingPrivate Sector Provi~ion'~ The privatesector has grown rapidly since 1996, with the most rapid growth at the senior secondary level. In2006-07, the share o fprivate sector inSSE was 54 percent, compared to 39 percent at JSE, and 64 percent inTVET. The private sector share inhigher education enrollment was close to 8 percent (Figures26a and 26b). Private institutions are heavily concentrated ina few districts, notably around the capital of Antananarivo. However, at the senior secondary level, there i s muchgreater regional dispersion. Inall regions, they serve mostly urbanpopulations. Seventy percent o f JSE institutions (and a similar share of students) are located inurban areas. Almost 85 percent of private SSE institutions are inurbanareas (Figure 26). Figure26. Private education in Madagascar 26b. Percentof students enrolledinprivate 26a. Enrollmentgrowth in private institutions institutions, 2006-07 800 80 .g 700 70 600 60 6 b 500 5z 50 1 ill 400 40 w' 2 1300 30 40% 200 20 ; X%1 ci 100 10 ; O E Primaty JSE SSE HE TVFT ~ 1 Source: MEN. Note: TVET data is for 2005. " Thissectioncoversbothschooleducationandtertiaryeducation.However,moredataareavailableon secondary education both from the MEN official statistics and fkom a study financedjointly by World Bank and Agence Francaise de Developpement (d'Aiglepierre, 2008). The study covered school education, for which a survey o fjunior secondary schools was conducted. However, as most schools have both JSE and SSE, the results are broadly indicative o fprivate secondary education. There has beenno detailed study o f private tertiary Institutions. 65 Figure 27. Share of private sector in secondary education institutions, by region Source: D'Aiglepierre, 2008 Despitethese impressive shares inenrollment, the number o fprivate institutions i s relatively few - 332 SSE schools, 350 TVET schools and only 21 tertiary level institutions. This partly reflects the overall small enrollment size inthese sub-sectors. By contrast, there are 5,300 primaryschools andover 1,100 junior secondary schools in the private sector, indicating that there i s a potential for growth if demand exists and conditions for supply are created. Programs: Most establishments inschool education offer several levels o f education from pre-primaryto SSE, although technical education i s rarely offered. Formally, there i s no difference inthe academic programs in school education between public and private institutions. Madagascar has a single uniquecurriculum, apart from differences in religious instructionprovided inthose affiliated to various churches. One appeal o fthe private sector is that most institutions are able to provide better teaching inFrench. This i s the language of instruction inpublic schools as well (from grade 3), but most teachers are unable to communicate inFrench." As inmany other countries, private TVET concentrates on lower-cost fields o f study orientedtowards the services. Private higher education institutions concentrate onjob-oriented programs at the Bat+% level ina numberof fields. l8 Underthe new EFA program, Malagasywill be the language of instruction from grades 1to 5. 66 Religious affiliation: Inschool education, the private sector consists o f a variety o f religious institutions and some lay schools. The most important are the Catholic schools, accounting for 44 percent o f students, followed by non-affiliated lay schools, accounting for 16 percent. Protestant schools are 7 percent and Lutheran accounts for 3 percent o f schools (Figure 28). Figure 28. Distributionof privateschool enrollmentby type of institution,2005-06 Catholic, 44.6% Lay, 16 0% I Source: D'Aiglepierre, 2008. School size: Private JSE and SSE schools tend to be smaller than public institutions. Against an average enrollment size o f 342 and 477 inpublic JSE and SSE, respectively, the size o fprivate JSE and SSE institutions was 212 and 182, respectively. Because both private andpublic secondary schools tend to be located inurban areas, competition has led to a reduction insize. Teachers: Private schools also have significantly lower pupil-teacher ratios; 23 at JSE (compared to 32 inpublic) and 16 in SSE (compared to 20 inpublic). However, most teachers are temporary, usually drawn fiom public schools and teach inmultiple institutions. Teachers tend to have higher qualifications butmost do not have teacher training. They also receive significantly less in-service training thantheir public counterparts. 19 The greater use o fpolyvalent teachers and longer hours o fteaching inprivate schools represents one important contrast with government schools. Over 50 percent of teachers inprivate schools teachmorethanone subject, comparedto lessthan 40 percent inpublic schools, but public school teachers teach more classes. Private school teachers work on average 10hours more than their public school counterparts. Almost forty percent o f private school teachers work inmore than one school. As a result, althoughpublic l9Basedonthe findings ftom the WorldBank-AFDstudyand surveyresults. 67 teachers' salaries are about 1.5 times higher thanthose of private school teachers, total monthly earnings are about comparable. Demandfor privateeducation:2o Who chooses private schools and for what reason? As stated earlier, private education inMadagascar i s essentially the same as public education interms ofcurriculumandlanguage o finstitutions, unlike inother countries. The survey found that parents inprivate school tendto be more educated and on average their family income is higher at 25 percent. However, this i s mainly inurban areas. Inrural areas, there do not seemto be significant differences inthe family income. The main difference i s inoccupation -private school families occupy senior positions inthe administrationor are businessmen and self-employed. The choice o f private schools i s sometimes made before grade 1particularly among richer families, but the majority seems to choose after grade 5. Almost two-thirds o f students switch from public to private schools after grade 5. About halfthe schools report selection exams. Cost is an important element for those choosing public schools. For those choosing private urbanschools, perceived quality o f teaching and infrastructure are important reasons. However, there may be other reasons; private schools offer longer hours of teaching (about 31-33 inprivate, comparedto 29 in public) and teacher absenteeism i s reportedly lower. Privatecosts: At JSE level, the annual cost is estimated to be between 1.8 to 2.8 times higherthanpublic education. Onaverage, at the JSE level, lay institutions are the most costly for families; an average requiredexpenditure o f about US$115, compared to US$ 75 inreligious institutions and US$40 inpublic.About one-fifths to one-half o f this is due to the costs at the beginning o fthe year, which seems to be the biggest hurdlefor parents. Examinationresults: The baccalaure'atpass rate inprivate senior secondary schools is similar to that ofpublic schools, butwith greater variability across schools. Public secondary schools have higher quality teachers and there is greater competition to enter them, allowing them to choose better students. Without data on student learning, however, it i s difficult to assess the relative performance ofpublic andprivate schools. There are few differences inexam pass rates betweenpublic and private schools. Only 50 percent o f students passthe JSE certificate inboth types o f schools. Constraintson growthof privateeducation: The recent survey o fprivate secondary schools revealed that ownership o f land and buildings is the most important factor in deciding the location o f a private secondary school. About two-thirds o fprivate secondary schools either own the landor have free use o f it (the landcould be by owned the proprietor or religious institutions). Purchasing o f land i s not easy, partly due to the cost but also because landtitles are not clear andrelated legal issues. Another important constraint is access to credit. The average capital requirementto start a privatejunior secondary school i s about 20 million Ariary (about US$ 1O,OOO), including average cost o f buildings, land and start-up costs. Almost all o f this i s financed by personal savings of the founder or contributions from religious institutions, parents or foreign patrons. The use o f credit from banks or micro finance institutions is negligible. Evenwhen they did 2oBasedonthe findings from the World Bank-AFDstudy andsurvey results. 68 take it, for most the loan size was less thanUS$2,500. Both these constraints - land and access and cost of credit -are common for all businesses. A variety ofpublic subsidiesare provided for private schools. Private schools receive five types oftransfers, whichare summarized inTable 3. The transfers lack clear objectives and are subject to arbitrary changes. This reflects a lack of a coherent policy framework for private education andcreates uncertainties for private operators. Examples of repeatedpolicy changes include: 0 Subsidiesfor teachers' salaries: a nominal amount o fU S $ 10per teacher is given to private school teachers with a certificate to teach. The policy underwentmany changes after its institutionin 1996. Itwas suspendedbetween2000 and 2002, taken up in2003, suspended in2004 and2005, andreinstated in2006. 0 School contracts: Provides funding for pedagogical activities to schools with an agreedcontract to deliver results. School contracts were suspended in2003 and re-instated in2006. The coverage i s very low. 0 School grantsfor primary private schools: Compensates for abolitionof fees and purchase school supplies. Institutedsince 2003. 0 Subsidy to national organizations ofprivate schools: Supports administrative costs. Has increasedbetween2000 and2006, but is very low. Intotal, the subsidiesto the private sector accountfor about 3 percent oftotal non- personnelrecurrent spending ofthe Ministry. This relatively small amount i s fragmented into different channels with little impact. There are no subsidiesfor private higher education institutions. Encourage 1. Teachers' Primary, JSE, teachers to 207000Ariary Teachers with certificate. 18,200 teachers Icontracts salary SSE obtain 1 teacher/y ear 1 Distributedby CISCO. certificate (US$lO) 2. School IPrimary, JSE,I Improve School development plan, Amounts vary approved by CISCO/ RegionalDirections. 270,000 3. School fee primary Free primary Ariary Schools with fees below US 4,300 schools reduction education /teacher/ yr $ 1per month 1 1 (US$ 135) Universal ftee 14. School grants 1 Primary 1 primary 1 `:le:: 1All private primary schools All primary education schools 5. Subsidy to private school All recognizednational organizations Primary' JSEy SSE To.s u ~ ~ O *5 cents per organizations o fprivate (Directions admlnlstratlve costs enrolled child schools (percentage o ftotal Nationales) transfers) Source:Adapted from d'Aiglepierre, 2008. 2. Amounts indollars are approximate usingan exchange rate of US$1=2000 Ariary. 69 Regulatoryframework The legal frameworkrecognizes the right of private education and private institutions are free to set fee levels and salariesofteachers.Private schools canbe establishedafter receiving three authorizations: (i) the school infrastructure satisfies minimumcriteria stated inthe rules (ii) the principalmeets qualificationcriteria and (iii) teaching personnel has the requisite qualifications at eachlevel. At the SSE the level, this means that the principal must have the teaching certificate for at least three years andthat teachers have completedthe first level of universitystudies (Bac +2). Applications to open a school i s usually submittedto the district head for primary schools, the regional headfor junior secondary schools and the national office for senior secondary schools (Office Nutionales de 1'Enseignement Prive` -ONEP) for senior secondary schools. Authorizations regarding the principal and teaching staffhave to be requested from the district or regional head. The regulatory framework at the school level appearsrelatively clear and simple. Authorizations for secondary schoolsare supposedto be givenin3 months. Nevertheless, about 12percent o f schoolsoperate without receiving formal approval, apparently becausetheir applications are rejected due to lack of information. Better communication ofthe proceduresandtraining of district and regional staff should help overcome such problems. Obligations of private schools include maintaining the legal documents, the student register and an annualreport to ONEP about student enrollment, teachers, financial data anduse of subsidies. However, there is no regular monitoring or assessment ofthe quality ofprivate schools. Incontrastto school education, bothinhigher educationandintechnicalhocational education, the policy and regulatory framework i s unclear and inconsistently applied. A request for opening a newprivate institutionrequires a visit to the premises and verificationthat norms are adheredto. A provisionalauthorization is givenfor 2 years, after which an evaluation is done and a permanentauthorization is given. However, there i s no accreditation although the institutions offer state approved programs. Inpractice, there are many delays inapproval by the Ministryof Education, causing institutions to seek approval from the Ministryof Labor, which also has the authority to approve. Inhigher education, two types ofrecognition are given: simpleauthority to openan institutionand "homologation" (approval). There is no accreditation or quality assurance system. However, since 2002, "homologation" hasbeensuspendedand since 2005, no newauthorization to openHE1hasbeengranted. The number ofinstitutions has stagnatedas a result, although the existing institutions continue to expand enrollments. The Ministryrecognizesthe needto update its proceduresfor recognition and to introduce accreditation and hasprepareddraft criteria, using World Bank funded technical assistance. However, action has beenpendingon these measures. Measuresto increase privateprovision:Usingthe private sector to expandprovision especially inurbanareas is a sensible policy choice, allowing the government to 70 concentrate its resources on improving access for underserved areas and groups. In school education, the existence of a reasonable regulatory framework means that this can advance fairly quickly. Effort should be focused on (i) clarifying andcommunicating the procedures (ii) rationalizing the subsidy programs for SSE (as well as JSE) and creating school development funds and/or scholarship programs with transparent eligibility criteria and well-designed implementationmechanisms and (iii) buildingcapacity at the central and local levels to implement the programs. InTVET andhigher education, priority shouldbe givento finalize and approve the procedures for recognition and accreditation. Further technical assistance will be required to design the institutional mechanisms and buildup capacity. A more detailed study o f private institutions inthese two sub-sectors, to identify additional constraints, should also be undertaken. 71 6. PARTNERSHIPSFOR GROWTH: INNOVATIONAND ON-THE-JOB TRAINING Despite a few outstanding examples, neitherMadagascar's tertiary institutions nor its firms have played a significant role inpromoting applied innovation or workforce development. As a result, Madagascaris failing to capitalize on its potential to increase productivity through development andmanufacture of higher value-add goods. This chapterwill describe and explore the expandedrole that tertiary institutions and private firms couldplay inmakingMadagascarmore productive. Organized by section, the chapterwill presenthow Madagascar ranks against other countries today (`Current status: global competitivenessand innovation'); what investments ininnovation and workforce development are today (`Current status: investments ininnovation and training'); andhow these investmentsmight be enhancedthrough public intervention (`Policy directions: investment ininnovation andworkforce development'). CurrentStatus: GlobalCompetitivenessandInnovation Madagascar'scomparativeposition. Madagascarranks very low oninternational indices of competitiveness andknowledge. The Global Competitiveness Index (GCI), which ranks countries on the conditions consideredessentialto economic growth, ranked Madagascar 118 out o f 131countries in2007.21This is not surprising initself, nor unusual incomparison to other low income countries insub-SaharanAfrica. Itdoes suggest that Madagascar's current tools for driving gains inproductivity are limited. However, change is possible. Madagascar's ranks 35`h on the time requiredto start a business,reflecting the progressthat Madagascarhas made insimplifying procedures since the last GCI rating in2005. Higher Educationand Training Low performanceon GCI. Madagascar's higher education and training systemis poor quality. The GCI is structured around a series of sub-indexesandpillars (Table 4). O f the pillars, Madagascarranks near-bottom on `higher education andtraining' (121)' trailed only by `financial market sophistication' (123). 