Document of The World Bank FOR OFFICIAL USE ONLY Report No. 76719-MA INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROGRAM DOCUMENT FOR A PROPOSED LOAN IN THE AMOUNT OF EUR 78.1 MILLION (US$100.0 MILLION EQUIVALENT) TO THE KINGDOM OF MOROCCO FOR A SECOND EDUCATION DEVELOPMENT POLICY LOAN APRIL 29, 2013 Human Development Department Maghreb Department Middle East and North Africa This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 76719-MA
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROGRAM DOCUMENT FOR A PROPOSED LOAN
IN THE AMOUNT OF EUR 78.1 MILLION (US$100.0 MILLION EQUIVALENT)
TO
THE KINGDOM OF MOROCCO
FOR A
SECOND EDUCATION DEVELOPMENT POLICY LOAN
APRIL 29, 2013
Human Development Department Maghreb Department Middle East and North Africa
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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MOROCCO GOVERNMENT FISCAL YEAR January 1 – December 31
CURRENCY EQUIVALENTS
(Exchange Rate Effective as of March 31, 2013) Currency Unit Moroccan Dirham
AAER School Support Association (Association d’appui à l’école de la
réussite) AECID Spanish International Cooperation Agency for Development
(Agencia Española de Cooperación Internacional para el Desarrollo) AFD French Development Agency (Agence française de développement) AfDB African Development Bank AREF Regional Education Office (Académie régionale d’éducation et de
formation) BAM Central Bank of Morocco (Bank al-Maghrib) CNEF National Education and Training Charter (Charte nationale de
l’éducation et de la formation 1999-2009) COBIT Control Objectives for Information and Related Technology COSO Committee of Sponsoring Organizations of the Tradeway Commission CPAR Country Procurement Assessment Review CPS Country Partnership Strategy CREE Regional Assessment and Testing Center (Centre régional de
l’évaluation et des examens) CRMEF Regional Teacher Training Center (Centre régional des métiers de
l’éducation et de la formation) CSC Central Steering Committee CSE Higher Council for Education (Conseil supérieur de l’enseignement) DA Designated account DPL Development policy loan EDPL1 First Education Development Policy Loan EDPL2 Second Education Development Policy Loan EIA Environmental Impact Assessment EIB European Investment Bank EU European Union EU€ Euro FDI Foreign direct investment GDP Gross domestic product HCP National Statistics Office (Haut Commissariat au Plan) IMF International Monetary Fund INDH National Human Development Initiative (Initiative nationale de
développement humain) JICA Japanese International Cooperation Agency
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MAD Moroccan dirham MDG Millennium Development Goals MEF Ministry of Finance (Ministère de l’économie et des finances) MEN Ministry of Education (Ministère de l’éducation nationale) MENA Middle East and North Africa Region MTEF Medium-Term Expenditure Framework NGO Non-governmental organization NIF Neighborhood Investment Facility PARSEM Basic Education Reform Support Program (Programme d’appui à la
réforme du secteur de l’éducation et de la formation) PAMT Education Action Plan (Plan d’action à moyen terme 2013-2016) PEFA Public Expenditure and Financial Accountability PER Public Expenditure Review PFM Public Financial Management PIRLS Progress in International Reading Literacy Study PJD Justice and Development Party (Parti de la justice et du
développement) PLL Precautionary and Liquidity Line (IMF) PNEA National Learning Assessment Program (Programme national
d’évaluation des acquis) PPD Public Procurement Decree PUEN Education Emergency Program (Programme d’urgence de l’éducation
nationale 2009-2012) RSC Regional Steering Committee TFP Technical and Financial Partners TIMSS Trends in International Mathematics and Science Study UCS Use of Country Procurement Systems in Bank-Supported Operations US$ United States dollar
Vice President: Country Director:
Sector Director: Sector Manager:
Task Team Leader:
Inger Andersen Simon Gray Steen Lau Jorgensen Mourad Ezzine Jeffrey Waite
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INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROGRAM DOCUMENT FOR A PROPOSED
SECOND EDUCATION DEVELOPMENT POLICY LOAN
TO THE KINGDOM OF MOROCCO
TABLE OF CONTENTS
LOAN AND PROGRAM SUMMARY ......................................................................................................... vi I. INTRODUCTION ............................................................................................................................ 1 II. COUNTRY CONTEXT ................................................................................................................... 3
II.A. Recent economic developments ............................................................................... 3 II.B. Macroeconomic outlook and debt sustainability ...................................................... 5
III. THE GOVERNMENT’S PROGRAM AND PARTICIPATORY PROCESSES ....................... 9 III.A. Education sector background and key issues .......................................................... 9 III.B. Government program .............................................................................................. 15 III.C. Implementation costs............................................................................................... 17 III.D. Participatory process ............................................................................................... 18
IV. BANK SUPPORT TO THE GOVERNMENT’S STRATEGY .................................................... 19 IV.A. Link to the Country Partnership Strategy ............................................................... 19 IV.B. Collaboration with the International Monetary Fund and other donors .................. 19 IV.C. Relationship to other Bank operations .................................................................... 21 IV.D. Lessons learned ....................................................................................................... 22 IV.E. Analytical underpinnings ........................................................................................ 24
V. THE PROPOSED EDUCATION DEVELOPMENT POLICY PROGRAM ............................. 25 V.A. Operation description ............................................................................................... 25 V.B. Policy areas .............................................................................................................. 27
VI. OPERATION IMPLEMENTATION ............................................................................................. 32 VI.A. Poverty and social impact ....................................................................................... 32 VI.B. Gender and inclusion .............................................................................................. 33 VI.C. Environmental aspects ............................................................................................ 33 VI.D. Implementation, monitoring and evaluation ........................................................... 33 VI.E. Fiduciary aspects ..................................................................................................... 35 VI.F. Risks and risk mitigation ......................................................................................... 37
ANNEXES
ANNEX 1: LETTER OF DEVELOPMENT POLICY ................................................................................ 39 ANNEX 2: SECOND EDUCATION DEVELOPMENT POLICY LOAN POLICY MATRIX .............. 58 ANNEX 3: GOVERNMENT’S EDUCATION EMERGENCY PROGRAM (PUEN) PROGRESS
INDICATORS .............................................................................................................................................. 64 ANNEX 4: FUND RELATIONS NOTE ....................................................................................................... 69 ANNEX 5.1: MACROECONOMIC DEVELOPMENTS OVER THE LAST DECADE ........................ 73 ANNEX 5.2: PUBLIC DEBT SUSTAINABILITY AND EXTERNAL FINANCING REQUIREMENTS
.............................................................................................................................................. 76 ANNEX 5.3: COUNTRY AT A GLANCE ................................................................................................... 79
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The proposed loan was prepared by a World Bank team consisting of Jeffrey Waite (Task Team Leader and Lead Education Specialist), Nadine Poupart (Senior Economist), Khalid El Messnaoui (Senior Economist), Abdul-Wahab Seyni (Senior Social Development Specialist), Alaa Ahmed Sarhan (Senior Environmental Specialist), Jean-Charles de Daruvar (Senior Counsel), Abdoulaye Keita (Senior Procurement Specialist), Lamyae Hanafi Benzakour (Financial Management Specialist), Hassine Hedda (Finance Officer), Christina Wright (Operations Officer), Fatiha Bouamoud (Program Assistant) and Emma Etori (Program Assistant). The team worked under the guidance of Mourad Ezzine (Sector Manager Education) and Simon Gray (Country Director Maghreb). The team benefitted from interactions with colleagues from the African Development Bank, the European Commission, the European Investment Bank, the French Development Agency, the Japanese International Cooperation Agency and the Spanish International Cooperation Agency for Development. Finally, the team is greatly indebted to many officials of the Government of Morocco, with especial thanks due to the Ministry of Education, the Ministry of Economy and Finance and the Ministry of General Affairs and Governance.
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LOAN AND PROGRAM SUMMARY
KINGDOM OF MOROCCO
SECOND EDUCATION DEVELOPMENT POLICY LOAN
Borrower Kingdom of Morocco
Implementing Agency Ministry of Education
Financing Data IBRD Variable-Spread Loan with 29 years maturity, including a 7-year grace period in an amount of EU€ 78.1 million (US$100.0 million equivalent)
Operation Type
Single-tranche stand-alone Development Policy Loan
Main Policy Areas
• Achieve universal basic education • Improve system performance (teaching, management and
stewardship) • Mobilize and utilize resources
Key Outcome Indicators
• Ratio of new rural schools to new urban schools planned in the previous year
• Number of new social support methodologies developed (cumulative)
• Number of Regional Assessment and Testing Centers established • Proportion of Regional Assessment and Testing Centers
producing an annual report during the previous year on its assessment and testing activities
• Number of students enrolled in Regional Teacher Training Centers
• Number of Regional Teacher Training Center graduates assigned to teaching positions
• Ratio of the urban female-male teacher ratio to the rural female-male teacher ratio (primary and lower secondary)
• Ratio of the urban student-teacher ratio to the rural student-teacher ratio (primary and lower secondary)
• Proportion of resource management decisions taken by AREFs • Revised guidelines for school charter development and funding
use, based on recommendations of the evaluation of school charter implementation, sent to all schools
• Proportion of regional internal audit units producing an annual report during the previous year
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Program Development Objective and Contribution to Country Partnership Strategy
The proposed program aims to strengthen the schools sector’s institutional arrangements in the short term, in ways that in the medium term will: (i) increase access to school education, especially for rural girls and boys at the lower secondary level; (ii) improve the quality of teaching and learning in primary and lower secondary education; and (iii) enhance efficiency in decentralized governance of the schools sector. The proposed program would contribute to the Country Partnership Strategy’s second pillar – improving the quality of service delivery to citizens – by improving equity, access and quality of education service delivery.
Risks and Risk Mitigation
• Implementation of key and sensitive reforms may not be continued
under the PAMT 2013-2016. The Bank team will continue to engage the Government in a close dialogue on these reforms, and to support decision making through technical assistance when important technical issues arise.
• The reform program faces resistance from unions, including
teacher resistance to the efficiency measures and the move
toward greater accountability. The Government will continue to engage in a broad dialogue with teacher unions and teachers, with a view to creating a buy-in to the reform program through participation and decision-making.
• Attainment of the ambitious objectives of the Government’s
program may be constrained unless sufficient resources are made
available. Education has been a national priority for successive government and this level of political commitment is expected to continue.
• Implementation of the governmental program may be constrained
by the capacity of decentralized agencies. The MEN is making considerable efforts to strengthen the capacity of its management systems.
