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Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: PP3034

JAPAN SOCIAL DEVELOPMENT FUND

PROJECT PAPER

ON A

PROPOSED GRANT

IN THE AMOUNT OF

US$2,752,295

TO

SAVE THE CHILDREN JAPAN

FOR A PROJECT ON

ENTREPRENEURSHIP-FOCUSED SOCIOEMOTIONAL SKILLS FOR THE MOST

VULNERABLE YOUTH IN RURAL MONGOLIA

August 13, 2019

Education Global Practice

East Asia And Pacific Region

CURRENCY EQUIVALENTS

(Exchange Rate Effective August 13, 2019)

Currency Unit = Mongolian Tugrik

US$1 = 2,665 MNT

FISCAL YEAR

January 1 - December 31

Regional Vice President: Victoria Kwakwa

Country Director: Martin Raiser

Global Director: Jaime Saavedra Chanduvi

Practice Manager: Tobias Linden

Task Team Leader(s): Rabia Ali

ABBREVIATIONS AND ACRONYMS

ALC Aimag-level council

CRBP Children's Rights and Business Principles CPS Country Partnership Strategy ESEL Entrepreneurship-focused socioemotional learning ESMF Environmental and Social Management Framework

FM Financial management GRM Grievance Redress Mechanism ICR Implementation completion results report IP Indigenous Peoples

ICT Information and communication technology IFR Interim financial report IFC International Financial Corporation ILO International Labor Organization

JSDF Japan Social Development Fund LLC Lifelong learning centers SME Medium-sized enterprise MTR Mid-Term Review

MECSS Ministry of Education, Culture, Science, and Sport MLSP Ministry of Labor and Social Protection

MNCCI Mongolian National Chamber of Commerce and Industry M&E Monitoring and Evaluation OECD Organization for Economic Cooperation and Development PDO Project development objective PMT Project management team PP Project paper RF Results framework SC Steering Committee

SCJ Save the Children Japan SBE School-based enterprises SLC Soum-based local council SCD Systematic Country Diagnostic SDV Sustainable Development Vision

TVET Technical and vocational education and training UB Ulaanbaatar

UNICEF United Nations International Children's Emergency Fund WBG World Bank Group

The World Bank Entrepreneurship-focused socioemotional skills for the most vulnerable youth in rural Mongolia (P165310)

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BASIC INFORMATION

Is this a regionally tagged project? Country (ies)

No

Financing Instrument Classification

Investment Project Financing Small Grants

[ ] Situations of Urgent Need or Assistance/or Capacity Constraints

[ ] Financial Intermediaries (FI)

[ ] Series of Projects (SOP)

OPS_BASI CINFO_TABLE _3

Approval Date Closing Date Environmental Assessment Category

29-Aug-2019 31-Dec-2023 B-Partial Assessment

Approval Authority Bank/IFC Collaboration

CD Decision No

Please Explain

Proposed Development Objective(s) The project development objective (PDO) is to train vulnerable, disadvantaged youth in 25 of Mongolia’s poorest rural districts across five provinces with socioemotional skills for improved performance in school and preparation for entry into self-employment. The PDO will be achieved through a school-based, community-driven program targeting 6,000 school-enrolled and out-of-school youth to support acquisition of socioemotional skills that are linked not just to success in school, but are also highly valued in the labor market. The project will address the largely unmet need for socioemotional and entrepreneurship skills stemming from extremely limited labor market opportunities that lead to high inactivity among youth in these locations and a job profile dominated by traditional herding, unpaid work and self-employment in the informal sector.


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Components Component Name Cost (USD Million)

Component 1: Development and implementation of an innovative community-driven program on entrepreneurship-focused socioemotional skills for vulnerable rural youth

1.19

Component 2: Introduction of a small grant mechanism to enable target youth to apply their entrepreneurship knowledge

0.96

Component 3: Project Management and Administration, Monitoring and Evaluation (M&E), and Knowledge Dissemination

0.60

Organizations

Borrower :

Save the Children Japan

Implementing Agency : Save the Children Japan

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 2.75

Total Financing 2.75

Financing Gap 0.00

DETAILS -NewFinEnh1

Non-World Bank Group Financing

Trust Funds 2.75

Japan Social Development Fund 2.75

Expected Disbursements (in USD Million)

Fiscal Year 2019 2020 2021 2022 2023 2024

Annual 0.00 0.28 0.40 1.00 1.00 0.08

Cumulative 0.00 0.28 0.68 1.68 2.68 2.75


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INSTITUTIONAL DATA

Practice Area (Lead)

Education

Contributing Practice Areas

Social Protection & Jobs

Private Capital Mobilized

No

Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

OVERALL RISK RATING

Risk Category Rating

Overall ⚫ Moderate

COMPLIANCE

Policy

Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✔] No


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Does the project require any waivers of Bank policies?

[ ] Yes [✔] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔

Natural Habitats OP/BP 4.04 ✔

Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔

Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔

Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Conditions

Type Description Effectiveness The Recipient shall prepare and adopt a Project Operations Manual in form and

substance satisfactory to the World Bank, containing detailed arrangements and procedures for implementation of the Project.

Type Description Disbursement No withdrawal shall be made for eligible expenditures under Category (5) unless

and until the Recipient has furnished to the Bank evidence acceptable to the Bank that the Sub-grant manual governing the provision of Sub-grants under Part 2(a) of the Project has been duly adopted by the Recipient.


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PROJECT TEAM

Bank Staff

Name Role Specialization Unit

Rabia Ali Team Leader(ADM Responsible)

HEAED

Gerelgua Tserendagva Procurement Specialist(ADM Responsible)

EEAR1

Erdene Ayush Financial Management Specialist(ADM Responsible)

EEAG1

Erdene Ochir Badarch Social Specialist(ADM Responsible)

SEAS1

Xiaodan Huang Environmental Specialist(ADM Responsible)

SEAE1

Akiko Sawamoto Team Member HEAED

Ana Maria Munoz Boudet Peer Reviewer EPVGE

Deborah Newitter Mikesell Team Member HEAED

Gantuya Paniga Team Member EACMF

Josefina Posadas Team Member HEASP

Mary A. Dowling Team Member HEAED

Pagma Genden Team Member HEAHN

Ria Nuri Dharmawan Counsel LEGES

Rita Kullberg Almeida Peer Reviewer HLCDR

Robertus A Swinkels Peer Reviewer EA1PV

Thu Ha Le Counsel LEGES

Tungalag Chuluun Team Member HEASP

Zhuo Yu Team Member WFACS

Extended Team

Name Title Organization Location


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MONGOLIA

ENTREPRENEURSHIP-FOCUSED SOCIOEMOTIONAL SKILLS FOR THE MOST VULNERABLE YOUTH IN RURAL MONGOLIA

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ...................................................................................................... 7

A. Country Context ................................................................................................................. 7

B. Sectoral and Institutional Context ..................................................................................... 8

C. Higher Level Objectives to which the Project Contributes ............................................. 15

II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 16

A. PDO ................................................................................................................................... 16

B. Project Beneficiaries ......................................................................................................... 16

C. PDO-Level Results Indicators ........................................................................................... 17

III. PROJECT DESCRIPTION .................................................................................................. 17

A. Project Components ......................................................................................................... 17

B. Project Cost and Financing ............................................................................................... 28

IV. IMPLEMENTATION ........................................................................................................ 29

A. Institutional and Implementation Arrangements ........................................................... 29

B. Results Monitoring and Evaluation ................................................................................. 31

C. Sustainability .................................................................................................................... 31

V. KEY RISKS ..................................................................................................................... 33

A. Overall Risk Rating and Explanation of Key Risks ........................................................... 33

VI. APPRAISAL SUMMARY .................................................................................................. 36

A. Other Safeguard Policies (if applicable) .......................................................................... 43

B. World Bank Grievance Redress ........................................................................................ 43

VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 45


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I. STRATEGIC CONTEXT

A. Country Context

1. Mongolia is the least densely-populated and the second largest landlocked country in the world. Out of 3 million inhabitants living within 1.6 million square kilometers, approximately 1.4 million people reside in Ulaanbaatar, the nation’s capital, and the rest reside in small urban centers and vast grasslands (National Statistical Office of Mongolia, 2016). Administratively, Mongolia is divided into Ulaanbaatar and 21 aimags (provinces). Ulaanbaatar is divided into districts and khoroos (city wards), while aimags are divided into soums (rural districts) and further into baghs (villages). About a quarter of the population is nomadic. The Khalkh ethnicity constitutes 84.5 percent of resident Mongolian nationals. Kazakhs constitute 3.9 percent of the population, ranking as the second largest ethnic group in Mongolia. Other ethnic groups such as Buriad, Bayad, Zakhchin and Uulds are also resident in Mongolia1. Mongolian is spoken by 95 percent of the population; a variety of dialects are spoken across the country. In the west of the country, Kazakh and Tuvan are also spoken.

2. Since the early 2000s, Mongolia made significant progress in poverty reduction. Mongolia transitioned toward a market-driven economy in 1990. Although it initially faced sluggish growth, the country experienced rapid economic transformation early on in the last 10-15 years, largely due to discovery of mineral reserves. Mongolia also made impressive progress in reducing poverty, with poverty incidence declining from 38.8 to 21.6 percent between 2010 and 2014, and robust gains evident across all regions of the country (World Bank, 2016). In an environment of high returns to education, rising levels of educational attainments during this period put households on a higher earning path. Despite increases in educational attainment, the better-educated continued to earn more on average, and were less likely to be poor.

3. Since 2014, Mongolia has faced severe economic challenges from major shocks compounded by expansionary policy. The economic boom in 2013 fueled by strong mineral exports and foreign direct investment and expansionary fiscal policy left Mongolia highly vulnerable to external shocks2. These risks materialized in 2014. With minerals accounting for almost 90 percent of exports, a sharp drop in commodity prices and slower growth in China significantly weakened the external and fiscal positions. The economy also took a major hit from a collapse of foreign investment. Expansionary policies compounded these shocks. Economic policy turned expansionary during the double-digit growth period despite high inflation and a sharp widening of the current account deficit. Economic policy was loosened further from 2014 in response to the external shocks through fiscal expansion and monetary easing, driven by off‐budget expenditure and quasi-fiscal lending. The economic stimulus, however,

1 Other social groups in Mongolia covered by OP 4.10 are include small Mongol groups with distinct dialects and cultures such as the Durbet Mongol, Buryat Mongol, and Dariganga Mongol; small groups of Turkic-speaking minorities in the western and northern parts of Mongolia (Uyghurs, Uzbeks, Tuvinians, Urianhais and Hotons); Tuvinian-speaking Tsaatan (also known as Dukha) reindeer herders the Sayan Mountains around Lake Hovsgol in northern Mongolia; and the Evenk who speak a Tungusic language. 2 World Bank, 2017. Program document for the Economic Management Support Operation. First Development Policy Financing.


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came at the cost of a significant increase in economic vulnerabilities. Government debt has increased almost fourfold since 2011, with the budget deficit reaching 17 percent of GDP in 2016. Mounting pressure on the balance of payments caused a sharp currency depreciation and a significant loss of reserves since 2013.

4. The economic slowdown has brought a decline in the labor force participation rate and a rapid rise in the unemployment rate, threatening Mongolia's progress in reducing poverty. The labor force participation rate declined from 63.7 percent of the adult population in the third quarter of 2014 to 61.6 percent in the third quarter of 2016 and the unemployment rate rose from 6.4 percent of the labor force in the third quarter of 2014 to 9.4 percent in the third quarter of 2016 (World Bank, 2016). In the first quarter of 2016, it even reached 11.6 percent. More structurally, even during the economic boom between 2010 and 2014, the unemployment rate stayed relatively elevated and rarely dropped below 7 percent. Many remain vulnerable to falling back into poverty. In 2014, about 11% of the country’s population had incomes of no more than 10% above the poverty line. Poor households have been significantly affected by the current prolonged economic crisis and are coping by (i) reducing food consumption and its quality; (ii) limiting health expenditure; (iii) increasing debt; and (iv) absorbing the impacts of delayed wages and reduced employment opportunities. The poverty rate at the national level reversed back to 29.6 percent in 2016 on account of slower economic growth, higher unemployment, and sluggish income growth.

5. Rural areas lag behind urban ones, with higher poverty rates and lower access to wage employment. In 2014, the poverty headcount rate stood at 26% in rural and 19% in urban areas, varying from 22 to 31% between Mongolia’s four main regions outside of Ulaanbaatar (World Bank, 2016). Poverty incidence was highest for those without productive and well-paying jobs. In rural areas, the majority of poor households had no access to wage employment: only 39.4 percent of poor households in rural areas had one or more household members with income from wages, compared to 79.9 percent of poor urban households. About one-third of the economically active population is involved in agriculture, where productivity, wages, and salaries are comparatively low. Informal work, defined as self-employment or unpaid work, accounts for 39 percent of total employment in Mongolia, is the predominant form of employment in rural areas (68 percent) and is lowest in Ulaanbaatar (18 percent). Nomadic families, households headed by women, and urban migrants have a particularly high incidence of poverty and are more vulnerable to the country’s extremely cold winters.

B. Sectoral and Institutional Context For most youth transitioning to work in rural Mongolia, the labor market offers virtually no opportunities other than self-employment in the informal sector

6. Nationally, a large and growing share of Mongolia’s workforce is self-employed. In 2013, 41 percent of the employed workforce was employed as waged or salaried workers in the formal sector, 22 percent were self-employed and another 26 percent were engaged in animal husbandry (RAND, 2015)3. Not only is the self-employed share of the Mongolian workforce large, it is also increasing (World Bank,

3 The self-employed and those engaged in animal husbandry were mainly own-account workers or contributing family workers.


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2015). The Mongolian economy is thus dominated by micro and small enterprises. Of the just over 90,000 businesses registered in Mongolia in 2013, more than two-thirds were classified as SMEs (ILO, 2017). Small companies generate around 20 percent of the national GDP and provide employment to almost 750,000 people, representing 70 percent of the workforce.

7. Despite relatively high educational attainment, unemployment and inactivity remains high in some groups, particularly among youth. Access to basic education is nearly universal in Mongolia, but drops at the upper-secondary level4. The adjusted net attendance ratio for primary education stands at 98 percent of children of primary-school age, 93 percent of children of lower-secondary-school age, and 85 percent among youth of upper-secondary-school age. Upon exit from school, rates of informality, unemployment, and inactivity are elevated for a number of groups, including women, seasonal workers, rural-to-urban migrants, but particularly among youth. Together with Indonesia and the Philippines, Mongolia is one of the three countries in the East Asia and Pacific Region where the problem of high youth inactivity is most acute, with 21 percent of young people between the ages of 15 and 29 years not in employment, education, or training (World Bank, 2014). Rates of long-term unemployment for youth are also elevated. The unemployment rate for youths aged 20–24 years has been persistently high at around 18 percent since 2014, well above the national unemployment rate of between 7 to 9 percent during this period. While high rates of youth unemployment are linked to dearth of employment opportunities available to youth, it should be noted that even during the mining boom prior to the current economic slowdown, as many as 40 percent of unemployed youth remained unemployed for over two years after entry into the workforce, and for about a third of new entrants to the labor market, it took over 2 years to acquire a job.

8. Mongolian women have higher rates of educational attainment than men but significantly lag behind in labor market outcomes, including in self-employment. Among children of secondary-school age, the share of boys out of school is almost three times that of girls (UNICEF, 2016). At the higher education level, the gender gap is compounded with 61 percent of women between the ages of 18 and 24 years enrolled in a college or university in 2013, compared to 44 percent of men. Despite the advantage in educational attainment, women lag behind in labor market outcomes. At 55 percent in 2016, labor force participation among women was lower than that for men (68 percent). 39 percent of firms in urban areas have female participation in ownership, while 37% employ a female top manager5. Women, particularly in rural areas, are in informal sector jobs or unpaid family work, and are far less active than men in entrepreneurial endeavors (World Bank, 2018). The latter finding has been linked to smaller amounts of human capital appropriate for setting up businesses and limited economic opportunities, including access to finance (IFC, 2014; World Bank, 2018).

9. Gender gaps exist in entrepreneurship-related technical skills. While no evidence is available on differences between Mongolian men and women in entrepreneurship-focused mindsets or socioemotional skills6, urban women entrepreneurs have been found to be disadvantaged relative to

4 Schooling is mandatory up to Grade 9 only. 5 While these figures are lower than for East Asian countries like China, they are higher than for other former Soviet countries like Russia (28.5%), Kazakhstan (28.3) or Azerbaijan (4.1%). 6 The global literature pays growing attention to gender differences in noncognitive skills, personality traits, and psychological attributes as potential explanatory factors for the gender gap in the labor market. Among the Big Five personality traits, agreeableness and neuroticism are the two traits most consistently associated with gender


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male peers in their capacity to prepare sound business plans and satisfactory cash-flow projections (IFC, 2014). They neither have a thorough understanding of the market they operate in nor can they closely follow technological developments or changes in supply and demand conditions. 36 percent found it difficult to present financial documents7 requested by banks during the loan application process, compared to about a quarter of male entrepreneurs; 60 percent acknowledged that they were hesitant to approach a bank, likely because they lacked financial knowledge or were insecure about dealing with financial issues.