21The GCIuses two types of data: (i) from the Executive Opinion Survey administeredby the WEF data and(ii) harddata. The former comprises qualitative information basedon subjective assessments; the latter relates to quantitativedata collectedfrom internationalorganizations.O fthe 113 variablesmaking up the index, approximatelytwo thirds come from the ExecutiveOpinion Survey, and one third comes from publicly available sources 72 2007-8 Overall (out of 131) 118 Sub-indexA: Basicrequirements 120 1st pillar: Institutions 93 2nd pillar: Infi-astructure 115 3rd pillar: Macroeconomic stability 118 4th pillar: Health and primary education 106 Sub-index B: Efficiencyenhancers 121 5th pillar: Higher education andtraining 121 6th Dillar: Goods market efficiencv 10.5 104 Sub-index C:Innovationand sophistication 94 1lthpillar:Business sophistication 104 12thpillar:Innovation 84 Source: World Economic Forum, 2008. Rankings withineach sub-index reveal the indicators that contribute to the extremely low ranking on higher education andtraining (Table 5). Madagascarranks poorly on secondary andtertiary enrollment rates, internet access inschools, the availability of specializedresearchand training services, the extent of staff training andthe quality of the overall educational system. The quality of math and science education, the quality of managementschools, and the availability of scientists and engineershave relatively higher rankings. 2007 Local availability o f specialized research andtraining 108 services Extent o f staff training 107 Quality o fthe educational system 101 r Quality Oualitv o fmath and science education 83 o fmanagement schools 74 I Quality ofmath and science education 83 Quality o f management schools 74 Source: World Economic Forum, 2008. 73 Innovation Higher performance on GCI. By contrast, Madagascar's innovationrankingi s better (84). The ranking i s due to relatively strong performance (below 100) on all innovation- related sub-indicators but one -the quality of scientific researchinstitutions (Table 6). These rankings suggest that Madagascarhas some innovationstrengths that it canbuild upon: university-industryresearchcollaboration, innovationcapacity, patenting, company spendingon R&D, availability of scientists and engineers, and government procurement of advancedtechnology. Quality o f scientific research institutions 106 Universitv-industrvresearchcollaboration 96 I Capacity for innovation Utilitypatents (harddata) Company spending on R&D Availability o f scientists and engineers 62 Government procurement o f advanced technology products Source: World Economic Forum, 2008. Relatively good performance on `Knowledge Economy Index'. Innovationindicators from the World Bank's Knowledge Economy Index reinforce the GCI conclusion that Madagascarhas innovation strengths that it can build upon. Figure29 shows Madagascar's perfonnance on innovation-related indicators, relative to SSA countries overall. 22 While FDIinflows andhigh-tech exports as percentageo fmanufacturing exports are low, science enrollment ratio, patents grantedby the UnitedStates Patents andTrademarksOffice (USPTO), andprivate sector spendingonresearchand development (R&D) are relativelyhigh. 22 The index uses 140 indicators to measure the performance ofcountries onthe four Knowledge Economy (KE)pillars: Economic Incentive andInstitutional Regime, Education, Innovation, andInformationand Communications Technologies. The index is the simple average o f the normalized country scores on key variables. The diagrams demonstrate comparativeperformance - thevariables are normalized on a scale ffom 0 to 10relevant to comparison groups. The normalizationprocedure canbe found on the Knowledge Assessment Methodology website. 74 Figure 29. Madagascar knowledge indicators -innovation systems FDIInflowsas % of GDP 10 Private Sector Spending on R8D Science and EngineeringEnrolment Ratio (%) High-TechExports as % of Manuf.Exports Science Enrolment Ratio I%) Patents Granted by USPTO Researchers in RBD Universly-CompanyResearch Collaboration Total Expendture for RBD as % of GDP Comparison Group: Africa Type: weighted Year: mostrecent (KAM 2007) Source: World BankKnowledgeAssessment Methodology(KAM)website (www.worldbank.org/kam) Incomparisonwith SouthAfrica andMauritius, two middle incomeAfrican countries, Figure30 show that Madagascar still does well onthe science enrollment ratio, the quality o f science andmath education, and private sector spendingon R& D. Figure 30. Select knowledge indicators Madagascar and middle income SADC - countries Madagascar, Mauritius. South Africa FDIInflows as % of GDP 10 Qualrty of Science and MathEducation Science and EngineeringEnrolment Ratio (%) Gross Tertiary EnrollmentRate Science EnrolmentRatio (%) Gross Secondary EnrollmentRate Total Expendture for RID as % of GDP PrivateSector Spendingon RID High-TechExports as % of Manuf,Exports Comparison Group: Africa Type: weighted Year: mostrecent ( M M 2007) Source:World BankKnowledgeAssessment Methodology(KAM)website (www.worldbank.or@am) Modest performance on firm-level innovation. Data from the Investment Climate Assessment (ICA) survey o f 2005 provide insights into innovation at the firm level inthe formal sector, reported inTable 7. These insights are complementary to those suggested by the GCI andKEIindices. 75 Madagascar's firms did not innovate on a significant scale. Spending on R&Dwas higher inMadagascar than inother low income SSA countries, at 0.4 percent o f sales. At the same time, only about a thirdof firms introduced newproductiontechnology, and less than 10percent had I S 0 certification. For over three-quarters o f firms, procuring new machinery -a less sophisticated approach to drivinginnovation - was the most important means o f acquiring new technology. Less than 7 percent of firms reportedother ways o f upgrading technologies, such as hiringnewtechnically qualified personnel, licensing technology, or usingturnkey projects and developing in-house technology. No firm reported acquiring technology from universities or public institutions (not reported in table). AVERAGE ALL 14 14 37 64 0.5 62 8 4 20 Benin 2004 3 4 62 0.6 64 6 2 19 Eritrea 2002 7 0.2 Ethiopia 2002 2 0.1 33 14 3 32 Kenya 2003 8 0.3 39 4 6 25 Madagascar 2005 7 8 37 66 0.4 77 7 2 7 Mali 2003 7 10 50 66 0.7 62 5 2 12 Mauritius 2005 28 24 62 72 2.3 73 6 4 13 Senegal 2003 6 15 75 3 2 16 South Akita 2003 42 23 61 89 0.5 25 8 11 39 Tanzania 2003 12 16 32 63 1.1 36 13 1 35 Uganda 2003 47 66 6 3 18 Zambia 2002 6 8 50 78 0.2 24 10 9 32 Source: Worl Bank, Enterprise surveys website (www.entemrisesurvevs.org) Insum, Madagascar has some goodbuildingblocks for innovation. These includestrong enrollment inrelatively good quality math and science education, a relatively high numbero fpatented innovations, and a relatively highlevelofprivate investmentinR&D (although at less than one percent, this level i s still very low when compared to R&D investments for firms inhighincome countries). At the same time, Malagasy firms struggle to translate innovationpotential into the development and sale o f higher-value goods and services. The `policy directions' section o f this chapter will explore ways that public intervention can drive more productiveresearch and development. 76 CurrentStatus: InvestmentsinInnovation and Training Innovation intertiary institutions. Madagascar has low levels o f innovation intertiary institutions, for two primary reasons. First, and as will be highlighted inthe following chapter, Madagascar devotes few public resources to R&D. Its 2007 expenditure for scientific researchwas 4 percent o f the $65.5M public education budget. Most visibly, the low level o ffundingresults ina lack o fresearch facilities, equipment anddoctoral level graduates (just over 380). There is also little finding for research projects, which results inlow rates o f faculty publication (in2005, just one percent o fthe faculty published inacademicjournals) and, consequently, little o fthe knowledge transfer requiredto spur innovation. Second, incentives are not structured to encourage universities or faculty to undertake serious research. There is not a clear regulatory framework for research. Without a clear view o f how proceeds from research would be divided, neither researchers nor universitieshave a strong incentive to undertake research. Moreover, many faculty members supplement their university salaries by teaching additional hours inuniversities and/or inprivate institutions. When faced with the decisionto pursue research (for which there is little finding or potential for financial reward) or augment their income, many university professors make the reasonable choice to increase their income. Firm-basedworkforce training. Malagasy firms make modest investments inwork- force training, especially inlarger firms and for managers, other professionals, andthose with higher levels of education. However, givenpositive returns to productivity, it appears that Malagasy firms still under-invest intraining. This section reviews the nature o f firm-based workforce training, as highlightedinthe 2005 I C A survey, as well as the returns to training. Incidenceof training. Employee training inthe formal manufacturing sector seems quite extensive.About 48 percent o f enterprises reportedhaving organizedinternal or external training inthe year precedingthe survey (Le., 2004). This was higher than the average o f 40 percent for the region and significantly higher than, for example, firms inSouth Asia. The incidence o ftraining was significantly higher inlarge firms (100 employees or more), with nearly over three-quarters o f firms providing some kindo f training. At the other end o f the spectrum, 32 percent o f small firms (fewer than 20 employees) provided training. Training intensity. Relatively few workers receivedtraining. About 27 percent o f workers infirms that providedtraining benefited from training. Overall, less than 10 percent o f all permanent skilled workers inthe sample received any training (compared to 22 percent for the region). Thus, while a larger proportiono f firms seem to provide training compared to other countries, the training deficit is large interms o f the relatively few numbers who are trained. Training appears to be concentrated on managers and professionals. 77 Sources of training. About 24 percent o f firms provided internal training, 12percent provide external training, and 13 percent provided both. The incidence o f external training was particularly low insmall firms where only 10percent provided external training, compared to over 50 percent among large firms. Data are not available on what types o ftraining institutes were used (domestic public and private, or foreign). A study o fthe textile and garment industry indicatedthat many firms, particularly foreign firms operating inthe export processing zones, tend to send middle level managers and professionals abroad for training. Determinants of training. The determinants o ftraining can be analyzed by using a logistic model inwhich the indicator variable - whether a firm offers any training -is regressed on a set o f explanatory variables. The marginal effects show the effects o f a unitchange inone o fthe explanatory variables onthe probabilitythat a firmwill train, calculated at the average value o fthe explanatory variables.23 The variables that have the highest, statistically significant impact on the probability o ftraining are: whether the firm i s large, whether it i s innovative, the average education level of workers, and its capital intensity. Firmsinthe textile and apparel industry and inchemicals and pharmaceuticals are also more likely to provide training (Table 8). These findings are consistent with empirical results from other countries. Firms that use more capital per worker tend to be technology-intensive and require workers with appropriate skills created by training. Large firms tendto have more managerial capabilities andmay also be able to access training at lower cost. They are also able to invest intraining without fear o f losing trained workers to competitors. Firm-based training is complementary to education because educated workers tend to benefit more from training. 23For example, for a fmthat introducedan innovation, the probability ofproviding training is about 0.18 higher than for anon-innovationfm.The coefficient itselfindicatesthe log-odds of af iundertaking training (versus nottraining); takingthe exponent gives the odds of it providingtraining (versus not providingtraining). 78 Table 8. Determinantsof the decisionto train employees in the formal manufacturing sector, 2004 zapitallworker (106) 57.14 0.0013* 0.0003* :ducation level o f employees (years) 8.22 0.2161** 0.0524** :irm size (excluded category =small) Medium 0.38 0.2579 0.0628 Large 0.22 2.0796*** 0.4722*** nnovative fm 0.34 0.7652* 0.1868* 7oreign 0.33 0.4608 0.1127 :xporter 0.22 0.0248 0.0060 ,ocated inexport processing zone 0.15 -0.7780 -0.1754 sector (excluded =agro industry) Texitiles, apparel 0.30 2.0327** * 0.4681*** Wood and furniture 0.23 1.1841* 0.2876 Paper and Printing 0.02 1.5266 0.3529 Chemicals and pharmaceuticals 0.08 1.7162** 0.3927** Metallurgy and machinery 0.07 0.0026 0.0006 Non-metal and plastic 0.04 0.0173 0.0042 Others 0.13 0.5206 0.1287 :onstant -4.1513 'seudo R2 0.2287 Jumber o f observations 166 iource: Lassibille, 2008. '**=significant at 1% ;**=significant at 5% ;*=significant at 10% ;"=significant at 20%. Jotes: 1Logistic model with dependent variable (0.1) showing whether the fm offered any raining (internal or external). 2. Marginaleffect calculated by the mid-point for continuous wiables or for a variation o f 0 to 1discrete variables 3. Innovative fm is one which had ntroduced new technology for producing a new product or modifying the production process or an existing product inthe preceding years. Impact onproductivity. Firms will undertake training only ifthey benefit through increases inproductivity. A production function model can be usedto assess the impact on productivity. Annex 2 shows the results o f a stochastic production frontier model which regressesvalue added on a set o f explanatory variables such as physical capital, labor (full-time equivalent, permanent andtemporary), the share of female workers, industrial sector, whether the firm introduced innovations, the number o f years o f education and whether the enterprise provided training. The stock o f human capital, as measuredby average years o fworker education, has a positive impact on firm-level productivity, with a 9 percent rate o f returnfor each year o f study. The introduction o f the education variable reduces significantly the return onphysical capital, and suggests complementarity betweenphysical and humancapital (Model 4 inthe Annex). 79 Training o fworkers i s beneficial for firms. Internal training, as measured by an indicator variable (whether the firm provides training or not), has a strong estimated impact, raisingproductivity by 33 percent (Model 5). External training was not included inthe model as it relatively few firms provide this form o f training. However, even though training raises productivity, as shown earlier, only some categories o f firms are likely to train - large enterprises and innovative firms, among others. Economies o f scale inthe provision o ftraining may be one reason for this. Smaller firms, which use relatively little physical capital, and those that are using mature technologies do not needto provide workers with additional training andthe humancapital levels o ftheir workers are also lower. Impact on earnings. Enterprisetraining benefits workers through higher earnings, as well, with anestimated 8 percent rate o freturn. Hence, training benefits bothfirms -in terms o fproductivity gains -and workers - interms o f increased earnings. However, only certain categories o f workers benefit: those higher levels o f education (Table 9), managers and professionals. Other categories o f workers are less likely to receive such training. Table 9. Determinants of training and impact on earnings, formal industr sector 2005 Cffects on the probability of participation in traininga Years of study 12.02 0.004*** Level of education("h) Generalsecondary 48.1 0.035** Technical secondary 9.0 0.0521 Professionalsecondary 5.7 0.096* Higher 17.7 0.142** Occupation(%) Skilledprodutionworkers 19.1 -0.035*** Unskilledproduction workers 44.3 -0.082 Non-production workers 26.4 -0.049* ** Cffect of training on earnings Loo** Jotes: *= significant at 10%;**= significant at 5%. ;***=significant at1%. / Table summarizesresults ofvariousregressionswith differentmodel specifications.Dataare fiomworkers' nodule. I1 Comparedto an employee with a levelof primary educationor less. I Comparedto amanager1professional. iource: Lassibille (2007) analysisof ICA 2005 data. Reasonsfor underinvestmentin training. It appearsthat Malagasy firms under-invest in training: althoughtraining i s associated withpositive effects on productivity (a benefit to the firm) and on earnings (a benefit to the worker), firms do not invest intraining most o f their employees. 