Operation ID P120541
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INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROGRAM DOCUMENT FOR A PROPOSED
SECOND EDUCATION DEVELOPMENT POLICY LOAN
TO THE KINGDOM OF MOROCCO
I. INTRODUCTION
1. The wave of democratization that the Middle East and North Africa (MENA) region has experienced since the start of the Arab Spring has also reached Morocco, although its experience has been a reasonably peaceful one with social demonstrations taking place regularly across the country during 2011 and only sporadic outbursts of violence noted. This social movement started with calls for political change, a curbing of corruption and a more inclusive development process. In March 2011, the King of Morocco proposed a broad and comprehensive package of political reforms that were approved in a constitutional referendum held on July 1, 2011.1 The new constitution sets the basis for a more open and democratic society, provides mechanisms for the construction of a modern state of law and institutions, and lays the foundation for extended regionalization. Transparent elections, held on November 25, 2011, were won by the Parti de la justice et du développement (PJD), a party that had traditionally been in active opposition and has seen its support increasing steadily in recent years. The PJD won 27 percent of the vote, almost twice the score of the second largest political party. An intense period of discussions among political parties then followed, leading to the formation, in early January 2012, of a four-party coalition Government, with the head of the PJD becoming the Head of Government. 2. In this context, Morocco’s unique experience reflects its political distinctiveness in the region, even though many of the same grievances among the population exist (lack of economic opportunities, corruption, widespread poverty, social inequality, unemployment). This experience has shown that Moroccans seem more inclined to seek evolution within the system – gradual change continuous with the country’s history and religious values. Morocco’s management of its own protest movement seemed well managed and the external world highlighted Morocco’s particular situation. The PJD election showed that, even in a constrained setting, the population was seeking real and sustainable change while working within the system. The protests, which continue to this day, keep the pressure on the Government to follow through on the promises and expectations expressed over the past year. The King remains popular among the general public and is widely believed to act as the guarantor of political stability and social cohesion. 3. These changes have followed on the heels of other reforms already undertaken since the current King came to power. Successive national governments have overseen an impressive political, economic and social transformation, with a marked acceleration of structural reforms in recent years. Sound macroeconomic management has produced solid foundations, and the country was on a recovery path from the stagnation of the 1990s when a series of adverse external shocks hit the economy, starting with the 2008 financial crisis. However, as shown, none of these factors provided total immunity to the rising tide of dissatisfaction and to the pressure from the outstanding development issues and challenges. The transition has shown the powerful consequences of exclusion and high levels of youth unemployment in the MENA region. Jobs are at the forefront of attention and unemployment
1 The vote in favor of the proposed reforms was 98.5 percent with a participation rate of 73 percent.
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is the main political and economic issue facing the Government. Despite a relatively favorable socio-political situation compared to some other MENA countries, Morocco still has a lot to do to address inequality and poverty, and its social indicators remain relatively low in comparison with other countries in the region. 4. The movements associated with the political transition and constitutional changes represent real pressure on the Moroccan State for meaningful and quick change. While the people seem to be willing to support the Government and its mandate, they are expecting and indeed demanding that it break with the past and usher in more credible and faster reforms, notably in the areas of job creation and improvement of the quality of public services delivered. Morocco is thus on the threshold of potentially profound social, political and economic transformation. If the Government can assume more ownership of the political process and genuinely deliver, then this will go a long way to transforming the social and political landscape of Morocco. 5. Investing in human capital through quality education is a priority in Morocco’s current development process. The low level of education and skills of the workforce is among the main factors which constrain the country’s economic growth and long-term prosperity. The labor market is imbalanced, with notable mismatches between job demands and graduation qualifications and skills. Improving the quality of outcomes in the education and training sector has become a key focus of governmental actions. To overcome the challenges faced by the education sector, previous governments embarked on a comprehensive reform of the education and training system, beginning with the 1999 National Education and Training Charter (CNEF).2 The CNEF, which enjoyed strong national consensus, declared 2000-2009 the “education and training decade”, thereby establishing education and training as a national priority. In line with royal instructions, an ambitious Education Emergency Program 2009-2012 (PUEN)3 was drawn up to build on this decade-long reform process. The Government, appointed just over a year ago, is now preparing its Education Action Plan 2013-2016 (PAMT), and is drawing lessons from the implementation of the previous action plans. 6. The proposed operation closes out a cycle of two development policy loans (DPL) that have supported the Government’s PUEN through the period 2009-2012. In 2007, the Government of the day asked five major donors (European Union [EU], European Investment Bank [EIB], French Development Agency [AFD], African Development Bank [AfDB] and World Bank) to assist the implementation of the PUEN reform agenda through the progressive application of the Paris Declaration on Aid Effectiveness. The World Bank developed the two DPLs to support the refinement and implementation of the PUEN reform agenda, in close collaboration with the other donors mentioned above. 7. The Bank has had a long and active dialogue with the Government in the education sector. A Basic Education Reform Support Project (PARSEM)–a sector-wide approach operation–supported the implementation of program reforms during the second half of the CNEF implementation period, closing in June 2009.
8. Through 2008 and 2009, joint technical and preparation missions were carried out by the five donors, known as the Technical and Financial Partners (TFP) Group. In the course of these missions, the TFP Group engaged in an active and coordinated dialogue with the Government on the new strategic framework. More specifically, the TFP Group and the Government discussed the various actions proposed to remedy the structural problems that were contributing to low education performance, especially at the basic and secondary education levels. This ongoing dialogue led to the joint identification of priority reform areas and the definition of main results/outcome indicators, along with monitoring and evaluation arrangements. Through 2010, 2011 and 2012, six-monthly joint missions were carried out by the TFP Group (which now also includes the Spanish International Cooperation Agency for Development [AECID] and the Japanese International Cooperation Agency [JICA]) to monitor progress in PUEN implementation. II. COUNTRY CONTEXT
II.A. Recent economic developments
9. Since 2008, Morocco has been hit by a series of exogenous shocks. Like other emerging countries, Morocco has suffered from the 2008 global financial crisis, though the limited financial integration of Morocco into global financial markets has contained the direct contagion effects. More serious were the effects of the subsequent food and fuel crises. With the price of Brent crude oil averaging more than US$110 per barrel in 2011-2012 and no domestic oil production, Morocco has been confronted with a major deterioration of its terms of trade. This deterioration was compounded by a significant increase in its food import bill in 2012 as a result of a severe domestic drought at a time of soaring international food prices, especially of wheat. Finally, with a strong trade exposure to the EU, Morocco has been adversely affected by developments in the euro area, in particular the sovereign debt crises in Spain, Italy and other peripheral countries and subsequent slowing down of economic growth. 10. These internal and external shocks combined with significant economic rigidities have exposed the fragility of the Moroccan economy in 2012. Gross domestic product (GDP) is estimated to have grown at a positive but modest 2.7 percent, compared to 3.4 percent expected in the 2012 Budget Law. This lackluster performance reflected the continued vulnerability of the agriculture sector (which declined by 9.8 percent) to erratic rainfalls. The non-agricultural sector grew at a healthier rate of 4.6 percent; however mostly driven by debt-creating domestic demand. Public consumption increased by 5 percent and household consumption by 4.8 percent, the latter benefiting from wage rises and relatively low prices of non-food products. Investment increased at the more moderate rate of 2.7 percent, mostly driven by programs of social housing, public works, and industrial equipment. 11. The Government and the Central Bank (BAM) continued to demonstrate their commitment to control inflation. Notwithstanding higher world prices of imported commodities, inflation has been kept low thanks to price subsidies benefiting basic food and fuel products. As a result of the Government’s price controls, the average consumer price index edged up to only 1.3 percent in 2012 as compared to 0.9 percent in 2011. Among all sectors, food sector prices contributed the most to inflation in 2012 (up 2.2 percent). The upward adjustment of the administered prices for fuel products in June 2012 and related direct increase in transportation prices (by 3.2 percent) has had limited indirect effect on overall inflation.
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12. Morocco’s unemployment rate has been stubbornly high at around 9 percent—or about one million people—despite years of respectable economic growth and declining participation rates. Less than half of the Moroccan population is actually active (i.e., either employed or looking for a job), which is one of the lowest participation rates among emerging economies. Participation rates have been steadily declining from 55.3 percent in 1999 to 48.4 percent in 2012. Regarding the profile of the job seekers, four out of five unemployed are urban jobless, two-thirds are youth aged 15-29, a quarter of jobless people hold a university diploma, half of the unemployed are looking for their first jobs, and more than two-thirds have been jobless for more than one year. 13. The gradual pace of public finance reforms coupled with the economic turmoil in Europe and continued high prices of commodities have eventually had their toll on Morocco’s fiscal balance. Data released by the Moroccan authorities in early February 2013 indicate that the worsening of public finance in 2012 had been more pronounced than expected.4 According to the Ministry of Economy and Finance (MEF), the budget deficit widened to 7.6 percent of GDP, which compares to a deficit of 5.5 percent of GDP envisaged in the 2012 Budget Law.5 The deficit would have been even higher without the decision of the Government to increase the prices of liquid fuel products in June 2012 (up 19.6 percent for gasoline, 14 percent for gasoil, and 13.4 percent for industrial fuel), which helped reduce the deficit by 0.6 percentage point of GDP. 14. The current universal and open subsidy system and higher wage bill are increasingly testing Morocco’s record of fiscal prudence. Despite the good performance of tax collection in 2012 (up 6.1 percent), government revenues could not compensate for the increase in current expenditures (up 11 percent), mostly due to higher subsidies and a larger public wage bill. The combined cost of the subsidy system and the Government wage bill (at 6.6 percent of GDP and 11.5 percent of GDP, respectively) represented more than 53.0 percent of total expenditures in 2012. Their increases contributed to more than 63.5 percent of the total increase in current expenditures in 2012. Table 1. Annual subsidies in percent of GDP
Commodities 2007 2008 2009 2010 2011 2012
Food 0.8 1.1 0.7 0.7 1.0 1.1
Fuels 1.7 3.5 1.1 2.9 5.1 5.5
Total Subsidies 2.5 4.6 1.7 3.6 6.1 6.6
Source: MEF and, for 2012, World Bank staff estimates
15. Even though the fiscal deficit has been mostly financed on the domestic market, there have been no apparent signs of private sector crowding out—thanks to the relaxation of monetary policy by the BAM (see below). The Treasury issued the equivalent of 6 percent of GDP in domestic bonds and sold part of its capital in the Banque populaire for an additional 0.4 percent of GDP. To fill the financing gap, the Government raised US$1.5 billion bonds on international financial markets in December 2012. As a result, the Treasury debt increased by 5.1 percentage points of GDP in 2012 to reach 58.8 percent of GDP. While the Treasury is
4 For overall consistency of indicators, all ratios to GDP have been calculated using the estimated nominal GDP released by the HCP in February 2013 instead of the projected GDP envisaged in the Budget Law 2012. 5 The budget deficit does not take into account privatization receipts.
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mostly indebted in its own currency (with only a debt of about 14 percent of GDP denominated in foreign exchange), the level and pace of deterioration of the debt are worrisome. In just four years, Morocco’s Treasury debt increased by 11.5 percentage points of GDP. Clearly, without corrective measures, Morocco’s current fiscal stance risks impacting the sustainability of Morocco’s overall macroeconomic framework in the medium term. 16. The weakening fiscal situation has also put the balance of payments under stress. The trade deficit continued to deteriorate in 2012 due to sluggish external demand, notably from Europe, and increased value of imports due to strong domestic demand and higher world prices of imported commodities. Total nominal imports increased by 6.7 percent, while exports grew by 4.7 percent. Tourism receipts declined by 1.5 percent and workers’ remittances dropped by 3.9 percent. The current account deficit is therefore estimated to have widened to 9.6 percent of GDP in 2012.6 On the capital account side, net foreign direct investment (FDI) inflows grew by a healthy 17.6 percent during the period, thanks to foreign investors’ continued confidence in the Moroccan economy. However, total net external capital flows were not sufficient to finance the current account deficit, and net official international reserves declined by US$3.1 billion to reach the critical level of US$16.3 billion by end 2012, corresponding to 3.9 months of imports coverage. 17. To stimulate economic activity and help finance the economy—in a context of price controls and low inflation expectations—the BAM decided to reduce its policy rate from 3.25 percent to 3 percent in March 2012 and to lower the money reserve requirement for banks from 6 to 4 percent in September 2012. These decisions, together with higher weekly liquidity injections by the BAM into the domestic banking system, had the effect of relaxing the liquidity constraints in the money market and helped finance the economy. As a result, money supply increased by 5.2 percent by end 2012 after an increase of 6.5 percent in 2011. Credit to the economy increased by 5.7 percent (compared to 10.3 percent in 2011), mostly driven by credit to corporate treasuries (up 7.8 percent). The latter was in part the result of liquidity needs of businesses to compensate for large arrears overdue by the public sector. Credit to housing also increased substantially (up 6.1 percent) with the extension of the social housing programs backed by the Government. With increased access to credit and the relatively low prices of housing equipment, consumption credit jumped by 9.8 percent in 2012. At the same time, credit to business equipment dropped by 2 percent. Non-performing loans remained at an average 4.3 percent of total credit to the private sector, slightly declining over the fourth quarter of 2012. II.B. Macroeconomic outlook and debt sustainability
18. Morocco’s macroeconomic room for maneuvering has narrowed considerably. The twin deficits that have accumulated to finance the series of adverse external shocks since 2008 have largely exhausted the room for maneuver that Morocco had built prior to these crises through prudent macroeconomic policies and management. They unveiled two main weaknesses that are endangering Morocco’s external and fiscal sustainability in case of a further deterioration of its external or domestic environment. First, the slow structural transformation of the economy hinders the prospects of a rapid increase in competitiveness, exports, and quality job generation. Second is the pursuit of highly onerous fiscal policies,
6 Bank staff estimates.
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such as the universal subsidy system and tax exoneration programs. These two weaknesses are contributing to the reversal of the downward trend of public debt and the depletion of foreign reserves to critical levels.