10. Youth residing in soums are most disadvantaged, with the lowest school enrollment rates in the country and virtually no job opportunities upon exiting school other than self-employment. Adolescents living in soums are at much higher risk of not being enrolled in school than adolescents elsewhere in the country. Among youth of upper-secondary-school age in 2013 (16-18 years), the share of soum residents out of school was 18 percent, compared to 6 and 7 percent of aimag center and Ulaanbaatar (UB) residents respectively (UNICEF, 2016). Further, for out-of-school youth in rural areas, labor market opportunities are extremely limited, leading to high inactivity. In 2013, 29% of rural youth aged 15–29 years were not engaged in employment, education, or training. Among rural youth who were employed, unpaid work and self-employment in the informal sector dominated the job profile, with average earnings of employed youth 25 percent lower in rural areas than in Ulaanbaatar.

Education and labor policies do not adequately support rural youth in developing skills needed for success in self-employment

11. Low productivity linked to high informality constrains the potential of self-employment to serve as a route out of poverty, especially among rural youth. Across the world, small and medium-sized enterprises (SMEs) are important generators of jobs and income, and often drive innovation and growth. In Mongolia, too, SME development offers a viable option for private-sector-led growth that reduces poverty and creates jobs in rural and urban areas (ILO, 2017). SMEs are also vital for diversification of the Mongolian economy and for enhancing its competitiveness. However, many microenterprises face barriers to productivity and to generating decent employment (World Bank and IFC, 2013)8. High-productivity jobs remain concentrated in formal sector waged and salaried work (RAND, 2015). Own-account or self-employed workers, including those self-employed in animal husbandry, have the lowest earnings. This is not surprising given that self-employed workers are usually

differences: women are consistently found to be both more agreeable and more neurotic than men (Bouchard and Loehlin, 2001). Women are more risk-averse than men, which may lead young women to systematically select lower earnings and lower-profile careers than their male counterparts, even absent any labor market discrimination (Croson and Gneezy, 2009; Eckel and Grossman, 2008). Occupational segregation may be associated with women’s propensity to choose safer jobs, both in terms of health and earnings (Bonin et al., 2007; DeLeire and Levy, 2004; Grazier and Sloane, 2006). Women also dislike and avoid competitive situations (Gneezy, Niederle, and Rustichini 2003, Niederle and Vesterlund 2007). This difference may be relevant to the gender gap in labor market achievement to the extent that many high-profile, high-earning occupations take place in extremely competitive settings where winners and losers are singled out, and winners are disproportionately rewarded. 7 Business documentation is not satisfactory, and women entrepreneurs have more difficulty writing a business plan. 8 Also reported during project focus group discussions with government Employment Promotion Program beneficiaries, conducted during preparation of the Mongolia Employment Support Project. Discussions were held in Tuv Aimag and Bayangol District.


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small-scale and family-based businesses, including kiosks and small vendors (ILO, 2017). These and other microenterprises in Mongolia end up in the informal economy, where low incomes and poor working conditions prevail and lack of enforcement of legal and social protections contributes to low productivity. Informality is particularly high among rural youth, of whom over 90 percent work in the informal economy. These conditions limit the potential for self-employment to reduce poverty and improve social mobility, and its role remains restricted to a “coping mechanism” (ILO, 2015).

12. Low productivity may also be associated with a shortage of non-cognitive or “socioemotional” skills needed for success in the labor market, including self-employment. Given that Mongolia was a centrally planned economy only two decades ago, self-employment and entrepreneurship culture is still in a fledgling state, and young Mongolians do not regard it as a viable employment option (ILO, 2017). Many are wary of starting a business. In addition to this lack of a “business mindset” and general entrepreneurial awareness, stakeholder consultations also reveal perceptions of deficiencies in entrepreneurship-related socioemotional skills and capabilities among youth and adults alike. For example, even existing recipients of microcredit are often unable to articulate their business development and training needs9. More broadly, there is a widespread lack of soft or “socioemotional” skills needed in the labor market. Most employers bemoan lack of creativity and skills related to innovation, time management, communication, leadership, interpersonal relationships, adaptability, problem-solving, critical thinking, and teamwork (RAND, 2015). Employers also report deficiencies in technical, language, and information and communication technology (ICT) skills.

13. Across the world, a strong foundation of socioemotional skills is associated with success in school and improved labor market outcomes. Following Guerra et al (2014), this Project Paper (PP) defines social-emotional skills as the broad range of malleable skills that enable individuals to navigate interpersonal and social situations effectively. Studies suggest that (i) such skills mediate cognitive performance, educational attainment, and labor market outcomes; (ii) the lack of socioemotional competencies, together with the lack of connection to the schooling environment, can harm academic performance; and (iii) noncognitive or personality skills rival IQ in predicting educational attainment and labor market success (Sanchez Puerta et al, 2016). Socioemotional skills predict a range of important life outcomes, and have a positive and strong influence on schooling decisions, employment, work experience, occupational choice, and wages, while simultaneously minimizing risky behaviors. Personality traits, and especially locus of control, have an important effect on wages. And, as in Mongolia, employers across the world acknowledge the importance of these skills in the workplace. Guerra et al (2014) identify the eight skill areas that employers demand (summarized in the acronym PRACTICE): (a) Problem solving, (b) Resilience, (c) Achievement motivation, (d) Control, (e) Teamwork, (f) Initiative, (g) Confidence, and (h) Ethics.

14. In Mongolia, the deficit in socioemotional skills exists in a context of low quality and relevance of training at the secondary and higher education levels, especially among rural youth. Mongolia’s senior secondary and tertiary education programs do a poor job of preparing students for work, as evidenced by the low labor force participation rate among youths nationally and a low employment rate of only about 50 percent among graduates of technical and vocational education and training (TVET) and tertiary education. This is in large part due to weak linkages of the system with industries

9 See footnote 2.


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and employers. Rural youth are particularly disadvantaged, as youth employment centers that exist in universities and TVET schools serve urban areas only. These centers do very little to alleviate employment constraints among urban youth, and virtually nothing for youth in rural areas.

15. The education system offers little to support socioemotional skill formation and the school-to-work transition. Career information and guidance has been provided since 2016 to junior secondary students as part of civic education in the eighth and ninth grades, but the system employs no practical strategy to support students’ transition from school to work. Despite emphasis on a “whole-child approach”, national curricula and classroom practices remain focused on academic learning only. Lifelong learning centers (LLCs)10, which target school dropouts under supervision of the Ministry of Education, Culture, Science, and Sport (MECSS), offer catch-up “equivalency” programs also of an academic nature, and teachers in these centers lack the technical expertise to foster skills relevant for local labor market needs in rural areas, such as self-employment.

16. A new business course developed by MECSS for use in secondary schools does not address socioemotional skill formation among adolescents and has little relevance to rural settings. MECSS recently developed a curriculum for a school-based business course, and schools were given the option to implement the curriculum as an elective subject at the secondary level. While introduction of the course reflects recognition on the part of the government for the need to nurture entrepreneurship skills at an early age, the curriculum is constrained due to its focus on abstract business concepts with virtually no guidance on how schools and teachers can support socioemotional skill formation, specifically among adolescents. Further, despite interest from students, administrators in rural schools find that the course has little relevance to training needs of students in rural areas. Teachers have not been trained on the curriculum and are unwilling to teach it. Finally, there is no guidance provided on how to track progress towards specific competencies or skills.

17. Existing government programs for workforce development do not address skill development needs among rural youth. To ensure social equality through inclusive growth, under the Sustainable Development Vision (SDV) 2030, the Government of Mongolia will “support employment, train the younger generation with proper knowledge and skills to have a decent work and run a private business, and reduce the unemployment rate”. The Employment Promotion Law, adopted in 2011, stipulates a set of responsibilities for the government, which include a training provision for the workforce that is aligned with labor demand. Active labor programs of the Ministry of Labor and Social Protection (MLSP) include (i) the Program for Providing Employment Skills and Retaining Work Places and (ii) the Entrepreneurship Development Program. The former provides jobseekers with technical skills through six-to-eight-week classroom-based trainings, but is insufficiently demand-driven and fails to comprehensively address skills constraints faced by program beneficiaries due to lack of integration of

10 LLCs cater to youth aged fourteen to eighteen years, adults, and people with disabilities of all ages. The centers have a branch office in each soum, each with one teacher. In general, branch offices attract school-age rural youth, while the aimag centers cater more to adults. The majority of out-of-school youth who study at LLCs are either children of herder families who cannot afford to send them off to study at soum schools or children who could not keep up with school due to poor grades. The centers offer programs that allow school dropouts and out-of-school youth to obtain a certificate of high school equivalency and to apply to universities. The general curriculum of the programs offered is developed by staff at its center in Ulaanbaatar under the auspices of MECSS, while course materials are normally designed by the teachers at the centers.


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vocational and on-the-job-training through internships or similar means. The latter program supports micro-entrepreneurship by giving microloans to new and existing microenterprises, but largely fails to address nonfinancial hurdles to starting or growing a microenterprise, especially among youth and women.

18. Skill deficits among youth in rural areas are also not addressed by ongoing donor-financed operations. Ongoing education sector operations financed by the World Bank in Mongolia focus on quality of primary education through interventions to improve primary grades learning outcomes, and to strengthen school-level planning processes. Needs covered by other development partners center on construction of new schools and renovation of existing ones, school dormitory upgrades, and deepening of curriculum reform and its implementation. None of these projects address socioemotional or entrepreneurship skill development needs among adolescent youth. The ongoing WB-financed Employment Support Project aims to provide jobseekers and microentrepreneurs in Mongolia with improved access to labor market opportunities, but targets urban areas only. Other donor-financed projects supporting skill development target the TVET system, seeking to make it more industry-driven, upgrading capacity among providers, and implementing competency-based training and assessment. In sum, while existing projects are national in scope and aim to strengthen the foundations of education and labor market institutions, they do not address the specific socioemotional skill development needs of youth in rural areas.

The operation proposed will empower vulnerable and disadvantaged rural youth with entrepreneurship-focused socioemotional skills associated with success in school and improved labor market outcomes

19. This PP proposes piloting of a novel and innovative approach to address these skill deficits through a

school-based, community-driven socioemotional skills program focused on entrepreneurship. The proposed operation will be the first in Mongolia to provide school-level support in rural areas for integrated student development for entrepreneurship-focused socioemotional and personal growth, tailored to facilitate entry into self-employment or other career opportunities upon exit from school. This novel approach is distinct from traditional labor market programs in Mongolia, which focus on improving access to labor market opportunities in the current workforce, but ignore future workers still in school. Also, socioemotional skill formation in the context of secondary education has not been attempted before in Mongolia, and certainly never developed within the cross-sectoral and participatory approach proposed here. The proposed pilot will thus be an innovation in the Mongolian setting. The project will target disadvantaged youth resident in the country’s poorest soums at high risk of becoming unemployed after leaving school, or entering unpaid work or self-employment in the informal sector, and will include children of nomadic herders, poor households, consistently low academic performers, and those not in school.

20. Informed by a growing body of global evidence, the proposed pilot will nurture a subset of PRACTICE skills associated with success in entrepreneurship. The training curriculum will consist of modules on inter- and intrapersonal skills and business skills11 (figure 1). The former set of modules12 will be

11 The literature also refers to these as “soft” and “hard” skills respectively. 12 Topics include self-management, communication, win-win judgment, personal power, negotiation, leadership and team building, goal setting, decision-making skills, group decision-making, risk-taking, social networking, and public speaking.


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informed by the Growth Mindset (GM) theory.13 The latter set will include modules on technical knowledge for entrepreneurship (e.g. basics of entrepreneurship, value creation, economic and financial literacy, etc.) and entrepreneurship-specific skills (e.g. creation of business and financial plans, etc.). The training thus aims to empower target youth with the mindsets and capabilities that are needed to succeed in school, and which, at the same time, are highly valued in the labor market, particularly in self-employment. These are the Big Five personality traits14 that have been shown to matter for success in the labor market more broadly, as well as in entrepreneurship specifically. In the area of socioemotional skills and mindsets, the project will thus aim to measure changes in a set of skills that may include beneficiaries’ Big Five traits, self-efficacy, resilience to stress, negotiation and persuasion skills, entrepreneurial passion, and risk tolerance, and life aspirations (see section VII for details of results expected under the project)15. Annex 1 presents a summary of the global evidence on socioemotional skills programs, including those informed by the GM theory, that have improved schooling outcomes and preparedness for entry into self-employment. Annex 2 clarifies the relationship between the skills and mindsets to be developed under the proposed operation, the PRACTICE skills, and the Big Five personality traits.

21. The design and implementation of the pilot hinges on intensive community participation and

mobilization at the grassroots level, aligning it with the principles of the Japan Social Development Fund (JSDF). Given the unique labor market conditions in rural Mongolia that limit employment opportunities to informal sector jobs and self-employment, and as confirmed in consultations with community-level stakeholders, any intervention that seeks to serve the most vulnerable and disadvantaged youth in rural areas requires a bottom-up approach, informed by and consistent with

13 The Growth Mindset (GM) theory posits that by helping students shift their theory of learning to one where intelligence or abilities aren’t in a fixed state but are malleable and susceptible to growth and improvement over time through work and dedication, students can become self-motivated to improve both academic effort and outcomes. See annex 1 for details. 14 Psychologists define the concepts of personality and personality traits to include characteristics of temperament as the overarching style of a person’s experiences and actions: Openness to experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism, called the “Big Five” with the acronym OCEAN (see, for example, Brandstätter, 2011). In the economics literature, these personality traits are shown to be strong predictors of success in the labor market. See Annex 1 for more details. 15 The instruments used to measure changes in skills and mindsets will be finalized during year 1 of the project in consultation with the psychologist and other experts recruited under the project.

Figure 1 Entrepreneurship-focused socioemotional skills targeted under the project

•Communication

•Win-win judgment

•Personal power

•Negotiation

•Leadership and team building

•Goal-setting

•Decision-making; group decision-making

•Risk-taking

•Social networking

•Public speaking

Inter-/intrapersonal skills

(informed by the Growth Mindset theory)

•Basics of entrepreneurship

•Value creation

•Economic & financial literacy

•Creation of business & financial plans

Business skills

(entrepreneurial knowledge & technical skills)


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local labor market conditions and needs. Existing donor-funded projects relevant to skills development are typically implemented by MECSS and MLSP or other line ministries, while the implementing agency for the new operation is Save the Children Japan (SCJ), a non-governmental organization with deep soum-level networks to conduct the outreach needed in remote, rural parts of Mongolia for design of a pilot that hinges on intensive community participation and consultations at the grassroots level – networks that UB-based government implementing agencies do not possess. Existing projects also do not have in place the cross-sector implementation arrangements necessary for this pilot, which spans the education and labor sectors. The intensive community participation and mobilization at the grassroots level underlying the pilot aligns it with JSDF’s financing principles.

C. Higher Level Objectives to which the Project Contributes

22. The proposed project is consistent with the Country Partnership Strategy (CPS) for Mongolia for the period FY 2013–2017. Among its three main pillars, the third pillar of the CPS—addressing vulnerabilities through improved access to services and better service delivery, safety net provision, and improved disaster risk management—identified two outcomes that are particularly relevant to the proposed project: (i) working with the government on the design, adoption, and implementation of a comprehensive social protection system that supports the poor and (ii) supporting better delivery of basic education services. While the proposed pilot project will be implemented by SCJ, both SCJ and the Bank will work closely with government authorities at the national, provincial, and district levels throughout the project cycle. In doing so, the project will establish modalities for sustainable scale-up to ensure a more inclusive social protection mechanism that facilitates improved and more equitable access to the labor market for poor and vulnerable youth. Furthermore, the project’s emphasis on community engagement in its implementation, including the implementation of participatory Monitoring and Evaluation (M&E), is well aligned with the CPS’s call for more responsive and accountable local service delivery through the strengthening of participatory processes.

23. The project is aligned with the recommendations of the 2018 Systematic Country Diagnostic (SCD) for Mongolia. In 2018, the World Bank Group (WBG) is conducted the Systematic Country Diagnostic (SCD) in Mongolia—in consultation with national authorities, the private sector, civil society, and other stakeholders—to identify key development opportunities and challenges and to prioritize critical interventions to accelerate the ending of poverty while boosting shared prosperity in a sustainable way. The SCD notes that as the Mongolian economy becomes more complex and linked to the global market, upskilling in poor-quality tertiary and vocational education are much needed to prepare the incoming workforce for higher value jobs. To accelerate accumulation of “genuine savings” to diversify productive assets, the SCD recommends prioritizing modern-skill training programs and promotion of entrepreneurship training and finance. The proposed operation stems from this recommendation. Building on the SCD and aligning with Mongolia’s development priorities, a new Country Partnership Framework (CPF) for Mongolia is being developed, which will guide the WBG’s engagement in Mongolia over the coming four to six years and determine priority areas for WBG support. Upon completion of the new CPF, the project will review its relationship with the CPF and make adjustments to improve its alignment, as needed.


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II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

24. The PDO is to train vulnerable, disadvantaged youth in 25 of Mongolia’s poorest rural districts across five provinces with socioemotional skills for improved performance in school and preparation for entry into self-employment.

25. The PDO will be achieved through a school-based, community-driven program targeting 6,000 school-enrolled and out-of-school youth to support acquisition of socioemotional skills that are linked not just to success in school, but are also highly valued in the labor market. The project will address the largely unmet need for socioemotional and entrepreneurship skills stemming from extremely limited labor market opportunities that lead to high inactivity among youth in these locations and a job profile dominated by traditional herding, unpaid work and self-employment in the informal sector.