80 There are several reasons for which firms are likely to under-invest inworkforce development. They will not invest intraining unless they will lose their competitive edge by not training employees. Inmany sectors, firms operatingwith limited capital and low skilled workers, employers perceivethat workers won't be able to absorb the training because workers are not educated enough. Most firms use "mature' technologies for which there is little economic surplus to be gained from more training. Further, for small firms, the opportunity costs o f sending workers for external training are very high (for example, the entire productioncanbe held up ifone out o f five workers goes for training). The lack o f affordable training andthe fear o f losing trained workers to competitors can also leadto under-investment. For these reasons, although training generates positive andhighreturns, private decisions may not leadto the optimal level of investment. Public intervention andpossibly financing may be requiredto raise training. The next section o fthis chapter will suggest policy tools that can be usedto encourage firms invest more inemployee training. Policy Directions: Fostering Investment inInnovation and Training TertiaryInstitutions Froma strategicviewpoint, Madagascar muststrive to increasethe number of researchersand Ph.D. graduates inpriority fields. The current annual output o f doctoral level graduates (`just over 380) i s insufficient. An increase innumber o f researchers and Ph.D.s i s necessary, first and foremost, to develop the cadre o f qualified universityfaculty who will improve tertiary level teaching. Priority should be givento the fields inwhich the Government plans to increase undergraduate enrollment, consistent with its growth objectives. Faculty recruitment policies must also change, as discussed inChapter 4. A final change would be to link the provision o f Ph.D. training to the new faculty recruitment policies andterms. An increase inthe number o fresearchers and Ph.D.s i s also necessary to improve the quality o funiversity research. Measures should encourage promising young academics to enter into research. They could include allowing graduates with a Master's degree who show evidence o f superior performance andpotential to be recruitedas researchers, and creation o fa "young scholars program" to provide small grants to new Ph.D. graduates to continue their research, with the aim of drivingapplied innovation inareas o fhighpriority to the economy. Given Madagascar's relative strengths inresearch capacity, the government could start actively promoting applied researchinselect priority areas. Traditional university research has tended to be academic, with the implicit bias o f generating "new technologies" through basic research. With the existing poor state o f infrastructure and the shortage o fqualified researchers, however, generating newtechnologies is an unrealistic objective for Madagascar. Inaddition, and as observed above, there i s a more pressing need to translate innovation potential into the development and sale of new, higher-value goods and services. A more productive approach to innovation would be structured aroundtwo principles: (i) concentrate on applied research andproblem-solving relatedto production-related 81 problems, and (ii) encourage universities to proactively acquire technology that can be adapted to local conditions. Inaddition to the formal sector, adaptation o f technology should focus on technology for the primary sector (agriculture, horticulture, fisheries, etc). The policy to promote research and innovation capacity could concentrate on four areas: 1. Developmentof youngresearchers. Buildup a cadre o fyoung researchers in priority fields, through awards for doctoral programs. 2. Competitivefundingof research. Provide competitive research hnds to solve problems that are important for national andregional economic development. 3. Continualresearcherlearning. Ensure that experienced researchers are able to keep up with research methods and latest developments intheir field o f specialization through workshops and seminars. This component would be linked to the program o f faculty development inuniversities. 4. Encouragementof contract research. At the moment, foreign firms operating inMadagascar aremorelikely to engage insuchresearch, rather than domestic firms. It would be advisable to asses whether foreign firms contract research outside the country and whether Malagasy researchers can engage incontract research. The government could provide matching grants to encourage foreign firms to undertake research inthe country. Inorder to makethis feasible, financing andgovernance reforms inuniversities and tertiary level institutions are indispensable. These are discussed inlater chapters. Private Firms Malagasy firms under-invest intraining, even though training i s associated with positive effects on productivity and earnings. Further, training i s confined largely to big firms, andthey rely to a large extent on internaltraining. When firms resort to externaltraining, institutions outside the country are frequently used. As outlined previously, the reasons for under-investmentintraining appear to be the lack o f competitive need to do so; worker difficulty inabsorbingtraining lessons, due to low education levels; use o f outdated equipment for which training is not required, nor will yield economic benefit; the lack o f affordable training; andthe fear o flosingtrained workers to competitors. The government can play a major role incounter-acting these incentives by: (i) fostering industrycooperation to boost firm-based training and (ii) enabling domestic education andtraining institutions to tap into this market. Boththese policy measures require setting up appropriate governance mechanisms for employers to express their training needs, participate indesigningprograms that are relevant for their needs and accredit training providers. 82 7. ADAPTING TO CHANGE: ISSUESAND REFORMS IN PUBLIC EXPENDITUREAND FINANCE MANAGEMENT Improvement o f quality and increasingaccess to pos-basic educationwill require more resources, public and private. Usingthose resources efficiently should be a major concern for Madagascar. International experience also indicates that how public resources are provided can greatly impact efficiency and quality improvement by changing the behavior o f education institutions. This chapter reviews the trends and composition o fpublic spending on post-basic education, per student expenditures, the drivers o f recurrent expenditure andthe issues in resource utilization. It reviews the efficiency of budget management andthe impact o f recent reforms. The chapter concludes with the identification o freform priorities inthree areas: better resource utilization, enhanced resource mobilization and reforms inresource allocation mechanisms. Trends and Compositionof Public Spending Between 2002 and2006, public spending on education grew by 62 percent, after adjusting for inflation, or 13 percent per annum. While creditable, this increase comes after years of under-investment and 2002 itself was a year o f crisis. Madagascar spent about 2 percent o f GDP in 1996, a share which steadily rose to 3.3 percent in2001, fell to 2.7 percent in2002 and has by now recoveredto its pre-crisis levels. Madagascar's public expenditure effort for education is comparable to that o f other low income countries (Figure 31). Figure 31. Total publiceducation expenditureas percentof GDP, 1996-2006 4.0% - 3.5% 3.0% & 2.5% '$ n 2.0% 1.5% 1.0% 0.5% 0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 _____~ Source: World Bank analysis o f MENdata. 83 Sub-sectoral shares o f government education expenditure revealthe priority given to primary education and some protection o fjunior secondary education, and suggest under- funding ofthe post-basic levels. Inthe former, between 2002 and 2006, real spending increased by close to 125 percent; inthe latter, by almost 50 percent. Real spending rose inall the other sub-sectors as well, withabout 35 percent increase insenior secondary education and higher education andonly 10 percent increase inTVET. As a result, the share o fprimaryeducation intotal public expenditurerose from 43 percent to 59 percent. The shares of other sub-sectors declined: in SSE, from 7 percent to 6 percent, in technical/vocational training from 3 percent to 2 percent and inhigher education (including scientific research) from 19 percent to 16 percent. The latter i s set to decline further to about 13 percent in2007. Excluding scientific research, higher education receives only 11percent o fthe education budget (Table 10). Table 10. Allocatioi If public t ucation e: enditure 1 sub-sectc 2002 -2( 7 ~ Total Education Exp (billions Ariary current 163 206 266 388 387 463 61.9% prices) O fwhich: (YO) Pre-school 0.5% n.a. Primary 43% 38% 51% 57% 59% 55% 124% JSE 11% 14% 10% 11% 10% 10% 48% SSE (incl tech. ed) 7% 6% 4% 6% 6% 5% 36% TVET 3yo 3% 3yo 3yo 2% 2% 11% Higher Education 16% 10% 10% 10% 13% 11% 35% Scientific Research 3yo 7% 2% 3% 3yo 2% 65% Administration 18% 23% 19% 11% - 8% 14% (32%) I I I I I I P Memo Items: Total in US $ million 119 166 142 194 181 247 ExchangeRate (1 US$) 1366 1238 1869 2003 2142 1874 Sources: 1. For 2002-2005, MEN,2008b. Rapportd'Etat du SystkmeEducatifNationalMalgache. 2. For 2006 and2007, MEN.2008a. Mise en euvre duplan EducationPour Tous- Bilan annuel 2007. Annex 1. 3 Exchangerates from World BankGlobal DevelopmentFinance online database. Notes: 1. Total expenditure represents executed budget (commitment basis) and includes recurrent and capital expenditure. 2. 2007 data are provisional. 3. Real increase calculated using inflation-adjusted expenditures by sub-sector and for total. 4. Educationtotal inparentheses are in current prices. Inrelationto GDP, public spendingonpost-basic education isminiscule. Madagascar spends about 0.4 percent o f GDP onhigher education(excluding scientific research) and about 0.2 percent on SSE. The former i s lower than the average even for francophone SSA countries (0.5 percent) and for Anglophone countries (0.8 percent). 84 Capital expenditures increasedby almost four-fold inreal terms between2002 and 2006. Most o fthis was for primaryeducation, largely externally financed, and accounts for the increase inthe share o fthis sub-sector. In2006, for example, o ftotal capital expenditures o f 109billionAriary, about 98 billionwas spent on primary education. These figures are somewhat misleading becausea significant part o fthe "capital expenditures" inprimary education includes recurrent expenditures(for example, for remunerationo fprimary teachers and teacher training).24 Evenwith these adjustments, the share o f other sub-sectors i s extremely low while absolute amounts are small and variable. In2006, investment inSSE was 2.1 billionAriary (approx U S $ 1million) and inTVET, 980 millionAriary (US $0.5 million). However, investment inhigher education and scientific research was significantly greater at 7.9 billionAriary (approximately US$3.6 million), butthis was mostly due to expenditure on scientific research, financed by external projects inother sectors. Investment inhigher education institutions has been inthe range o f U S $2-4 millionper year between 2002 and2006 (Table 11). Table 11. Allocation of public capital expenditures in education bv sub-sector, 2002-2007 Total Capital Exp (billions Ar current) 123 Ofwhich (in`YO): Pre-school 2% 86% 2% 4% TVET 0.4% Higher Education 0.9% Scientific Research 4% 65.5 Notes: 1. Executed budget (commitment basis). 2. 2007 data are provisional. Sources: Zbid Capital expendituresare largely financed by external sources and this explains the high share o fprimary education and negligible shares for other sub-sectors. Donors have provided funding almost exclusively for primary education: in2006, donor funding for education was 68 billion Ariary, or about 10times the fundingto all other education levels combined. Scientific research receives a higher share o ftotal capital expenditures than higher education for the same reason (Figure 32). 25 With a highlevel o f dependence on donor fundinginthe education sector, budgetallocations reflect donor 24A part o fthese are financed by external projects andhence classified as "capital expenditures" inthe budget. 25In2006, anIDAproject onm a ldevelopment accounted for the bulkofR& Dinvestment expenditure; in 2007, the major share was dueto the NationalProgram onNutrition financed byUNICEF. 85 priorities to a great extent. The domestic investmentbudgeti s too small to make a significant impact on changing sub-sectoral priorities. Figure32. Investmentspendingin SSE, TVET and higher education, by source of financing, 2006 TVET 1 QInternal i External HigherEd i Scientific Research 7 I 0 1000 2000 3000 4000 5000 6000 7000 Millions of Ariary Notes :Budget execution data. Source: MEN2008a: Mise en muvre du plan Education Pour Tous : bilan annuel 2007. March2008, Annex 1. The increase inrealpublic recurrent expenditures hasjust kept pace with enrollment in SSE and higher education (Table 12). InTVET, per student unit expenditure declined by about 25 percent between2002 and 2006, mainly due to increase inthe student:teacher ratio. Indollar terms, the unit expenditure in SSE, TVET and higher education was about US$180, US$206 and US$570 in2006. These low absolute values reflect primarily low salary levels. They are not disproportionate either inrelation to per capita GDP or as a ratio o f unit expenditure inprimary education when compared to many other SSA countries.26 Table 12. Per student public recurrentexpenditure by level of education, constant2006 prices Primary 45.4 44.3 42.7 46.4 43.4 See note 1 JSE 135.7 161.3 133.9 147.2 117.2 -3.6% ISSE 1 340.5 I 396.5 I 320.4 I 370.9 I 344.4 I 0.3% I TVET 519.4 526.9 660.6 598.9 387.6 -7.1% HigherEducation 948.3 804.7 896.7 806.6 1065.7 3.0% 26Per student recurrentexpenditureinprimary educationis understatedinthe table, whichusesthe budgetaryclassification, becauseofsome recurrentexpendituresare onthe investmentbudget.Adjusting for these would give ratios ofper student expenditure at each sub-sectorthat are inline with norms for low- income countries. 86 Almost all o fpublic recurrent expenditure is on salaries insenior secondary education, leaving about 1percent on school operating costs. Public schools finance additional inputs through registrationfees, which they are free to set. Expenditures on teacher training, curriculum or materials development are notableby their absence (Figure 33). Figure33. Composition of recurrentpublic expenditureby educationsub-sector, 2007 SSE School TVET Higher Ed Operatmg Other Staff Other Indemes 2% 07% Personnel 10% 4% Transfers ersonnel 75 2% 78% 89% Source: Zaafrane 2008. Notes: 1. Transfers to institutions are for public TVET schools andhigher education institutions, which manage these funds. For latter, this includes payment for supplementary hours o funiversity faculty. 2. Data are for budget execution (commitment basis), provisional estimates. The disproportionate share o f staff salaries inSSE highlightsthe major inefficiencies in public spending at this level -low student-teacher ratios, under-utilization o fteachers and a relatively highproportion o fadministrative staff. The average student:teacher ratio o f 20:1inpublic secondary schools is lower thanthe SSA average and arises from the over-specialization o fthe curriculum and subject overload, small size o f schools and low teaching hours. Public SSE teachers' salaries are about 7 times per capita GDPbut this is notunusual, giventhat teachershave university level education. Inany case, as their salaries are set as part of civil service salaries, there is little roomfor maneuver. It does mean, however, that teachers are an expensive resource andmustbe utilized carefully. Low teacher workload and pupil-teacher ratios are things that Madagascar cannot afford ifit wishes to maximize use o f its resources. Inshort, Madagascar's SSE has a highcost structure which i s disguised by the low absolute levels o funit costs (in dollar terms). Intechnicalhocationaltraining, the shareofpersonnel costs is about 78 percent. Student-teacher ratios quadrupled inCFPs from 4: 1to 16:1. This has come about as a result o f hiringfreeze and has resulted inthe aging o fthe teaching force. Institutions have also increased their size to accommodate enrollment increases. The average size o f a public vocational training center grew from 34 students in 1999to 138 in2005, when newconstructions were restricted. However, average teaching loads at about 20 hours perweek are about 50 percent lower thaninternational averages. About a quarter of the public budget i s transferred to public training institutions for supplies. These institutions are therefore relatively better fundedthan SSE. Further, training institutions are allowed to mobilize additional resources. 