19. Macroeconomic prospects in the medium term will greatly depend on the scope, depth and pace of Morocco’s reform programs as well as developments in Europe – the main trading partner of Morocco. Morocco is expected to benefit from ongoing reforms to improve the economy’s overall competitiveness and the effectiveness of sectoral policies. The current reforms to strengthen governance and justice, consolidate public finance, and deepen decentralization are critical to achieving long-lasting improvement in economic efficiency, productivity, and employment. Under these assumptions, economic growth should recover to around 5 percent by 2015. Inflation is projected to remain under control at 2.5 percent or below. Main macroeconomic indicators are presented in Table 2 below.
Table 2. Base-line Medium Term Macroeconomic Indicators
Est. Projections 2010 2011 2012 2013 2014 2015 2016 2017 Part A: Main Macro Aggregates
Real annual growth rates GDP at market prices 3.6 5.0 2.7 4.5 4.7 5.0 5.5 5.7
Total Debt of Central Government/GDP 50.3 53.7 58.8 59.4 59.0 57.8 55.8 53.9 Total interest payments/Tax revenues 9.9 9.7 10.0 10.6 10.2 9.6 9.1 8.4
Part C: Balance of Payments indicators Exports of G&S (US$, mln) 30,308 35,582 34,567 37,365 41,273 45,075 49,058 53,375 Imports of G&S (US$, mln) 40,192 49,482 48,713 50,866 53,784 57,064 61,243 65,824 Remittances (US$), change in % 3.5 12.8 -9.9 5.0 5.0 5.0 5.0 5.0 Current Account balance (in % of GDP) -4.5 -7.9 -9.6 -8.4 -7.1 -6.0 -5.6 -5.2 Net reserves (CB) in months of MGNFS 6.7 5.0 3.9 3.9 3.9 3.9 3.9 3.9
Source: Government of Morocco until 2011 and World Bank staff estimates after
20. Should the underlying sources of growth be slow to materialize, growth prospects would have to be adjusted downward. A potential deterioration of the world economy,
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particularly in Europe, would negatively impact the medium-term macroeconomic outlook through reduced prospects on exports, including tourism, as well as on workers’ remittances and FDI flows. Similarly, sustained high commodity prices, a deterioration of the regional context and prolonged global financial uncertainties would have an adverse impact on Morocco’s prospects. Moreover, there is a potential risk that even pre-crisis growth levels might not be sustainable over the medium term if internal demand remains the key driver of growth. 21. In line with the new constitutional requirement, the Government has further committed to fiscal stability and to progressively decrease the budget deficit to the medium-term target of about 3 percent of GDP by 2016 through the implementation of a set of critical reforms. The key measures include: (i) reforming the universal subsidy system; (ii) implementing civil service reform, notably by introducing a ceiling on wage expenditures and a new remuneration system; (iii) accelerating the fiscal and pension reform agenda; and (iv) enhancing the efficiency of public as well as private investments.
22. The Government’s debt strategy is to diversify financing sources and take on a greater proportion of external financing (Table 3). In this context, new external financing schemes are being put in place beyond the classical multilateral and bilateral sources of financing. The government signed in February 2013 a grant agreement of US$1.25 billion over a five year period with the Kuwait Development Fund to support economic and social projects. In addition, the government signed in March 2013 a first installment of US$400 million grant of a total of US$ 1.25 billion committed by the Saudi Development Fund. Both grants are part of a broader cooperation agreement signed with the Gulf Cooperation Council countries last year committing US$5 billion over a five-year period. In August 2012, Morocco also benefited from a Precautionary and Liquidity Line (PLL) of US$6.2 billion approved by the International Monetary Fund (IMF). The PLL is part of the proactive approach of the Government to ensure new precautionary lines of credit to be able to cope in the event of a severe deterioration of external balances that could erupt for instance as a result of a worsening of the economic situation in Europe. Table 3. Financing Requirements of the Central Government (in percent of GDP)
23. Despite its deterioration in 2012, the external position is expected to remain sustainable over the medium term provided that key critical reforms under implementation take hold. As noted earlier, the current account deficit deteriorated in 2012 and is expected to progressively edge downward to around 5.2 percent of GDP in 2017 benefiting from improved export potentials and a recovery of tourism activities and workers’ remittances. This scenario critically assumes that Morocco would benefit from its continued reform efforts
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in trade and competitiveness, supported among others by the World Bank. These reforms, along with sector strategies already under implementation, would translate into higher productive private investments, including FDIs, and progressive gains in competitiveness of its exports, including tourism. In this context, external debt is expected to follow an inverted U-path reaching a maximum at almost 40 percent of GDP in 2015 before steadily dropping thereafter, while net foreign reserves will remain at around four months of imports. 24. Balance of payments financing requirements constitute a moderate concern in the medium term, given the country’s relatively low outstanding external debt, the financial support from the Gulf States, and still adequate foreign reserves. As the current account deficits are projected to steadily improve in the medium term, financing large share of them through traditional multilateral and bilateral credit lines along with other private capital flows, including FDIs, should not be a major constraint. In addition, the Gulf Cooperation Council countries recently confirmed their intention to invest US$5 billion over the next five years, mostly in the form of grant. Any remaining financing gap could be filled by tapping international financial markets. The PLL from the IMF will continue to provide a potential precautionary line of credit over the period 2013-2014.
25. The authorities are considering a possible move to a more formal inflation targeting system in conjunction with a more flexible exchange rate. The BAM has developed the necessary prerequisites and tools to shift to an inflation targeting framework. However, the timing of this reform should be carefully considered as it requires measures to ensure fiscal sustainability, especially with regards to reforming the subsidy system so as to prevent a negative impact on financial stability. The current exchange rate regime has contributed to macroeconomic stability, yet given the rigidities of the economy, the recent trends in the current account balance would suggest that it could possibly be undermining international competitiveness. In the future, a more flexible exchange rate policy would help strengthen structural reforms to foster competitiveness and weather external shocks.
26. A comprehensive public debt sustainability analysis indicates that the fiscal framework remains sustainable although it would weaken under some medium term downside risks (see Annex 5.1). Indeed, when the debt sustainability analysis was run under the assumption of “no-policy-change” scenario, the debt stock increased steadily over the period 2013-2018. All the six bound tests proved sustainable over the medium term, although debt of three of the tests remained high within the range of 58-60 percent of GDP, which indicates that debt sustainability remains fragile to further deterioration in Morocco’s internal or external business environment.
27. In sum, Morocco is facing growing economic and fiscal challenges. Assuming that the ongoing key fiscal and structural reforms, including those envisaged in the 2013 Budget Law and described above, are implemented in a timely fashion, Morocco’s macroeconomic framework would remain adequate and sustainable in the medium term. The projected macroeconomic outlook and the success of the structural reforms depend on a robust fiscal consolidation, a prudent monetary policy, and more flexible exchange rate policy over the medium term that supports external competitiveness. In particular, it is of utmost urgency that the government starts implementing the reform of the subsidy system to ensure the sustainability and efficiency of public finance. Until now, the adverse effects of the global environment on Morocco have been weathered relatively well, thanks to strong economic fundamentals and sound macroeconomic policies carried out over the last decade. Yet, in
9
contrast to when the international crisis struck in 2008, the Government today has much smaller margins for maneuver. Its commitment to deepen and expand the current reform efforts is key to the prospects for a sustainable recovery of investment, growth, and employment in the years to come.
III. THE GOVERNMENT’S PROGRAM AND PARTICIPATORY PROCESSES
III.A. Education sector background and key issues
III.A.1 Access to, and completion of, schooling 28. Implementation of the CNEF and the PUEN resulted in impressive progress in terms of access to education. Efforts to increase the availability of educational services have led to expanded participation in education at all levels. From 1990/91 to 2012/13, national net enrollment rates increased from 52.4 percent to 98.2 percent for primary education, from 17.5 percent to 56.7 percent in lower secondary education and from 6.1 percent to 32.4 percent in upper secondary education.7 The increased enrollment in compulsory education has placed pressure on higher levels of education, leading to substantial increases in student enrollments in upper secondary schools, universities and other tertiary education institutions.
29. Progress has been made in ensuring equitable access to education for young children. While the gap between urban boys and rural girls at the primary education level narrowed to just 3.5 percentage points by 2012/13, the gap at higher levels of the education system remains large, with 53 percentage points still separating urban boys and rural girls at the lower secondary education level in 2012/13 (Figure 1).
Figure 1: Net enrollment rates for primary (left) and lower secondary (right), 2005/06 – 2012/13 (%)
Source: MEN
30. Education completion rates have improved, but, at the current pace, the Millennium Development Goal (MDG) universal primary school completion target is unlikely to be achieved by 2015. The primary school completion rate (Grades 1-6) has increased from 68.6 percent in 2005/06 to 90.0 percent in 2012/13. More than two-thirds of students complete the full two cycles of basic education (Grades 1-9). At both levels, girls’ and boys’ completion rates are now almost identical (Table 4).
Total n.a. n.a. 48.0 51.8 57.0 64.6 65.3 70.5 Female-Male Ratio n.a. n.a. 115.6 112.5 112.0 103.6 101.2 97.9 Source: MEN III.A.2. Schooling outcomes 31. To its credit, Morocco has been able to maintain a constant, albeit low, level of education quality all the while increasing school education coverage (at a particularly rapid rate in primary education). Figure 2 shows the percentages of students from Morocco and other MENA countries attaining each international benchmark for Grade 4 mathematics across the last three editions (2003, 2007 and 2011) of the international Trends in Mathematics and Science Study (TIMSS), compared with two better-performing countries (Hungary and Turkey) and the international median. The 2011 editions of TIMSS and the Progress in International Reading Literacy Study (PIRLS) showed low learning achievement scores for Moroccan Grade 4 and Grade 8 students compared to those from other participating countries. With the exception of Dubai UAE (for the Grade 8 tests in mathematics and science), no Arab state achieved above the international medians; among the participating Arab states, Morocco and Yemen produced the weakest scores. In Grade 4 mathematics, for example, 74 percent of Moroccan students did not reach even the lowest of four benchmark levels,8 while none at all reached the highest benchmark level; this compares with the international median of 10 percent not reaching even the lowest benchmark and 4 percent reaching the highest benchmark. In Grade 4 reading, 79 percent of Moroccan students did not reach the lowest benchmark, and once again none reached the highest benchmark; the international median scores 8 percent and 5 percent for these two benchmark levels respectively.
8 In response to the following TIMSS Grade 4 mathematics question involving the addition of two three-place whole numbers based on the reading of situation text – “There are 218 passengers and 191 crew members on a ship. How many people are on the ship altogether?” – only 35% of Moroccan students answered correctly.
11
Figure 2: TIMSS 2003, 2007 & 2011 Mathematics (Grade 4) Scores: proportion by benchmark level, in selected countries
Source: IEA & Boston College 32. Learning achievement is uneven within the country. The first National Learning Assessment Program (PNEA), carried out jointly in 2008 by the CSE and the Ministry of Education (MEN), points to small gender gaps in mathematics and science, but large gender gaps in favor of girls in Arabic and French (Table 5). In addition, there are considerable differences between urban and rural areas and between public and private schools (even when the comparison is between urban public and private settings). Unfortunately, the second PNEA, originally scheduled for 2011, has been postponed until 2013 as a result of ongoing teacher strikes.