B. Project Beneficiaries

26. The project’s direct beneficiaries are at least 6,000 vulnerable, disadvantaged boys and girls of secondary school age resident in the country’s poorest soums. These include youth (i) whose parents engage in subsistence herding; (ii) who come from poor households; or (iii) who are poor performers on school examinations. These youths are at high risk of dropping out from school. The fourth target group consists of youth under the age of 25 years who have already dropped out of school. Together, youth in these four groups are at high risk of becoming unemployed after leaving school, or entering unpaid work or self-employment in the informal sector, and as such constitute the most vulnerable and disadvantaged youth in the country. Indirect project beneficiaries include 100 teachers from secondary schools and lifelong learning centers (LLCs), parents of youth targeted by the project, and at least 100 soum-level stakeholders that will include representatives of community and business associations, education authorities, the soum labor office, and soum government.

27. The project soums are located in aimags with the highest poverty and unemployment rates in Mongolia. The target youth reside in 25 of Mongolia's poorest soums in Gobisumber aimag (Central region); Zavkhan and Khovd aimags (Western region); Uvurkhangai (Khangai region); and Sukhbaatar (Eastern region). In each aimag selected, over one in three persons is living in poverty, and the unemployment rate ranges from 9 percent in Uvurkhangai aimag to 18 percent in Gobisumber aimag. The latter aimag is particularly disadvantaged, with more than half its population living below the poverty line. As described earlier, labor market opportunities are extremely limited in such rural areas, leading to high inactivity among youth. Since unpaid work and self-employment in the informal sector dominate the job profile among rural youth who are employed, there is a large unmet need in this target group for entrepreneurship-centered skill-building to facilitate entry into the labor market and the competitive business sector, promote economic empowerment, and alleviate the high poverty rates.

28. The skills training benefits both school-enrolled youth at risk of dropping out, as well as those who have


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already dropped out of school. Under current conditions in Mongolia’s schools, even youth who complete their secondary education lack the practical experience, habits, confidence and relationships to enter self-employment. Thus, for vulnerable youth enrolled in school but at risk of dropping out, the project will offer a chance to build these skills as well as social networks to facilitate the transition from school to the labor market. Further, rural youth who had dropped out of school and who are not working lack the basic life skills and employment experience to escape poverty. Many of them are unable to return to formal secondary school due to financial constraints and family obligations. The project would give such youth a second chance by equipping them with basic skills and providing them the opportunity to implement these skills in practice, under supervision and mentorship from experienced entrepreneurs.

29. The target group of vulnerable rural youth was chosen with two additional considerations in mind. One, as seen earlier, this is a group of beneficiaries whose skill development needs are not met under ongoing donor-financed operations. The target group has not been included in past efforts by the government, nor in WB lending in education and employment support, nor in the JSDF-financed project “Improving Primary Education Outcomes Among the Most Vulnerable Children in Rural Mongolia”, which closed in 2017. Second, traditional labor market programs in Mongolia focus on improving access to labor market opportunities in the current workforce, but ignore the project’s target group, i.e. future workers still in school.

30. The project’s target group and locations were selected after consultations with MECSS, MLSP, community members, youth, and education and labor officers in rural soums (including through joint WB/SCJ missions to Uvurkhangai aimag between May 25-27, 2017, and in Arkhangai aimag between 18-19 September 2017). The stakeholder discussions confirmed the unmet need and demand for entrepreneurship-focused skill development in the target group: (i) despite emphasis on a “whole-child approach” in education, national curricula and classroom practices remain focused on academic learning, with no provisions for preparing youth for the school-to-work transition in the context of the local labor market; (ii) the LLCs, programs supervised by MECSS that target school dropouts, are focused on catch-up “equivalency” programs also of an academic nature and teachers lack technical capacity to foster skills relevant for self-employment; and (iii) local stakeholders, especially youth aged 14-18 years, expressed their concerns about lack of employment at local aimag/soum levels. The proposed project will thus fill a critical unmet need and facilitate entry into self-employment for better-informed future career development paths.

C. PDO-Level Results Indicators

1. Number of direct beneficiaries reached (of which number female) 2. Share of beneficiaries with improved academic performance (disaggregated by gender) 3. Number of beneficiaries with enhanced capacity of doing business (i.e. improvements in

skills/mindsets targeted under the ESEL training) (of which number female)

III. PROJECT DESCRIPTION

A. Project Components


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31. The project will consist of three components. Component 1 will support development and introduction of a community-driven, locally-tailored, innovative socioemotional skills program for vulnerable rural youth. Component 2 will establish mechanisms for the target youth to gain experience in practically applying socioemotional learning and entrepreneurship knowledge to meet school or community needs and grasp business opportunities. Component 3 will enhance the policy environment in support of entrepreneurship education through evidence-based advocacy and public outreach campaigns and provide support for participatory M&E and project management.

Component 1: Development and implementation of an innovative community-driven program on entrepreneurship-focused socioemotional skills for vulnerable rural youth (estimated cost: US$1,194,505)

32. This component will undertake the following activities: (i) develop a hands-on, innovative

entrepreneurship-focused socioemotional learning (ESEL) curriculum and associated package of learning materials for use by youth and teachers in schools and LLCs in target soums; (ii) develop materials to train teachers in target schools and LLCs on implementing the ESEL course, including counseling and mentoring of students, and deliver the teacher training; (iii) design and implement community awareness information campaigns in each year of the project that include outreach modalities effective for women and ethnic minority groups resident in project locations; (iv) design and implement sensitization trainings for parents and related consultations; (v) establish a multi-stakeholder networking platform consisting of local councils at the aimag and soum levels to undertake bottom-up design of all project outputs, ensure alignment with local economic conditions, and support implementation of project activities, including design of localized solutions to challenges faced.

33. Link with PDO: These activities, targeted to the most disadvantaged and vulnerable adolescents in Mongolia’s poorest soums, seek to empower beneficiaries economically by imparting to them a set of entrepreneurship-focused socioemotional skills linked with success both in school and, in the longer run, a labor market dominated by informal work and self-employment. Beneficiaries are expected to increase their self-efficacy, need for achievement and risk-taking propensity, and become more persistent, pro-active and creative. In addition, the training delivered to teachers will improve teachers’ knowledge and understanding of the significance of social emotional learning among adolescents and young adults, and build their competencies in mentoring and shaping mindsets to exercise creativity, innovation and measured risk-taking, and develop other soft skills needed to thrive academically and later in life.

Subcomponent 1.1 Development and piloting of an innovative, locally-tailored entrepreneurship-focused socioemotional learning (ESEL) curriculum and training package (estimated cost: US$1,065,655)

34. The main activity of this sub-component will be development of a course curriculum and training materials for secondary school students, to be delivered by teachers in schools and LLCs. Four experts (two experts with extensive experience and knowledge of the Mongolian education system, one of entrepreneurship, and one of socioemotional skills i.e. a psychologist) will work with MECSS to develop a training package for both teachers and students. The ESEL curriculum will consist of modules on inter-


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and intrapersonal skills16 and business skills17. The former set of modules (self-management and motivation, personal power, goal setting, and decision making) will be informed by the Growth Mindset theory. The latter set will include modules on technical knowledge for entrepreneurship (e.g. basics of entrepreneurship, value creation, economic and financial literacy, etc.) and entrepreneurship-specific skills (e.g. creation of business and financial plans, leadership, etc.). These technical knowledge and skills training modules will draw on the abstract business concepts covered under MECSS’s existing business course curriculum and will customize it for practical application using real-world business scenarios relevant for the rural settings in which the youth are resident. This will be done under MECSS’s supervision. The content, venue, and mode of training delivery will be designed to accommodate the specific constraints faced by vulnerable youth in the target group. For example, for youth that have already dropped out of school, the training would be delivered in LLCs and delivered on a customized schedule that accommodates their needs18. The course materials will be made available in Kazakh language and trainings delivered in the dialects of other ethnic minority groups resident in project locations.

35. The training package will consist of a teacher training manual (teachers’ guide) that will cover pedagogy methods for the targeted soum-level LLC and secondary school teachers, as well as a students’ workbook. The teacher training will aim to develop teacher competencies related to creativity and entrepreneurship to help inspire students, and to nurture entrepreneurial attitudes among them. A range of teaching, facilitation, and learning methodologies (including presentations, individual assignments, group meetings with guest speakers, case studies, real-life business simulations, group exercises, and internet-based learning) will be introduced. Training of trainers will be organized at target aimag centers during school holidays, once teacher training materials have been developed by the experts involved. The curriculum will be delivered annually over the course of 12 – 16 weeks in the first half of the academic year. Training on entrepreneurship will also be provided for the parents of youth enrolled in the ESEL course.

36. The ESEL course curriculum and the main components of the training package will be pre-tested in one soum within the first year after project approval; based on the pre-test results, the content of the package will be revised and finalized. For youth enrolled in secondary schools in target soums, the course will be offered as part of elective courses offered during the school year. For out-of-school youth, including those attending catch-up “equivalency” programs, the course will be offered at the LLCs attached to schools in target soums. The project will carry out community awareness and information programs prior to rollout of the pilot, and prior to each subsequent school year of the project.

16 Topics include self-management, communication, win-win judgment, personal power, negotiation, leadership and team building, goal setting, decision-making skills, group decision-making, risk-taking, social networking, and public speaking. 17 Otherwise referred to in the literature as “soft” and “hard” skills respectively. 18 For out-of-school youth, this implies that training schedules will vary from soum to soum, depending on local conditions and availability of beneficiaries. The course content will also be tested and piloted separately to adjust for the specific needs of out-of-school and in-school youth, given that the former group is older and faces a different set of economic opportunities and challenges than the latter. The content for the former will also be delivered on a compressed schedule of 3 weeks (compared to 12-16 weeks for in-school youth).


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37. ESEL course participants will be provided with access to a designated counsellor at each target school and LLC, available throughout the duration of the course and through its completion. The counsellors will be trained to identify and develop strategies to work with youth most vulnerable to dropping out of school, e.g. those from herders’ families. The mentoring will aim to prepare, coach, and encourage youth to complete the ESEL course. The counselling will seek to identify and alleviate personal issues and dysfunctional attitudes, as well as values and behaviors that could be a barrier to success both academically at the secondary school and higher education levels and later on when entering the labor market through self-employment or otherwise. Counsellors would support participants’ decision-making on schooling and life transitions, liaising with parents when necessary. Referrals will be provided for further training opportunities, including TVET and higher education, scholarship services for further education, and health and employment services.

38. A total of 125 participants (i.e. three teachers and two counsellors from each of the 25 soums) will be trained during the first year of the project implementation19. These teachers and counsellors of secondary schools and LLCs will be provided with monetary incentives, based on the rate set under teachers’ hourly remuneration system. As a further incentive for teachers to participate in the program, they will be awarded, upon completion of training, certificates developed jointly with MECSS that recognize the training as contributing officially to teachers’ professional development. After the pre-testing and finalization of the ESEL course curriculum and the main components of the training package, training of both teachers and counsellors will be organized at target aimag centers.

39. The entrepreneurial skills and attitudes covered under the ESEL curriculum seek to mitigate the impact of gender-related constraints that lead to poorer labor market outcomes among rural Mongolian women when they exit school as well as low participation in self-employment. The project has a target that half of the participants enrolled in the ESEL training are female; this will be achieved and sustained through targeted community awareness and sensitization campaigns to foster female students’ participation in the trainings. Additional gender-sensitive activities include gender awareness modules in the student, teacher and parent trainings offered under the project; inclusion of female role models in sector-specific examples from Mongolia in the training modules; and gender-sensitive counseling and mentoring.

40. A Component 1 Coordinator, to be recruited under this component, and who will spend most of his/her time in the project’s field offices, will take the lead in carrying out the above described activities and the tasks necessary for planning, preparation, coordination, logistics, implementation, supervision and monitoring and evaluation of the component’s activities.20 In addition to the Component 1 Coordinator,

19 The UB-based SCJ project management team and consultants will travel to target aimags and soums for training sessions and other project-related activities. The project’s aimags and soums are some of the remotest locations in Mongolia: In general, distance between soums ranges between 50 and 300 kilometers, while distance between aimags ranges between 400 and 1500 kilometers. 20 Specifically, s/he will: (i) Implement component activities as per the POM, including ensuring that the timing of component 1 and 2 activities is aligned with/complementary to each other; (ii) Ensure appropriate coordination with the concerned provincial and soum government departments and units, schools, and support ALCs and SLCs during the project’s implementation cycle; (iii) Develop all technical inputs such as the terms of reference and technical specifications and preparation of all necessary procurement documentation as these pertain to their component; (iv) Prepare component-specific annual activity-based work plan, procurement and financial plans,


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an ESEL Course Design Coordinator will also be recruited who will coordinate exclusively the activities of the international and national experts to be recruited for design and adaptation of the ESEL course, including providing coordination support for the experts’ meetings and consultations with aimag- and soum-level councils (see below) and other local stakeholders in the project’s target locations. This is needed to ensure that the project has adequate capacity to design a high-quality ESEL course, which is innovative and novel in the Mongolian context. The ESEL design coordinator will also work closely with the UB-based Monitoring, Evaluation, Accountability and Learning (MEAL) specialist of the SCJ project management team to ensure consistency of designed data collection/skill measurement instruments with the ESEL training content.

Subcomponent 1.2 Establishment of a multi-stakeholder coordination and networking platform to support implementation of the training program (estimated cost: US$128,850)

41. Upon commencement of the project, local councils at the aimag level and at the soum level will be established. The aimag-level council (ALC) will be comprised of technical experts including business associations, private sector stakeholders, government officials including investment, local development policy and planning department, education and labor departments, Mongolian National Chamber of Commerce and Industry (MNCCI) and relevant NGOs. The ALC’s role is to provide inputs for development of the ESEL curriculum and training package under subcomponent 1.1 as well as technical guidance to the soum-based local councils (SLCs). ALCs will also be responsible for creation of panels of judges to organize the soum-level competition for the award of grants under component 2. SLCs created under this subcomponent will work under the direction of their respective ALCs and will consist of representatives from among parents of the targeted youth, teachers and other school administrators, private sector stakeholders, soum government, and local community leaders. SLCs will support all project activities within soums. SLCs will support the SCJ project management team in identification of soum training schedules appropriate for out-of-school youth. SLCs and ALCs together constitute a multi-stakeholder networking platform that will come together in quarterly meetings to review project implementation and outputs produced, suggest improvements needed to fine-tune alignment of project activities with local economic and school conditions, and brainstorm solutions to problems reported by project school teachers and other school administrators. These committees will also monitor compliance of project activities with relevant safeguard policies. The project will provide support for the ALCs and SLCs to build their capacity to conduct these monitoring activities. Special attention will be paid to ensure that representatives of ethnic minority communities and women are represented on ALCs and SLCs, in soums where these communities are resident.

Component 2: Introduction of a small grant mechanism to enable target youth to apply their entrepreneurship knowledge (estimated cost: US$954,530)

42. This component will undertake the following activities: (i) design and pilot an innovative grant scheme to finance competitively-selected proposals developed by youth teams in target soums who would receive customized training and personalized coaching and mentoring, and implement their proposals under supervision of ALCs and SLCs; (ii) sensitize stakeholders to and align all project activities with the

technical and operational reports as inputs to the Project Manager; (v) Implement the Monitoring and Evaluation of the components activities against the indicators of the project results framework; (vi) coordinate outreach activities to ensure consultations with ethnic minorities in design of all component activities.


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Children's Rights and Business Principles (CRBP); (iii) disseminate the most successful ideas implemented under the grant scheme, including through experience sharing events for target youth and community-based information campaigns; and (iv) conduct a comprehensive economic assessment and market analysis to explore potential for creation of school-based enterprises (SBEs) in the project’s target soums.

43. Link with PDO: The small Sub-grant scheme will provide a mechanism to enable youth in the project’s target group to apply their entrepreneurship knowledge and social emotional learning acquired under component 1 to identify and harness unexploited business and other opportunities at the local level to address unmet community and school needs. Thus, component-2 activities associated with the small grant scheme will deepen the development impact of the ESEL training under component 1, further strengthening potential for self-employment and economic empowerment among target youth through enhancement of entrepreneurial attitudes, mindsets and behaviors, leading to enhanced capacity of doing business.

44. Among older youth, the Sub-grants will function as a seed capital scheme to exploit untapped business or social entrepreneurship21 opportunities at the soum level and proceeds directed towards activities with potential for economic productivity that allow practical application of skills acquired under the ESEL course. The business idea selection criteria will thus be carefully prepared in consultation with soum labor and economic development authorities. Aimag and soum governments regularly publish economic development plans and priorities which identify sectors with greatest potential for growth. Selected proposals will demonstrate adequate alignment with these soum-level priorities. Ensuring this alignment will also allow for mobilization of supplementary resources available at the soum level through the local government and through schools, and enhance potential for sustainable implementation of successful business ideas. Close attention will be paid to the relevance of the business proposal, its feasibility, and its approach to measured risk-taking and managing risks, given the economic conditions of each soum. Together, these measures are intended to ensure that the grants are not considered to be handouts or social transfers; rather, these are investments intended to nurture entrepreneurial skills and mindsets through giving target youth a chance to creatively explore, assess and harness business opportunities that they could have never explored or tapped in the absence of such grants. Younger youth of lower-secondary-school age who receive training under component 1 will also be eligible to apply for grants; however, the nature of their projects will be academic and oriented more towards learning and school-based extracurricular activities rather than exploiting business or income-generating opportunities, which the case for projects undertaken by older youth.