87 Inhigher education,salaries ofpermanent teaching staff are includedinthe Ministryof Education's budget and paid directly by the Ministry o f Finance. This accounts for a quarter of recurrent expenditure. Three-quarter o fthe expenditures consists o ftransfers to public institutions, which are managed by them. The transfers include a variety o f expenses, including supplementary teaching hours o f faculty, salary o fnon-teaching staff, operating costs (pedagogical and overheads) as well as domestic scholarships to students. Universities account for over 80 percent o f all transfers (Figure 34). Figure34. Compositionof transfers for higher educationby category of expenditure, 2006 Scholarships Operating (external),8.8% costs. 126% Salanesof adrnfnistrative staff,264% 2.2% Supplementary teachinghours, 20.7% Source: Zaafrane, 2008. A better economic classificationofrecurrentexpenditureinhighereducation is obtained by breakingdowntransfers into their components. This shows that about 54 percent o f current spending comprised remunerationo f staff, two-thirds o f which is spent on teachers (salaries and complementary hours) and the rest on administrative staff (Figure 35). About 30 percent oftotal recurrent spending was allocated to scholarships, leaving only 10percent for administrative andpedagogical expenses o funiversities. Figure35. Compositionof recurrentexpenditurein higher education,2006 CROU I External Antananarivo, scholarships, 3 9% Teacher salaries, teaching hours, 16 6% Administrative Other institutions'1 Operaling costs staff salaries, ~ operatingcosts, of universities 17.8% 1.9% and educational institutions, 7.2% I Source: Zaafrane, 2008. Note: CROU is the Centres Rigionawl des Guvres Universitaires, the organization in charge o f student dormitories and canteens at the University o fAntananarivo. Universities manageabout 80 percent of public funds for education and their spending patterns in2006 underscore serious deficiencies inthe use ofresources: 0 About one third of auniversity's budget goes to the central administration (Presidencies) ofuniversities, another thirdto the actual teaching institutions and a thirdto scholarships. 0 Four itemscomprise most of central administrative expenditures:the salaries of nonteaching staff hiredby the university (32 percent); petrol andtravel costs (15 percent); water and electricity (10 percent) and student accommodation, exams etc (25 percent). Faculty training accounts for just 1percent o f central expenditures. 0 About halfthe expenditures inthe faculties/teaching institutions are on scholarshipsand another 25 percent on supplementary teaching hours and temporary staff. Ten percent i s on administrative staff. 0 Very little is spent on faculty development or researchby either the central administration or teaching institutions. The Presidenciesspent less than $5,000 in total on faculty development and about $350,000 on research. Inthe faculties and institutions, another $100,000 was spent on faculty training and $200,000 on research. 0 Per student spendingon administrative and pedagogical expenditures was only US$65 peryear. This is agrim indicator ofthe reality inMalagasyhigher education institutions, which lack basic teaching-learning materials. The caseof supplementary teaching hoursreflectsgraphicallythe inefficiencyof public spending. Since 1992, ahiringfreeze on university teachers hasresultedinan explosion of supplementary teaching hours, which now account for almost 85 percent o ftotal hours taught (see Figure 36). This i s a result of several factors. First, professors and assistant professorshave a very light teaching loado f 5 hours per week. The originaljustification for this (that faculty would spend about 15 to 20 hours on research) does not hold any more, as the conditions for researchdo not exist. Second, there is little administrative control interms ofproceduresand criteria for determining supplementaryhours of teaching. The hourly rate for supplementary teaching hours increasedby 174percent between2002 and2007. As a result, faculty earn almost as muchfrom supplementary hours as from their regular salary. The supplementary teaching hours are not distributed across departmentsand individualfaculty membersaccording to transparentcriteria. Overall, this phenomenonhas a negative impact on the quality ofteaching andresearch as faculty membersare keento increasetheir remuneration by accumulating supplementaryhours. Further,it createsa strong vestedinterest to protect existing teaching-learning processesfor fear that teachers' earningsmay be disrupted. 89 Figure 36. Supplementaryhours as percentof total universityteaching hours, 2006 ~= I 1 Toliara Toamasina Mahajanga 15% 7 4 I 0% 20% 40% 60% 80% 100% IConpulsory hours rn Supplemntary teaching hoursI Source: Zaafiane, 2008. Salary level of university teachers: A review o f faculty remuneration and recruitment procedures should be a highpriority inthe medium term to ensure effective functioning o funiversities. The original aim o fthe hiringfreeze was to control salary expenditures in the early 1 9 9 0 ~ ~that Governmentresources could be focused onmanagingthe so macroeconomic crisis occurring duringthat time. Since then, and long after the macroeconomic crisis abated, the Government has maintainedthe hiring freeze and system o f supplemental hours. As a result, there i s not enough new faculty to accommodate increased student enrollments -and existing faculty fill this gap by teaching costly `supplementary hours' above their regular salary. The average annual salary o f university teachers was about US $6100 in2007, which i s about 17times the per capita income. Inreal teams, salary levels have remained roughly constant this decade. This salary does not include additional revenue from the supplementary teaching hours, which may double the remuneration o f some teachers (mainly senior faculty members). Hence, university teachers are relatively well paid inMadagascar. Excluding supplemental income, they get 3.4 times more than civil servant primary teachers and 2.5 more than secondary teachers. However, inabsolute terms and inrelation to norms in SSA countries, the salary levels are low andmay be insufficient to attract good faculty. The critical issue, however, is that a significant part o fthe earnings o funiversity teachers is distributedwithout proper regulations or control. Evenmore than inthe case o f SSE, teachers are the most expensive resource and their workload andperformance are critical to increasing the overall effectiveness o f higher education. 90 Another source of inefficiency i s the high ratio o f administrative staff to faculty. At the University o f Antananarivo, for instance, there is an administrative staff o f 2,200 for about 500 teaching staff, or one administrative staff for 11 students. Public institutions have a much higher proportion o f administrative staff, ranging from one staff for 6 to 16 students, compared to 1:18 inprivate institutions. One o f the major differences between Madagascar and most other African francophone countries i s that, since the mid 1990s, the Malagasy tertiary education institutions have not been directly involved in financing and managing subsidized restaurants and dormitories for the majority o f students. O n the positive side, this means that the social expenditures part o f the tertiary education budget is less sizeable than in other francophone countries. The Ministry o f Education department (CROU) operates facilities only inthe University of Antananarivo. However, the negative side is that most institutions do not have adequate provision for basic student services. The living conditions in all university student hostels are inadequate, from the viewpoint o f space, hygiene and safety. Transportation services are minimal. Inthose institutions which have dormitories, students use electric stoves at the university's cost. This practice is so widespread that electricity costs represent 42.5 percent o f the total budget o f CROU, the Ministry o f Education department responsible for social services. The electricity issue often becomes a source o f conflicts with the students, as mentioned earlier inrelation to the problems o f insufficient budget allocation to pay the arrears and delays indisbursements. PrincipalIssues inResourceUtilization Senior Secondary Education: The critical size o f SSE schools is around 275 students, below which number, the unitcosts o f students grows at a geometric rate. Sixty percent o f SSE schools have enrollments o f less than 200. The small size o f schools accentuates the problems o fteacher underutilization caused by low teaching loadper teacher andtoo many subjects. Seventy percent o f SSE schools have fewer than 20 students perteacher (World Bank, 2007). The proposed re-structuring o f curriculum provides an opportunity for better deployment o f polyvalent teacher and increasingtheir workload to international norms. It should also enable increasing the size o f schools, at least inurbanand semi- urbanareas. A school construction strategy, built onthe lessons learned from the national construction strategy for basic education, would help to optimize school sizes and ensure good construction. To do so, it should include clear planningand technical norms, as well as identificationo fthe number o fnew classrooms required. Higher Education: This sub-sector also suffers from the small size o f institutions. Only two universities (Antananarivo and Toamasina) have the minimumenrollment size to qualify for a multi-faculty university, which i s resource intensive interms o f administration. Despite the lack o f critical mass, five out o f the six universities offer postgraduate programs. Enrollment inthese programs i s very small, rangingfrom 4 to 10 percent o ftotal enrollment. Paradoxically, the share ofpostgraduate enrollment at the 91 Universityo fMahajanga is almost twice that at the University o fAntananarivo, which is supposed to be the main research institution inthe country. There are many cases o f duplication among existing schools and institutes within the universities. The University o f Antsiranana, for example, has two technology-focused institutions, the Ecole Supe`rieure Polytechnique and the Technical Teacher Training Institute ("Ecole Normale Supkrieure Technique"), which have a lot o f comparable courses. Similarly, the Faculty o f Sciences' business administration department overlaps with the newly created Business Administration Institute. At the University o f Antananarivo, the Faculties o f Humanities and Sciences and the Teacher Training College offer many similar courses. It seems that schools, institutes and departments are often created on an ad-hoc basis, without a strategic vision o f how each university should evolve. An example o f resource sharingis provided inAntsiranana where the Technology Institute andthe Polytechnic work well together, sharingprofessors and lab facilities. . BudgetManagement As is common infrancophone countries, the Ministryo f Finance exercises strong ex-ante control over the major categories o fthe budget both at the time o fthe preparation and execution. The move to "program budgets" since 2005 is intendedto introduce greater flexibility inbudget management, by allowing greater discretion by the Ministryto re- allocate withinthe mainprograms. Inthe case o f the education sector, these programs correspond to the sub-sectors. However, inpractice, there continues to be a clear separation betweenthe preparationand reporting o fthe three main components o fthe budget,personnel expenditures, non-personnel current expenditures andthe public investment program (PIP). The first i s managed directly by the Ministryo f Finance, while the last i s driven by donor projects. The fungibility o f resources withina broad program (for instance, senior secondary education) is accepted by the budgetary law but not implemented inexecution, as prior controls still exist at the level o f budget line items. There are major weaknesses inbudgetpreparation inpost-basic education. This arises primarily from a lack ofpolicy and clear medium-term priorities for each sub-sector. Another contributing factor is the lack of planning andtechnical capacity to prepare the budget according to priorities, including lack o f tools. The Ministry has benefited from technical assistance financed under Bank's Governance and Institutional Development project, pro-actively usedit with Bank support especially incontext o f EFA. Concrete advances have beenmade through the preparation o f sector policy note and medium term expenditure plan, which i s updated annually andusedfor budgetary discussions with the Ministry o f Finance andtrade-offs inmaking sub-sectoral allocations. However, the advances have beenrelatively limitedinpost-basic education in comparisonwith primary education. Inthe latter, budgetpreparationtools have been created, including use o fthe personnel database, calculation of unitcosts, planningo f construction. An annual performance planis prepared for EFA and the Ministryis movingtowards similar tools for individual technical directorates and the regional and 92 district offices. Incontrast, budget preparationinthe post-basic education is still in incrementalmode, with little linkto strategic objectives. Budget execution still poses major problems, despite considerable efforts by the Ministry o f Finance to simplify procedures. A study commissionedby the Bank in2005 inthe context o fpublic expenditure foundthat release of expenditures often required up to 18 signatures. Further, the period o f budgetexecution is effectively limitedto 6-7 months, with commitments beginningonly inApril and ending by October/November. The Ministryo fFinance imposes limitations onbudget executioninthe first sixmonths due to lack o f domestic revenue inthat period. Reform o f budget execution procedures, which should complement the move to program budgets, have not been implemented effectively, due to lack o f clarity and training o f Ministryo f Finance staff inthe districts, software problems, etc. The focus i s still on the control o f inputs, rather than on the management and utilization o f resources. The third area o f budget management, reporting, is arguably the weakest, especially in post-basic education. The Ministry submits a report to the national assembly on the realization o fphysical targets but not on budget execution. Within the Ministry, regular reports are not prepared or reviewed for management purposes. The exception is the EFAprogram, where as parto fthejoint donor reviews, bi-annual performance reports are prepared, which cover the results indicators, budgetexecution, progress in implementation o f key activities, new initiatives and institutional performance. A positive feature o fthe EFAreports i s the discussion o fproblems and challenges in program implementation. There are several problems inbudget reporting. As expenditures on personnel are controlled by the Ministryo f Finance, the Ministryo f Education does not track either the number o f staff or expenditures (except inthe case o fprimary education). Expenditure on transfers, which represent a significant part o fthe higher educationbudget, are not tracked at all, because they are managed by the institutions. As stated earlier, these transfers finance the supplementary teaching hours of faculty (which are almost equal to faculty salary expenditure) as well as the salaries o f administrative staff o f universities. Universities submitreports to the Director o f Finance inthe Ministryo f Education, but these are not analyzed. This lack o freporting andreview explains why key expenditure itemshave grown uncontrollably andwhy universities can continue for years without paying the electricity bill. The government also does not assess the resources generated o f autonomous organizations, such as universities, andthe expenditures financed them. Reform Priorities Improvingresourceutilization: Insenior secondary education, key policy decisions are requiredto improve resource utilization at the system level. The first i s to improve teacher utilization, which could be done through the introduction o freform o f curriculum. 