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12
Table 5: Average scores9 in mathematics and Arabic (%), by grade, in 2008 Mathematics Grade 4 Grade 6 Grade 8 Grade 9
Male 25 33 39 40 Female 29 39 46 46 Urban 32 39 44 44 Rural 24 32 37 40 Source: CSE (National Learning Assessment Program 2008) 33. The legacy of poor access to education weighs on the adult population’s education capital. In the past, few Moroccan males and even fewer females had access to schooling, with only a small proportion reaching secondary and higher education. Literacy rates have as a result long been low. The effects of the recent increase in school enrollments, however, can be seen in the positive trends in literacy over the past 25 years, with both overall rates increasing and (in the case of young adults who have graduated more recently from the formal school system) the gender gaps narrowing. III.A.3. School sector financing 34. The leveling-off in primary student enrollment10 that has followed a demographic decline in the relevant school-age population,11 along with the ongoing shift from public to private provision,12 provides favorable conditions for a reallocation of resources to support expansion of other levels of the education system; at present, secondary education (lower secondary and upper secondary combined) absorbs more than half of the education sector budget. That said, there is room for achieving greater efficiencies in the school education system, particularly at the secondary level; at the broadest level, public spending, as a proportion of both the overall national budget and GDP, is high by international standards whereas results are average (primary enrollment rates) to below-average (repetition rates, gender equity in secondary education, scores in international learning assessment surveys). Teacher remuneration, as measured against per capita GDP, is at the high end of the international middle-income country range at the primary level and very high at the secondary level; this results in high per-student costs relative to comparable countries. Whereas student-teacher ratios (although high by MENA standards) are now in line with international norms, a large proportion of teachers at the secondary level still do not teach the minimum number of weekly hours (see Table 6).13
9 Percentage of questions receiving a correct response among the target sample. 10 From 4,022,600 in 2004/05 to 4,016,934 in 2011/12 (Source: MEN). 11 Source: HCP 12 The share of students enrolled in private education has gone from 6.6% in 2004/05 to 12.9% in 2011/12 at the primary level, and from 2.7% in 2004/05 to 7.2% in 2011/12 at the lower secondary level. 13 World Bank (2012) Education Public Expenditure Review (draft).
13
Table 6: Share (%) of teachers teaching minimum number of weekly hours, by level, 2008-2011 2008 2009 2010 2011 Primary Share of teachers teaching minimum number of hours 95.1 97.2 93.6 99.0 Share of teachers without teaching load 4.0 2.3 1.4 0.7 Lower Secondary Share of teachers teaching minimum number of hours 34.2 40.2 43.0 59.3 Share of teachers without teaching load 3.3 3.5 3.1 1.2 Upper Secondary Share of teachers teaching minimum number of hours 13.2 32.1 33.3 46.2 Share of teachers without teaching load 2.6 2.3 1.3 1.6 Source : MEN III.A.4. School sector governance 35. Decentralization of the governance of the education sector is under way, even though effectiveness of these reforms remains a key challenge. The capacity of the Regional Education Offices (AREF), which have been granted some administrative and financial autonomy, has improved over time. The AREFs have played an important role in leading the reform program at the regional and sub-regional levels. 36. There exists also an independent evaluation institution under the Higher Council for Education (CSE) to evaluate system performance and disseminate its findings and results. The publication of its first report in April 2008 led to a welcome debate among the various stakeholders on increasing outcome measurements and accelerating the improvement of the education and training sectors. This new institution is expected to help the system manage for results and ensure greater accountability.
37. With increasing public awareness on quality of life, the environmental protection and sustainable development agenda has become a national priority. An Environmental Impact Assessment (EIA) system consistent with international good practices is now fully operational, at the national and regional levels, and contributes to the mainstreaming of social and environmental dimensions in development activities. The Government has successfully developed the necessary EIA operational tools and manuals14 for the preparation and review of the EIA system including the appropriate procedures for public consultation as well as an annual reporting of its activities and achievements.15
38. The MEN applies an “Environmental and Social Protection Framework”16 to its school construction program. The Framework aims to prevent, attenuate or compensate for a range of negative impacts that may arise from school construction, and ensure that: (i) the safety and security of buildings’ users are guaranteed; (ii) energy use is as efficient as
14 MEMEE : Référentiel sur les études d’impact sur l’environnement, http://www.environnement.gov.ma/PDFs/referentiel_eie.pdf 15 MEMEE: Rapport annuel des activités du Comité national des études d’impact sur l’environnement pour l’année 2011, Rapport annuel es Comités régionaux des études d’impact sur l’environnement 16 Cadre de protection environnementale et sociale
14
possible; (iii) buildings are accessible to disabled users; (iv) sites are managed in ways that respect users’ and neighbors’ health and well-being (e.g., efficient water use, waste management, management of dangerous goods, proper use of safety equipment); and (v) all land acquired is suitable for school construction. 39. Accumulation of arrears in compensations for resettlement with respect to land acquisitions has been a generic issue in Morocco. Some structural weaknesses in the practices related to land acquisition in the schools sector were noted in the assessments carried out in 2009 by the World Bank and the AFD and recommendations were made with a view to clear compensation claim arrears and reduce the time taking to deal with new compensation claims. Since 2009, the MEN and the MEF have put in place mechanisms to better monitor land acquisition and related compensation payments, and the MEF has settled a significant number of compensation cases, over a period when, moreover, the volume of new acquisitions through expropriation – whether measured in terms of land area or land value – has decreased dramatically. The time now taken to deal with new claims is on average three months.
III.A.5. Transition from school to work 40. Morocco’s unemployment rate has fallen during the last years, thanks mainly to the good economic growth that was brought about by the expansion of the service, commerce and public works sectors and lower labor force growth. The unemployment rate was reduced from 13 percent in 2000 to 8.9 percent in 2011. The difference between female and male unemployment has also significantly diminished (9.6 percent for women, 8.9 percent for men, in 2009). Unemployment rates are higher in urban areas (13.7 percent) than in rural areas (3.9 percent), for young people (17.6 percent for those aged 15-24), especially those living in urban areas (31.3 percent), and for skilled workers. Higher education graduates, however, represent only 20 percent of unemployed workers aged 15-34, while one-third of the unemployed population has no diploma.17 Overall, it appears that unemployment is much higher for graduates from “open enrollment” university programs (22.3 percent), secondary education (21.7 percent) and vocational training (19.7 percent), particularly short vocational training programs (25.2 percent). Unfortunately, detailed information on the labor market entry rates of higher education graduates – broken down by characteristics such as region, discipline and level – is not yet available. Better information is available for vocational training graduates, where employment rates are significantly higher in some areas (construction, engineering, fisheries and tourism) than in others (textile, information technology and management). 41. School-to-work transition is a major problem, with first-time job-seekers representing half of the unemployed population. Unemployment spells are mainly of long duration, especially in the case of skilled workers. In fact, the incidence of long-term (i.e., longer than 12 months) unemployment is 83 percent among skilled workers, compared with 60 percent among the unskilled unemployed. This situation points to the structural nature of unemployment in Morocco and the need for targeted interventions to retrain the long-term unemployed and facilitate the job search process. Indeed, long-term unemployment can reduce the chances of finding a job as workers lose skills and because of negative signaling.
17 Source: HCP, 2010.
15
42. Youth unemployment co-exists with a high level of inactivity. According to a recent World Bank study,18 the proportion of young men who are inactive (25 percent) is, in fact, greater than the percentage of those who are unemployed (16 percent). Most young men are inactive because they are discouraged. Ninety-three percent of young women with no education are out of the labor force, compared to only 37 percent of young women with higher education, suggesting higher returns to education as well as their greater ability to overcome social barriers to participating in the labor force. III.B. Government program
III.B.1. Socio-economic program 43. The PJD election platform emphasized anti-corruption and set out policy proposals to deliver on good governance, justice, revamping the delivery and quality of social services and improving people’s economic inclusion. As part of its mandate, the Government is charged with implementing the changes proposed in the new Constitution as regards putting in place a new institutional model based on separated, balanced and complementary powers. In particular, the new Constitution reinforces the principles of good governance, human rights, protection of individual freedoms, as well as more responsibility and accountability for institutions. These themes are all central to the Government’s 2012-2016 program, which was presented to Parliament in January 2012. 44. As regards good governance, the areas of future focus are multiple, including public administration reform, simplification of procedures, access to information, reform of fiscal system, budget reform, regionalization and decentralization, and a profound reform of the justice sector. Social solidarity, participation and inclusion are all emphasized with a special focus on youth and families. Improving the transparency of economic and financial governance is given particular mention with a strengthening of the Competition Council and improving governance of state-owned enterprises.
45. For the period 2012-2016, the program aims for a growth rate of 5.5 percent, an inflation rate of 2 percent, reducing unemployment to 8 percent and aiming for a progressive reduction in the budget deficit to 3 percent by 2016. Key areas of priority on the economic front include strengthening the competitiveness of the economy, improving the business climate, support to SMEs, encouraging exports and land registry reform. Addressing unemployment to bring the rate down to 8 percent by 2016 will demand an integrated approach and includes measures to continue support to employment creation programs undertaken to date and introduction of new programs to insert the unemployed into businesses and associations. Social assistance and pension reform are also being pursued as part of a broader and more comprehensive overhaul of the compensation system. III.B.2. Education Emergency Program (PUEN) 2009-2012: project-based sector management 46. The proposed operation itself recognizes the achievements of the second half of the PUEN – 2011 and 2012 – and is aligned with the directions set out in the draft Education Action Plan 2013-2016 (PAMT), which itself emphasizes continuity over the medium term in education sector reform. As noted above, previous governments implemented a
18 World Bank. [Ongoing]. Promoting Youth Opportunities and Participation.
16
comprehensive set of reform measures in the education sector, through the CNEF 1999-2009 and the PUEN 2009-2012. The impetus to promote education reforms in Morocco came in part from the publication of major sector reports, including (i) the World Bank’s Flagship Report in 2008 (“The Road Not Traveled”)19 and (ii) the CSE’s 2008 Annual Report.20 47. The fundamental guiding principle of the PUEN placed the student at the heart of the education and training system. The key goal was to provide the student with basic competencies by establishing an environment conducive to learning and using qualified teachers. The PUEN, spanning the period of 2009-12, drew on lessons learned during the previous decade, and presented a comprehensive policy framework, with a sizeable expenditure program (MAD 34 billion or US$4.1 billion), to significantly improve education outcomes from pre-school to university. The PUEN pursued four strategic directions: (i) achieve universal basic education; (ii) promote initiative and excellence in post-basic education; (iii) improve system performance (teaching, management and stewardship); and (iv) mobilize and utilize resources. Associated targets included increasing net enrollment rates for pre-school, primary and lower secondary education from 48.2 percent, 90.5 percent, and 42.7 percent in 2008/09 to 54.2 percent, 98.2 percent 56.4 percent, respectively by 2012/13. 48. Over the PUEN period, Morocco witnessed significant results in primary education (with near-universal access for girls and boys alike, lower repetition and drop-out rates and higher completion rates), but less dramatic improvements in lower secondary education (with large gaps between urban and rural participation and stubbornly high rates of repetition and drop-out). There was strong program ownership within the MEN and AREFs (with, however, a notable lack of coordination across key PUEN projects), but it was noted that province-level and particularly school-level players (namely, school principals and teachers) were not sufficiently equipped to deliver the reforms effectively in the classroom. This was particularly true, for example, of the projects aimed at identifying and remedying weak learning performance through a child-centered, skills-based pedagogy. Whereas PUEN implementation was well supported through administrative documentation (circulars, guidelines and other written materials), school principals and classroom teachers had little access to professional support from trainers, inspectors and other resource staff and suffered at times from a lack of cross-project coordination. Finally, while the decentralization agenda allowed important decisions to be taken locally on the basis of local information, the decentralized entities (in particular the AREFs) often did not have the systems and tools to manage PUEN implementation effectively. III.B.2. Education Action Plan (PAMT) 2013-2016: quality schools and classrooms 49. Human development is prioritized in the current Government’s program. For the health sector, reducing infant and maternal mortality in order to achieve the MDGs is the main priority. Supporting the National Initiative for Human Development (INDH) is also key to the plan, as is the need to address housing shortages and focusing on women, youth and disadvantaged people. In the area of education, the Government’s manifesto,21 adopted by the
19 Report No. 46789: http://siteresources.worldbank.org/INTMENA/Resources/EDU_Flagship_Full_ENG.pdf 20 CSE. 2008. Rapport annuel 2008: Etat et perspectives du système d’éducation et de formation. Rabat: CSE 21 http://www.maroc.ma/NR/rdonlyres/62F451B1-275B-4A3D-B024-B9E018A7362F/0/Programme_Gouvernement_2012_BON.pdf
17
Moroccan parliament on January 26, 2012, linked the quality of education to appropriate governance arrangements. The central theme is to push decentralization to the school level. On August 20, 2012, the King of Morocco, in a speech centered around youth,22 indicated that education was at the top of the list of national priorities; he stressed the importance not just of equitable access to education and training but also of equitable access to quality learning opportunities, which he defined as equipping young people for “the life that awaits them” and which therefore requires teachers to adopt a student-centered approach that encourages critical thinking rather than memorization of facts.
