78802 STRICTLY ONFIDENTIAL 1 LV/er INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Joint Meeting Washington, D. C. Tuesday, March 28, 1972 A joint meeting of the Executive Directors of the International Bank for Reconstruction and Development and the International Development Association was convened at 10:02 a.m., in the Board Room, 1818 H Street, N.W., Mir. Robert S. McNamara, President, presiding as chairman. HOOVER 9EPORTING Was6g- DC 2000 (202) 54666 STRICTLY ONFIDENTIAL 1 2 CONTENTS Agenda Item Page 3. Proposed Loan - Nigeria . . . . . . . . . . . . . . 3 CO, ING. 320 Massachusetts Avenue, NE Washington, D.C. 20002 (202) 546-666 STRICTLY CONFIDENTIAL 3 PROCEEDINGS MR. McNAMARA: And that brings us then to Agenda Item No. 3, a proposed loan in the amount of $17.3 million to Nigeria for an education project. I will ask Mr. Pearce of the Western Africa Department to present it to us. HOOVER REROFUTI,'( 11 3,20 Ma , u tsA4 '204-) 540-666 STRICTLY ONFIDENTIAL 4 MR. PEARCE: Mr. Chairman, Members of the Board, the circumstances in which the Federal Government, in January 1970, requested Bank assistance for this project are outlined in the reports before you. Two years have elapsed since then and some explanation of this delay is appropriate. Whil$e it reflects in part some of the peculiar problems, r administrative, institutional, and legal,facing the country since the civil war, it also indicates the manner in which Nigerian authorities have approached their reconstruction needs in the context of long-term development objectives. The project's original objective was quite simple: to reconstruct and rehabilitate war-damaged secondary schools and primary teacher training colleges in the three Eastern States. However, in the process of reviewing their future manpower needs in the light of postwar priorities, the three States decided not only to restore facilities to their prewar level but also to consolidate and expand them and, more importantly, to implement reforms in the secondary school curriculum. The latter, comprising the strengthening of science training and the introduction of practical employment-oriented courses, were already being introduced experimentally in some secondary schools in the former Eastern Region before the civil war, which then disrupted HOOVER REPORTING CO, INC. 320 Massachusetts Avenue, N.E Washington, D.C.20002 (202) 546-6666 STRICTLY (ONFIDENTIAL 5 the entire educational system. Consequently, the project, during appraisal, was modified to include consolidation and expansion of the selected secondary schools and primary teacher training colleges and the implementation of curriculum reform. Nearly half the secondary school student places and nearly three-quarters of the primary teacher training college places to be financed by the proposed loan represent additions to these institutions' prewar enrollment capacity. Apart from the obvious advantage of this modification to and expansion of the original rehabilitation project, other less visible but equally important benefits will follow. First, the combination of reconstruction with consolidation ard expansion will result in substantial economies of scale in both construction and equipment. Moreover, the concentration in these expanded schools of the costly, specialized staff and facilities required for the reformed secondary school curricula will optimize their use. Second, the expanded project schools, which will account for about 12 percent, 37 percent, and 32 percent of the three States' total seconda y school enrollments by 1974, may be expected to have a considerable "demonstration effect" on the development of secondary education in the Eastern States and possibly HOOVER REPORTINC~ 370 -Mwl"hy & (,202) 5465ck26 STRICTLY ONFIDENTIAL 6 elsewhere in Nigeria. Third, the proposed establishment of project units in the Federal and State Ministries of Education and the associated technical assistance represent a form of institution building intended to strengthen the administration of this project, which will hopefully be adopted in future education projects in other States, particularly in those new States where executive capacity is now extremely weak. To summarize, we believe that this second education project will, in the longer term, prove to have benefited from the time taken to prepare it. In addition, the experien gained in preparing and implementing it is expected to help the Nigerian authorities and the Bank develop a continuing program of education projects. In this connection, the report of the 1971 UNESCO Project Identification Mission recommended the following priority areas for early action: primary teacher training, expansion of industrial trAining at skilled worker and technician levels, expansion and reform of secondary education, and improved adult education and agricultural training. During the next three months, the Bank expects to prepare and appraise a third education project probably concentrating on the six Northern States' needs for improved primary education, including teacher training, HOOVER REPORTING CO, INC. 320 Massachusetts Avenue, N.E. Washington, D.C. 20002 (202) 546-6666 STRICTLY CONFIDENTIAL 7 secondary education and the better employment of non-formal systems. We hope that this project will be sufficiently advanced to present a loan for your consideration during the second half of Fiscal 1973. In the meantime, we commend the proposed loan for this second education project to your consideration. Thank you, Mr. Chairman. MR. McNAMARA: Thank you, Mr. Pearce. May I have your questions and comments? Dr. Sen. DR. SEN: Mr. Chairman, this is a day for education. Wehave not only three education projects