93 The second isto plancarefully the distribution of schools. The World Bank's report on secondary education suggests that there are economies o f scale up to an enrollment size o f 275 in senior secondary schools. This i s clearly more applicable inurbanareas. In rural areas, with dispersed populations, models for rural schools and alternative delivery mechanisms must be found. InTVET, the most importantway to makemore efficient use ofexistingresources is to shorten the length o ftraining. Inhighereducation, the nonviable size ofmost universities andthe dispersionof resources across a relatively large number o f post-graduate programs call for two types o f government decision. First, the Ministry o f Education should assess, for each o fthe four under-populated universities, the feasibility o f expanding enrollment to at least 5,000 students. Those universitieswhere this goal is not achievable inthe near future couldbe downgraded and should operate as a single or several regular institutes. Second, postgraduate programs should be consolidated inone or two universities at most to start takingadvantage of economies o f scale. Inorder to optimize, the utilization ofexistingfacilities andavailable resources, each institution should undertake a strategic planningexercise to rationalize the existing offering o fprograms and courses and guide the development of new programs inyears to come. Additional finding could be made conditional on universities undertaking such an exercise, for which technical assistance should be organized. The issue o f supplementary teaching hours requires addressing the employment conditions and status o f faculty as well as general civil service remuneration conditions. The most feasible course is to introduce newconditions for newfaculty hires inpriority courses, including higher salaries tied to a new system o fperformance evaluation that would take their actual teaching and research output into consideration. The example o f Pakistan i s worthy o f study, where a parallel tenure track was established for new faculty withhigher salary and stricter productivity requirements. Participationby higher education institutions i s voluntary, but those participating would get additional funding. Any stepsto reform faculty recruitment andremuneration should ensure that the best faculty will be retained and rewarded-to enhance the overall quality o f university instruction, and to make sure that teacher training is highquality. While the State should not get involved again inthe direct financing o f social services for all students, each tertiary education institution could facilitate, through sub-contracting arrangements with private firms or agreements with the relevant municipalities, the organization o f basic social services for the students. Successful experiences, such as the non-subsidized cafeteria managed by the Student Association at the Antananarivo Technology Institute, should be studied carefully and emulated. Inall sub-sectors, improvements ininternalefficiency throughreductiono fdrop out, repetition and failure on examinations, will release financial and physical resources. 94 Encouraging resourcemobilizationinpublicinstitutionswith greateraccountability: Currently, resource mobilization i s important only inTVET and inhigher education. However, it can be expanded even inSSE, through for instance, settingup a textbook and learning materials fund at the school level, which would pool resources from the government, households andprivate contributions. Increasingthe use of learning materials i s critical to improving quality andthe Ministry should avoid the temptation to provide all these free o f cost. Measures for cost-sharing should be accompanied by targeted aid for poorer students. InTVET, the possibility ofexpanding employer financing should be actively pursued, butthis would also required setting up governance structures that allow employers to manage funds. A study on financing options should be considered, including a national payroll levy, voluntary contributions, or sectoral funds for skills development. Inhighereducation, resourcemobilization activities andthe useofthese additional resources are got governed by clear rules. The share o f non-budgetary resources has increased to about 10percent o f resources o f universities. Registration and other fees account for close to 60 percent o f their resources. Revenues from consultancy services and others constitute less than 10percent. The "payment courses" account for another 31 percent and are growing rapidly. The first task i s for the Ministryo fEducationto provide all public tertiary education institutions with a clear description o f applicable regulations and procedures as defined bythe Ministryof Educationitself, the Ministryo fAdministrative Affairs and the Ministry o f Finance. Eachtertiary education institution, inturn, will need to work out appropriate criteria andmechanisms for the allocation o f income among all entities concerned (university/institute/school, department, individual). Inmany tertiary education institutions inindustrial countries, additional income i s split equally amongthe three levels. Reforms inpublicresourceallocation mechanisms: Resource utilization and mobilization, as well as changes inthe educational process and outcomes, can be induced by the conditions under which public funds are provided to institutions. Insenior secondary schools, the introduction o f school development funds for quality improvementcan be used to leverage changes teaching-learning, improvement ininternal efficiency and ensure better budget management and reporting. Inorder to be successful, the program requires clear guidelines, schools need to be supported with technical assistance for the preparation o f development plans as well as inimplementation, and there should be effective monitoring. InbothTVET andhigher education, the Ministryshouldconsider transferring incrementalresources to public institutions onthe basis o fperformance, rather than historical levels. Three maintypes o f innovative allocation mechanisms might be considered inthis context (examples given relate to higher educationbut can be adapted for TVET): 95 0 Output-basedfunding formulas: Funds for recurrent expenditures (part or total) would be given based on a formula linking the amount o f resources spent on inputs such as the numbero fstudents or professorsto some indicator o f institutional performance such as the number o f graduates. Sometimes higher amounts are paidfor graduates incertain fields o f study, or with specific, high- priority skills. 0 Performance contracts: governments enter into regulatory agreements with institutions to set mutual performance-based objectives, relatingto fields o f study, efficiency indicators or resource utilization. 0 Competitivefunds: financing is awarded to peer-reviewed proposals designedto achieve institutional improvement with respect to quality and relevance, promote pedagogical innovation and foster better management. Institutions are typically invited to formulate project proposals that are reviewed and selected by committees o f peers according to transparent procedures and criteria. The eligibility criteria vary from country to country and depend on the specific policy changes sought, for example, whether to change whole universities or individual faculties. The capacity o fthe Ministryto design andimplement such reforms needsto be built. Fundingformula, for instance, require detaileddata on factors that affect cost. Inorder for competitive funds to be effective, apart from clear and simple criteria and procedures, anindependent evaluation committee is required. Incountries like Madagascar that have a relatively small or isolated academic community, it would be desirable to draw from a regional or internationalpool o fpeer reviewers to reduce the danger o f complacency and subjective evaluation among a limitedgroup o f national colleagues. Use o f a transnational pool is a long-standing practice inthe Scandinavian countries, the NetherlandsandIreland. Inadditionto changing the resource allocationmechanisms, the Governmentneedsto clean up the arrears situation inuniversities for utilities, such as electricity. This may require action by the Ministry o f Finance, rather thanthe Ministryo f Education. The Ministry should also demand greater accountability for the use o f all public resources as part o fthe move to new allocationmechanisms. Improving the regularity and content o f normal budget reporting would greatly help. The Ministry's directorates responsible for SSE, TVET and higher education should show monthly and quarterly reports on financial execution, as well as bi-annual and annual performance reports assessingthe progress inimplementing the program andproblems encountered. The EFA implementation reports already provide a model within the Ministry.Inaddition, all public institutions, startingwith universities, but eventually all senior secondary schools should be requiredto submit at least one annual report on their activities anduse o f funds. 96 8. STEERINGCHANGE:REFORMS INMANAGEMENT AND GOVERNANCE The post-basic education system must be re-orientedto respond to labor market and development needs. The re-orientation requires important changes inhow education institutions andthe overall post-basic systemare managed and governed. Institutions needto become more outwardly oriented. To do so, they must be givengreater flexibility while beingmade more accountable for results. This requires changes inorganizational structures and mandates. At the same time, the education and training system as a whole needs mechanisms for goal setting andpolicy making, and structures and instruments to motivate institutions to change and to foster partnershipwith economic producers. This chapter examines these issues, first identifyingkey reforms at the system level and then identifyingreforms specific to each sub-sector. BuildingMechanismsfor PoliticalLeadershipof the Reform Involving the users and other stakeholders o fthe education and training system, especially employers, but also private institutions, other Ministries, teachers, etc., is extremely important. Because o fthe time requiredto show results, experience shows that education reforms succeed only ifreforms enjoy broad support across the political spectrum. To achieve broad support for reform, many countries have established higher level bodies, above the Ministryo f Education. These bodies report to the Prime Minister or President's office. They might establish policy, commission studies, ensure inter- Ministerial coordination, organize consultations, or guide the use o f additional funds towards national priorities. Examples from other countries include commissions for specific sub-sectors (higher education; secondary education; skill development), or broader `knowledge commissions' or `education commissions'. Madagascar could consider establishing a commission for post-basic education along these lines (Box 6). However, it i s important to assess the feasibility o f doing this, given the administrative capacity at various levels, andto avoid creatinglargebureaucratic structures. The responsibilities o f such a body should be clearly delineated, with a nimble governance structure that is appropriate to these responsibilities. Irrespective o fthe option chosen for leading the reform, it is important to establish mechanisms for involving actors outside government, for consultation as well as for assistance intakingkey policy decisions. Ifestablishing a national commission is not appropriate at this stage, the Ministry could consider creating task forces on specific issues, the members o f which would be drawn primarily from outside the education system. An alternative i s to establish a leading body for specific sub-sectors that require a highdegree ofexternal participation(for example aNational Training Authority for 97 TVET -see below). The most important challenge for the Ministry o fEducationis to become more outwardly oriented by listening to the needs and demands o fthe society. ]Box6. Model for a Post-BasicEducationReform Commission International experience has shown that reform commissions are helpfulindriving successful educational reform. A reform commission typically provides oversight, ensures progress against reformbenchmarks, and offers guidance on critical areas o f reform-or bottlenecks that appear during implementation. A Post-Basic Education Reform Commission (PERC) might helpto establish accountability for successful reforms insecondary and higher education inMadagascar. An important issue to consider is who the Commission should report to. Some countries have found it usefulto have the commission report to the President or Prime Minister. Another issue i s the responsibilities givento the commission. Some possibilities include: : 1. Policy research and development 2. Curriculum development and assessment policy 3 , Regulation o f private secondary schools and universities 4. Management o f Funds for SchooLUniversity Development/Training funds and Scholarships 5. Management o f donor-financed technical assistance 6. Management of monitoringand evaluationo freforms 7. Creation o fNational Qualifications Framework IThePERC could be authorized to receive funds from domestic and international sources, bothpublic andprivate. It could be empowered to contract for both longterm and short-termtechnical services. The PERC's Boardof Governors could bemade upo f a cross-section o f stakeholders affected by post- basic reform. A sample mix could be private industry (relatively highrepresentation) public sector ministries,the private schools sector, localgovernment and education officials Governors could serve terms suchthat 1/3 o f governors will be appointed every three years. The Board would elect its own chairperson every two years. Inthis framework, the MENwould continue to beresponsible for teacher salary administration, school construction, routine monitoringand evaluation, and all functions relatedto basic education. Re-definingthe Roleof the MinistryofEducation The Ministryo fEducationdoes not play a leadingrole insteering the sector. There is as yet no policy or strategy for senior secondary education, TVET or tertiary education. Many ofthe weaknesses discussedbelow result from this. There is limited capacity to develop policy, operational strategies and implementationplans. Nonetheless, the example o f EFA shows that bothleadership and planningloperational capacity can be builtthrough a structured process of `learning by doing' together with international technical assistance. One major issue preventingmore rapid capacity buildingis the frequent change o f the organigram, and accompanying change o f senior personnel. In2002, the creation o f a single Ministryfor education, through merger o fthree separate Ministries for school education, TVET and higher education, respectively, created the possibility for a holistic policy for the sector. However, this has not materializedinpractice. Although the 98 Ministries were merged, there was no rationalization of functions and human resources. Inthe last year therehavebeenthree major re-organizations, mainly affectingpost-basic education. The departure of key personnelwith each re-organization results inloss of capacity as there is no institutional memory. The organizational instability reflects inpart the lack of strategic direction. Problems of governanceand managementare more complex inhigher education and TVET, because these sub-sectors involve interface with stakeholders outsidethe education systemand steering institutions that have a highdegree of autonomy inmany respects. It is particularly due to these reasons that reforms inthese sub-sectors have beendifficult to conceptualizeandimplement. The Ministrylacks a cadre ofprofessional educational administrators, whichmodern education systems require. Most staff view their job functions as being related to executing the budget or managing personnel files. Most staff are teachers who have taken up administrative positions. Universityfaculty who work inthe Ministry also continue their teaching andresearchduties. There is no simplepanaceato these problems. Major organizational re-structuring is not a solution inand of itself. However, it is advisable to carry out an institutional assessment of main structures and work processes inthe Ministry andto identify capacity building measures for key functions such as planning, budgeting, humanresource managementandproject management. Basedon this, a capacity building program canbe created. The most important mechanismfor capacity building, however, i s through the practice o f designing and implementing reforms. Limitedcapacity means, however, that priorities should be chosenvery carefully. As afirst task, the Ministry could constitute adedicatedteam with anappropriate skill mix, includingmembersdrawn from outside the Ministry and the education sector, to develop a long term vision and strategy for higher education. Policy options should be formulated basedon the analytic work done so far. These options should includechoices regarding structure, curriculum and courseduration and the priority programs that are demandedby the country's development strategy. The feasibility ofthese options should be evaluatedthrough (i) financial and fiscal sustainability analysis using medium-term projections of expenditures andresource availability and (ii) consultations with stakeholders. This could be followed upwith the design of operational programs and reforms to implementthe strategy. Creation of a MadagascarNational QualificationsFramework An important priorityto ensure the outward orientation of educational andtraining institutions i s the establishment of a national qualification framework that ensures that all Malagasy educational and vocational qualifications