50. The draft PAMT 2013-2016, currently under internal discussion and external consultation, adopts three principles that are derived from lessons learned during the implementation of the CNEF 1999-2009 and the PUEN 2009-2012: (i) the PAMT 2013-2016 will consolidate and extend the achievements of the earlier cycles with a view to long-term improvements, rather than engage in a radically new direction; (ii) major efforts will be made to better prioritize key policy interventions, in order to focus resources on realistic goals; and (iii) these policy interventions will be implemented in ways that rely on improved coordination and greater coherency between the various actors, both vertically (between central, regional, provincial and school levels) and horizontally (across services at a given level). The key policy interventions, organized into four groupings, are an extension of the PUEN achievements: (a) access and equity; (b) teaching and learning quality; (c) governance and decentralization, through to the school level; and (d) human resource management. The PAMT is likely to have an even greater emphasis than the PUEN on school-based management and classroom-based teaching practices, as the Government is eager both to ensure that school principals and teachers are better empowered and supported and that the reforms designed at higher levels truly impact student learning achievement. III.C. Implementation costs
51. As seen in Figure 3, the Government backed its commitment to the PUEN 2009-2012 by increasing the budget allocated to the school education sector, with a significant initial boost in 2009. Over the period of PUEN implementation, public expenditure on school education has remained steady as a share of GDP around 6 percent and has fluctuated somewhat as a share of the overall State budget around 25 percent. This fiscal effort has focused on non-salary expenditures, with the share of the budget going to investment and non-salary recurrent items rising from 16.6 percent in 2008 to 25.7 percent in 2009, 26.5 percent in 2010, 31.9 percent in 2011 and 27.7 percent in 2012. The overall cost of the PUEN 2009-2012 was estimated at MAD 34.0 billion (US$4.1 billion), averaging MAD 8.5 billion per year, which corresponds to largest part of the investment and non-salary recurrent budget. The cost has been shared between the Government (around four-fifths) and the TFPs (around one-fifth).
Figure 3: School Education Budget 2005-2012, as amounts in MAD billions (primary y-axis) and as share of State budget and GDP (secondary y-axis)
Source: MEN
52. Table 7 shows the amounts committed by the TFPs other than the World Bank, provided either through investment operations (“invest”) or through budget support operations (“budget”).
Table 7: Commitments by Technical and Financial Partners to the Government’s Education Emergency Program (in EU€ million)
2009 2010 2011 2012 2013* Total Type
AECID 4.0 4.0 4.0 12.0 Budget
AFD 10.0 12.5 12.5 15.0 50.0 Invest
AfDB 37.0 38.0 113.0 188.0 Budget
EIB23 60.0 60.0 60.0 20.0 200.0 Invest
IBRD 44.2 78.1 122.3 Budget
JICA 73.8 73.8 Hybrid
EU 30.0 21.0 21.0 21.0 93.0 Budget
NIF24 5.0 5.0 5.0 15.0 Invest
Total 142.0 146.7 140.5 60.0 264.9 754.1
Source: TFPs; *amounts scheduled for 2013 have not yet been committed. III.D. Participatory process
53. Since 2006, the CSE has served as the main forum for wide-ranging consultation on education policy. The CSE, which answers directly to the King, has around 100 members drawn from the Government, the Parliament, specialized State entities, MEN staff, AREFs, universities, teacher unions, parent associations, student organizations, industry, and NGOs. The CSE is consulted on all education reform, advises on all national education matters and carries out comprehensive evaluations of the national education system of education. With
23 EIB’s commitment amounts may vary from year to year, within the fixed total amount. 24 The Neighborhood Investment Facility (NIF) is a separate funding facility financed by contributions from EC and member states.
0%
5%
10%
15%
20%
25%
30%
35%
0
10,000
20,000
30,000
40,000
50,000
60,000
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Recurrent
Investment
Share State budget
Share GDP
19
the CSE, Morocco has a permanent and independent source of advice that reflects the different components of society. 54. As part of the development of its PUEN 2009-2012, the Government engaged in consultations with various stakeholders. In the fall of 2007, the King of Morocco instructed the Government to develop the PUEN to speed up the implementation of the education reform agenda. During the first round of program development, the consulting firm hired to provide technical assistance to the Government consulted with regional and provincial education officials, focusing on a number of pilot sites. In a second round, the MEN met with parliamentarians and teacher union representatives to present the draft program and receive feedback. With the third round of development, the MEN tested the feasibility of the final draft by consulting with governors, as well as regional and provincial education officials, in a series of regional forums, again in pilot sites. 55. In preparing its PAMT 2013-2016, the MEN intends to consult with a range of stakeholders both inside and outside the education sector – teacher unions, parents, students, communities – before presenting the program to the CSE for validation and then to the Government for final approval. IV. BANK SUPPORT TO THE GOVERNMENT’S STRATEGY
IV.A. Link to the Country Partnership Strategy
56. The Country Partnership Strategy25,26 (CPS) comprises three pillars. These pillars are: (i) encouraging growth, competitiveness and employment; (ii) improving quality service delivery to citizens; and (iii) promoting sustainable development within the context of climate change. Other cross cutting themes, such as regional development, governance, public private partnerships, and regional integration, are also covered. The proposed operation is part of the Bank’s support to the second CPS pillar and, as such, will address the issue of quality education service delivery through: (a) improved management of the sector by way of increased decentralization to, and accountability of, the AREFs; (b) increased targeting as a means to reach the most vulnerable; and (c) enhanced accountability of education personnel. The proposed operation is also aligned with the Bank’s new framework for engagement in MENA, with its focus on improving the social and economic inclusion of disadvantaged groups, strengthening governance through transparency and accountability, and on gender equality.
IV.B. Collaboration with the International Monetary Fund and other donors
57. The World Bank and the IMF maintain a close collaboration in Morocco. Regular exchanges between Fund and Bank country teams are customary. Discussions focus on the respective work programs, country priorities, recent developments and prospects, and reflect the growing weight of DPLs in the Bank’s Morocco portfolio. The Fund participates in Bank project review meetings where relevant. Similarly, Bank staff was consulted in the context of
25 World Bank. 2009. Country Partnership Strategy for the Kingdom of Morocco for the Period FY10-13. (No. 50316-MA) 26 World Bank. 2012. Country Partnership Strategy Progress Report for the Kingdom of Morocco for the Period
FY10-13. (No. 67694-MA)
20
the IMF’s 2012 Article IV consultation with Morocco, which was concluded by the IMF’s Board on February 1, 2013. The IMF has also completed its first review of Morocco’s performance under the economic program supported by the PLL arrangement (approved on August 3, 2012 in an amount equivalent to about US$6.2 billion) and reaffirmed Morocco’s continued qualification to access PLL resources. The Public Information Notice issued by the IMF on February 5, 2013 is provided in Annex 4. 58. The proposed operation was prepared in close consultation and coordination with main donors active in Morocco’s education sector. The Government demonstrated great interest in the results of the Paris Declaration on Aid Effectiveness. As a result, the Government requested the World Bank and the donor community to support the reform program, using the principles of the Declaration. A non-binding partnership framework has been signed by the Government and a wide group of donor representatives (including the World Bank) with a view to encouraging donor support in the education sector.
59. The World Bank works closely with other donors. In line with the main principles put forward by the partnership framework, the World Bank joined with six major sector donors (AECID, AFD, AfDB, EIB, EU and JICA) to form the TFP Group, offering technical and financial support to the Government as it implemented its PUEN. This level of harmonization among major donors marks an important advance in donor relations with the Government. AECID, AfDB, EU and the World Bank are providing their funds in the form of budget support; AFD and EIB (along with the EU’s Neighborhood Investment Facility [NIF]) are providing programmatic investment financing; JICA is using a hybrid instrument, partly budget support (adopting the World Bank’s policy matrix and adding four prior actions of its own related especially to school-level management)27 and partly project investment financing.
60. The TFP Group worked together with the Government to establish a common results framework and common monitoring and reporting arrangements that underpin each TFP’s support of the PUEN. While the overall results framework is common to all TFPs, each TFP has its own financing operation with prior actions that differ slightly from one to another. All TFPs other than the World Bank have signed their respective financing agreements with the Government, for a total commitment amount of EU€ 433.0 million (US$579.2 million equivalent) over four years. To provide a structure for coordinating their parallel financing operations with the Government’s own PUEN implementation, the TFPs and the Government developed a memorandum of understanding and an associated operational manual. The memorandum28 has been signed by the Government, AFD, AfDB, EU and EIB; while the World Bank has not signed the memorandum, it operates in accordance with the principles set out therein.
27 JICA-specific prior actions: [1] Reinforce the concept of monitoring the school and support mechanisms to improve education and learning processes; [2] Ensure the effective implementation of the « school project » based on the new concept; [3] Develop and formalize organizational, pedagogical and technical process of implementation of Regional Teacher Training Centers; and [4] Motivate parents and community members to enroll and keep their children in school at the level of basic education (primary and secondary). 28 The memorandum provides that where there is a conflict between the memorandum and the individual financing agreements the latter prevail.
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IV.C. Relationship to other Bank operations
61. The Bank has a long history of active engagement in Morocco’s education and other social sectors. Over the past decade, four relevant projects -- Social Priorities (Education) Program (4024-MOR), Alpha Maroc (Adult Literacy) Project (4607-MOR), Social Development Agency Project (4661-MOR) and PARSEM (7273-MOR) -- were fully executed. These operations assisted the Government in: (i) increasing access to basic education, literacy and other social services; and (ii) improving the quality and effectiveness of service delivery. Overall, these projects were implemented successfully with respect to the objective of increasing access to basic services and promoting participatory approaches and partnership arrangements.29 The Social Priorities (Education) Program and the Social Development Agency project results were remarkable in this regard. Achievements regarding quality of service delivery were less positive. 62. The proposed Second Education Development Loan (EDPL2) builds on the First Education Development Loan (EDPL1) (7879-MOR), which closed on March 31, 2011. These two basic education operations are complemented by other DPLs under preparation that seek to address other key constraints to promoting the type of growth that will create good quality jobs in Morocco and that target service delivery improvements in education and skills and in other areas of the public administration system. The dialogue across these different operations (see descriptions below) has been closely coordinated.
63. The First Skills and Employment DPL, developed through a partnership bringing together four ministries – education, labor, finance and economic affairs – seeks to: (i) match skills developed within the vocational training and higher education systems to the needs of the labor market; (ii) improve the effectiveness of intermediation services, including active labor market programs; (iii) improve job quality; and (iv) strengthen the labor market information system.
64. The First Economic Competitiveness Support Program DPL aims at: (i) improving the investment climate, in particular by removing barriers to entry and competition, simplifying the regulatory environment for doing business and reducing discretion in the implementation of the rules by increasing transparency and access to information; (ii) furthering trade policy reform and trade facilitation, in particular by pursuing the ongoing tariff rationalization (levels and bands), strengthening the regulatory framework for import standards and easing logistics at ports of entry; and (iii) improving economic governance, by strengthening significantly the Competition Agency’s missions and prerogatives, increasing transparency and accountability in the way the investment incentives are granted and sectoral policies conducted, and strengthening the public-private coordination body for investment climate reforms.
65. The Second Financial Sector DPL (under preparation) continues to support the reform agenda already initiated under the First Financial Sector DPL approved by the Board in January 2010. Specifically, it fosters: (i) household and small and medium enterprises (SME) access to financial services; (ii) increased financial stability, supervision and regulation; and (iii) capital market development. Key reforms supported include a new guarantee scheme targeting micro-enterprises and measures to strengthen the functioning of private equity markets.