before us, but the population project is also basically an education project because the large part of it is for the training of paramedical personnel. I think all of these four projects are very commendable and they have my full support. But I have two general points which cover all three projects. Therefore, I will make those points now. 1r. Chairman, in the Nigerian project, also in the other projects, the things that are proposed to be done, need to be done, and I am very glad that provision is being made for that. There is provision for teacher training, HOOVER REPORT!PNG, fl,U j Washigt.) .?00 (202) 546-6666 STRICTLY IONFIDENTIAL 8 provision for improvement of secondary education, for technical education. But I find that although today we have got three projects and there is a promise of another project in Nigeria in the near future, I find that the aspect of training in management at the middle level in particular is not being paid attention to. I think of all the education projects, it is only in one project in Turkey that some management training was provided. Now, in most of these countries, there is a great need for training of management personnel, giving training in business management, administration, but not so much necessarily at the top level because top level people can get training abroad. But middle level people, there is a great shortage, and a reference to that was made in the education sector paper. And I feel that this is a very important subject, and I think in the future education projects attention should be paid, particularly to training of middle level management, business management and also administ1 a- tion. This is one general comment that I have. The second point, Mr. Chairman, that I notice is that in none of these projects in civil works has the approach of slicing and packaging been followed. I thought that these HOOVER REPORTING INf2 32C1as Washington, DL 200Y (202) 546-6666 STRICTLY (:ONFIDENTIAL 9 are the projects which are eminently suitable for the slicing and packaging approach so far as civil works are concerned. There is some slicing in the population project, Indonesian population project, but not in the other three education projects. Why is it I would like to know. Thank you, Mr. Chairman. MR. McNAMARA: I will ask Mr. Chadenet to comment on your second question regarding slicing and packaging of civil works in a moment. But first perhaps Mr. Ballantine would comment on education for middle level management. Duncan, what's the problem, how do we approach it, what other comments would you wish to make on it? MR. BALLANTINE: Well, I can't speak, Mr. Chairman, too fully about the case of Nigeria except that there is an Institute of Management in the East Central States. MR. McNAMARA: Speak more generalyabout the middle management problem that we see in the developing countries and the solution, if any, that we are working on. MR. BALLANTINE: Right. Well, we are certainly very conscious of this. It's borne in on us every day. We are trying to expand our activities through project identification. We see several forms of treatment of this. First is through university HOOVER REPORT4,C W 5ashingto.D24 (202) 546 666 STRICTLY (ONFIDENTIAL 10 training, which is training for a less specific market. It's a broad general market. It's the basic training that would be provided in an advanced country. We have an identification of a project forthcoming in Korea identified possibilities for a thing like this, and we will be doing it more and more. On the middle management level, the other approach would be through the short courses. And here I think what we are doing in Turkey is the best example. We have an Institute of Management which is in the project that was recently signed there, and this will call for one-year courseE and for a series of short courses which will be offered on specific subjects such as inventory control, personnel management, etc. It involves a very close relationship with the employers. And although it's not in the project, the systei that has been developed in Turkey under the Turkish Management Association calls not only for training of manager in institutions in either short or long courses, but also forl consulting services which will be sent out to firms that will enable them within the firm to improve their management practices. These are, very briefly stated, the range of approaches that we feel we can make. I should point out HOOVER REPORTING 00, 1N 320 Massachusdett, Aves N. Washington, D.C 200C< (202) 546-6666 STRICTLY ONFIDENTIAL 11 also that of course, this would be dealt with through the training adviser in Mr. Chadenet's office, that is to say, in other projects as well. MR. McNAMARA: I think it depends on what middle level management means. If you're thinking about rural areas, and certainly a large part of our problem in education is educating for increased efficiency in rural areas, agricultural production, our agricultural vocational training, particularly for extention agents, goes a long way toward meeting that. One of the real problems we face in this Bank is developing project managers for agricultural projects. And we are giving increasing attention to that. In the industrial sector, middle level management there, the Turkish approach, the efforts to assist firms to do their own middle level management teaching is something we will want to give increased attention to. Taiwan, for example, has an extraordinarily effective program of that kind. I don't think we have gone very far, frankly, in developing training for middle level management, if you want 1! to call it the foreman level, the middle supervisory level for industry. The Turkish