are clearly understoodby students andtheir families, employers and society at large. A NationalQualifications Framework could provide a hierarchy of educational qualifications that clearly describes the knowledge and skills gainedfrom eachpost-basic education award, andthe equivalency 99 between awards. It could serve as a consistent framework that employers could use to identify prospective employees' knowledge and skills. Itwould also allow educational institutions to design admission criteria, curriculum, teaching methods and student assessmenuexams to different skill standards. Such frameworks improve access and mobility by enabling a wide recognition o f learning achievements obtained through different sources. The creationo f such a framework will take several years andinternational experience indicates that it i s necessary to start with a simple framework. However, all frameworks involve some common steps: 0 Industries identify relevant occupations andthe skill andknowledge requirements requiredto carry out thejobs 0 Curriculum, teacher training and learning materialsrequiredto meet the skill standards are developed by educationandtraining institutions 0 Accreditation is done by government or industryto certify that the education and training programs meet these skills standards 0 A hierarchy of qualifications is defined, with inputsfrom stakeholders, to determine equivalence and progression. Commitment to the fkamework by employers i s essential to ensuring that education institutions and students use it to for designing and choosing programs. Many countries have found it useful to establish a national qualification agency or authority to develop and implementthe framework. This option requires developing a clear mission, roles and responsibilitiesand appropriate governance structures. However, creating an agency withinthe Ministryo fEducationto start the process and organize consultationwith employers i s a viable option, to buildup support and avoid creating bureaucratic structures that do not have a clear mission. Governance and Management Reforms by Sub-sector Despite some changes introduced since the 1990s to encourage institutional autonomy, Madagascar's education systemsuffers from major deficiencies ingovernance and management. There are, however, good examples within Madagascar which should serve as guideposts for the future. Internationalexperience with implementing education reforms i s also useful. Senior Secondary Education: The positive feature o f the public Zyce'es is the existence o f a school council, comprised of the school head, representatives from parents andteachers and local authorities. The school council has authority to set fees but inpractice it does not influence the functioning o f the school. The school has little recurrent budget. Teachers are recruited and deployed by the central Ministry. Principals are appointed by the Ministry,without specific training. Supervisionresponsibilitiesare assigned to the Direction Re'gionalede Z 'Education Nationale (DREN); they often have no means to carry out supervision and little capacity. 100 At the Ministry level, capacity gaps are glaring. There is no unitresponsible for curriculum development, teacher training or student as~essment.~~ The directorates have had no experience indeveloping policy or inplanning. The introduction o f school development funds and/or scholarship programs, discussed earlier, provides an opportunity to address all these issues on a manageable scale. The design o fthese programs should assign specific roles and responsibilities to different levels, right up to the school principal and school council. Leadership training and capacity building should be built into the program. The creation o f new types o f schools should be linked to developing planningcapacity for determiningthe location and type o f schools. Vocationaland TechnicalTraining: There are several positive features inthe organization andmanagement of institutions, as aresult o freforms o fthe 1990s. First, TVET institutions have autonomy to select entrants, to set fees and spend the revenue inline with approved work programs and government regulations. There exist structures that enable employers to interface with government. This includes, at the regional level, the organization o ftraining providers, employers and government (Groupement d'Etablissements Educational, Techniqueet Professionnelle - GEETP) and the National Council o f Technical andVocational Training (Conseil National de la Formation - TechniqueProfessionnelle - CNFTP) at the national level. However, there are also many weaknesses. Structured participation by employers to direct the TVET system andto express their need for workers of different skills i s limited.Eveninthe GEETP, employers represent only 30 percent o fthe group. Another weakness i s that various Ministers are involved inTVET provision andregulations with limitedcoordination. Apart from MEN, there are the Ministryo f Labor, which sometimes provides approvals for new institutions, andother sectoral Ministries that operate sectoral training institutions. The government should create a mechanismfor establishing close linkages with the labor market and employers. The latter have to be involvedat various stages o fthe process, from identifying priority areas to exercising quality control. One possibility i s to establish a National Training Authority (NTA). The NTA would include providers, government and employers andenable the latter to articulate their training requirements. Itwould establishpolicies andstandards, monitor performance, provide accreditationand quality assurance andallocate funds for training. Another model followed in some countries is to establish "sector councils" especially inpriority economic sectors. Such councils bringtogether the three main stakeholders and sometimes workers' representatives to assess humanresource needs and shortages o f specific skills and find solutions. A third model is to link the assessment o ftraining needs directly with investment promotion, particularly inorder to attract FDI. The agency that solicits FDI would also assess skills gaps andpropose measures for skills training either through domestic providers or inpartnershipwith the foreign investor. 27A unitfor developmentof curriculum, learningmaterials andassessmenthas beencreatedinthe Directorate-Generalfor Educationfor All andhas responsibilitiesfor basic education. 101 An important issue is whether the Ministryo fEducation alone cantake leadership in constituting a body involvingcross-sectoral coordination. Experience inother countries suggeststhat the involvement o fhigher levels o fthe political leadership i s required to jump-startthe process. Higher Education: The institutional governance and management mechanisms in universities are not inline with international trends. However, Madagascar does have tertiary level institutionsthat are managed well, use their resources effectively and produce good results. University Boards, established inthe 199Os,have not been functioning well. They have little representation o f industryand limitedmandate. Their main function i s to approve the budget and oversee its execution. Duringthe 1 9 9 0 university presidents were ~ ~ nominated by the government from three candidates proposedby the University Board. Currently, the universities adopt a democratic approach, inwhich the faculty and administrative staff elect their leaders. However, the selection does not guarantee that only the most competent candidates are selected due to the lack of comprehensive criteria. Management practices inthe public universities are ineffective fromthe following reasons: (i) their management information systems including accounting and financial reporting andperformance related data management are weak; (ii) university heads lack leadership; (iii) most universities do not make enough efforts to develop proactive strategies and long-term vision - only a few schools have accepted to introduce a self- assessmentprocess; (iv) there are little linkages with industry; and (v) universities lack a culture o fmanagement flexibility and responsiveness to demands. By contrast, the two ISTshave better, hctioning Boards, whichhave equal representation from the public andprivate sectors, and are actively involved instrategic planningon management andproviding effective support to strengthen linkageswith firms. The directors o f the two ISTs are appointed by the Minister of Education based on meritcriteria. An important area o finflexibility is the management o ffaculty positions and remuneration. The former i s controlled by the Ministry o f Finance and the latter i s defined by civil service laws andregulations. All public tertiary education institutions- universities andtechnology institutes alike--are heavily constrained inmakingdecisions on the number o fteachingpositions they need, and do not have the possibility to offer competitive compensation packages bothto keep their brightestfaculty members andto attract the best internationally. Nor are they able to offer other incentive packages to attract faculty o f their choice locally or internationally. Four areas o f reform appear to be the priorities. First, the Ministryo fEducation should move from direction management functions to strategic functions such as vision setting, mediumterm planning, guidance on development priorities andrelatedtraining needs, 102 resource allocation to stimulate quality improvements, career guidance and information management. Table 13 summarizes the desirable changes. 1Formulatingoverallvisionandsettingpolicies Y I Strengthened I Allocatingbudgetaryresources basedonperformanceand equity criteria N Y Evaluatingandpromoting quality Limited Strengthened IAllowing flexibility to hire anddismissfaculty I N I Y I Allowing flexibility to establishsalary levels N Y Imposingex ante fmancialcontrolsandaudits Y N 1Allowing flexibility inprocurementrules 1 Y I MonitoringI evaluating Limitedcapacity Y Second, to facilitate the financing reforms proposedinthe previous sections, the Ministry o f Education could grant increased management autonomy to the public tertiary education institutions under its authority. These would be accompanied by agreed performance objectives and greater accountability. The use o f a competitive fund could be one vehicle for introducing these management changes. A thirdarea ofreform is to modify the composition andpowers o funiversity boards as well as the mode of appointment ofthe university leaders. A single tier board is increasingly become common growing number o f countries (theAnglo-Saxon model, as compared to the two-tier structure that was common on the European continent), which combines both supervisory and executive (managerial) tasks. Such boards have extensive powers, including overseeing all financial management aspects, selecting the president / rector, determining the appointment and employment conditions o f staff, and deciding on the management o f the property o fthe university. A fourth area is to move aheadwiththe new accreditationsystem for bothpublic and private institutions. However, the proposednewregulations would benefit from external peer review inorder to ensure that the conditions are appropriate for Madagascar, including the need to have a diversified system that can expand access. One way o f dealing withthe heterogeneity o fthe Malagasy tertiary education system would be to establish different criteria for different types o f institutions. 103 9. A STRATEGIC FRAMEWORK FOR POST-BASIC EDUCATIONINMADAGASCAR This work i s the first stage indevelopment o f a strategic framework for post-basic education reform, based on sound policy choices and strong consensus around those policy choices. The next steps are to agree uponthe over-arching components o freform; design the specifics o f the reform initiative; and phase them at a measured pace during the implementationphase. This chapter reviewsthe analytical inputsprovided inthis report, and outlines the reforms implied by the report's analysis. Overview of Report Findings Rationale for reform. There are two main rationale for reform o f Madagascar's post- basic education system. First, Madagascar may not be able to reachits M A P goal o f 8 - 10% annual GDP growth by 2012 without a significant increase inthe quality and educational attainment o f its labor force. Last reformed inthe 1970s, post-basic education i s not relevant to current or future labor market demands. Madagascar's educational attainment i s markedly lower than that of other lower income countries. Indicatively, 11% o f Madagascar's labor force has secondary education or higher - against 15% inPakistan, 17% inBangladesh, 22% inIndia, and a striking 53% inSri Lanka. Madagascar's average educational attainment declined slightly between2001 and 2005, from 4.1 to 3.9 years. For Madagascar to have a strong foundation for growth, this trendmustbereversed. Second, post-basic educationreforms are requiredto provide a broader segment o f Madagascar's youth the opportunity to build core labor market skills and, consequently, participateinthe benefits o f Madagascar's growth. Today, post-basic enrollment i s strongly biased towards students inupper income quintiles and select geographic regions. In2005, average JSEenrollmentfor the bottom3 income quintiles was 13percent, against 38 percent for the top income quintile. Average SSE enrollment for the bottom 3 quintiles was 1percent, against 14percent for the top income quintile. Inequality inpost- basic education enrollment perpetuates economic disparitiesand has the potential to erode social cohesion. State of the current system. The post-basic education system needs a major overhaul. The education provided is poor quality. As mentioned above, post-basic education i s not relevant to current or future labor market demands. The post-basic education systemalso has poor `throughput,' or ability to move students successfully from matriculationto eventual graduation. There are highrates o f drop-out, repetition and exam failure. As a result, 45 students must enroll inGrade 6 (JSE) for a single student to complete tertiary education. As highlightedabove, enrollment is especially low-and `throughput' weak -forstudentsinlowerincomequintilesanddisadvantagedgeographicregions. 104 Drivers of weakness of the current system. There are two mainreasons for the weakness o f the current system: (i) poor governance and (ii) financial inefficiency. Interms of governance, Madagascar has first andforemost lackedthe decisive political leadership that i s needed to drive major reform. There i s no coherent post-basic education strategy. As a result, it i s very difficult to builda cohesive post-basic education system. MEN'Sorganizational structure i s frequently changed, which has made it hardto assign and maintain clear accountability for performance o f the post-basic education system. Lastly, there i s no `feedback loop' between MENandthe private sector, which prevents MENfrom developing a post-basic system that is relevant to current or future economic needs. Interms offinancial inefficiency, the current systemisbothunder-fundedandhighcost. Though Madagascar's total education expenditure i s on par with that o f other low income countries, 59 percent of spendingwas allocated to basic education in2006. The share of public expenditure allocated to post-basic education (at 5.5 percent for SSE, 2.3 percent for TVET and 15.6 percent for tertiary) is below average for SSA or fiancophone countries. Furthermore, these resources do not stretch very far because (i) the teacher payment structure drives highstaff expenditure(indicatively, 98.7 percent o f SSE and 78 percent o f TVET recurrent expenditure are spent on personnelcosts and other staff payments), and (ii) the structure and specializationo fthe curriculum increases teacher and classroom requirements. Reform Priorities Key reform areas. The goal o f Madagascar's post-basic education reform i s to builda highquality post-basic education system, Le., a set ofinstitutionsthat provide students withmultiple pathways to post-basic education, that provide differentiated skills to the labor market, andthat support Madagascar's economic development needs. A secondary goal is to increase access to post-basic education, especially for students from the bottom 3 income quintiles and from disadvantaged geographic regions. There are three areas inwhich reform i s required: (i) educational content (structure, curriculum, teaching, and process) and linkages with the economy; (ii) cost-effective increases incoverage; and (iii) the enabling framework for reform (finance, governance, andsub-sector management). Educational content. The objective o f content reform is to ensure that educational content equips studentsto respond to current and future labor market demands. Thereare three major elements o freform. First, the post-basic education curriculum must be simplified andmade more relevant to current and future labor market needs. Changes mightinclude a