45. Under a designated supervisor, ESEL course participants will work in teams to develop business plans for submission in a soum-level competition, organized under the project, for a chance to win grants to fund business ideas and school projects proposed. At the end of the ESEL course, each team would submit a proposal describing a business idea feasible for implementation at the soum level, a basic marketing and primary customer assessment, and an estimated budget. The business proposal template would be introduced to target youth as part of the ESEL course. Up to 6 teams will be selected from each of the 25 soums to receive small project-financed grants of up to US$1,000 per team each

21 A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems.


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year to implement their business and school project ideas over the course of one to two years, under guidance of the team supervisor. Local trainers in each aimag will also receive coaching from UB-based business consultants to build capacity to provide mentoring to successful teams. All teams preparing proposals will receive business training and personalized coaching organized through school extracurricular activities such as entrepreneurship clubs. Local stakeholders including private sector representatives will also be invited to provide coaching and mentoring to support teams in development of their business plans. Activities will be aligned with Children's Rights and Business Principles (CRBP)22, which will be disseminated during project workshops, meetings and campaigns to all stakeholders, including the youth teams.

46. Teams whose business ideas are selected for implementation will be partnered with relevant stakeholders including the local government office and members of the Mongolian National Chamber of Commerce and Industry (MNCCI), to improve quality of implementation. Where relevant, ALCs will work with MNCCI and other stakeholders to develop relationships between the youth teams and potential markets external to the team’s soum or aimag and facilitate market linkages. Experience sharing events among participating teams will be organized to observe and learn from implementation of the best ideas in other soums. This hands-on approach will strengthen youths’ enthusiasm for the ESEL course by engaging them in a creative exercise that is relevant to the economic life of their community. It will also give participating youth an opportunity to gain the experience of working in teams, develop and exercise leadership skills, and practically apply communication and other skills developed throughout the course.

47. A grant manual will be developed and disseminated in order to clarify requirements for key elements expected in youth’s business and school project proposals, criteria and procedures for short-listing and selection of proposals, youth team composition, beneficiary eligibility and selection criteria, the governance structure for grant award and implementation, the grants’ expected outcomes, grant agreement signing and termination procedure, and reporting and monitoring, among others. The manual will be made available in the Kazakh language in soums where the Kazakh ethnic minority is resident. The following paragraphs of the PP outline the key elements of the governance structure and criteria for awarding grants, and these elements will be fleshed out in the grant manual.

48. Selection of proposals and grant awards: ALCs, set up under component 1 of the project, will establish an independent panel of judges for each soum to organize soum-level competitions for the award of grants, and to review and evaluate the proposals received, jointly with the SCJ project management team. The panel of judges will consist of three individuals: two MNCCI or TVET representatives at the aimag center level, and one representative of the business community in the respective soum. Organization of these grant competitions at the soum level is expected to attract more participants to the ESEL course. The selection criteria for proposals include, among others, potential to improve the quality and productivity of economic activity within the community and alignment with soum-level development priorities where beneficial, potential for sustainability, strong environmental awareness, innovativeness, and potential for profitability. The judges will score proposals that meet all the

22 Developed by the United Nations Children's Fund, the United Nations Global Compact, and Save the Children, CRBP is the first comprehensive set of principles that provide guidance for businesses and firms on how they can take the full range of actions in the workplace, marketplace, and community to respect and support children’s rights.


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requirements and eligibility based on each selection criteria for short-listing, including ensuring compliance of proposed activities with safeguard policies. Applicants whose proposals are short-listed will present their business ideas to judges at the grant competitions. Based on the teams’ presentation of proposals, the judges will select and award teams in accordance with the grant manual’s guidelines and selection criteria, also jointly with SCJ. The judges will receive a small daily remuneration to cover their per diem, accommodation, and transportation costs. Team members will be required to have completed the ESEL course at the time of grant receipt, and would be under 25 years old at time of grant application and resident in a project soum. The grant manual would also include a template for youth team business proposals.

49. Implementation and monitoring of grant activities and expenditures: A trilateral agreement will be signed between SCJ, the selected school director (on behalf of the youth team), and the chairperson of the SLC. This agreement will be a legally-binding document that clarifies the role and responsibilities of each signatory in proposal implementation, monitoring and reporting on use grant of proceeds, and financial management. The chairperson’s written declaration of such purpose and his/her responsibility of using the account for the agreed purposes will be attached to the grant agreement. Overall, the roles and responsibilities will be shared between the three parties in the following manner: (i) The SLC and the youth team supervisor will monitor the day-to-day activities funded by the grant and carried out by the youth team, including adherence to sound financial management practices, audits to ensure that grants are not subjected to misuse and that expenditures exclude items from a negative list prepared in consultation with soum government and labor authorities, and compliance with safeguard policies and risk mitigation measures agreed with the Bank; (ii) SLCs will work with ALCs to facilitate youth teams’ engagement with MNCCI and other private sector stakeholders; (iii) SCJ, together with each ALC, will monitor implementation of grant-financed business ideas through joint supervision missions. A template for tripartite agreements will be included in the grant manual. The SLC will meet with youth teams at least once a month during the first four months of implementation to brainstorm solutions to problems faced; thereafter the meeting frequency will be reduced to once a quarter to receive an update from the team on implementation of activities, expenditures and profits to date. Non- or low-performing business ideas will be identified within the first quarter of implementation, reported to the respective ALC and SCJ, and will receive increased scrutiny and handholding from the SLC, ALC, and counsellors. The SLC will update ALCs and SCJ on grant activities and expenditures through quarterly reports mandated under component 3 of the project. The grant proceeds will be transferred to the SLC’s account in three installments, constituting 40, 50, and 10 percent of the total value of the grant, respectively. The transfer of the second and third installments will require joint approval by SCJ and the respective ALC. Criteria for approval of transfers will also be stated in the tripartite agreement.

50. Grant completion/closing formalities: A grant completion report describing achievement of business objectives and lessons learnt would be prepared by the youth teams upon completion of activities. As part of the counseling offered under the project, SLCs, in conjunction with ALCs and SCJ, would provide feedback to youth teams whose business ideas were not selected and advice offered on how the proposals could be improved for submission in the next round, and the teams would be encouraged to apply again in the subsequent year. All interested youth would be provided referrals to existing micro-finance or credit providers. Upon completion of grant implementation among youth teams whose ideas were selected, counseling sessions will provide an opportunity for teams to reflect on the work and learning achieved, the challenges faced, successful and unsuccessful strategies employed while


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implementing the grant, and practical life lessons learnt or skills acquired during the experience.

51. A large share of grant proceeds are expected to go towards initial investments in small equipment, tools, and materials, and operating costs at start-up, and youth team business ideas are expected to be concentrated in (i) services and sales (e.g. tourism and hospitality – tour operation, customer welcoming, sightseeing, theory of B&B; electrical product repair; tailoring; carpentry; vehicle repair/maintenance; Internet cafés/IT services; produce vendors); (ii) small-scale, labor intensive production of goods (handmade products from locally-sourced raw and other materials including those derived from livestock; leather crafts, woolen products, dairy products, arts and crafts, clothing and textiles, toys and learning materials for young children, shoes, etc.); and (iii) food production, agriculture and animal husbandry (e.g. running semi-settled or intensive farming, animal health and breeding, farming management, animal feed e.g. making fodder, greenhouse and food processing, vegetable planting, growing, cooking, pickling etc.). Among younger youth, the proposals funded will be oriented more towards learning and school-based extracurricular activities rather than the business or income-generating activities undertaken by older youth, such as creation of school newspapers or magazines, student-led extracurricular groups around themes approved by schools, and science projects for incubating/testing new ideas.

52. The project has a target that at least 45 percent of the grants are awarded to proposals led by female beneficiaries. This project component will also include gender-sensitive counseling and mentoring; development of female-centered social and business networks and linking female students to these networks; and prioritization of financing and promotion of grant proposals led by female beneficiaries.

53. A comprehensive economic assessment and market analysis will be conducted in each aimag by UB-based experts, jointly with ALCs and SLCs, examining potential for leveraging untapped resources available in schools to set up school-based enterprises (SBEs), and the role SBEs may play in advancing economic opportunities among vulnerable youth in target soums. An SBE is an entrepreneurial operation in a school setting that provides goods/services to meet the needs of the market. SBEs are managed and operated by students as hands-on learning laboratories that integrate national curriculum standards in marketing, finance, hospitality or management. SBEs are effective educational tools in helping to prepare students for the transition from school to work or college. For many students, they provide the first work experience; for others, they provide an opportunity to build management, supervision and leadership skills. Therefore, SBEs will allow the project’s targeted youth to apply their ESEL training and further strengthen their capacity to put their business ideas into practice by increasing their exposure to business operations. SBEs, if implemented successfully, could also serve as an innovative model for enhancing school-community relationships and spurring growth of local businesses. In Mongolia, a draft amendment to the Law on Primary and Secondary Education was recently submitted to the Parliament aiming to give school directors the authority to rent out school canteen/food processing facilities for commercial purposes. Such a regulation has the potential to provide a legal basis for establishment of SBEs; the proposed assessment would thus explore opportunities for creation of such enterprises in target soums. If the assessment’s results (to be made available in the second year of the project) are promising, the project will work with business consultants to develop operational guidelines and provide coaching services to selected schools to pilot establishment of one SBE during the third and fourth years of the project.


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54. A Component 2 Coordinator, to be recruited under this component, and who will spend most of his/her time in the project’s field offices, will take the lead in carrying out the above described activities and the tasks necessary for planning, preparation, coordination, logistics, implementation, supervision and monitoring and evaluation of the component’s activities.23 A Small Grants Officer will also be recruited under this component.24 The Officer, who will spend most of his/her time providing support at the project-site level and will complement the UB-based finance officer on the SCJ project management team, will conduct small grant funding related functions including evaluation of proposals, budgets, monitoring, verification of compliance with trilateral grant conditions, documentation, audit, disbursement, guidance for local assistants, and ensuring safeguards compliance with the project’s Environmental and Social Management Framework (ESMF).

Component 3: Project Management and Administration, Monitoring and Evaluation (M&E), and Knowledge Dissemination (estimated cost: US$603,260)

55. This component will undertake the following activities: (i) support operations of the SCJ project

management team (PMT) that will manage day-to-day activities at the project level and conduct M&E of project activities, including regular updating of the project’s results framework (RF), management of a project-level Grievance Redress Mechanism (GRM), and monitor compliance with safeguard policies and implementation of planned environmental and social risk mitigation measures; (ii) design and conduct the baseline and end-line surveys as part of the project’s final evaluation; (iii) conduct an annual audit; (iv) conduct a mid-term Review (MTR) for the project; (v) produce an implementation completion results report (ICR); (vi) provide training support for participatory M&E by the project’s stakeholders; and (vii) undertake capacity-building training and knowledge dissemination activities, including development of communication materials, public outreach campaigns, and consultations and fora at the local and national levels.

56. Link to PDO: Together, these activities will allow measurement of progress towards the PDO and will support achievement of the PDO through participatory M&E and project management, generation and dissemination of information to diagnose implementation problems and address them in a timely manner and to hold project stakeholders accountable for progress, including the implementing agency SCJ, and enhance the policy environment in support of entrepreneurship education through evidence-based advocacy and public outreach campaigns.

23 Specifically, s/he will: (i) Implement component activities as per the POM, including ensuring that the timing of component 1 and 2 activities is aligned with/complementary to each other; (ii) Ensure appropriate coordination with the concerned provincial and soum government departments and units, schools, and support ALCs and SLCs during the project’s implementation cycle; (iii) Develop all technical inputs such as the terms of reference and technical specifications and preparation of all necessary procurement documentation as these pertain to their component; (iv) Prepare component-specific annual activity-based work plan, procurement and financial plans, technical and operational reports as inputs to the Project Manager; (v) Implement the Monitoring and Evaluation of the components activities against the indicators of the project results framework; (vi) coordinate outreach activities to ensure consultations with ethnic minorities in design of all component activities. 24 During appraisal, a concern was raised surrounding the implementation capacity of SCJ with regard to the NGO’s ability to successfully run a small grant program, in particular, for safeguarding against ineligible expenditures and providing support to teachers supervising student teams on compliance with Bank-specified procedures. The position of the Small Grant Officer was thus added as an additional fiduciary safeguard measure to bolster project support to implementation of these grants at the soum level.


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Subcomponent 3.1 Project management and administration (estimated cost: US$300,920)

57. Day-to-day implementation and operational support for the project will be provided under this

subcomponent. In addition to operational costs, it will finance the staffing required for the project’s implementation, which will include, among others, (i) SCJ staff: a full-time Project Manager, and 25 percent of staff time of each of a human resources (HR) officer, a finance officer, and a procurement officer. See Annex 3 for the roles and responsibilities expected of each position. These positions require project management skills that are available in-house within the SCJ Mongolia office, and for which therefore there is no need to recruit consultants. As such, 25 percent of the staff time of these PMT members will be financed under the “NGO staff operating costs” expenditure category of the JSDF grant; and (ii) Consultants to be recruited under the project: a Monitoring, Evaluation, Accountability and Learning (MEAL) specialist, and an independent firm that will undertake the baseline, mid-term, and final evaluation surveys.

58. A project launch event coinciding with the signing of the Grant Agreement is planned, and a total of four annual audits are planned for the duration of the project, and an Implementation Completion Results Report (ICR) will be produced at project closing. A project-specific GRM will be established and project stakeholders will be sensitized to the GRM. The goal of the GRM is to ensure that project activities are implemented transparently and accountably, that voices and concerns of targeted groups and other stakeholders are heard, and that the grievances raised are resolved effectively and expeditiously at the SLC, ALC or project level, as appropriate.

Subcomponent 3.2 Participatory M&E system (estimated cost: US$175,100)

59. This subcomponent will support data collection to establish baseline and annual values for the project’s Results Framework (RF) indicators, the baseline, MTR and final evaluations, all of which will feed into the ICR. The baseline survey will also collect data from local stakeholders to reconfirm presence of non-Mongolian speaking ethnic minorities in project soums and that the appraisal-stage conditions continue to apply throughout the project’s duration; the findings of the survey will be used to reconfirm the need for translation of the ESEL course and grant scheme materials into the Kazakh language. This subcomponent will also finance activities that will provide training support for participatory M&E by the project’s stakeholders, including ALCs and SLCs. Each SLC will have a designated M&E focal point, who will be responsible for monitoring implementation progress, which will include the number of ESEL and other trainings delivered, program uptake, attrition, and academic performance, and providing regular implementation updates and data to the respective ALC and the SCJ project management team. Report formats will be designed to ensure that data are available to the SLC and other stakeholders to monitor progress and fix problems in a timely manner, and that challenges faced at the soum level and lessons learnt are adequately documented. Quarterly reports will be generated for MECSS and MLSP, who will jointly review performance and provide oversight.

60. An impact evaluation is embedded in the project’s M&E framework and rollout of activities. In order to ensure availability of an objective account of the ESEL training’s impact at project completion, SCJ has agreed to roll out the ESEL course in a schedule with randomized assignment of training at the individual (student) level that will allow outcomes among the “treated” youth (i.e. those who receive


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the ESEL training) to be compared to those among “untreated” youth in a control group in the project’s target schools. By project completion, training will be fully rolled out in the control group, but the project’s intervening years (year 2 and 3) will allow for an evaluation of the impact of the ESEL course on the PDO-level outcomes, yielding valuable findings that will inform the ICR and overall final evaluation of the project.

61. The project will build female beneficiaries’ confidence and real-world experience of what it means to be an entrepreneur and will contribute to bridging the gender gaps in entrepreneurship-related technical skills that have been documented at the national level. The project’s M&E system monitors progress in this area via gender-disaggregated indicators in the Results Framework around targets for female enrollment in the ESEL training and female participation in the grants scheme, and number/share of female students with enhanced capacity of doing business, better market linkages, and strengthened life aspirations.

Subcomponent 3.3 Knowledge generation and dissemination (estimated cost: US$127,240)

62. To sustain community ownership of the intervention and prepare for sustainable implementation and possible replication in other parts of Mongolia, this subcomponent will develop communication materials based on the project’s progress and intermediate results to conduct consultations and public outreach campaigns on the importance of early-age entrepreneurship education and its potential contribution to local economic development and employability of rural youth. ALCs will play the lead role in organizing advocacy and campaign work at the aimag level. The campaigns will draw on in-house 3evaluation of the project’s effectiveness, intermediate results, and outcomes, which will be conducted jointly with SLCs, ALCs, and other community-level and national stakeholders involved in the project’s implementation, through the dissemination of project results and best practices to policymakers, government and private sector stakeholders, and the Mongolian public, at national and regional fora. Successful business ideas and their implementation will be documented and disseminated through the media. The overall objective for this subcomponent is to document and disseminate evidence on the need for curricular and pedagogical reform at the national level and development of a roadmap for integration of contextually-relevant employment and entrepreneurship skills with foundational academic skills currently taught in schools.

B. Project Cost and Financing

Project Components Project cost Trust Funds Counterpart Funding

Component 1: Development and implementation of an innovative community-driven program on entrepreneurship-focused socioemotional skills for vulnerable rural youth

US$1,194,505 US$1,194,505 US$0


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Component 2: Introduction of a small grant mechanism to enable target youth to apply their entrepreneurship knowledge

US$954,530 US$954,530 US$0

Component 3: Project Management and Administration, Monitoring and Evaluation (M&E), and Knowledge Dissemination

US$603,260 US$603,260 US$0

Total Costs US$2,752,295 US$2,752,295 US$0

Total Project Costs US$2,752,295 US$2,752,295 US$0

Total Financing Required US$2,752,295 US$2,752,295 US$0

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

63. The project will be implemented by Save the Children Japan (SCJ), a leading independent, worldwide, non-profit child rights organization. SCJ has worked in Mongolia since 1994 and has a track record of results and expertise in the fields of education and skills, child protection, and child rights. Between 2012 and 2017, SCJ implemented the JSDF-financed “Improving Primary Education Outcomes For the Most Vulnerable Children in Rural Mongolia” project (P130760). The project’s immensely successful home-based school preparation program has given SCJ familiarity with World Bank (WB) fiduciary guidelines and safeguard policies and is under consideration for national scale-up. In Africa and Asia, SCJ supports the youth-focused, innovative programs on Education and Livelihood for Youth Empowerment and Adolescents Skills for Successful Transition. The programs empower vulnerable children and youth through development of competencies and skills needed for accessing safe employment and participating in decisions that affect their lives. In short, SCJ is well equipped with the capacity to design this pilot project that hinges on intensive community participation and consultations at the grassroots level.