experiment is the most noteworthy HOOVER REPORTMiN C-, ' Washingion, D ; 20002 (202) 546-66666 STRICTLY ONFIDENTIAL 12 example of anything we have done I think, Duncan. But we will be giving more attention to it, Dr. Sen. .Are there other comments or questions? Mr. Wolf. MR. WOLF: Mr. Chairman, as Mr. Sen has said already, it seems to be an education day, and that encourages me to say a few words on education as such. The projects.before us, three of them, or at least the two first, follow more or less a certain line which favors the improvement of secondary education. But in all the appraisal reports it says that the primary education remains much to be desired and as a matter of fact, if you read the passages on what is said about primary education in those countries, it's really a matter of concern. Now, Mr. Chairman, I am very much concerned -- I am much more concerned pken&ntly about primary education than I am about secondary education. And I am very much concerned about the fact whether we are not trying to build the first floor and improve the first floor of a house before we have considered the basement at all. And I think that's a basic consideration which is not limited to less developed countries. It's a basic consideration going right through all countries of this world, and it's very much in the mind II HOOVER REPORTING CO, INC. 320 Massachusetts Avenue, N.E. Washington, D.C. 20002 I (202) 546-6666 STRICTLY ("ONFIDENTIAL 13 of many people nowadays what to do about primary education. I think that's teally what we should be concerned about, to give the best of any education at the earliest stage of a child, and if considering what the priorities are, I would say that the Bank as such should dedicate more attention to the primary education, to the training of teachers for primary education, and on top of that to adult education. One can find these priorities, these problems, as I said, even in the richest country, and a few of us have just recently had the opportunity to go to California on a trip and we found there that even in the United States, the facts are there that neglecting primary education costs an enormous amount to the economy. Now, that leads me to the consideration and to my little statement that I think the Bank should not try to emphasize too much on secondary education but to help those less-developed countries, and I think many developed countries need help in this case, too, to improve,basically improve, primary education, and especially teacher training for primary education. Because in my opinion, only the best teachers should be available for primary education because that's the age where the child is really formed and built. Thank you, Mr. Chairman. HOOVER REPORTINC IR WashneLor., b.C. 200M2 (02) 4-666 STRICTLY GONFIDENTIAL 14 MR. McNAMARA: Thank you, Mr. Wolf. Mr. Ballantine, would you comment on our attitude toward primary education? MR. BALLANTINE: Mr. Chairman, Members of the Board, this subject has had a long history in our dealing with education, and at the beginning it was almost arbitrarily excluded as not being one of the priorities. You will recall that in the submission of an education policy paper a year ago last summer, the point was made that we should not have a priori areas of eligibility but that we should analyze the needs of the education training sector as a whole and determine within the framework of the Bank's major objectives, its declared objectives, what would be the priority items. Now, I think the first thing we have to recognize is that all of these countries we are dealing with have extreme constraints, financial and resource constraints, and that therefore the matter of priority is perhaps as urgent in this sector as it is in any one, particularly considering that investment is not revenue capturing, that is to say, it requires a continued recurrent expenditure in order to sustain the operation. And this has to be our guideline much more than the level of investment. 400OVEF, REPORTING CO,N, Washingto!, D.C. 20002 (202) 546-6666 STRICTLY (ONFIDENTIAL 15 That being so, we tried to approach the question of priorities not in terms exclusively of building an educational system, let alone a formal one. As you know, we are trying to broaden our view and take a look at the non- formal and the formal together, but certainly not simply in the sense of building up a formal education system. The point of reference that we prefer to use is what will be the role that will be played, the economic or in some cases the social role that will be played by a student when he leaves that particular level of education. And using that and using the need to man the systems, both private and public sector systems, of newly developed countries with very poor stocks of manpower, we have to conclude that by those strict criteria, primary education often has a lower priority, in terms of enabling people to govern and manage and operate the country effectively. Now, as our sector paper said recently when it was presented to you last summer, we find that in certain countrie there is a growing saturation or approaching th point of saturation in secondary education. We feel also that the new objectives and trends in our thinking that are coming forward, such as the maximizing, the distribution of income, and so forth, call for a somewhat wider look, and we would feel, and I 400YER REFORTRIC N, Washingtr. DC. 2002 202) 546-6666 STRICTLY CONFIDENTIAL 16 agree, I think, with Mr. Wolf that primary education is achieving a much higher priority in our thinking than it has held in the past when we concentrated our attention more on the secondary, on the technical, and vocational fields. It's