29 PARSEM was closed in June 2009 and the ICR delivered in December 2009.
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66. The Accountability and Transparency DPL is being prepared to build on the Bank’s previous engagement in public sector administration reform. There is broad agreement with the Government that this new DPL series will focus on accountability, transparency and public service delivery reforms, in line with the goals and objectives of Morocco's transition as envisaged under the new constitution, thus focusing on school to work transition. IV.D. Lessons learned
67. The proposed operation design was informed by lessons learned from the above-mentioned projects and sector DPLs in Morocco, as well as from general experience with human development sector DPLs implemented in other countries. Main lessons learned are summarized below, first those concerning education policy and second those linked to reform processes. IV.D.1. Education policy lessons 68. International experience brings to bear lessons on a number of areas that are featured in the proposed operation. 69. First, demand-side interventions have improved retention where they include conditional cash transfers (used in contexts as diverse as Mexico and New York), school transport, school feeding (supported throughout the developing world by the World Food Program).
70. Second, assessing student performance is critical to inform practitioners (teachers, school leadership, as well as local and national decision-makers) of the true level of students and schools. In addition, disseminating results to concerned stakeholders, like parents and communities, has been shown to exert a positive effect on the accountability of education providers because assessment results give content to a stakeholder’s voice.30
71. Third, pre- and in-service training should focus on adapted instructional practices for: (i) improving literacy in early grades (which could include pilots on using national languages, such as those used in West Africa, for example, in the Gambia); (ii) teaching to heterogeneous learning levels (differentiated pedagogy is used in France); and (iii) remedial instruction. International evidence reveals that all these have the potential to improve repetition and drop-out rates. Workshops to demonstrate how best to use the student record booklet would also be beneficial, as these can form the basis of personalized work plans for students. Good monitoring of teacher in-service training is essential to discover to what extent the lessons have been appropriated by the learner (the in-service teachers in this case) and how they will change their instructional practices in class. This is the only way the efficacy of the in-service modules can be gauged; waiting for class inspections is too late. In the absence of effective in-service training, collaboration – the extent to which educators work together on behalf of students – is also an important predictor of success. Teachers who work closely with other teachers to improve their instruction, adhere to the norms associated with peer review.31
30 World Bank, 2011, Making Schools Work: New Evidence on Accountability Reforms 31 Fullan, M., 2011, Choosing the Wrong Drivers for Whole System Reform
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72. Fourth, school-based management initiatives should focus in their action plans on improving school climate, which directly affects retention. International evidence from TIMSS 2011 reveals that, in Morocco, only 29 percent of Grade 4 and 26 percent of Grade 8 Moroccan students report that their school is ‘safe and orderly’ compared to the international average of 45 percent and 49 percent for the same grades. International research shows that when education authorities delegate more responsibilities to schools to mobilize and manage the inputs necessary to address local circumstances and changing demand for education services, there is a wide range of configurations possible. Nevertheless, more autonomous schools have three features of note: (i) the margin of freedom of schools to acquire and manage resources (financial, human, material) as they see fit to meet expected results; (ii) the possibility of diversifying sources of revenue; and (iii) greater use of performance-based agreements tied to resource allocation. 73. Within the Morocco setting, the EDPL1 Implementation Completion and Results Report32 showed that many of the EDPL1 prior actions “set the ground” for longer term improvement in educational outcomes. For example, the results of the first national student learning survey (EDPL1 Prior Action1.2) provoked public debate in the quality of education. The transfer of initial pre-service teacher training to universities (EDPL1 Prior Action1.3) has allowed for a stronger recruitment-on-merit process. The strategic human resource management action plan (EDPL1 Prior Action1.4) laid the groundwork for the decentralization of human resource management. The AREF-MEN program-contracts (EDPL1 Prior Action1.5) laid down a contractual “spirit”—introducing new performance monitoring and reporting practices and thus increased accountability—even if the contracting arrangements have not been formalized with rewards and sanctions. With new discretionary budgets (EDPL1 Prior Action1.6), schools were able to take decisions to fund their own priorities and over time these priorities have tended to move from physical repairs (e.g., broken windows) to out-of-school activities and increasingly to activities aimed at increasing learning outcomes. The MEN has continued to update its MTEF (EDPL1 Prior Action1.7) on an annual basis and reports both better planning and greater visibility for short- and medium-term goals and more effective management of resources. Finally, the charter on relations between schools and their parent associations (EDPL1 Prior Action1.9) provided a framework for greater parental involvement in their children’s schooling. IV.D.2. Reform process lessons 74. Government ownership and commitment are key to the success of the reform program. The PUEN, from which the content of the proposed operation is drawn, has been fully owned by the Government and supported by the highest authorities in the country. To ensure success, it is necessary to establish and maintain support within the administration and to establish communication channels among the various actors at central, regional, provincial and school levels.
75. The effective implementation of some reforms requires time, especially in the human development sectors, as shown in the transition from EDPL1 to EDPL2. It is important to take into consideration the time required to build up executing agencies’ capacity when preparing the reform implementation plan, especially when the agencies are at the
32 Report No: ICR00002495. See Sections 2.1 and 3.2 for a detailed analysis of the on-going results of each of the EDPL1 prior actions.
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developmental stages. The point was discussed at length with the authorities and has led to better prioritization of the reform program, geared by the principle of selectivity and realism.
76. Success in reform implementation, especially in the human development sectors, depends to a great extent on the existing institutional capacity and sustained consensus among the main stakeholders. Addressing these key challenges requires a fully-fledged medium-term strategy and good coordination. The Government is aware of these issues and lays out a range of measures and activities in this direction. In addition, the ongoing coordination among donors providing direct investment and budgetary support offers the opportunity to respond meaningfully to the critical capacity building needs.
77. As noted above, the MEN carried out its own evaluation of the PUEN 2009-2012, drawing lessons that will inform the development of its PAMT 2013-2016: (i) effective education reform requires a long-term commitment to core goals and, as a result, a significant level of continuity from one cycle of change to the next; (ii) policy interventions need to be clearly prioritized in line with the overall vision, in order to focus scarce resources on realistic goals; and (iii) coordination and greater coherency between the various actors, both vertically (between central, regional, provincial and school levels) and horizontally (across services at a given level) is needed to ensure that policy interventions truly impact classroom-level practice.
IV.E. Analytical underpinnings
78. Substantial analytical work underpinned the preparation of the Government’s PUEN and PAMT and the preparation of the proposed operation. First, the Bank analytic program led to the production of an education sector policy note,33 a report on school absenteeism and time-on-task in the classroom,34 and a report on skills development and employment,35 whose findings shaped the sectoral dialogue. Second, the CSE’s 2008 Annual Report36 provided a comprehensive and frank diagnosis of the state and performance of the education sector and laid out recommendations for improving the country’s education outcomes. The CSE recommended inter alia: (i) improved learning achievement assessments; (ii) a more open policy concerning the recognition of language as a quality improvement mechanism; and (iii) the promotion of the private sector in improving access and quality. Third, the World Bank’s Flagship Report in 2008 (“The Road Not Traveled”)37 contributed to a public debate on the level of education sector outcomes and the need to improve design and accountability measures in the sector. Though achievements have been made in expanding access through construction in both urban and rural areas, increased teacher training, and revision to the curricula, there has been less attention to management of the sector, incentives, and accountability. Fourthly, a Public Expenditure Review (PER), completed in 2012, points to inefficiencies in the school education system: public spending, as a proportion of both the
33 Report No. 40197: World Bank. 2008. Conditions for Higher and Inclusive Growth. Washington D.C.: World Bank (Chapter 11). 34 Report No. WPS 4376: Abadzi, H. 2007. Absenteeism and beyond : instructional time loss and consequences. Washington D.C.: World Bank. 35 Report No. WPS 4681: Marouani, M., Robalino, D. 2008. Assessing interactions among education, social
insurance, and labor market policies in a general equilibrium framework: an application to Morocco. Washington D.C.: World Bank. 36 See footnote 21. 37 See footnote 20.
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overall national budget and GDP, is high by international standards whereas results are average (primary enrollment rates) to below-average (repetition rates, gender equity in secondary education, scores in international learning assessment surveys). The proposed operation focusses on these issues, responding also to the CPS’s emphasis on governance strengthening and on service delivery improvement. 79. Additional analytical and advisory assistance would have facilitated the implementation of a range of reforms, particularly those involving decentralized governance. This was recognized by the Government and the TFP Group and led to the identification of core studies that were to be carried out during the PUEN implementation period and funded in large part by the EU-Technical Assistance Fund or its NIF. For reasons related primarily to the MEN’s weak capacity in consultancy contract management (including procurement procedures), only a small part of this program was realized. V. THE PROPOSED EDUCATION DEVELOPMENT POLICY PROGRAM
V.A. Operation description
80. The proposed EDPL2 was originally designed as the second and last operation in a programmatic DPL series to accompany the implementation of the Government’s PUEN over the period 2009-2012. The EDPL1, which was approved by the World Bank Executive Board on June 8, 2010, became effective on August 9, 2010 and closed on March 31, 2011, supported key initial institutional and regulatory measures as well as the introduction of new approaches to improve service delivery effectiveness and efficiency. The proposed EDPL2 is designed to support deepening institutional reforms and scaling up the program to tackle core cross-cutting issues. The MEN’s slow implementation of its PUEN resulted in considerable delays in completing most of the triggers originally agreed for EDPL2, thus, the two operations have been delinked and the Bank team has prepared an ICR for the EDPL1 in February 2013. Although the EDPL1 and EDPL2 operations no longer form a programmatic series for administrative purposes, the Government and the Bank wish to maintain the spirit of the series and the EDPL2 prior actions are in large part consistent with the triggers that were agreed for this second operation at the time the EDPL1 was approved. 81. The proposed operation’s development objective is to strengthen the schools sector’s institutional arrangements in the short term, in ways that in the medium term will: (i) increase access to school education, especially for rural girls and boys at the lower secondary level; (ii) improve the quality of teaching and learning in primary and lower secondary education; and (iii) enhance efficiency in decentralized governance of the schools sector. 82. The EDPL2 prior actions (which are summarized in Box 1 below) and results indicators are set out in the Policy Matrix provided in Annex 2. (The EDPL1 prior actions are also listed in Annex 2, for reference.) Box 1. Prior Actions for the Second Education Development Policy Loan The Government has agreed upon and implemented the following prior actions before the presentation of the Loan to the World Bank Executive Board: • Prior Action EDPL2.1: The MEN has developed new criteria for locating primary schools and
colleges, with priority given to rural and semi-urban areas, and has instructed each AREF to adopt
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and apply these criteria; • Prior Action EDPL2.2: The MEN has developed and adopted on November 26, 2012, a social
support action plan for 2012/2013 consolidating and integrating social programs including school supplies, canteen/hostels, transport and conditional cash transfer program;
• Prior Action EDPL2.3: Each of five AREFs has established its Regional Assessment and Testing Center, and carried out its regional student learning assessment activities;
• Prior Action EDPL2.4: The MEN, in compliance with the provisions of Decree No. 2.11.672 dated December 23, 2011, signed by the Prime Minister and published in the Official Gazette of February 2, 2012, has established fifteen (15) Regional Teacher Training Centers covering the sixteen (16) regions of the Borrower, and has developed and adopted competency guidelines for pre-service teacher education (pre-school/primary, lower secondary, and upper secondary education);
• Prior Action EDPL2.5: The MEN has developed and adopted a mechanism for rationalizing human resource allocation in the schools sector (covering teacher redeployment, mobility and retention);
• Prior Action EDPL2.6: The Minister of Education has issued Orders (Arrêtés) No. 113.13 and 114.13 dated January 2, 2013 transferring to AREFs the responsibility for human resource management decisions not subject to the MEF’s prior review;
• Prior Action EDPL2.7: The MEN has evaluated the results of, and has drawn lessons from, the first years of implementation of school charters and their funding, on the basis of a representative sample of schools;
• Prior Action EDPL2.8: Each AREF has established its internal audit unit in compliance with Letter No. 12-663 dated May 31, 2012, from the Minister of Education, and has approved the audit unit’s work plan for 2013 in compliance with Letter No. 2-5405 dated December 27, 2012, from the Minister of Education.