64. From the very beginning of its operation in Mongolia (1994), SCJ has been working in provinces with the largest ethnic minority populations in the country, namely Bayan-Ulgii, Khovd and Dornod provinces. SCJ’s work in these areas includes support to education of children of ethnic minorities, strengthening preschool and primary education, support to education of children with disabilities and emergency responses during difficult times. In 2005-6, SCJ brought the issue of education for Kazakh minority children to the attention of the government and other stakeholders by undertaking and documenting a comprehensive situation analysis on the subject. The findings were submitted to the UN Committee on the Elimination of Racial Discrimination. The Committee accepted the findings and


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formally recommended to the Government of Mongolia that minority children should be able to learn in their mother tongue, as well as in Mongolian. SCJ also supported a number of small projects to promote bilingual education programs for Kazakh children in 2007-9.

65. Since 2017, SCJ has been implementing the “Educational Support and School-based Disaster Risk Reduction (DRR) Strengthening for Dzud Affected Children” project in Arkhangai, Dornod, Zavkhan, and Bayan-Ulgii aimags through its local field staff members who speak ethnic minority languages. This project aims to mitigate the negative impact of the Dzud disaster on herder children to ensure education continuity within a safe and child-friendly environment, and develop capacity for DRR in the future.

66. Overall responsibility of the project will rest with SCJ, which coordinates and oversees all aspects of project implementation, including the delivery of project components and management of financial, procurement, and environmental and social safeguards. Specifically, the SCJ's PMT will manage day-to-day activities at the project level and conduct M&E of project activities, including regular updating of the project's RF, management of a project-level GRM, and monitor compliance with safeguard policies and implementation of planned environmental and social risk mitigation measures.

67. To facilitate a better project implementation and monitoring, the PMT will prepare an Operations Manual. As part of the Operations Manual, a grant manual will be developed for use by all stakeholders involved in implementation of the grant scheme, including the project's target youth, teacher trainers, school administrators and all soum-level stakeholders. The grant manual will clarify requirements for key elements expected in youth's grant proposals, criteria and procedures for short-listing and selection of proposals (including exclusion of activities that trigger moderate or higher risk of adverse environmental impact), youth team composition, beneficiary eligibility and selection criteria, the governance structure for grant award and implementation, the grants' expected outcomes, grant agreement signing and termination procedure, and reporting and monitoring, among others. Moreover, the manual will not only describe procedures that ensure compliance with the safeguards policies but also include guidance on assessment of environmental impacts of proposed activities, and treatment and mitigation of risks identified in grant proposals. The manual will be prepared under SCJ's oversight in coordination with ALCs, and will be subject to World Bank review and No Objection by the project task team leader and environmental and social safeguards specialist.

68. Local councils at the aimag level (ALCs) and at the soum level (SLCs) will be established to support implementation of the project. ALCs will provide inputs for development of the ESEL curriculum and training package under subcomponent 1.1 as well as technical guidance to the SLCs. ALCs will also be responsible for creation of panels of judges to organize the soum-level competitions for the award of grants under component 2. SLCs, which will work under the direction of their respective ALCs, will support all project activities within soums. They will also assist the SCJ's PMT with identifying soum training schedules appropriate for out-of-school youth. SLCs and ALCs will jointly constitute a multi-stakeholder networking platform that provides on-site monitoring of project activities and their compliance with relevant safeguard policies. To this end, the project will provide support for the ALCs and SLCs to build their capacity to conduct these monitoring activities. Special attention will be paid to ensure that representatives of ethnic minority communities are represented on ALCs and SLCs in soums where these communities are resident.


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69. A project steering committee (SC) will be established, including representatives from both MECSS, who

specialize in life-long learning and secondary education with a focus on business course curriculum, and MLSP, who are involved in TVET and skills development for youth. The committee members would not only review the quarterly reports produced by SLCs under component 3, they would also provide technical assistance and oversight for both components 1 and 2, when needed.

B. Results Monitoring and Evaluation

70. The project’s M&E system is designed to be participatory. Monitoring of project rollout, targets, and results will take place under supervision of community-level monitoring mechanisms in each soum. A soum-level committee (SLC), consisting of school and community stakeholders together with a designated M&E focal point, will be responsible for monitoring implementation progress, which will include the number of trainings delivered, program uptake, attrition, and academic performance. PDO-level and intermediate results indicators in the project’s RF are designed so that data underlying the indicators can be collected efficiently and sustainably by school administrators and teachers, utilizing existing systems to the extent possible, and data made available to M&E committees and ALCs and SLCs to monitor progress and fix problems in a timely manner.

71. Standardized instruments/questionnaires for collecting data underlying RF indicators that track progress on development of skills and mindsets will be developed in year 1 of the project, jointly with the ESEL course curriculum. This is necessary to ensure that the testing instruments that track development of socioemotional skills and mindsets among beneficiaries are fully aligned with the content of the ESEL course, with opportunities for school teachers and soum-government and labor officers to provide inputs for design of the data collection instruments as well as the overall design of the M&E system. The M&E focal points on SLCs will be trained on using these instruments to collect data for the RF. The focal points will acquire data for the remaining indicators in the RF, including academic performance, from teachers involved in provision of the ESEL training, as well as through the Education Management Information System (EMIS). Data collection for these and all other RF indicators will be paper-based. Then, the individual-level data on beneficiaries, including data collected through the skills testing instruments, will be transferred into Microsoft Excel spreadsheets using a standard format developed together with the World Bank supervision team. The M&E focal points on SLCs will compile results to produce soum-level progress reports, and these will be aggregated by the SCJ project management team to produce quarterly project-level progress reports.

72. These quarterly reports will be generated for MECSS and MLSP and other members of the project SC, who will jointly review performance and provide oversight with the World Bank supervision team. Knowledge dissemination activities under component 3 will ensure public access and dissemination to results, which will in turn be used to hold project stakeholders and SCJ accountable for progress.

C. Sustainability

73. Sustainability is built into the project, as its activities, though community-driven in nature, aim at introducing lasting improvements in education and labor policies and service delivery institutions in a number of ways.


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74. At the level of schools and teachers: By project closing, capacity will be built at the school and teacher

levels to allow for continuation of project activities in target soums independently of SCJ, JSDF and WB support. Under component 1, as described earlier, the training of trainers delivered to teachers in target soums on the ESEL course will improve teachers’ knowledge and understanding of the significance of social emotional learning among adolescents and young adults, build teacher competencies in mentoring and shaping mindsets to exercise creativity, innovation and measured risk-taking, and develop other soft skills needed to thrive academically and later in life. These competencies are expected to improve teaching and instruction not just within the context of the ESEL course, but also in all other subjects taught by the teachers. Overall, by the end of the project, capacity of school- and soum-level administrators, and teachers in particular, will be developed to deliver skill-development trainings independently of SCJ, and, if successful in achieving results, the trainings and grant scheme will be integrated into annual school plans in target schools. Moreover, it is expected that through knowledge dissemination activities under component 3, school stakeholders in neighboring soums not covered by the project will be sensitized to project interventions and their benefits. This will create demand for the training, including the grant scheme, outside the project’s target areas, which could be met by mobilizing resources from local development funds that can be made available to schools for activities for which need is demonstrated to local government authorities.

75. At the level of the education system: By project closing, a package of innovative entrepreneurship training materials – with impacts rigorously demonstrated under the project – will be available to MECSS and MLSP for adoption as national curricula at the secondary school and/or TVET levels. To ensure ownership, the ESEL training modules will draw on the basic business concepts covered under MECSS’s existing business course curriculum and improve its relevance and applicability for rural youth by (i) augmenting the course with innovative socioemotional skills training; and (ii) customizing it for practical application using real-world business scenarios relevant for rural settings, including through use of the grants scheme. This process, including the implementation of the enhanced curriculum, will be conducted under supervision of MECSS and MLSP. Overall, component 3 of the project will bring to the forefront, at the national level, the need for curricular and pedagogical reform to equip students with contextually-relevant employment and entrepreneurship skills integrated with foundational academic skills in numeracy and literacy currently taught in schools. If the training, together with the full set of modules on socioemotional skills and the grant scheme, is successful in achieving its objectives and intended outcomes, the ESEL curriculum developed by SCJ and the grant scheme could be adopted by MECSS as part of its official secondary school curriculum for business skills. Component 3 supervision and knowledge dissemination activities will thus focus on engaging MECSS and MLSP in project activities from start of project implementation, especially in design of the ESEL modules. In particular, the dissemination of results from the impact evaluation planned as part of the project M&E activities will be available by end of year 3 of the project, allowing for substantial engagement with the two line ministries during year 4 around integration of the ESEL curriculum into official secondary school curricula. The project team will also work closely with other donor partners with ongoing national projects in secondary schools, such as the Asian Development Bank, to explore potential for scaling up use of the ESEL curriculum and associated grant scheme in schools outside the project’s target areas. The project SC, which will include representation from key donor partners in addition to national level stakeholders, will be an important instrument through which to ensure that no opportunity for scale-up and mainstreaming of project activities is missed. The meetings of the SC will


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provide an opportunity to engage high-level leadership early on and thus increase government incentives to scale up entrepreneurship education as well as the government’s ownership and buy-in for the project’s activities. Also, SCJ will build on its past operational experience working across Mongolia and leverage its international expertise in building capacity of key stakeholders to exploit opportunities for scaling up and mainstreaming of project activities, as it has done successfully in the past.25

76. At the level of beneficiaries: Sustainability of the competitive grant scheme will be ensured through selection of proposals that demonstrate alignment with soum-level priorities and opportunities, which will support mobilization of supplementary resources available at the soum level such as local development funds, both during the project and after it closes. The financial literacy modules of the ESEL course will raise awareness and train youth on accessing and mobilizing financial resources available to them, e.g. development funds from local government or resources available from nonprofit or for-profit lending institutions/banks. Overall, the potential for sustainability of grant-financed business ideas beyond the project’s duration through mobilization of non-project funds will be one of the criteria used in selection of proposals. Finally, the entrepreneurship education offered under the project, although offered only once to each beneficiary, and the grants offered under component 2, could have lasting impacts on the lives of beneficiaries at the individual level. Outside Mongolia, such programs have increased the long-term probability of starting a firm as well as entrepreneurial incomes, increased entrepreneurial attitudes and perceived behavioral control, and increased entrepreneurial intentions which in turn impact behavior associated with creation of new business ventures.

V. KEY RISKS

A. Overall Risk Rating and Explanation of Key Risks

77. The overall risk associated with this operation is estimated at the appraisal stage to be Moderate. It is estimated that moderate risks linked mainly to the nature of the project, which is a demonstration for innovative activities new to Mongolia, fall under three categories: Political and Governance, Technical Design, and Financial. See summary table below, and annex 4 for detailed description of risks. As agreed at the project initiation stage, SCJ has prepared an Environmental and Social Management Framework (ESMF) that outlines measures to enhance the project’s benefits for IP communities and a risk mitigation strategy to ensure that the risk of adverse impact on the environment remains low throughout the duration of the project.

25 Among SCJ’s proven record of scaling up its pilot interventions is the aforementioned JSDF-financed “Improving Primary Education Outcomes for the Most Vulnerable Children in Rural Mongolia” project, for which supervision support was provided by the WB. The project, which was conducted between 2012 and 2017 and which offered a home-based alternative for children with little or no access to early childhood education due to their residence in remote areas, achieved great success. This initiative eventually culminated in the MECSS’s issuance of a ministerial decree (No. A/487) on August 2, 2018, which adopted the home-based early childhood development program. To date, MECSS has scaled up the implementation of the program in the Ulaanbaatar districts and 21 aimags.


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Table 1 Summary of risks and mitigation measures

Risk Rating Mitigation Measures

1. Political and Governance (High turnover of central and local government officials could lower chances of government’s ownership of the project, successful scale-up of project interventions, and integration into existing programs at project closing, while turnover at the level of local government and schools might affect concerted implementation of project components needed to maximize development impact)

Moderate Ensuring sustained government ownership of project activities will remain a priority throughout implementation. The key to this is that the project seeks to build on and improve MECSS’s existing business skills curriculum to enhance its relevance for rural youth. This process will be undertaken jointly with MECSS. MECSS will also be involved in identification of the specific socioemotional skills to be targeted under the project, and in adaptation of their measurement in the rural Mongolian setting. These measures ensure government oversight of project activities, at the same time offering MECSS an incentive to stay engaged. At a higher level, the SDV 2030 commitments to supporting development of business skills among youth ensures alignment with Mongolia’s long-term development goals, which helps buffer potential adverse impacts stemming from high turnover of officials. Further, SCJ, together the WB task team as part of its routine project supervision, will formally document issues discussed and agreements reached during project implementation and will emphasize broad and frequent consultations and communication with technical counterparts under component 3 of the project, and also with political decision makers, beneficiaries, and other stakeholders at the central and local levels. This will promote ownership, continuity, broad-based buy-in, and support for the implementation of all planned activities.

2. Macroeconomic Low

3. Sector Strategies and Policies Low

4. Technical Design of Project or Program (the project is by design an innovative pilot with interventions that are new for Mongolia, and there is therefore moderate risk that some activities will not be punctually implemented. Given the innovative nature of activities, there is also a risk of lower-than-expected uptake of project activities, as well as the risk of dropouts prior to completion of the program)

Moderate SCJ and the WB team will work together to provide additional implementation support in the early stage of implementation period, especially during development of the skills curriculum and adaptation of assessment instruments in order to avoid implementation delays. To maximize uptake of the intervention, information campaigns will be conducted at the start of each school year, targeting students enrolled in school and LLCs, parents, teachers and school administrators, and soum government officials. The opportunity offered by the project to compete for small business grants at the end of the training may also be a source of motivation for students to enroll.


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Risk Rating Mitigation Measures

The Bank team will leverage its experience supervising similar interventions successfully implemented in other countries. Component 3 activities will yield M&E data on program enrollments and attendance, with feedback sought through focus group discussions with dropouts and their parents in the first year of implementation. These discussions will be conducted during joint supervision missions with SCJ. The discussions will focus on reasons for dropping out related to training design and relevance, as well as external or household-level factors that might constrain attendance. The training and project design will be adjusted based on the results of the discussions.

5. Institutional Capacity for Implementation and Sustainability

Low SCJ has strong in-house capacity for project design, preparation and implementation. Further, its excellent working relationship with MECSS developed while implementing other education projects in the past is necessary for engaging MECSS from the outset in development of the ESEL curriculum and overseeing project activities, which in turn paves the way for implementing strategies for ensuring sustainability at the level of the education system (see section IV.C for details).

6. Fiduciary (project’s planned operation across multiple aimags, its rural focus, and the significant share of project funds, including sub-grants, to be disbursed through the field offices.)

Moderate The overall fiduciary environment is strong. In other WB-financed projects, SCJ exhibited adequate data controls in the FM system, timely financial reports, adequate internal controls and high compliance with core rules, and effective internal and external audit with timely audit reports and follow up. Procurement function and controls were strong and compliance was high. The WB task team and UB-based designated FM analyst and procurement officer will work closely with SCJ throughout implementation to ensure compliance with the Bank’s fiduciary requirements. The grant manual to be developed under component 2 will be subject to WB review and No Objection prior to finalization.

7. Environment and Social Low SCJ has prepared an ESMF that describes the risks, and outlines measures to enhance the project’s benefits for IP communities and a risk mitigation strategy to ensure that the risk of adverse impact on the environment remains low throughout the duration of the project. See ESMF attached.

8. Stakeholders Low

9. Other N/A

10. Overall Moderate


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VI. APPRAISAL SUMMARY

Benefits

78. The project’s interventions empower disadvantaged rural youth with socioemotional skills that

cultivate a growth mindset and would lead to improved performance in school. Across the world, socioemotional skills interventions, delivered directly through classroom-based lessons, pedagogical methods that teach academic content using PRACTICE skills, and through after-school programs, have been shown to improve school outcomes (Sanchez Puerta et al, 2016; OECD, 2015). Such interventions leverage the mediating effect of these skills on cognitive performance to improve educational attainment and enhance school performance. A number of growth mindset interventions have led to increases in math test scores (see World Bank, 2018, for South Africa; Claro et al., 2016, for Chile; West et al., 2016, and Blackwell et al., 2007, for the US). Under the proposed operation, increases in growth mindset and abilities related to optimism toward the future, self-esteem, and other positive attitudes, e.g. self-efficacy, perseverance, taking initiative, creativity and problem solving, will lead to improvements in schooling outcomes, including test scores and level of school engagement.