reduction insubject overload, the re-organization o fthe technical and academic baccalaure`atsinto more relevanttracks, and on-going private sector input into curriculum development and modification. Second, reforms must aim to improve teacher quality at all post-basic levels - in SSE, inTVET and intertiary education. In SSE, reforms could include in-serviceteacher development, aimed at improving classroom instruction and familiarizing teachers with new curriculum; designo f a teacher 105 certification that could be open to all bachelor's or master's degree holders, not only those studying pedagogy at the university level; and expansion o f university capacity to train a larger number o fteacher educators. At the tertiary level, reforms should change faculty recruitment, focusing on recruitment inpriority areas such as math, science, and languages; faculty hiring, with permanent contracts granted only after the completion o f a successful trial period; and faculty development, with workshops designed to upgrade faculty skills inthe short term, and research support provided inthe longterm. Third, incentives to enhance tertiary institutions' performance are needed. These might include the creation o f competitive research funds, or increases infunding tied to clear performance benchmarks. Increased coverage. Increased post-basic coverage aims to raise the educational attainment o f the labor force, andto reduce inequalities inenrollment and completion across income groups and regions. To a large extent, coverage will rise naturally as the quality o fpost-basic education improves. Additional measures will that could drive fwther increases and greater equity incoverage include: (i) effective cost more management, with a focus on rationalization o f school sizes and shortening o f TVET training; (ii)enhancement o f scholarship programs' equity and efficiency, including definition o f stricter, needs-based eligibility criteria, increases inscholarship levels to cover students' actual living costs, exploration o fthe feasibility o f a student loan program, and introduction o f needs-based scholarships at the secondary level; (iii) launch o f open anddistance learning (ODL) programs, focusing on selection o f an appropriate ODL model for Madagascar; and (iv) greater private sector provision o f education, beginning with clarification o fthe rules for private sector participation inpost-basic education, and creation o f state and local subsidies to enhance participation. Strengthenedenablingframework. A stronger enabling framework i s critical to post-basic education reform-Madagascar's past reform experience suggeststhat reform will not succeed without a strong and clear enabling framework. This framework has three elements. First, clear, emphatic political leadership o f reform is central to reform success. The government must be strongly committed to reform, and that commitment must be reflected ina public policy document and other concrete actions. High-level and broad- based political support mustbe systematically built. The creation o f a mechanism for political leadership o fthe reform and steering the post-basic system i s required. A post- basic education reform commission with highlevel political authority and involving outside stakeholders should be considered. The role o f the Ministry o f Education needs to be re-defined, depending on the option chosen. Second, there mustbe a strong governance framework for reform. The governance framework must include a post-basic reform strategy for the medium term which guides budgetallocations and other actions; aNational Qualifications Framework, so that post- basic qualifications correspond to labor market needs and are recognizedby employers; and decentralization of some decisions to the district or school level, accompanied by fundingto support those decisions. 106 Thirdand finally, stronger financial management is required. Better financial management includes upgrading financial management capabilities; rationalizing capital investment decisions (schools, classrooms, teachers) based on defined utilization and equity criteria; andincreasing fundingto post-basic education through greater private sector participationand user fees.** Reform should clarify the rules around resource mobilization, so that it i s clear how resources can be raised, used andreported on. Generalprinciplesof reform. Successful post-basic education reform will keep the post- basic `system' inbalance. To designsuch a reform, that will keep the system inbalance, policymakers must ensure that: Reforms inSSE, TVET and higher education are consistent with one other, andwith basic education reforms Reforms strike a balance ofpower betweenthe nationalpost-basic education system, andthe institutions that will carry out the reforms at the regional andlocal levels. The national system should provide the context and incentivesfor the regional or local institutions, while local institutions will needthe autonomy, access and resources to carry out reform. Reforms are phased ingradually with individual institutions, to allow implementation capacity and consensus to be built, and adjustments are made to implementation as experience is gained The education sector - andMENinparticular - becomes more outwardly oriented, actively seeking the participation and cooperation o f individuals and organizations outside the sector indesigning the program Thepace ofexpansion incoverage calibrates the availability o f financial resources against physical andmanagerial capacity, to ensure the feasibility and sustainability o freform Technical expertise is usedto design key elements o f reform, such as those relatedto governance, financing and curriculum changes. These reforms should not be launched inanadhoc mannerwithout preparation Cost of reform. An important step indevelopment of the strategy i s to cost the proposed reform measures. The final selection of policies will be greatly influenced by the availability o fresources. O f special importance are policies related to the structure and duration o f courses, teacher numbers and salaries, and the cost o f facilities and equipment. Specifically, the Ministry needs to assess the cost implications o f different post-basic reform scenarios. Itmust weigh the advantages o f each reform scenario against its cost, taking projected domestic resource availability and external fundinginto account. Cost estimates musttake bothinvestment needs and recurrent expenditure needs into account. 28A national school construction strategy -buildingon the experience ofnational school construction strategy for basic education - could helpto rationalize capital investment decisions related to schools and classrooms. 107 Alternative scenarios could be developed usinga simulation model constructed around four basic modules: (i) enrollments (including coverage and completion, student flows between and within each education level); (ii) service delivery parameters, such as curriculum structure and specialization, student-teacher ratios, types o f schools, etc; (iii) costs, specifically costs o f construction, equipment, teachers' salaries, scholarships or student aid, and system-level management; and (iv) financing, specifically public resources, private resources and external donor funding. Differences intargets for each scenario are incorporatedthrough varying assumptions ineach module. The Ministryhas experience inpreparing andusingsimple models for projecting financial requirements inbasic education. However, at the post-basic level, more detail i s requiredinorder to take into account the higher level o f complexity o fthe system, and the diversity of courses andinstitutions. Cost estimates canbe sensitive to assumptions regardingstudentflows through these differentchannels. Further, the directorate o f planninginhigher education is not adequately staffed, and currently there is no unit dealing withplanningo f senior secondary and TVET. Inthe short run,technical assistanceshouldbeusedto builda simulation modelfor post- basic education. The simulation model will allow policy makers to assess the impact o f key options. The results o fthese simulations should be usedto guide selectiono fthe final policy options. Over the medium-term, the capacity for system planningand financial projections should be built withinthe Ministry. Next steps and time frame. Madagascar should develop an overall strategy for post-basic education, usingthe elements described inTable 14 as priorities. The suggested framework, presented inTable 14, focuses on five pillars.The first two pillars relate to system level reforms: (i) system governance and (ii) resource mobilization andefficiency. The other three pillars relate to specific reforms ineach o fthe three sub-sectors: SSE, TVET andhigher education. Interms ofphasing, the mainpriorities are as follows: 0 Short term (1-2 years): (i) determine strategic policy choices; (ii) the cost alternative reform scenarios, to assess the financial sustainability o f each scenario; (iii) areformscenario,toguidebudgetallocationandadditionaldonor choose funding; (iv) designnew governance structures and financing instruments, to orient the system towards labor market needs andto improve equity; (v) launchinvestment on a modest scale for quality improvement inselected institutions and programs, devolving greater autonomy to institutions; and (vi) diversify types o f programshnstitutions 0 Mediumterm (3-5 years): (i) establish the National Qualifications Framework; (ii) revise the regulatory framework for the private sector, accreditation and other system level structures; (iii)increase the use o f performance-based financing instruments to reinforce reforms at the institution level; and (iv) expand the investment program to upgrade quality, create some model newinstitutions, and enhance access 108 0Longterm (beyond5 years): (i) the National Qualifications Framework, update based on feedback from employers, educational institutions and end beneficiaries; (ii) create governance systems for permanent interactionbetween MENand employers, and sustainable financing mechanisms; (iii)ensure all education and training institutions are accredited and become autonomous; and (iv) roll out quality improvement reforms throughout the system and expand access rapidly. 109 Table 14. Framework for Strategic Development of Post-Basic Education OBJECTIVE 1: EFFECTIVE SYSTEMGOVERNANCE Formulate draft post-basic 1 Give authority to the steering Devolve authority to all education strategy; consult mechanismto channel new funds universities, training with stakeholders and according to priorities institutions and senior finalize strategy; conduct 1 Devolve authority to selected secondary schools specialized studies, including institutions inconjunction with Update National teacher study new financing instruments Qualifications Framework, Determine the appropriate 1 Develop and introduce based on feedback from steering mechanism for the management development employers, educational reform, including re- programs for MENstaff and institutions and end beneficiarie, defining role o f MENand educational institutions new governance structures 1 Implement key fiameworks, basec Undertake financial on results o f feasibility studies simulations to determine o National Qualifications feasible policy Framework Conduct assessmento f o Private sector regulatory institutional capacity in framework Ministryand universitiesh-aining institutions Develop and implement communication strategy Develop and implement SSE and TVET teacher recruitment and professional development policies Revise faculty recruitment procedures and professional development for new hires at universities inselected fields Undertake key feasibility studies o National Qualifications Framework o Private sector regulatory framework, including changesrequired for accreditation, quality assurance, and partnership with foreign providers 110 . . 1 Assess possible scope o f Design and launch competitive Design and introduce new private sector participation, fimds/performance-based system o f transfers o f public including private sector fundinghcholarship funds to fbnds for improving marketsize, growth and improve quality, target equity and performance and internal businessmodel leverage managerialchange in efficiency .. . I Develop planning criteria to secondary schools, TVET and Create fund for long-term rationalize location o f public universities development o fpost-basic . schools anduniversity Strengthen budget management education or for specific sub- programs, giving weight to capacity inMEN sectors with multiplesources regional equity criteria Strengthen financial management I Prepare simple tools for andreporting capacity at the budget preparationand institution level reporting at MENlevel I Create system o fmonitoring efficiency OBJECTIVE 3: EXPANI HIGHERQUALITY SENIOR S CONDARY EDUCATION I Undertake study to re- Expand school provision, school Introduce open learning organize/modernize development fund and scholarshiF systeminselected areas baccalaurkat series program Roll out the reformto all SSE I Review curriculum in Continue revision o f curriculum schools priority areas and identify Establishmodel senior secondary Introduce changes to needs for learning materials schools examination and assessment and equipment Determine new types o f system I Undertake study o f teacher secondary schools for expansion preparationand development inruralareas, andfor specific needs regional/ skill needs as well 1 Design and launch appropriate open learning systems scholarship program for poor Design and start implementation students o f school development fund for selectedpublic andprivate schools 111 OBJECTIVE 4: IMPROVERELEVANCEOF SKILLS TRAINING Take a policy decision to Create mechanisms for identifying Implement re-designed introduce vocational course national /regional /sectoral vocational training courses in after grade 10 and phase out training needs and rationalize role priority fields existing CFP o f MENand Ministryo f Labor Design and implement Undertake tracer study on Pilot promising institutional employer participation in TVET graduates models and curriculum testing and certification o f Evaluate the current o Revised vocational and LTP graduates provision and training needs curricula in selected Establish national skills for the informal sector institutions development authority based Review curriculum for LTPs o Model TVET centers on lessons learnt inpriority fields o Experimentalmodels for Upgrade curriculum inall Expandtraining to informal sector training vocational centers and LTPs enterprises Redesign vocational training and Expandinformal sector SSE technical training to be training based on the shorter and more flexible outcomes o f experiments and (polyvalent; multipurpose trials institutions) Introduce revised pre- and in- service instructor training Increase financing for instructor training and move to demand-side financing Institutionalize graduate tracer studies OBJECTIVE 5: CREATEA HIGHQUALITY TERTIARY EDUCATION SI STEM Conduct assessment o f labor Reformuniversity governance 1 Increase tertiary enrollments market needs with employer: structures through diversified system of and other government Expandnumber o fISTs, based on public universities, ISTs, agencies and enrollmentkost need and available funding private sector, foreign projections to determine the Roll out LMD implementation in partnerships and ODL relative priorities and more disciplines using Continue upgrading o f quantitative targets for competitive funds or other curriculum indifferent fields specific disciplines, types o f financing mechanisms Introduce benchmarking o f programs and institutions Expand Ph.D training and faculty institutions against Undertake feasibility study o development programs international standards expansion o f ISTs in Establish accreditation and quality Design mechanisms for different regions and begin assurance mechanism for public university-industry investment andprivate sector partnerships, and provide Undertake feasibility study o Introduce new opeddistance matching fundingto expanding'specializing learning delivery systems to encourage appliedresearch regional universities and expand access partnerships in selected provide additional funding Design and start implementation priority fields Prepare plan for introducing o f competitive fund inselected LMDreform andstart institutions/disciplines introduction Design and start implementation Undertake study o f private ofrevised student scholarship sector, external partnerships scheme and opeddistance learning 112 REFERENCES BackgroundPauersfor this Report WorldBank Johanson, Richard. 2006. A Preliminary Assessment of Technical-VocationalEducation and Training (TVET) in Madagascar. February2006, unpublished. Lassibille, Gerard. 2007. Education et marche' du travail h Madagascar.Unpublished. Lassibille, Gerard. 