83. The proposed operation provides budget and technical support for the refinement and implementation of the national education sector reform program, and was developed in close coordination with the Government to ensure full ownership of the processes, actions and outcomes. The Government and the Bank recognize that under Government leadership, the Bank can play a critical role in bringing sector knowledge and experience, strengthening cross-sectoral policy dialogue between various government entities (especially linking sector development outcomes to the country’s overall economic framework), and ensuring sustained commitment toward effective reform of the sector. Box 2. Good Practice Principles on Conditionality
Principle 1: Reinforce ownership.
The design of this operation has been fully client driven and thus enjoys solid country ownership. The Government embarked on a comprehensive reform of the education and training system, with the promulgation of the 1999 National Education and Training Charter (CNEF). The CNEF, developed with strong national consensus, receives strong support from the donor community, but the implementation of the reform program has encountered delays. In 2008, an Education Emergency Program (PUEN) was drawn up to accelerate this reform process. The proposed operation supports the Government in the implementation of this strategy. Principle 2: Agree up front with the Government and other financial partners on a coordinated
accountability framework. The proposed operation is prepared in parallel with four other donors’ operations. The AFD, the AfDB, the EIB, the EU and the World Bank worked actively with the Government on the design of coordinated policy matrices and a common set of performance indicators. AECID and JICA joined the
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consortium after the PUEN was launched and have joined the shared accountability framework. Donor alignment on the reform program objectives was also achieved through joint missions, informal consultations and regular updates by staff of respective institutions.
Principle 3: Customize the accountability framework and modalities of Bank support to country
circumstances.
By design, the program fully reflects country’s circumstances, priorities and institutional responsibilities as indicated by the Government. For the more complex policy reforms, the donor consortium is providing technical assistance to carry out the necessary underpinning analytic work. The proposed operation has also benefited from the lessons learned from the previous education operations and other DPL operations in Morocco, and benefits from the flexibility embedded in the CPS. Principle 4: Choose only actions critical for achieving results as conditions for disbursement. Prior actions have been identified through a process of extensive consultations with the MEN, the MEF, and with the other members of the donor consortium. The jointly agreed policy matrix uses a limited set of prior actions across the selected policy areas and is aligned with good practice principles. The prior actions are focused on steps considered critical to achieving results on the ground and sequenced to support consistent progress towards program objectives. Principle 5: Conduct transparent progress reviews conducive to predictable and performance-based
financial support. Joint multi-donor progress reviews take place twice a year, timed so as to allow for a predictable review of progress and announcement of support levels at the beginning of the budget year. The results framework, which includes outcome indicators that are assessed as part of operation implementation and mid-term review, is closely linked to the Government’s own PUEN results measurement system.
V.B. Policy areas
84. The proposed operation’s prior actions, organized under three main policy areas – (I) achieve universal basic education; (II) improve system performance (teaching, management and stewardship); and (III) mobilize and utilize resources – are outlined below and then detailed in the Program Policy Matrix (Annex 2). These critical actions respond to crucial strategic issues such as the impact of poverty on schooling (through both supply-side and demand-side actions that target rural and semi-urban areas), low quality of student achievement (through both national surveys and regional structures), poor teacher efficiency and accountability (through teacher education and human resource management), weak implementation capacity at the decentralized level (through region-level initiatives, including financial management improvement in AREFs) and lack of "voice" for stakeholders (through improved school-parent structures).
V.B.1. Policy Area 1: Achieve universal basic education 85. Description. The Government aims to achieve compulsory basic education by rationalizing the use of physical capacities and enhancing measures for greater equity in school access and retention. 86. Challenge. Despite major advances in expanding access to primary and lower secondary education, a 20-point gap still exists between urban and rural areas for both girls and boys at the lower secondary level, and drop-out rates remain (see Annex 3). Overall,
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some 80 percent of students complete the full six years of primary schooling, while some 60 percent complete the nine years of primary and lower secondary schooling combined (see Annex 3). Barriers to ongoing schooling include physical access (e.g., distance from school), socio-economic status (e.g., direct and indirect costs of schooling), low quality of service provision (e.g., teacher absenteeism, poor teaching quality) and cultural attitudes (e.g., concerns over safety of children attending school). 87. Government measures. In order to address issues of access and retention, the MEN has identified a range of supply-side and demand-side measures. On the supply side, the MEN continues with an ambitious school construction program and has defined new criteria for the selection of sites to build and implant new schools, involving local administrations in the decision-making process and giving priority to level of demand for schooling (especially in rural and semi-urban areas), integration within a network of infrastructure and appropriate environmental considerations. Teacher deployment has become more efficient in recent years, with a greater proportion of teachers delivering their full teaching load (see Prior Action EDPL2.5 under Policy Area II). On the demand side, the MEN is moving to consolidate and integrate a series of interventions -including school transport, school feeding programs, student accommodation, provision of learning materials and a conditional cash transfer program for school attendance – in ways that better target needy students and their families. The low quality of student learning is being addressed through participation in international student achievement surveys, a national student achievement assessment tool, and the establishment of regional structures to monitor teaching and learning quality.
88. EDPL2 prior actions. The prior actions under the EDPL2 “universal basic education” policy area are as follows:
• EDPL2.1. The MEN has developed new criteria38 for locating primary schools and colleges, with priority given to rural and semi-urban areas, and has instructed39 each AREF to adopt and apply these criteria. Where demand for new school capacity outstrips available financial resources, the rationing mechanism needs to ensure that decisions on infrastructure investment in general, and location of new schools in particular, are taken at the local level on the basis of objective and transparent criteria that correspond to the Government’s stated aim of narrowing the gap in enrollments between urban and rural/semi-urban areas.
• EDPL2.2. The MEN has developed and adopted on November 26, 2012, a social support action plan for 2012/2013 consolidating and integrating social programs including school supplies, canteen/hostels, transport and conditional cash transfer program. At present, the provision of support is managed on a component-by-component basis (boarding facilities, school feeding programs, school transport facilities, and a conditional cash transfer program), rather than in an integrated manner that uses the commune as the unit of planning. By developing a global approach, the MEN will be able to develop methodologies for determining the optimal mix of support for a given commune. Improvements are also being pursued within the different programs, with household-targeting for the conditional cash transfer program and encouragement of local public-private partnerships in the area of school transport.
38 “Évaluation et mise à jour des critères des établissements scolaires (primaires, écoles communautaires, collèges et lycées)” (October 2010). 39 Letters No. 3/1311 through 3/1326 dated December 16, 2010 and signed by the Director of Strategy, Statistics and Planning.
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• EDPL2.3. Each of five AREFs has established its Regional Assessment and Testing Center, and carried out its regional student learning assessment activities.40 Even as the MEN develops its capacity at a national level to assess student learning as a tool for decision-makers at all levels, it is critical that the country also have the capacity to carry out assessment activities at the regional level. Regional-level activities, involving AREFs, will: (i) support implementation of national assessment activities at the local level; (ii) carry out assessment activities corresponding to specific local needs (e.g., examine further factors of school performance highlighted in national surveys); and (iii) provide technical support to province-, commune- and school-level assessment activities.
89. Expected results. Under this policy area, it is expected that, by 2013/14: (i) all 65 schools (community schools and colleges) programmed for construction in that year will be assigned to rural areas; (ii) there will be two new social support methodologies developed since the application of the new social support action plan; and (iii) 14 Regional Assessment and Testing Centers will have been established and all of the centers will be producing an annual report. V.B.2. Policy Area 2: Improve system performance (teaching, management and stewardship) 90. Description. The Government aims to strengthen MEN staff competencies, especially those of teachers, with a view to improving the delivery of classroom-based education services. 91. Challenge. Morocco spends heavily on its school teaching force. At around 6 percent of GDP, Morocco’s public spending on school education is at the high end of the range for countries with comparable national income; moreover, Morocco’s per-student spending is also high among comparable countries: 17 percent of per capita GDP for primary education and 40 percent for secondary education. Recurrent expenditures account for 86 percent of the national school education budget and staff salaries take up 84 percent of the recurrent expenditures.41 In 2011/12, nine out of every ten staff working in the public schools sector were teachers.42 On the positive side, teacher deployment has become more efficient in recent years, with a greater proportion of teachers delivering their full teaching load and an average and a student-teacher ratio that has risen to reasonable levels (28 in primary, 24 in lower secondary and 20 in upper secondary education). Student learning, as measured by international standardized benchmarks, maintained a low level of quality over the last decade against a backdrop of significant increases in access. That said, significant spending on teachers, combined with weak results in the classroom, makes teacher management, teacher professional development and teacher accountability key priorities for Government action. 92. Government measures. The MEN is addressing teacher-related issues through a series of measures. With a medium-term goal of having teachers recruited and managed at a regional level and therefore making AREFs rather than the MEN teachers’ employers, the MEN has moved to optimize teacher redeployment by favoring mobility within local–provincial and regional–zones; the MEN is also progressively transferring human resource
40 “Amélioration du système d’évaluation et de certification - réalisations et contraintes” (November 2012). 41 Expenditure information drawn from World Bank’s School Education Public Expenditure Review (2013). 42 In comparison: teachers made up 81 percent of the staff working in the private school sector.
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management functions to AREFs, starting with those that require little or no MEF oversight and ending with those that require major MEF oversight. In the area of teacher professional development, a major step has been taken to strengthen pre-service teacher training: pre-service training for all teachers – pre-school/primary, lower secondary and upper secondary – is now structured into a three-year undergraduate qualification and a follow-up year in one of the newly created Regional Teacher Training Centers (CRMEF). Training materials, including key competency guidelines for each level of teaching, have been prepared for use in these CRMEFs. In-service teacher training has unfortunately been scaled back, as the MEN looks for a mechanism, in association with teacher unions, that enables teachers to pursue their professional development without reducing their class-contact time. Finally, the MEN is also aiming to enhance teacher accountability through a “contracting” approach, but progress with teacher unions has been slow on this topic.
93. EDPL2 prior actions. The prior actions under the EDPL2 “system performance” policy area are:
• EDPL2.4. The MEN, in compliance with the provisions of Decree No. 2.11.672 dated December 23, 2011, signed by the Prime Minister and published in the Official Gazette of February 2, 2012, has established fifteen (15) Regional Teacher Training Centers covering the sixteen (16) regions of the Borrower, and has developed and adopted competency guidelines43 for pre-service teacher education (pre-school/primary, lower secondary, and upper secondary education). The MEN aims to improve the quality of new teachers by establishing a new pre-service teacher training system (university degree plus professional qualification). The guidelines describe the competencies that all new teachers must master as they graduate from this two-stage training system.
• EDPL2.5. The MEN has developed and adopted a mechanism44 for rationalizing human resource allocation in the schools sector (covering teacher redeployment, mobility and retention). At present, there are a multitude of transactions that occur in the area of human resource allocation at the national, regional and provincial levels, which makes for an inefficient distribution of teachers and administrators across the schools sector. The MEN has put in place systems and procedures to streamline redeployment – both in enabling mobility and encouraging retention as required by local circumstances – particularly with a view to increasing AREFs’ authority in this domain. Although they have improved efficiency in administrative processing, these systems and procedures have, from 2008/09 to 2011/12, had little effect on equity of teacher deployment between urban and rural areas: (i) whereas the urban-rural gap in student-teacher ratios remained unchanged at the primary level (31 in urban schools and 25 in rural schools), the positions have reversed at the lower secondary level (from 24 to 25 in urban schools and from 25 to 24 in rural schools); (ii) the ratio of male to female teachers did not change at the primary level (0.6 in urban schools and 1.9 in rural schools) or in urban lower secondary schools (1.4), but became less balanced in rural lower secondary schools (from 1.8 to 2.2).