79. By strengthening mindsets and capabilities associated with entrepreneurship, the project will also

prepare youth for entry into a labor market dominated by informal self-employment. In particular, the entrepreneurship training modules of the ESEL course comprising of both business skills and inter- and intrapersonal skills, together with the practical experience acquired under the grants scheme, will lead to changes in the Big Five personality traits that matter for success in the labor market more broadly, as well as in entrepreneurship specifically, i.e. increased Openness to Experience, Conscientiousness, and Extraversion, but lowered Neuroticism. Resilience to stress is expected to increase, and self-esteem increased due to strengthened beliefs in self-efficacy. Additional benefits include heightened optimism about the future and the opportunities it offers and increased likelihood of self-reports of perceptions of moving forward in life, improved negotiation and persuasion skills, entrepreneurial passion, and risk tolerance. Finally, there are a number of skills and mindsets that will not be measured directly in the project but are expected to strengthen (indirectly) through their association with the Big Five traits. In particular, beneficiaries are expected to increase their need for achievement and risk-taking propensity, and become more persistent, pro-active and creative. Also, while measuring impacts on entrepreneurial status and performance is beyond the scope of this operation, based on evidence from other studies, long-term benefits in these areas would include increases in self-employment and profitability of businesses created by target youth (Carney and Gertler, 2018, for Uganda; Premand et al, 2012, for Tunisia; Elert, Andersson, and Wennberg, 2013, for Sweden).

Financial management (FM)

80. SCJ will be the project implementing agency to manage the grant proceeds and oversee the project

Designated Account. The FM team assessed the adequacy of the project FM for the TF. The assessment, based on the World Bank Directive: Financial Management Manual for the World Bank Investment Project Financing Operations issued in February 10, 2017, concluded that the project will meet the


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World Bank minimum FM requirements. In the FM team's opinion, FM arrangements employed by SCJ are acceptable to the World Bank for implementing the operation and provide reasonable assurance that the proceeds of the grant under the TF project will be used for the purposes for which the grant is provided. In addition, SCJ has extensive knowledge and experience with regards to managing IFI funded projects as well as implementing projects financed by the World Bank, and the responsible project accountant for the TF has sufficient relevant professional experience and has worked on a World Bank financed project before. Overall, the residual FM risk for the project is assessed as Moderate.

81. Disbursement and flow of funds arrangements. There will be four disbursement methods available for the project: advance, reimbursement, direct payment and special commitment. The supporting documents for disbursements will be statements of expenditures (SOEs) or other relevant records such as contracts and invoices depending on the disbursement method used. The grant fund will flow from the World Bank to a Designated Account (DA) established at a commercial bank acceptable to the Bank and managed by SCJ. The ceiling of the DA will be specified in the Disbursement and Financial Information Letter (DFIL). SCJ finance staff will prepare payment orders and withdrawal applications which will be signed and approved by the authorized officers of SCJ in accordance with the payment authorization scheme. SCJ Country Director will ultimately ensure the completeness and accuracy of the withdrawal applications.

82. The following chart shows the general flow of funds for the project as described:

83. Under Component 2 of the project, small Sub-grants in the form of seed capital will be provided to youth teams to finance their grant proposals which will be competitively selected. A grant manual will be developed and disseminated by SCJ in order to clarify requirements for key elements expected in youth's business and school project proposals, criteria and procedures for short-listing and selection of proposals, youth team composition, beneficiary eligibility and selection criteria, the governance structure for seed capital grant award and implementation, the grants' expected outcomes, grant agreement signing and termination procedure, and reporting and monitoring. The grant manual will also contain a trilateral grant agreement template to be signed between SCJ, the selected school director (on behalf of the youth team), and the chairperson of the Soum-based local council (SLC). The grant agreement shall specify, among others, roles and responsibilities of signatories as well as


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reporting requirements on the use of Sub-grant proceeds and related financial management arrangements including the disbursement scheme. It is envisaged that the Sub-grant proceeds will be transferred to the SLC's account in three installments, constituting 40, 50, and 10 percent of the total value of the grant, respectively. However, the final financial management and disbursement arrangements in relation to the Sub-grant proceeds will be detailed out in the grant manual which shall be reviewed and approved by the Bank.

84. The project proceeds will be disbursed against eligible expenditures according to the table below.

Category Allocated Grant Amount

(US$)

Percentage of Expenditures to Be Financed

(inclusive of Taxes)

(1) Consulting services 544,860

100%

(2) Training 848,265 100%

(3) Goods 652,150 100%

(4) Operating costs 407,020 100%

(5) Sub-grants under Part 2 of the Project 300,000 100%

Total Amount 2,752,295

85. Budgeting, accounting and financial reporting. SCJ will follow the overall project costing approved by

the World Bank for project implementation. SCJ will maintain separate accounting records for the grant in its existing accounting system. As the implementing agency, SCJ will centrally manage and handle the project financial management and, therefore, it will be responsible for recording the project accounts, preparing project financial statements, and retaining all documentation supporting disbursements as well as processing the withdrawal applications during the life of the project.

86. The administration, accounting and reporting of the grant is set up in accordance with the Bank requirements. SCJ will use a cash basis of accounting for accounting records and preparation of the financial statements. Consistent with IPSAS requirements, the financial statements will include the following:

• Balance Sheet;

• Statement of Sources and Uses of Funds by Disbursement Categories;

• Statement of Uses of Funds by Project Activities;

• Designated Account Statement; and

• Explanatory notes

87. All accounting documents and project files, including contracts, will be kept and maintained by SCJ. These documents should be available upon request during the Bank's supervision missions and project audits carried out by external auditors. In accordance with related World Bank guidelines, the project interim financial reports (IFRs) will be submitted by SCJ on a semi-annual basis to the Bank starting with the first semester in which disbursements are commenced, no later than 45 days after the end of each relevant semester. In terms of the IFRs templates, SCJ may use the same reporting formats previously used under the World Bank financed project implemented by SCJ for financial reporting purposes of the


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TF project.

88. Internal control. An FM manual will be developed and followed by SCJ under the TF project. The FM Manual will be followed for the procedures related to proper authorization for payment requests, segregation of duties, and other specific internal control procedures and practices relating to the project's FM. In addition, periodic supervision missions by the World Bank's task team, annual financial audits by independent external auditors, and reports of public internal auditors will serve as mechanisms to ensure that the project's FM systems function effectively.

89. Audit arrangements. The World Bank requires the project financial statements to be audited in accordance with auditing standards acceptable to the World Bank. Mongolian National Audit Office shall select and contract an independent external auditor acceptable to the World Bank to conduct annual audits of the project financial statements in accordance with the International Standards on Auditing and under the terms of reference satisfactory to the World Bank. The audit will be financed from the grant proceeds. The audited project financial statements of the grant will be due to the Bank within 6 months after the end of each fiscal year.

90. Risk assessment and mitigation. The project activities will be carried out in rural areas and involves significant activities relating to trainings and consulting services. Although the project accountant has prior experience of implementing a World Bank financed project, she will be based in Ulaanbaatar whereas project activities will be conducted in rural areas. Therefore, it is important that local focal points for the project implementation have sufficient capacity to ensure the financial management related work is properly carried out at local levels and that project accountant exercises proper controls over the local FM work such as disbursing against proper primary documents and limiting cash transactions. Furthermore, as part of the mitigating measure, these concerns will be closely monitored during the Bank FM supervision missions.

91. Supervision plan. The supervision strategy for this project is based on its FM risk rating, which will be evaluated on a regular basis by the FM specialist, in line with the Bank FM Manual and in consultation with the project task team leader.

Procurement 92. Procurement arrangements. The procurement officer on the SCJ project management team will be

responsible for procurement activities as well their planning, monitoring and consolidated reporting. It is estimated that the project will procure contracts up to US$100,000, with most contracts for procurement of goods and consultancy services. Procurement will be carried out in accordance with the World Bank Procurement Regulations for IPF borrowers (Borrowers Regulations), July 2016 (revised November 2017), as well as the provisions stipulated in the Grant Agreement (GA). The project will utilize Systematic Tracking of Exchanges in Procurement (STEP) for procurement planning, monitoring, and records keeping. A draft Procurement Plan has been prepared. The procurement method and review thresholds may be subject to the World Bank’s review and modification throughout the project period based on the procurement performance and risk rating of the project. The World Bank will


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officially notify SCJ about such changes in a timely manner to ensure smooth implementation.

93. Capacity Assessment. Procurement will be conducted by SCJ, whose staff is well-versed in procurement procedures under past and ongoing Bank-financed projects.26 While SCJ’s procurement function and controls were strong and compliance was high during these projects, the overall fiduciary risk at appraisal stage is estimated to be moderate due to the project’s planned operations across multiple aimags, its rural focus, and the significant share of project funds (including sub-grants) to be disbursed through the field offices. There is also a low risk of possible contract issues like suspension, termination, consultant's non-performance and over-pay to consultants during contract implementation. Mitigation measures include: (i) training to SCJ procurement staff; (ii) early involvement by the Bank team in procurement; (iii) a detailed procurement plan with dates for key milestones including submission of TORs and Technical Specifications; and (v) the Bank team to closely monitor the progress and deliverables of consultants’ assignments during implementation. The overall procurement risk is rated moderate.

94. Filing and record keeping. The Procurement Manual (part of the Project Operational Manual) sets out

the detailed processes for maintaining and providing readily available access to project procurement records. The procurement officer on the SCJ PMT will be responsible for maintaining the records. A logbook of the contracts with unique numbering system shall be maintained.

95. SCJ and the WB have agreed on the following procurement scope for the project financing, which will

support achievement of the PDO:

a. Civil works. There are no civil works planned under the project.

b. Goods. Goods will include contracts for printing of teacher training materials, the ESEL curriculum and associated package of learning materials; VCDs/DVDs for trainings and dissemination; supplies and materials for training on SBEs; printing of the grant manual; procurement of computers and office equipment; procurement of stationery for project use; printing of M&E reports; production of videos on grant recipients and successfully-implemented grant proposals; and production of materials for project visibility and community outreach packages.

c. Consulting Services. The consulting services will be procured from (i) consultants who will provide services largely in UB, with visits to project sites: international and local entrepreneurship and socioemotional skill consultants, a psychologist, local education specialists, an SBE assessment consultant, business consultants and coaches, consultant for CRBP sensitization activities and materials, a finance and grant officer on the SCJ project management team (PMT), a firm for undertaking baseline, mid-term, and final evaluation surveys, a Monitoring, Evaluation, Accountability and Learning (MEAL) specialist on the PMT, and a firm for external audits; (ii) Field-based consultants for component-specific activities: project component

26 SCJ has satisfactorily performed procurement activities to date for other donor-funded projects and has demonstrated sufficient capacity to manage these under the WB-financed “Improving Primary Education Outcomes For the Most Vulnerable Children in Rural Mongolia” (P130760) and the ongoing “Mainstreaming Social Accountability in Mongolian Education” projects (P153283).


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managers, field training facilitators, and facilitators for consultations with parents.

d. Small grant scheme/sub-projects. Procurement under the grants will be conducted by grant recipients using very simple procurement methods described in the Grant Manual. Procurement under the grant scheme will be subject to procurement post review by external auditors and/or by the Bank.

e. Operational Costs. Project operation costs such as motor vehicles operation and maintenance cost, maintenance of equipment, communication costs, rental expenses, utilities expenses, consumables, advertisements, and translation. Such services’ needs will be procured using the procurement procedures specified in the POM accepted and approved by the Bank.

96. Procurement Thresholds. The table below shows the thresholds and procurement methods to be used under the project.

Table 2. Procurement Threshold Methods and Prior-review Thresholds

Expenditure Category

Contract Value Threshold (USD)

Procurement/Selection Method

Prior Review Threshold (USD)

Goods and Non- Consulting Services

<=1,000,000 NCB >500,000

<=100,000 Shopping or Request for Quotations (RFQ)

>500,000

-- Direct Contracting >500,000

Consulting Services --

Quality Cost Based Selection (QCBS)

>600,000

<=100,000 (national)

Consultants’ Qualification Based Selection (CQS)

>600,000

Audits only Least Cost Based Selection All

Individual consultant >200,000

-- Direct Selection (firm) >600,000

-- Direct Selection (individual) >200,000 *The thresholds will be revised periodically. Works will not be conducted under the project.

97. Procurement Plan. SCJ has prepared a Procurement Plan. The Procurement Plan is subject to public

disclosure and will be updated on an annual basis or as needed by including contracts previously awarded and to be procured. The updates or modifications of the Procurement Plan shall be subject to the World Bank’s prior review and ‘no objection’. The World Bank shall arrange for the publication of the Procurement Plan and any updates on the World Bank’s external website directly from STEP, while SCJ will do the publication on its project website.

98. Monitoring by STEP. Through mandatory use of STEP by the Recipient, the World Bank will be able to consolidate procurement/contract data for monitoring and tracking of all procurement transactions. Using STEP, comprehensive information of all prior and post review contracts for goods, works, technical services, and consulting services awarded under the whole project will be available


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automatically and systematically on a real time basis whenever required, including, but not limited to: (a) the reference number as indicated in the Procurement Plan and a brief description of the contract; (b) the estimated cost; (c) the procurement method; (d) timelines of the bidding process, (e) the number of participated bidders; (f) names of rejected bidders and reasons for rejection; (g) the date of contract award; (h) the name of the awarded supplier, contractor, or consultant; (i) the final contract value; and (j) the contractual implementation period.

99. Publication of Procurement Information. The project will follow the World Bank’s policies on publication of procurement information that are set forth in the World Bank’s Procurement Regulations.

100. Procurement Post Review. Contracts below the abovementioned prior review thresholds shall be subject to post review according to procedures set forth in World Bank Procurement Regulations on an annual basis by the World Bank team.

101. Training, Workshops, Study Tours, and Conferences. Training activities would comprise workshops and training, based on individual needs, as well as group requirements, on-the-job training, and hiring of consultants for developing training materials and conducting trainings. Selection of consultants for training services follows the requirements for selection of consultants above. All training and workshop activities (other than consulting services) would be carried out on the basis of approved Annual Work Plans / Training Plans that would identify the general framework of training activities for the year, including: (i) the type of training or workshop; (ii) the personnel to be trained; (iii) the institutions which would conduct the training and reason for selection of this particular institution; (iv) the justification for the training, focusing on how it would lead to effective performance and implementation of the project; (v) the duration of the proposed training; and (vi) the cost estimate of the training. Report by the trainee(s), including completion certificate/diploma upon completion of training, shall be provided to the Project Coordinator and will be kept as parts of the records, and will be shared with the Bank if required.

102. Training Plan. A detailed plan of the training/workshop describing the nature of the training/workshop, number of trainees/participants, duration, staff months, timing and estimated cost will be submitted to the Bank for review and approval prior to initiating the process. The selection methods will derive from the activity requirement, schedule and circumstance. After the training, the beneficiaries will be requested to submit a brief report indicating what skill have been acquired and how these skills will contribute to enhance their performance and to attain the project objective.

103. Procurement Manual. Procurement arrangements, roles and responsibilities, methods and requirements for carrying out procurement shall be elaborated in detail in the Procurement Manual which will be a section of the POM. The POM shall be prepared by SCJ and agreed with the Bank prior to project effectiveness.

Social and environmental safeguards

104. OP 4.10 on indigenous peoples is triggered due to presence of ethnic minorities in the project's target

locations. The project is a category B project and OP 4.01 is triggered as the Bank’s umbrella safeguards


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policy. As agreed at the project initiation stage, SCJ has prepared an Environmental and Social Management Framework (ESMF) that outlines measures to enhance the project’s benefits for IP communities and ensure that the project includes representatives of IP and minority communities in the multi-stakeholder networking platform consisting of local councils established under the project.

105. The project does not finance civil works under any component. Component 1 of the project will support

development and implementation of an innovative community-driven education program on entrepreneurship skills for vulnerable, rural youth. There is thus no adverse environmental impact expected under this component. Under Component 2, the project will finance and oversee implementation of a competitive small grants scheme (up to $1,000 per grant) to enable youth in the project’s target group to practically apply entrepreneurship knowledge and social emotional skills acquired under component 1 to identify and harness unexploited business opportunities at the local level. Youth team business ideas are expected to be concentrated in (i) services and sales, e.g. in tourism and hospitality; (ii) small-scale, labor-intensive production of hand-made goods; and (iii) food production, agriculture and animal husbandry. The screening process for grants will weed out ideas that pose moderate or higher environmental risks. The ESMF prepared by SCJ includes a risk mitigation strategy to ensure that the risk of adverse impact on the environment remains low throughout the duration of the project.

106. Gender: The project will build female students’ confidence and real-world experience of what it means

to be an entrepreneur and will contribute to bridging the gender gaps in entrepreneurship-related technical skills that have been documented at the national level. The entrepreneurial skills and attitudes covered under the ESEL curriculum seek to mitigate the impact of gender-related constraints that lead to poorer labor market outcomes among rural Mongolian women when they exit school as well as low participation in self-employment. The project has a target that half of the participants enrolled in the ESEL training are female; this will be achieved and sustained through targeted community awareness and sensitization campaigns to foster female students’ participation in the trainings. In addition, the project has a target that at least 45 percent of the grants are awarded to proposals led by female beneficiaries. Outcomes expected under the project include an increase in the number of female students with enhanced capacity of doing business, better market linkages, and strengthened life aspirations. Each of these outputs and outcomes will be monitored via gender-disaggregated indicators in the RF. Additional activities include gender awareness modules in the student, teacher and parent trainings offered under the project; inclusion of female role models in sector-specific examples from Mongolia in the training modules; gender-sensitive counseling and mentoring; development of female-centered social and business networks and linking female students to these networks; and prioritization of financing and promotion of grant proposals led by female students.