a question of how much the country can sustain in terms of recurrent expenditure, what the vlume of our investment is, what the degree of maturity of the system is, andhow far we have gone in the direction of specifically meeting manpower needs. But I certainly, Mr. Chairman, would have no argument whatsoever with the proposition that the gradual extension of an improved -- and I underline an improved -- primary education should be a concern of ours. I might add just one more point. This Board did agree, I believe, with a policy which was expressed in that policy paper, and again in the sector paper, that we should consider experimental projects in primary education which gave promise of greater efficiency, relevance, or economy, and we have begun to do that. We still are approaching it through primary teacher training primarily, but we would be prepared to offer you projects which were experimental by the description I have just given. MR. McNA4ARA: Thank you, Duncan. OOVER REPORTI546 7666 ,202) 546-6666 STRICTLY CONFIDENTIAL 17 The problem varies in different countries. In some countries with 90 percent enrollment of the primary age group in school, the problem is ensuring some reasonable degree of, I will call it, efficiency and relevance. With dropout rates as high as 60 and 75 percent in some of these cases, the whole system is inefficient at the primary level and with relevance completely lacking because either the primary curriculum is directed toward movement of that entire group up into the secondary level which is impossible to finance in the area, or alternatively it does not prepare them for a terminal relationship to primary education. Curricula revision is necessary. In other areas, and Ethiopia is a good illustration with a very low rate of attendance in the primary schools, 15 percent, I think, 85 percent of the primary aged group not attending school, the nonformal programs that Mr. Ballantine mentioned will become increasingly important. As I think our Board knows, we have a research project under way now dealing with that subject. We don't know how to deal with non-formal education. I think we budgeted $250,000, something like that, included in the last budget that the Board reviewed last May. And I am very hopeful that project will throw some light on how to deal with a problem such as Ethiopia's. It is a very OOVEP RPORT :0)546-6666 STRICTLY ONFIDENTIAL 18 common problem in developing countries where generations have passed by primary school without exposure to it, and not just past generations, but future generations are going to be in that position because the resources of the nations will to not permit an expansion of the primary system sufficient deal with the requirement of the people who don't go to those schools. So we have much further work to do on it. Duncan, did you wish to add something? MR. BALLANTINE: Mr. Chairman, I just wanted to amplify your point about Ethiopia by way of illustration. In 1970-71, Ethiopia has about a 15 percent enroll- ment of the primary age group. It has 3.6 percent in the secondary, and substantially less than one-half of one percent in the higher education. And it is spending 19 percent of its total budget on education. We have projected these figures ahead to 1978, and we find that at that time, if they achieve a level of 20 percent in primary enrollment, of about 6 percent in secondary enrollment, and still less than one-half of one percent in higher education enrollment, they will then be spending 25 percent of their budget. And this rapid increase in the absorption of educational expenditure the commitment to recurrent expenditure, I think, is a very clear illustration of the problems that countries face if HOOVER REPORTING "0, iF 320 Massanusetk A4c-q Washingtop., 20002 0"02N 54-666 STRICTLY GONFIDENTIAL 19 they try to pursue meeting their educational needs through the conventional and costly system. MR. McNAMARA: Therefore, there has to be an unconventional answer to this because I don't think any of us could visualize Ethiopia or the Ethiopias, because there are many of them, we just happen to remember those figures, in the 21st century being an effective nation with productive people with whatever it be, 80 percent of the 60-year-old adults in the 21st century never having been exposed to primary education. There must be some other answer and that's what we are searching for. Dr. Sen has reminded me I failed to address his second question. I apologize, Dr. Sen, I was thinking so much of education I neglected to call on Mr. Chadenet to comment on your question regarding slicing and packaging for civil works. Why haven't we done more of it in these projects, Bernard? DR. CHADENET: In this slicing, we don't slice the projects because they are small, while we would slice the long highway into several elements which enable local contractors to bid on a contract which is in accordance with its ability;in the case of schools facilities, they are small, the units are small, therefore no need to slice them. HOOVER REPORTINJG CO, f 30 %a~~A Washi-igtnn 0 .2000? (202) 546-666 STRICTLY (*ONFIDENTIAL 20 Now, why don't we package them? In fact, we do. MR. McNAMARA: You might comment on how we package some of these educational projects. PR. CHADENET: I think in this case I would like Mr. Hammerschmidt to help me, but I think in this case we package by groups of three to five schools. MR. McNAMARA: Mr. Hammerschmidt, would you come to the table. MR. HAMMERSCHMIDT: Mr. Chairman, the map at the back of the report will show how the schools are distributed over the country, and the Government would call for tenders for two schools or three schools or four or five, as