2008. Laproductivite' des entreprises malgaches: Re'sultatsd'apr8s I'enqugteICA. Unpublished. Mikhail, Sam. 2007. Applied Science,Engineering and Technology (ASET)Education in Madagascar: Analysis of Issues, ChallengesandProposedReforms Initiatives. Unpublished. d'Aiglepierre, Rohen. 2008. Enseignementpost-primaire prive' h Madagascar: Diagnostic de la SituationActuelle et Analyse des OptionsEnvisageablesde Partenariats Public-Prive'.Studyjointly financedby World Bank andAFD. February2007, Unpublished. Salmi, Jamil. 2008. Madagascar:Financing and Governanceof Tertiary Education. Unpublished. Prasad, S.N. 2007. Curriculum, Textbook and Teacher Training in theIndian School System: Study of Four SouthIndian States.Mysore, India. Unpublished. MEN MEN.2008a.Mise en euvre duplanEducationPour Tous-Bilan annuel 2007. Version provisoire MEN.2008b. Rapportd'Etatdu SystimeEducatifNational Malgache (Country Status Report on Education). Inprogress. Middleton, John. 2007. Optionsfor Re-structuringSecondaryEducation in Madagascar. DiscussionPaperfor MEN. Unpublished. Zaafrane, Hafedh. 2008. Etude sur les coats et lefinancement de 1'enseignement supe'rieur 6Madagascar. Consultancy Report for MEN.January 2008. Unpublished. 113 Other Sources Alesi, Bettina, Burger, Sandra. Kehm,BarbaraM.and Teichler, Ulrich.2005. Bachelor and Master Courses in SelectedCountriesComparedwith Germany.Federal Ministry of Education and Research, Berlin. Bashir, Sajitha. 2007. Trendsin International Tradein Higher Education: Implications and Optionsfor Developing Countries.World BankEducation Working PaperNo. 6 March2007, Washington, DC. NathanAssociates Inc. 2006. CambodiaGarmentIndustry Workj5orceAssessment: IdentiJLingSkill Needs and Sources of Supply. Preparedfor USAID/Cambodia Nathan AssociatesInc. Arlington, Virginia. June 2006, Unpublished. Riboud, Michelle, Savchenko, Yevgeniya and Tan, Hong. 2006. TheKnowledge Economy and Education and Training in SouthAsia: A Mapping Exercise of Available Survey Data. World Bank.Draft Paper. Salinger, Lynn.2003. CompetitivenessAudit of Madagascar 's Cotton, Textiles,and GarmentsSector. Preparedfor USAIDMadagascar. NathanAssociates Inc. Arlington, Virginia. September2003, Unpublished. Shah, JalanS.A. andBaru, Bandar B.2005. Feasibility studyfor establishingan industry-ledskills developmentprogramfor the textile andgarment industry in Madagascar.Penang, Malaysia. Unpublished. Stifel, David, Rakotomanana, Faly H.and Celada, Elena. 2007. AssessingLabor Market Conditionsin Madagascar, 2001-2005. World Bank, Washington, DC. UNESCO. 2002. Openand Distance Learning: Trends,Policy and Strategy Considerations.UNESCO, Paris. World Bank. 2001. Education and Training in Madagascar: Towardsa Policy Agenda for Economic Growth andPoverty Reduction- A Summary of the Key Challenges.World BankAfrica RegionHumanDevelopment Working Paper Series, Washington, DC. World Bank. 2005a. Expanding OpportunitiesandBuilding Competenciesfor Young People - A New Agendafor SecondaryEducation. World Bank, Washington, DC. World Bank.2005b. Madagascar: Investment ClimateAssessment. World Bank, Washington, DC. World Bank.2007. Madagascar: Thechallengeof expandingsecondary educationand training. World Bank,Washington, DC. 114 World Bank.2008a.At the Crossroads: Choicesfor Secondary Education and Training in Sub-SaharanAfiica. (The SEIA SynthesisReport) Africa HumanDevelopmentSeries. (May). World Bank.Washington, DC. World Bank.2008b. Curricula, Examinations, andAssessment in Secondary Education in Sub-SaharanAfiica. World Bank, Washington, DC. World Bank.2008c.Madagascar: Integrated GrowthPoles Project. ProjectPaper. World Bank, Washington, DC. Websites BolognaProcessNationalReportswebsite (http://www.bologna-bergen2005.no/> GlobalCompetitivenessReport 2007-2008 (http://www.gcr.weforum.orrr/) National Instituteof OpenSchoolingwebsite (http://www.nos.org/) UNESCOInstitutefor Statistics website (http://stats.uis.unesco.orq) World BankEdStatswebsite (http://sima.worldbank.orrr/edstats/) World Bank,Enterprise Surveyswebsite (http://www.enterprisesurvevs.org/) World BankKnowledgeAssessment Methodology(KAM)website (http://www.worldbank.orrr/kam) 115 APPENDIX: THE REFORMOFBASICEDUCATIONIN MADAGASCAR: LESSONSAND IMPLICATIONSFOR POST-BASICEDUCATION Madagascar's education and training system has to respondto three challenges: (i) make education and training more relevant to labor market needs; (ii) increase access ina cost- effective manner; and (iii)improve equity through more balanced regional development and creating opportunities for poor students. Reformsto address these concerns inan inter-relatedmanner are already advanced for the new basic education cycle (grades 1-10). These include: 0 changing the structure and duration o f education cycles -this enables an increase inaccessandinternalefficiency, while improving relevance 0 introducing reform o f curriculum and pedagogicalpractices -this i s closely linkedto the reform o fthe structure andduration andis imperative for increasing relevance and quality 0 providing alternative and flexible delivery models that complement the formal education system 0 targetedprograms to improve enrollment and completion This chapter briefly assessesthe important changes inbasic educationandthe lessons and implications for the reform o fpost-basic education. Proposed New Structure of School Education The school cycle inMadagascar currently comprises 5 years ofprimary, 4 years o fjunior secondary and 3 years o f senior secondary education. This system, with a relatively long junior secondary duration which i s typical o f francophone systems, is due to change between2008 and 2011. The primarycycle will be gradually extended to 7 years of education, with a lower primary sub-cycle of five years and anupper primary sub-cycle o ftwo years. Thejunior secondary phase will become three years o f duration and together, the primaryandjunior secondary cycle will constitute a basic education cycle o f 10 years. These reforms are inline with international trends, where countries are increasingly movingto universal provision o f 9 or 10 years o f education with a common curriculum. The new senior secondary education will last for two years and entrants to senior secondary education will therefore have ten years o fprior schooling. Technical and vocational education and training (TVET) will also undergo a change. Currently, students can enter vocational training after grade 5, ifthey fail to enter junior secondary education. The reform means that students would enter vocational programs after 7 or 10 years o f schooling, depending on the choices made regardingthe introduction o f vocational reforms. 116 The reform of primary andjunior secondary education is well articulated inthe Ministry's newEFA Plan, Plan d 'Educationpour Tous. The plan includes EFA 10, the 10year basic education cycle (Figure 37). Fundingo fthe reform will be provided by the government budgetand through a U S $ 85 million grant from the Education for All - Fast Track Initiative global partnership, which has been secured for the period 2009- 2011. Introduction o f the new primary cycle is expected to begin in September 2008, withthe new grade six beingintroducedin20 districts and new curriculum andtextbooks introduced ingrade 6 and grade 1inthese districts. The reform will be rolled out to new districts and new grades ina phased manner. The reform ofjunior secondary education willbeginonasmall, experimental basis in2009 andwillbescaledup, depending on implementation capacity and availability of resources. Inthe vision for EFAl0,the outcomes oftenyears ofgoodquality education for all are directly linked to strengthening the human resources needed for the nation's economic growth strategy. The Ministryhas usedthe reformto introduce major changes in curriculum, language o f instruction andteacher training and textbooks. The new curriculum will be structured around three main domains o f learning: (i) Malagasy and social studies (ii) mathematics, science andtechnology and (iii) other languages (French and English). These domains will organize teacher and student time, learning materials and the participation o fthe local community is thus o f critical importance to improving quality. This new curriculum will replace the highly academic andincreasingly irrelevantone installed at the time o findependence. Figure 37. New structure of basic education ReformofPrimaryEducation At theprimary level, anew curriculum withuse of Malagasyas language ofinstructionin grades 1-5 and strengtheningo flanguage teaching inFrenchand English (upper primary) is being designed(Figure 38). The curriculum renewal i s complemented by new learning materials, new teacher education andcertification programs as well as school-based teacher development initiatives. Changes inmanagement and governance with progressive expansion o f regional, district and school budgets are being introduced. 117 Figure38. Proposedcurriculum,grades 1-10 ,--------------I I Languages: Grades 1 7 - Social Studies Frenchand j; I----English---- ----- I -1 Junior Malagasy& AppliedMath Communication: Secondary: Social Studies and Science FrencWEnglish Grades 8,9, & I lS' lo Studentschooseelectivesatbeginningof grade10Ftterm term Of I I I Choiceof Project-BasedElectiveCourses Junior Secondary: Career education Applied mathand science Pdtermof Grade 10 I Electivesmay include internshipsor community service I Key ;_t - - 1 --; Strongeremphasis inupperprimary(Grades6-7) Source:Adapted fromMiddleton(2007), Figure 1. ReformofJunior SecondaryEducation The challengesfor junior secondary education are to equip students for the triple requirementsof the world of work, society and senior secondary education. The reform o f junior secondary education will focus on three broad areas: (i) quality improvement through curriculum reform, new teacher training programs and learning materials and (ii) creating highquality junior secondary schools (colliges d'excellence - COE) networked withother JSE schools and (iii) expanding access through introduction o f flexible learning models. Curriculum: The newJSE curriculum would depart from the traditional model currently inuse. The general trend inthe world isto moveto areductionofsubjects and curriculum overload. Currently, Madagascar's JSE curriculum requires about 1100 class time ayear, significantly higherthanthe 800-1000 hours norminmost OECD countries and other regionsthat are modernizingtheir curriculum. This long duration, together 118 with a framework that emphasizes rote learning, reduces time for self-directed student learning. The new curriculum would be aligned with the curriculum domains o fthe new primary curriculum, and it would use Grade 10to broadenand deepen student learning to include 21Stcentury skills inproblem solving, critical thinkingand communication (see Figure 38, above). Colliges d'excellence (COE) and network schools: COEs would be the focal point for introducing newcurriculum, distributinglearning andtraining teachers. COEs would provide leadership and support a network o f four to six local schools while the new curriculum and teaching methods are put inplace. COE teaching loads would include in- service work withteachers o f other schools, intheir classrooms as well as intheir own classrooms. Changes would be disseminated through the network schools. Implementationwould be based on voluntary participation o fpublic and private schools, which would receive additional funding and technical support. This i s a "whole school" development approach. Itis a departure from the traditional model o f grade-by-grade curriculum change which i s appropriate for the primary level. This approach allows scaling upaccording to implementationprogress andbuildingup capacity gradually. Teacher training: The curriculum reform implementedthrough the COEs would be supported through renewal o f teacher training programs at the senior secondary and universitylevels. The programs will focus onteacher verbal ability, knowledge o fthe content beingtaught, and mastery o fteaching methods. InMadagascar's context, the following teacher competencies are especially important: multi-grade teaching, how to adapt the general curriculum to rural realities and needs; the ability to teach across the courses ina curriculum domain andto work as a team withthe head teacher and other teachers, with parents andwith community leaders; the skills to organize open schools, to designelective courses; and to organize and supervise student community service and work internships. Flexiblelearningmodalities: Open schools would be introducedto provide flexible learningopportunities for those who have completedprimary education but are unableto continue with formal education or those who have discontinuedJSE. Many countries, including India, Indonesia, and Colombia, and nearly all OECD countries as well, have established Open Schools that enable students who cannot attend regular schooling to study for their examinations. Successful approaches emphasize flexible student promotion, a curriculum orientedto rural issues, special learning materials, specially trained teachers and highlevels o f community participation. Open schooling has muchto offer inMadagascar. Lessons o f experience also show that large scale and rapid expansion o f a "packaged" model without careful management andmonitoring i s risky. Flexible, community-based modelswork better. These elements are expected to be built into the open school model at the JSE level. 119 ImprovingEquity The EFA 10 program envisages targeted measures to improve access and completion, withthe goal o f ensuring universal primarycompletion by 2015 and gradually expanding junior secondary. At the primary level, these include ensuring that all villages are provided with a complete lower primary cycle (grades 1-5) withina radius o f 2 km, allowing flexibility inthe school calendar based on local climatic conditions, providing targeted funding for districts with low completion rates and fundingto schools to improve school level management. At the JSE level, greater equity ingeographical coverage will be a criteria for new schools (especially public schools) and fundingfor private schools will encourage participation o f poor children. Open schools are another methodto expand educational opportunity. ImplicationsandLessonsfor Post-BasicEducation Overall, the reform o fthe basic education structure and simplification o f the curriculum resulted incost savings intwo main areas: construction and specialized teachers. These resources can be used for expandingaccess and improving quality. The reform o fbasic educationhas implications for other levels. The first is an opportunity. Extending universal primary education to 7 years andbasic educationto 10 years, which increasing number o f children will complete over the next decade, will itself raise the educational attainment o f the population. Introducingflexible opportunities for out-of-school youth will enable faster progress on this. Curricular reform can improve the competencies o fthe majority o f young people who will enter occupations in agriculture and the informal sector. The implication is that, while access to post-basic education will need to increase to absorb a part o f the increasingnumber o f JSE leavers as well as for Madagascar's growth strategy, the main focus o fthe reform inthe medium- term can be on improving quality andrelevance for skilled labor needs and supporting economic development. The second implication i s that reform o fpost-basic education cannot be avoided, ifonly to avoid discontinuities inthe system. As a starting point, programs at the tertiary level would needto be changed inorder to upgrade the quality o f teachers at the lower levels. More importantly, a holistic approach to the content o f education i s required across the spectrum. Finally, reform at the higher levels is required to broadenthe base o f support for reforms at lower levels o f the education system. There are also some important lessons. Beyond the primarylevel, the implementationo f reforms i s best done through the institutions, rather than launching system wide changes at one go. This i s best exemplified by the reform o f JSE. Complicatedreforms with too manyelements are difficult to manage, especially ina low capacity environment. At the same time, reforms focusing on improving quality and relevance need to cover an entire package - curriculum, teachers, learningmaterials, financing and management - ifthey are to bring about desired changes inthe classroom. Major cost reductions can be realized 120 through curriculumre-organization, utilizingteachers and classroomsmore effectively. Careful planning and realistic phasing are important. Finally, ownership and leadershipby the Ministry is required to guide the process o f change, which covers bothtechnical andpolitical aspects. For the EFA 10, a considerableamount of international technical assistance i s beingprovidedby the partners,butwithout the leadershipofthe Ministry'sEFAteam anda systematic approachto capacity building, these advances would not have been possible. Capacity canbe and hasbeenbuilt inthe processof leading change. 121