A. Other Safeguard Policies (if applicable) N/A

B. World Bank Grievance Redress

Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project


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may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

.

http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service

http://www.inspectionpanel.org/


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VII. RESULTS FRAMEWORK AND MONITORING

Results Framework

COUNTRY : Mongolia Entrepreneurship-focused socioemotional skills for the most vulnerable youth in rural Mongolia

Project Development Objectives

The project development objective (PDO) is to train vulnerable, disadvantaged youth in 25 of Mongolia’s poorest rural districts across five provinces with socioemotional skills for improved performance in school and preparation for entry into self-employment. The PDO will be achieved through a school-based, community-driven program targeting 6,000 school-enrolled and out-of-school youth to support acquisition of socioemotional skills that are linked not just to success in school, but are also highly valued in the labor market. The project will address the largely unmet need for socioemotional and entrepreneurship skills stemming from extremely limited labor market opportunities that lead to high inactivity among youth in these locations and a job profile dominated by traditional herding, unpaid work and self-employment in the informal sector.

Project Development Objective Indicators

Indicator Name Corporate Unit of Measure

Baseline End Target Frequency Data Source / Methodology

Responsibility for Data Collection

Name: Number of direct beneficiaries reached

Number 0.00 6000.00 Annual

Project progress reports of the SCJ project management team and SLCs

Data collection by soum-level committee (SLC) M&E focal points based on teacher/school records, and aggregation of


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results by the Save the Children (SCJ) project management team

Number of female beneficiaries



Data collection by soum-level committee (SLC) M&E focal points based on teacher/school records, and aggregation of results by the Save the Children (SCJ) project management team

Description: Cumulative number of target youth who register for the entrepreneurship-focused socioemotional learning (ESEL) course

Name: Share of beneficiaries with improved academic performance

Percentage

0.00 35.00 At the beginning and end of each school year, starting with year 2 of the project

Project progress reports of the SCJ project management team and soum-level committees (SLCs)

M&E focal points of SLCs will acquire test score data from teachers. Data on students' involvement in participatory structures at schools/local communities (youth clubs/councils, student councils,


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health committees, social committees, youth-led organizations) and perceptions of connectedness with their communities will be assessed through student and parent interviews also conducted by M&E focal points. The SCJ project management team will aggregate the soum-level data to produce project reports.

Share of female beneficiaries with improved academic performance

Percentage



M&E focal points of SLCs will acquire test score data from teachers. Data on students' involvement in participatory structures at schools/local communities (youth clubs/councils, student councils, health


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committees, social committees, youth-led organizations) and perceptions of connectedness with their communities will be assessed through student and parent interviews also conducted by M&E focal points. The SCJ project management team will aggregate the soum-level data to produce project reports.

Description: Academic performance will be assessed among youth enrolled in the ESEL course as a composite (index) of performance on school examinations (end-of-year test scores in Mongolian language and mathematics) and engagement in classroom and school life. The test scores used to construct the index will be obtained from existing teacher reports for students and from the EMIS. The data on school engagement will be collected through standardized questionnaires developed during year 1 that assess students' involvement in participatory structures at schools/local communities and perceptions of connectedness with their local communities. The construction of the index – i.e. the weights to be placed on each dimension of the index (test scores and school engagement) – will be finalized in year 1 in consultation with local education experts and the psychologist recruited under the project to develop the ESEL course.

Name: Number of beneficiaries with enhanced capacity of doing business (i.e. improvements in skills/mindsets targeted

Number 0.00 2500.00 At the beginning and end of each school year, starting with year 2 of the project


Data on entrepreneurial attitudes and mindsets will be collected through face-to-face assessments of


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under the ESEL training) students by SLC M&E focal points. The SCJ project management team will aggregate the soum-level data to produce project reports.

Number of female beneficiaries with enhanced capacity of doing business (i.e. improvements in skills/mindsets targeted under the ESEL training)

Number 0.00 1250.00 At the beginning and end of each school year, starting with year 2 of the project


Data on entrepreneurial attitudes and mindsets will be collected through face-to-face assessments of students by SLC M&E focal points. The SCJ project management team will aggregate the soum-level data to produce project reports.

Description: “Capacity of doing business” will be assessed through examination of changes in a set of entrepreneurship-focused socioemotional skills and mindsets targeted under the ESEL training. The list of skills (and instruments used to measure them) will be finalized during year 1 of the project in consultation with the psychologist and other experts recruited under the project, and may include combination of “broad and smaller order” skills including the Big Five personality traits, self-efficacy, resilience to stress, negotiation and persuasion skills, entrepreneurial passion, and risk tolerance. The data on these skills and mindsets will be collected through standard questionnaires used globally and that will be adapted to the context of rural Mongolia during year 1 of the project in consultation with the education experts and the psychologist recruited under the project to develop the ESEL course. The Big Five Inventory is a self-reported multidimensional personality inventory consisting of


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44 items expressed as short phrases with relatively accessible vocabulary (John et al, 1991). Stress resilience could be measured using the Stress Appraisal Measure that assesses on 5-point scales anxiety or stress level of participants (Peacock and Wong, 1990). For self-esteem, the team has explored use of the General Self-Esteem Scale that is associated with leadership, with higher scores indicating stronger belief in self-efficacy (Schwarzer and Jerusalem, 1995).

Intermediate Results Indicators




Name: ESEL course has been developed and piloted

Yes/No N Y Annual

Project progress reports of the SCJ project management team

SCJ project management team

Description:

Name: Number of Soum-Level Committees (SLCs) established


Project progress reports of the SCJ project management team and aimag-level committees (ALCs)

Aggregation of ALC reports by the SCJ project management team

Description: Cumulative number of SLCs established under the project.

Name: Number of teachers trained

Amount(USD)

0.00 100.00 Annual

Project progress reports of the SCJ project management team and

Data collection by SLC M&E focal points, and


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SLCs

aggregation of results by the SCJ project management team

Description: Cumulative number of teachers that have received the training of trainers on the ESEL course.

Name: Share of beneficiaries with strengthened life aspirations

Percentage



Data on life aspirations will be collected through face-to-face assessments of students by SLC M&E focal points. The SCJ project management team will aggregate the soum-level data to produce project reports.

Share of female beneficiaries with strengthened life aspirations

Percentage



Data on life aspirations will be collected through face-to-face assessments of students by SLC M&E focal points. The SCJ


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project management team will aggregate the soum-level data to produce project reports.

Description: “Life aspirations” will be assessed through examination of changes in beneficiaries’ level of optimism about the future and the opportunities it offers, and perceptions of moving forward in life. Data on these mindsets will be collected through standardized questionnaires developed during year 1 in consultation with local education experts and the psychologist recruited under the project to develop the ESEL course.

Name: Share of grant applicants who are female

Percentage

0.00 45.00 Annual, starting in year 2 of the project


Data collection by SLC M&E focal points and aggregation of results by the SCJ project management team

Description:

Name: Number of grant recipients with better market linkages

Number 0.00 1000.00 Annual, starting in year 2 of the project


Data on market linkages will be collected by SLC M&E focal points on the basis of grant recipient teams' supervisor reports.


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The SCJ project management team will aggregate the soum-level data to produce project reports.

Share of grant recipients with better market linkages who are female

Percentage



Data on market linkages will be collected by SLC M&E focal points on the basis of grant recipient teams' supervisor reports. The SCJ project management team will aggregate the soum-level data to produce project reports.

Description: “Market linkages” will be assessed through measurement of the extent to which grant recipients meet or interact with the Mongolian National Chamber of Commerce and Industry and other private sector stakeholders, under component 2.

Name: Share of grant recipients who have achieved at least one grant objective within 6

Percentage



SLC M&E focal points, on the basis of grant recipient teams'


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months after receiving the funds

supervisor reports and following verification protocols stated in the tripartite grant agreements. The SCJ project management team will aggregate the soum-level data to produce project-level reports.

Share of female grant recipients who have achieved at least one grant objective within 6 months after receiving the funds

Percentage

0.00 40.00

Description: This is defined as the share of grant recipients in each school year who, within six months after receiving grant proceeds, demonstrate as part of their reporting to SLCs that they have achieved at least one of the objectives or outcomes stated in their grant proposals. In order to be successfully counted in this indicator, the achievement of the objective or outcome will need to be verified by the SLC per the verification protocol stated in the trilateral agreement signed between SCJ, the school and the SLC in question.

Name: Number of national dissemination workshops conducted with participation of the ministries of education,


Project progress reports of the SCJ project management team

SCJ project management team, working in collaboration with MECSS, MOLSP, and


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labor, and finance other stakeholders at the national level

Description: Cumulative number of workshops conducted for dissemination of project results and discussion of recommendations produced under component 3 with the ministries of education, labor, and finance, development partners, and other national-level stakeholders. The objective of these workshops will be to enable integration of entrepreneurship skills development into national curricula and/or pedagogy policies, and/or other donor- or government-funded operations.


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Target Values Project Development Objective Indicators FY

Indicator Name Baseline YR1 YR2 YR3 YR4 End Target

Number of direct beneficiaries reached 0.00 0.00 1000.00 2000.00 6000.00 6000.00

Share of beneficiaries with improved academic performance

0.00 0.00 15.00 20.00 35.00 35.00

Number of beneficiaries with enhanced capacity of doing business (i.e. improvements in skills/mindsets targeted under the ESEL training)

0.00 0.00 200.00 1000.00 2500.00 2500.00

Number of female beneficiaries 0.00 0.00 500.00 1500.00 3000.00 3000.00

Share of female beneficiaries with improved academic performance

0.00 0.00 15.00 20.00 35.00 35.00

Number of female beneficiaries with enhanced capacity of doing business (i.e. improvements in skills/mindsets targeted under the ESEL training)

0.00 0.00 100.00 500.00 1250.00 1250.00

Intermediate Results Indicators FY


ESEL course has been developed and piloted N N Y Y Y Y


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Number of Soum-Level Committees (SLCs) established

0.00 0.00 10.00 20.00 25.00 25.00

Number of teachers trained 0.00 0.00 20.00 40.00 100.00 100.00

Share of beneficiaries with strengthened life aspirations

0.00 0.00 15.00 20.00 35.00 35.00

Share of grant applicants who are female 0.00 0.00 30.00 35.00 45.00 45.00

Number of grant recipients with better market linkages

0.00 0.00 0.00 500.00 1000.00 1000.00

Share of grant recipients who have achieved at least one grant objective within 6 months after receiving the funds

0.00 0.00 10.00 20.00 40.00 40.00

Number of national dissemination workshops conducted with participation of the ministries of education, labor, and finance

0.00 1.00 2.00 3.00 4.00 4.00

Share of female beneficiaries with strengthened life aspirations

0.00 0.00 15.00 20.00 35.00 35.00

Share of grant recipients with better market linkages who are female

0.00 0.00 0.00 20.00 40.00 40.00

Share of female grant recipients who have achieved at least one grant objective within 6 months after receiving the funds

0.00 0.00 10.00 20.00 40.00 40.00


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ANNEX 1. SUMMARY OF GLOBAL EVIDENCE ON IMPACTS OF SOCIOMOEMOTIONAL SKILLS PROGRAMS RELEVANT FOR THE ESEL TRAINING

Improving school outcomes

1. Socioemotional skills can be nurtured during middle childhood and adolescence, and these skills can improve schooling outcomes. The socioemotional skills covered under the PRACTICE skills framework are best developed before reaching the labor market (Guerra et al, 2014). International evidence shows that primary school children can develop and crystalize socioemotional skills indirectly through teacher modeling and through reinforcement in a positive school setting. In countries across the world, children have learned these skills directly through classroom-based lessons, pedagogical methods that teach academic content using PRACTICE skills, and through after-school programs. Socioemotional skills interventions leverage the mediating effect of these skills on cognitive performance to improve educational attainment and enhance school performance as well as a range of other welfare-enhancing outcomes (Sanchez Puerta et al, 2016), allowing beneficiaries to benefit even further from existing or complementary investments in cognitive skills, e.g. mathematics and science education (OECD, 2015). Improvements in mindsets and abilities related to optimism toward the future, self-esteem, and other positive attitudes and mindsets, e.g. self-efficacy, perseverance, taking initiative, creativity and problem solving, can also improve schooling outcomes.

2. Among these skills are those that help foster a “growth mindset”, exhibited by individuals who believe their talents can be developed and who, as a result, tend to achieve more than those with a more fixed mindset. The Growth Mindset (GM) theory posits that by helping students shift their theory of learning to one where intelligence or abilities aren’t in a fixed state but are malleable and susceptible to growth and improvement over time through work and dedication, students can become self-motivated to improve both academic effort and outcomes. Students who exhibit more of a growth mindset are more motivated, work harder, and achieve higher test scores in diverse contexts such as Chile and the United States (Claro et al, 2016; West et al, 2016). A GM intervention in South Africa positively impacted math grades among high school students through an improvement in attitudes towards learning as a mediating factor (World Bank, 2018). A growth mindset intervention for seventh-graders in New York City public schools reversed a downward trend in math grades (Blackwell et al, 2007).

3. Other interventions not explicitly based on the GM theory but aimed at developing skills and behaviors linked with the growth mindset also show promise in improving schooling outcomes. Examples abound. A large-scale randomized program aimed at improving “social-cognitive” skills – self-control, conflict resolution, reduced attribution bias – among disadvantaged male adolescents in Chicago public schools led to increased school engagement and performance (Heller et al., 2012). The high-school-wide Chicago OneGoal program targeting socioemotional skills such as grit and self-regulation delivered by teachers increased college enrollment and persistence, with the highest impacts achieved among students with low cognitive skills (Kautz and Zanoni, 2014). An intervention that taught Mental Contrasting with Implementation Intentions (MCII) – which combines mental contrasting, a strategy for pursuing (i.e. committing to and striving for) goals, with the formation of implementation intentions, a strategy of planning out one’s goal pursuit – improved grade point averages (GPAs) and attendance rates among fifth-graders in public middle schools in the US


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(Duckworth et al., 2014). Among fourth-graders in Istanbul, recipients of instruction on grit were likelier to receive top grades in core academic subjects (Alan, Boneva, and Ertac, 2015). A self-affirmation intervention in the US focused on value-affirmation improved GPAs and remediation/repetition rates, especially among low-achieving minority students in public schools susceptible to the stereotype threat27 (Cohen et al.,2009).

Improving preparedness for entry into a labor market dominated by self-employment

4. Entrepreneurship-support interventions targeting students have been deployed in many economies

with constrained labor demand from the private sector and high rates of youth unemployment. Common education and entrepreneurship training (EET) mindsets and skills include socio-emotional skills like self-confidence, leadership, creativity, risk propensity, motivation, resilience, and self-efficacy; overall awareness and perceptions of entrepreneurship; and the general business knowledge and skills needed for opening and managing a business, like accounting, marketing, risk assessment, and resource mobilization (Valerio et al., 2014). EET programs seek to influence four areas of outcomes: (a) entrepreneurial mindsets (the socio-emotional skills and overall awareness of entrepreneurship associated with entrepreneurial motivation and future success as an entrepreneur); (b) entrepreneurial capabilities (entrepreneurs’ competencies, knowledge, and associated technical skills); (c) entrepreneurial status (the temporal state of a program beneficiary as measured through entrepreneurial activities and beyond e.g. starting a business, becoming employed, and achieving a higher income); and (d) entrepreneurial performance (how indicators of a venture’s performance have changed as a result of an intervention e.g. higher profits, increased sales, greater employment of others, higher survival rates).

5. Entrepreneurship-focused skills trainings can improve entrepreneurial status and performance. Entrepreneurship training has the potential to enable graduates to gain skills and create their own jobs. Such interventions have shown to be effective in strengthening entrepreneurial status and performance, fostering self-employment and earnings, including among low-skilled individuals28. Benefits also include enhanced skills to enter self-employment through increased entrepreneurial attitudes and perceived behavioral control and increased entrepreneurial intentions which in turn impact behavior associated with creation of new business ventures. Participation in the Junior Achievement Company Program delivered to upper secondary-level students in Swedish schools increased the likelihood of starting a new business by at least 20 percent when compared to non-participants and had a positive effect of expected income in the range of 7 percent to 18 percent (Elert, Andersson, and Wennberg, 2013). In Tunisia, an entrepreneurship education track for university students that provided business training and personalized coaching, including a module “for the person” aiming to develop entrepreneurial traits and behavioral skills, increased self-employment – although the effects were small in absolute terms (Premand et al, 2012).

6. A growing body of evidence demonstrates the promise of improving the standard approach employed to train entrepreneurs by using insights from psychology. In Togo, a personal initiative (PI) training, focused on teaching business owners a mindset of self-starting, proactive behavior, increased

27 Stereotype threat is the cognitive burden imposed on individuals for whom stereotypes exist, putting individuals at a relative disadvantage and threatening to harm their performance relative to others. 28 See examples in Premand et al, 2012.


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firms’ profits by 30% compared to the less significant 11% for traditional training. Firms taking part in personal initiative training also experienced a 17% increase in monthly sales compared to the control group (Campos et al, 2017). The Skills for Effective Entrepreneurship Development (SEED) intervention in Uganda delivered two versions of trainings to recent high school graduates – traditional “hard” business skills and soft inter- and intrapersonal skills – and, while both training types were rewarded in the wage sector and both increased business startups, only the soft skills training increased profitability (Carney and Gertler, 2018).