it is practical in accordance with the distribution. So a builder would be able to bid for one school or for five in accordance with his capacity. MR. McNAMARA: Thank you, sir. Dr. Mey. DR. MEY: Thank you, Mr. Chairman. Mr. Chairman, let me enter into a slightly different aspect of the project. Nigeria is a country in a rather special situation. Due to the oil boom, the balance of payments prospect is very good. But at the same time the country is lacking the human HOOVER REPORTING IN lO Washington, DC. 20002 (202) 54C-666 STRICTLY CONFIDENTIAL 21 resources needed to make adequate use of the excess external resources. Since this situation is to a certain extent shared by some other countries, countries with large oil and ore mineral resources, like Venezuela, I think it deserves our careful consideration if we are to avoid a wastage of resources and to promote an effective growth in those countries. I think that for this country, Nigeria, the the present education project and / coming review of Bank financing are two important steps in the right direction. However, although in paragraph 21, the paper recognizes that project preparation and investment capacity are the major development constraints, it looks like most of the burden of solving this problem is on the Government side. I wonder if the Bank is playing or is going to play a role more active than usual in identifying and prepari g Government projetts in Nigeria, not only those to be financed by the Bank, but also other projects which could take advantage of the potential resource position? Thank you, Mr. Chairman. MR. McNAMARA: Thank you. Mr. Chaufournier, would you comment on this, to what extent is Nigeria penalized by a lack of capacity to HOOVER REPORTIN-C C9-W Mass,-uet~~I 3120 Washington, DC 2000: (202) 546-6660 STRICTLY CONFIDENTIAL 22 prepare projects and what are we doing about it? MR. CHAUFOURNIER: Well, I think it is our judgment that Nigeria is penalized by its inability to prepare a sufficient number of projects, and our willingness to help in this field has been known to Nigeria for some time. Actually when we decided to establish a resident mission in Nigeria, we had in mind that this resident mission could do in Nigeria what the West African mission in Abidjan does for other countries. .PJlAgahpm.h. In discussing the matter with the Nigerians, they felt that immediately after the end of the war the problems of relations between the Federal Government and the States and the fact that responsibility for prepara- tion of projects was given to the individual States, it required for them to think out carefully their development plan before organizing substantial technical assistance in this field. They agreed that the field of transportation, which was one very urgent in which they required our assistance, they would welcome Bank staff, and we are now stationing someone in Lagos for that:purpose. We have in mind to also help Nigeria in the field of agriculture particularly, and also in education, and these . are some of the questions we plan to discuss with the Nigeria HOOVER REPORTING CO, INC. 320 Massachusetts Avenue, N.E. Washington, D.C. 20002 I (202) 546-6666 STRICTLY CONFIDENTIAL 23 Government in the light of the conclusions of our economic report. As you have noted from the President's report, we have not yet defined the final strategy vis-a-vis Nigeria, this will come out of our discussions in our recent economic mission. But that nission paid particular attention to the point you have raised, and we very much plan to help Nigeria in this area. MR. McNAMARA: Thank you, sir. Are there other comments or questions? Yes, Mr. Reynolds. MR. REYNOLDS: Mr. Chairman, back on the question of planning and priorities, we had one point. We noticed in paragraph 28 of your report there is a discussion of the inadequacies of general educational planning in Nigeria. The paragraph concludes with a notation that the Federal Government is considering the establishment of a commission of some kind to study the general educational system. This makes us wonder whether consideration was given to the possibility of including provision for some such study in this project. Perhaps the question is now more relevant to future projects. MR. McNAMARA: Mr. Pearce, would you comment on that, HOOVER REFORTOW.3 STRICTLY ONFIDENTIAL 24 did -we consider providing funds to finance a review of the educational program? MR. PEARCE: Yes, sir. UNESCO has recently looked at the educational sector in Nigeria last year, and for that reason we are not including any funds in this project for that purpose. MR. McNAMARA: Is there need for a national education study of the kind, for example, we financed in Malaysia? MR. PEARCE: I ask Mr. Burt to answer. MR. McNAMARA: Yes. Mr. Burt, would you comment on this? MR. BURT: Well, the study which UNESCO did last year is almost parallel to the one done in Malaysia. They put in a much bigger team, a very comprehensive group of people, and have produced quite a good report. So the work is parallel to that done in Malaysia. MR. McNAMARA: Therefore, you did concluded it k wasn't necessary to finance an additional study. MR. BURT: Well, this is quite a new idea for the Nigerians to provide this commission. They are only just talking about it now. It's quite early in the day. MR. McNAMARA: Thank you. HOOVER REPORTING CO, INC. 320 Massachusetts Avenue, N.E. Washington, D.C. 20002 (202) 546-666 STRICTLY CONFIDENTIAL 25 Are there any other comments or questions? If not, we will consider the project approved and move to Agenda Item No. 4, a proposed credit in the amount of $7.2 million to Liberia for an education project. Washngt . C200 202) 546-6666