7. Research highlights the personality traits that matter for success in the labor market more broadly, as well as in entrepreneurship specifically. Psychologists define the concepts of personality and personality traits to include characteristics of temperament as the overarching style of a person’s experiences and actions: Openness to experience29, Conscientiousness30, Extraversion31, Agreeableness32, and Neuroticism33, called the “Big Five” with the acronym OCEAN (see, for example, Brandstätter, 2011). In the economics literature, the “Big 5” personality traits are shown to be strong predictors of success in the labor market (Heckman, 2000; Bowles, Gintis, and Osborne, 2001; Heckman and Rubinstein, 2001; Heckman et al, 2006). Entrepreneurs in particular exhibit greater Openness to Experience, Conscientiousness and Extraversion, but significantly lower Agreeableness and Neuroticism. Further, greater Openness to Experience, Conscientiousness and Extraversion are associated positively with entrepreneurial intentions and performance, while the opposite is true for Neuroticism34 (Brandstätter, 2011).

8. Entrepreneurship-focused socioemotional skills trainings can empower potential and existing entrepreneurs with mindsets, capabilities, and skills needed for entrepreneurial success. Appropriately-designed interventions can shape a variety of socioemotional skills and personality traits that support entrepreneurship, leading to increased perceptions of self-efficacy in the labor market, need for achievement and risk-taking propensity, entrepreneurial passion, persistence, pro-activity and creativity. Participants in the Chile Solidario exhibited greater self-esteem and higher perceived self-efficacy in the labor market as well as greater optimism towards the future (Carneiro et al, 2010). In Jordan, a soft skills training course improved female graduates’ positive thinking (Groh et al., 2012). Reintegration combined with an agricultural livelihoods program for high-risk Liberian youth had positive impacts on social inclusion, through improvements in social engagement, citizenship and stability (Blattman and Annan, 2011). An entrepreneurship education track that provided business

29 Describes the breadth, depth, originality, and complexity of an individual’s mental and experiential life. 30 Describes socially prescribed impulse control that facilitates task- and goal-directed behavior, such as thinking before acting, delaying gratification, following norms and rules, and planning, organizing, and prioritizing tasks. 31 Implies an energetic approach toward the social and material world and includes traits such as sociability, activity, assertiveness, and positive emotionality. 32 Contrasts a prosocial and communal orientation toward others with antagonism and includes traits such as altruism, tender-mindedness, trust, and modesty. 33 Contrasts Emotional Stability and even-temperedness with negative emotionality, such as feeling anxious, nervous, sad, and tense. 34 Other more specific scales that measure readiness for innovation, proactive personality, generalized self-efficacy, stress tolerance, need for autonomy, and locus of control, have also been reported to be significantly correlated with business creation and business success. Risk propensity supports business foundation, but not necessarily business success. Achievement motivation is favorable both for business foundation and business success.


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training and personalized coaching to university students in Tunisia fostered business skills, expanded networks, and strengthened a range of behavioral skills, while heightening graduates’ optimism toward the future (Premand et al, 2012). In Togo, the positive impacts reported for the PI training were mediated by training-related (i) increases in personal initiative; (ii) increased innovation, introduction of more new products, and likelihood of diversification into a new product line; and (iii) increased borrowing and larger investments (Campos et al, 2017). In Uganda, the SEED intervention strengthened both hard business skills and soft inter- and intrapersonal skills, with changes in the Big 5 personality traits observed in directions largely consistent with existing literature on entrepreneurship (Carney and Gertler, 2018): the intervention increased Openness to Experience, Conscientiousness, and Extraversion, but lowered Neuroticism. Stress levels were also reduced, while self-esteem increased due to strengthened beliefs in self-efficacy. Interventions targeting students in primary or secondary schools have also led to improved entrepreneurial mindsets. See Huber, Sloof, and van Praag (2012) for the Netherlands, Nakkula et al. (2004) for Boston; Reimers, Dyer, and Ortega (2012) for the Middle East.


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ANNEX 2. MAPPING BETWEEN ESEL SKILLS, PRACTICE SUB-SKILLS AND THE BIG FIVE PESONALITY TRAITS The PRACTICE sub-skills targeted under the ESEL curriculum are highlighted in table A1 below, in orange. Table A1 PRACTICE skills, sub-skills, Big Five traits, and biological foundations (Guerra et al, 2014)


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ANNEX 3. ROLES AND RESPONSIBILITIES OF POSITIONS ON THE SCJ PROJECT MANAGEMENT TEAM

1. The Project Manager, based in Ulaanbaatar (UB) and supported by the HR, finance, and procurement officers and the MEAL specialist will (i) provide overall strategic direction for the project; (ii) prepare the annual work plan, aligned with the procurement plan prepared and updated by the procurement officer, for the consideration of the SC; (iii) Make day-to-day decisions to ensure the timely implementation of the approved annual work and procurement plan attuned to the Grant Agreement and the POM; (iv) Guide and coordinate the activity of the project officers for component 1 and 2, the ESEL curriculum design coordinator, and the component 2 small grant officer; (vi) act as the secretary to the SC ensuring the undertaking of regular SC meetings, preparing reports and documents to be presented to the SC, keeping a record of SC meetings minutes, and following on the implementation of agreed actions; (vii) oversee preparation of IFRs and project progress reports; (viii) liaise with key project-related line Ministries, including MECSS< MLSP, and MOF; (ix) ensure appropriate follow up on recommendations agreed during the Bank supervision missions; (x) oversee advocacy, media and communication activities planned under component 3; (xi) plan and participate in supervision missions to project field sites; (xii) ensure safeguards compliance with the ESMF at the project level.

2. The finance officer, based in UB, will: (i) Provide an oversight to the overall financial management

functions of the project, including recording, reporting, budgeting, and banking activities; (ii) Elaborate the project financial plans and budgets; (iii) Monitor the project budgets, expenditures and costs; (iv) Provide the required financial reporting as per the Grant Agreement and the POM; (v) Prepare and submit withdrawal applications from the project designated accounts; (vi) Maintain financial management policies and procedures including adequate internal controls to ensure safeguarding of the projects assets and funds and ensure that these are adequately implemented; (vii) Prepare periodic cash flow forecasts estimating the costs to be incurred in respect of each item set out in the approved project budget; (viii) Ensure that all contracts and other commitments are promptly entered in a commitment control record so that the uncommitted/unspent balance on each activity and line item is readily known at any point of time; (ix) Maintain records and process payments for all project transactions up to the end of the disbursement grace period following the project closure; (xi) Provide FM training as needed and ensure transfer of related competencies to other project staff.

3. The procurement officer will: (i) Coordinate all procurement under the project ensuring that the

procurement is carried out in accordance with the Grant Agreement including by reference, the Procurement Guidelines, the Consultant Guidelines and the procurement plan agreed with the World Bank; (ii) Establish and update regularly a project Procurement Plan in the format agreed with the Bank and ensure that the plan and its updates are disclosed to the public; (iii) Ensure adequate publicity to business opportunities through the preparation and publication of the General Procurement Notice, Specific Procurement Notices and Requests for Expressions of Interest (REOI) in the format and timing acceptable to the Bank; (iv) Prepare complete Bidding Documents (BD) for goods and services and Requests for Proposals (RFP) for consulting services based on applicable World Bank Standard BD and Standard RFP and in compliance with the provisions of the Guidelines and of the Financial Agreement; (vi) Assist in the management of contracts under execution, including the preparation of documentation required to certify progress, conclusion or acceptance


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of goods and services; (vii) Ensure the timely submission of procurement documentation, reports and procurement decisions to the Bank for no objection in all cases of mandatory prior review; (viii) Establish and maintain complete and accurate procurement records including all actions and documents for review by the Bank's supervision missions, including advertisement, bidding documents, requests for proposals, invitation for bids, REOI, minutes of pre-bid meeting/pre-proposal submission conferences, requests for clarifications and responses provided, record of bid/proposal submissions, bids/proposals/quotations, bid/proposal opening, complaints and responses, bid/proposal evaluation reports, contract award and performance of the contracts; (ix) Facilitate procurement post review by the Bank and/or procurement audits by independent Auditors; and (x) Provide procurement training as needed and ensure transfer of related competencies to other project staff.

4. The MEAL officer, under the guidance of the Project Manager and the World Bank supervision team,

will develop reporting formats and M&E training content, provide training to SLCs and ALCs established under the project on the M&E arrangements for the project including the RF, participate in and provide inputs to adaptation of skills assessment instruments to the Mongolian context, oversee data collection for the RF indicators, provide quality assurance on data collected, compile quarterly reports from the SLCs and prepare quarterly progress reports at the project level, and facilitate external evaluation surveys.


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ANNEX 4. DETAILED DESCRIPTION OF RISKS AND MITIGATING ACTIONS

1. Political and governance (moderate). There is a moderate likelihood that political factors could adversely impact the PDO. Mongolia’s complex and, at times, volatile political and institutional environment is not likely to affect implementation of the project, as the implementing agency is an independent NGO. However, the high turnover of central and local government officials, and even school directors, could undermine government ownership of the project’s activities and lower chances of successful scale-up of project interventions and integration into existing programs at project closing, while turnover at the level of local government and schools might affect concerted implementation of project components needed to maximize the project’s development impact. Ensuring sustained government ownership of project activities will remain a priority throughout implementation. The key to this is that the project seeks to build on and improve MECSS’s existing business skills curriculum to enhance its relevance for rural youth. This process will be undertaken jointly with MECSS. MECSS will also be involved in identification of the specific socioemotional skills to be targeted under the project, and in adaptation of their measurement in the rural Mongolian setting. These measures ensure government oversight of project activities, at the same time offering MECSS an incentive to stay engaged. At a higher level, the SDV 2030 commitments to supporting development of business skills among youth ensures alignment with Mongolia’s long-term development goals, which helps buffer potential adverse impacts stemming from high turnover of officials. Further, the World Bank task team will formally document all issues discussed and agreements reached and will emphasize broad and frequent consultations and communication with technical counterparts under component 3 of the project, and also with political decision makers, beneficiaries, and other stakeholders at the central and local levels. This will promote continuity, broad-based buy-in, and support for the implementation of all planned activities.

2. Technical design of project or program (moderate). There is a moderate likelihood that factors related to the technical design of the project may adversely impact the achievement of the PDO. SCJ is very experienced in working with disadvantaged subpopulations in remote parts of rural Mongolia and in working with soum-level stakeholders to include the difficult-to-reach youth targeted under the operation. The project has three components that are not too technically complex. However, the project is by design an innovative pilot with interventions that are new for Mongolia, and there is therefore moderate risk that some activities will not be punctually implemented. Given the innovative nature of activities, there is also a risk of lower-than-expected uptake of project activities, as well as the risk of dropouts prior to completion of the program. To mitigate these risks, SCJ and the project team will work together to provide additional implementation support in the early stage of implementation period, especially during development of the skills curriculum and adaptation of assessment instruments in order to avoid implementation delays. To maximize uptake of the intervention, information campaigns will be conducted at the start of each school year, targeting students enrolled in school and LLCs, parents, teachers and school administrators, and soum government officials. The opportunity offered by the project to compete for small business grants at the end of the training may also be a source of motivation for students to enroll. The Bank team will leverage its experience supervising similar interventions successfully implemented in other countries. Component 3 activities will yield M&E data on program enrollments and attendance, with feedback sought through focus group discussions with dropouts and their parents in the first year of implementation. These discussions will be conducted during joint supervision missions with SCJ. The discussions will focus on


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reasons for dropping out related to training design and relevance, as well as external or household-level factors that might constrain attendance. The training and project design will be adjusted based on the results of the discussions.

3. Fiduciary (moderate). The overall fiduciary environment is strong. In the last JSDF-financed project (“Improving Primary Education Outcomes for the Most Vulnerable Children in Rural Mongolia” - P130760) which was implemented by SCJ and closed in 2017, SCJ exhibited adequate data controls in the financial management (FM) system, timely financial reports, adequate internal controls and high compliance with core rules, and effective internal and external audit with timely audit reports and follow up. Procurement function and controls were strong and compliance was high. Principles of 3Es, integrity, transparency, fairness and accountability were embraced and implemented. SCJ has demonstrated substantial experience successfully managing grant schemes in other World Bank projects: (i) under the afore-mentioned project “Improving Primary Education Outcomes for the Most Vulnerable Children in Rural Mongolia” (P130760) SCJ supported Local Education Council initiatives at the soum level through grant transfers. At project closing in 2017, both the FM and procurement ratings were satisfactory; (ii) SCJ has been competitively selected and contracted under the Mainstreaming Social Accountability in Mongolian Education (P153283) project for grant management for the project. However, in spite of this experience in managing and disbursing sub-grants, the fiduciary risk is considered to be moderate at the appraisal stage given the project’s planned operation across multiple aimags, its rural focus, and the significant share of project funds (including sub-grants) to be disbursed through the field offices.

4. Environmental (low). The project does not finance civil works under any component. Component 1 of the project will support development and implementation of an innovative community-driven education program on entrepreneurship skills for vulnerable, rural youth. There is thus no adverse environmental impact expected under this component. Under Component 2, the project will finance and oversee implementation of a competitive small grants scheme (up to $1,000 per grant) to enable youth in the project’s target group to practically apply entrepreneurship knowledge and social emotional skills acquired under component 1 to identify and harness unexploited business opportunities at the local level. Criteria for selection of business ideas will be aligned with soum-level economic development priorities. A large share of grant proceeds are expected to go towards initial investments in small equipment, tools, and materials, and operating costs at start-up. Grant operation will be governed by criteria and procedures described in the grant manual, and youth business ideas are expected to be concentrated in (i) services and sales, e.g. in tourism and hospitality; (ii) small-scale, labor intensive production of goods (handmade products from locally-sourced raw and other materials, arts and crafts, clothing and textiles, toys, etc.); and (iii) food production, agriculture and animal husbandry (e.g. running semi-settled or intensive farming, animal health and breeding, farming management, animal feed e.g. making fodder, greenhouse and food processing, vegetable planting, growing, cooking, pickling etc.). The screening process for grants will weed out those ideas that pose substantial environmental risks. To reduce potential for adverse impacts for activities linked to agriculture and animal husbandry, preference will be given to ideas that convert processed raw materials into an end product. Additional risk mitigation measures include (i) sensitization of youth as part of the ESEL training to laws, regulations and good practices related to environmental management and sustainability in the context of key business areas of interest; (ii) The grant proposal template will include (a) mandatory justification that the implementation of the business idea will have no adverse


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impacts on the physical and social environment; (b) description of the practices to be employed to manage and minimize adverse impacts, including production of noise, congestion, refuse or litter; and (c) measures for safeguarding the well-being of workers and family members involved in the businesses. Mitigation measures approved for each business idea will be monitored by SLCs and reported quarterly in SLC reports to ALCs and SCJ. Overall, thus, no significant, irreversible, or major environmental impacts are anticipated under the project, but each grant proposal will be screened and the decision to proceed with the business idea (or to continue its implementation) will be made on a case-by-case basis and through ongoing monitoring. Overall, thus, with these restrictions and mitigation measures in place, the risk of adverse impacts on the physical environment is assessed to be low.

5. Social (low). There is a low likelihood that the achievement of the PDO could be affected by social risk factors; no such factors relevant to project activities have been identified. By design, project activities will target the most vulnerable and disadvantaged youth in rural Mongolia, who also tend to be the most excluded from service delivery. All project activities will be designed in consultation with communities in target soums, including women and ethnic minorities, who will also be involved in monitoring implementation progress through the project’s participatory M&E arrangements and the mechanisms of ALCs and SLCs. As such, project activities are designed to improve equity and social cohesion, with no adverse impacts on IPs or minority groups.

6. Macroeconomic (low). Mongolia’s macroeconomic environment is characterized by severe economic challenges stemming from major shocks compounded by expansionary policy. However, the resulting cyclicality of economic activity and its effect on private sector job creation is unlikely to affect the PDO, as project activities aim to improve potential for self-employment among youth resident in rural areas, among whom formal sector employment is very low already. Worsening of macroeconomic conditions would only further justify the need for the project.

7. Sector strategies and policies (low). Sector strategies and policies represent a low risk to the PDO. At the operational level, education and labor policies and strategies provide a supportive environment for carrying out the project. The proposed project will fill a critical unmet need and facilitate entry into self-employment or better-informed future career development paths, which is consistent with labor force development and education system goals. The operation would be distinct from but complementary to ongoing labor market support programs targeted to urban youth and would offer an innovative model for integration of skills necessary for labor market success into academic and technical curricula offered in schools and higher education institutions.

8. Institutional capacity for implementation and sustainability (low). SCJ has strong in-house capacity for project design, preparation and implementation. Monitoring and evaluation arrangements are comprehensive and capable of producing real-time data. The new operation by design is a pilot for introducing an education sector innovation, and will establish modalities for sustainable scale-up, based on lessons learnt during implementation. SCJ’s excellent working relationship with MECSS developed while implementing other education projects in the past is necessary for engaging MECSS from the outset in development of the ESEL curriculum and overseeing project activities, which in turn paves the way for implementing strategies for ensuring sustainability at the level of the education system (see section IV.C for details). A successful home-based school preparation program


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implemented previously by SCJ is under consideration for national scale-up, and demonstrates SCJ’s past success in ensuring sustainability of interventions.

9. Stakeholders (low). Multiple consultations in Ulaanbaatar and at the soum-level have been held throughout the year. Consultations were held with numerous stakeholders, including MECSS, MLSP, community members, youth, teachers, and education and labor officers in rural soums, and all stakeholders fully endorsed the project. By design, the conceptualization and implementation of the operation hinges on intensive community participation and mobilization at the grassroots level. The operation is distinct from, but complementary to, ongoing labor market support programs targeted to urban youth.

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