• EDPL2.6. The Minister of Education has issued Orders (Arrêtés) No. 113.13 and 114.13 dated January 2, 2013 transferring to AREFs the responsibility for human resource management decisions not subject to the MEF’s prior review. As a further
43 “Guidelines and Calendar for Teacher Training” (September 2012); original title in Arabic: “مرجعيات التأھيل و رزنامة تدبير زمن التكوين” 44 Ministerial Letters No. 12-708 and 12-709 dated June 6, 2012.
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step in devolving human resource management, AREFs will be able to take decisions that have hitherto been taken only at the central level, provided that those decisions are not subject to MEF’s prior review. At a later stage, it is envisaged that even the decisions that are subject to MEF’s prior review will be handed on to AREFs.
• EDPL2.7. The MEN has evaluated the results of, and has drawn lessons from, the first years of implementation of school charters and their funding, on the basis of a representative sample of schools.45 Having encouraged schools to adopt their own charters and having provided for a transfer of a discretionary budget directly to school associations to fund charter actions, the MEN has carried out, with the support of the Canadian International Development Agency, a review of this new approach. The review primarily finds that the first school charters often focused on improving physical infrastructure – a library or a sports field – and recommends that the support provided through the Canadian project encourages schools to organize the second-generation charters around activities that improve learning outcomes over the medium-term.
94. Expected results. Under this policy area, it is expected that, from 2010/11 to 2013/14: (i) the number of students enrolled in Regional Teacher Training Centers will have increased from 7,864 to 8,000; (ii) the number of Regional Teacher Training Center graduates assigned to teaching positions will have increased from 5,517 to 8,000; (iii) the ratio of the urban female-male teacher ratio to the rural female-male teacher ratio will have progressed from 3.0 to 1.6 in primary education and from 2.9 to 1.5 in lower secondary education; (iv) the ratio of the urban student-teacher ratio to the rural student-teacher ratio will have progressed from 1.2 to 1.0 in primary education and from 1.2 to 1.0 in lower secondary education; (v) the proportion of resource management decisions taken by AREFs will have increased to 50 percent; and (vi) revised guidelines for school charter development and funding use, based on recommendations of the EDPL2.7 evaluation, will have been sent to all schools. V.B.3. Policy Area 3: Mobilize and utilize resources 95. Description. The Government aims to mobilize and better use resources through a strategy that involves working both with central government partners as well as with school communities and private sector partners. 96. Challenge. The execution of the PUEN required sizeable financing – about MAD 34 billion (US$4.1 billion) over a four-year period (2009-12) – which represents a significant increase of public sector financing over the implementation period. As public funding follows the trend towards decentralized management, it becomes increasingly important that the decentralized entities have the systems, tools and qualified personnel in place to oversee the use of these resources. AREFs’ capacity in management in general, and financial management in particular, is currently weak.
97. Government measures. The MEN identified a series of saving and efficiency measures, whose implementation would contribute to greater sustainability in the long run. These include the reduction of repetition rates, the introduction of multi-subject teachers in lower secondary education, teacher deployment and utilization measures, and contract-based
45 “Rapport sur l’état d’avancement de l’implantation de la Stratégie nationale du projet d’établissement et de la demarche Projet d’établissement” (October 2012).
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management. The MEN aims also to manage budgeting systems in a more effective manner, developing better planning tools and strengthening AREFs ability to plan and execute regional budgets. The Head of Government issued a circular applying the “Moroccan Good Governance Code for State-owned Enterprises and Public Corporations”46 to all public corporations including AREFs, with a view to enhancing performance, promoting transparency and ensuring public accountability. The establishment of internal audit units and the development of strong financial management information systems in all AREFs are measures that follow the same logic. 98. EDPL2 prior actions. The prior actions under the EDPL2 “resources” policy area are:
• EDPL2.8. Each AREF has established its internal audit unit in compliance with Letter No. 12-663 dated May 31, 2012, from the Minister of Education, and has approved the audit unit’s work plan for 2013 in compliance with Letter No. 2-5405 dated December 27, 2012, from the Minister of Education. Despite having been established a decade ago, the AREFs in general still have weak financial management systems. This weakness not only hampers day-to-day management of the schools sector at the regional level but also limits AREFs’ accountability to the MEN, to Government in general, and to the public at large. The establishment of an internal audit unit in each of the sixteen AREFs, with qualified staff and an annual work plan, is aimed to reinforce a culture of transparency and accountability.
99. Expected results. Under this policy area, it is expected that, by 2013/14, all of the regional internal audit units will have produced an annual report during the previous year. VI. OPERATION IMPLEMENTATION
VI.A. Poverty and social impact
100. The prior actions supported by the proposed operation are largely pro-poor and promote equity and inclusion. Prior Actions 2.1 (new criteria for locating schools) and 2.2 (adoption of a social support action plan) are specifically designed to increase participation and improve the school experience of children living in rural and semi-rural areas, who are disproportionately likely to be poor and currently out-of-school. Prior Actions 2.3 (establishment of Regional Assessment and Teaching Centers [CREE]), 2.4 (establishment of Regional Teacher Training Centers [CRMEF] with guidelines), 2.7 (evaluation of school charters and funding) and 2.8 (establishment of regional internal audit unit with work plans) are designed to improve the quality and efficiency of the teaching and learning process for all students, but could in fact disproportionately benefit poorer and poorer-performing students simply because of the emphasis on introducing nationwide standards in quality and efficiency. 101. While negative impacts are likely to be low, Prior Actions 2.5 (adoption of a mechanism for rationalizing human resource allocation) and 2.6 (transfer of human resource management decisions to AREFs) may generate some adverse social impact, inasmuch it will likely impact lifestyles of teachers and their families and perhaps generate resentment. Aware of the resistance, the MEN is approaching human resource management reform on an incremental basis, consulting and discussing with the teachers’ unions to arrive at a solid consensus over time. 46 « Code marocain de bonnes pratiques de gouvernance des entreprises et établissements publics »
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VI.B. Gender and inclusion
102. As noted above, while the enrollment gap between urban boys and rural girls at the primary education level narrowed to just 3.5 percentage points by 2012/13, the gap at higher levels of the education system remains large, with 53 percentage points still separating urban boys and rural girls at the lower secondary education level in 2012/13. At both primary and lower secondary levels, girls’ and boys’ completion rates are now almost identical. The first PNEA results show to small gender gaps in mathematics and science, but large gender gaps in favor of girls in Arabic and French. Given then that the main gender gap concerns access to secondary schooling for rural girls, the pro-poor measures mentioned above – Prior Actions 2.1 and 2.2 – include features, such as expanded school transport options and improved school canteen and hostel facilities, that are designed to provide safe facilities that encourage rural households to send their daughters to school. The MEN systematically collects and publishes school statistics broken down by gender and by urban/rural settings. VI.C. Environmental aspects
103. The proposed operation’s prior actions are not likely to have significant negative effects on the environment, forestry and other natural resources. It is noted in particular that the MEN’s school construction program lies outside the proposed operation. VI.D. Implementation, monitoring and evaluation
VI.D.1. Implementation
104. Under Government leadership, the MEN was assigned overall responsibility for PUEN implementation. Implementation was carried out under a matrix organizational structure with a “thematic” dimension and a “regional” dimension, ensuring coherence in the execution of the reforms. Central and regional steering committees were established, and these committees were mirrored by similar structures also at the provincial and school levels. The Central Steering Committee (CSC), chaired by the Minister, set overall PUEN objectives and priorities, reconciles decisions, finds solutions to issues and provides a report-back system for decision-making. The CSC comprised key members of the Minister’s Office, as well as the Director of Strategy, Statistics, Strategy and Planning and the Director of Budget. The CSC held regular meetings, sometimes including other central directors, the national coordinators and/or the AREF directors. Regional Steering Committees (RSC), led by the local AREF Director, guided the strategic direction of the Emergency Plan at the regional levels. Specifically, the RSCs defined the implementation path of the regional programs, validated the action plans and monitored their implementation. Finally, the MEN established a Project Management Office, operated and staffed by a consulting firm, to carry out the core project management functions at the central, regional and provincial levels.
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Figure 4: Government’s organizational chart for PUEN implementation
105. More generally, according to the law47 establishing the network of AREFs, each AREF is administered by a board comprising inter alia MEN representatives, the regional council chairperson, the regional governor, the provincial governors, local authority chairpersons, university rectors and representatives of teachers’ groups, parents’ groups and employers’ groups. The AREF board meets at least twice a year, and is charged with deciding on a work program and budget for the year ahead and presenting a report on the preceding year’s work program. The AREF itself is managed by a director, with responsibility at the regional level for developing education plans (including multi-year school construction plans), executing school construction activities, supervising teaching and evaluating learning in schools, carrying out devolved human resource management tasks (including the organization of teacher professional development activities), licensing private schools, and promoting relations with regional agencies with a view to improving education. VI.D.2. Monitoring and evaluation
106. The proposed operation supports the results-based management put forward by the Government’s PUEN and the draft PAMT. The implementation progress will be monitored based on a results framework which comprises the results/outcomes indicators highlighted in the policy matrix to measure progress regarding the three policy areas (see Annex 2), as well as a set of sectoral performance indicators that are shared by all TFPs and incorporated into their respective operations (see Annex 3). These indicators – net enrollment rates, completion rates, and learning assessment results – will be disaggregated for gender and urban/rural areas. These indicators will continue to be closely monitored during review missions.
47 Loi sur la création des Académies régionales d’éducation et de formation, en date du 19 mai 2000
responsible for Project 1 responsible for Project n
National Coordinator (Project 1) … … … National Coordinator (Project n) PMO Team
Regional Steering Committee
Regional Coordinator PMO Team
Regional Leader Regional Leader
responsible for Project 1 … … … responsible for Project n
Provincial Coordinator PMO Team
Provincial Leader Provincial Leader
responsible for Project 1 … … … responsible for Project n
School Principal School Principal School Principal School Principal
Thematic Leader
Teaching & Learning
Thematic Leader
Human Resources
Thematic Leader
Governance
Thematic Leader
Infrastructure
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VI.E. Fiduciary aspects
VI.E.1. Public Finance Management 107. In 2009, the World Bank and the EU carried out a joint Public Expenditure and Financial Accountability (PEFA) assessment. The PEFA report confirmed substantial progress in Public Finance Management (PFM) reforms in Morocco. The results based on the PEFA ratings indicate in particular that Morocco has an overall credible, comprehensive, and transparent budget. The PFM system also supports the achievement of aggregate fiscal discipline, strategic allocation of resources and efficient service delivery. The main strengths of the Moroccan PFM are the following aspects: (i) credible and transparent budget (since the Ministry of Finance [MEF] publishes the annual budget on its website in a timely fashion), (ii) transparency of taxpayer obligations and liabilities, (iii) timeliness and regularity of Government banks account reconciliation, (iv) accurate and timely in-year budget reports covering expenditures at both commitment and payment stages, and (v) strong cash and debt management. The main challenges of the Morocco PFM relate to: (a) the budget classification, since despite the level of detail, accuracy, and reliability, it does not yet allow for reliable direct tracking of program-related spending being financed under priority programs; (b) timeliness of annual statements which are submitted for external audit 15 months after the end of the fiscal year, (c) the limited extent of legislative scrutiny of external audit reports, and (d) the insufficient frequency, scope and follow-up of audits. The Government is committed to address these challenges and, in order to do so, has introduced measures to: (1) move to a performance based budgeting framework, (2) develop a medium-term expenditure framework (MTEF) to assist in fiscal sustainability, (3) modernize its accounting and internal audit framework, and (4) improve revenue management. In conclusion, the strength of Morocco’s PFM system and the Government’s commitment to reform, taken together, are, in the Bank’s view, adequate to support the proposed operation. VI.E.2. Sector Finance Management 108. The World Bank joined other TFP to monitor the PUEN’s fiduciary aspects even though this is not a requirement of the Bank’s DPL arrangements. As a public administration entity, the MEN is subject to an ex ante review of commitments and a review of payments in line with the regulations in force. These reviews are carried out by the central Treasury Department via the ministerial treasury unit. The MEN may in addition be reviewed ex post by the Office of the Auditor-General and/or reviewed under the jurisdiction of the Court of Audit. Likewise, AREFs, as public administrative corporations, are subject to financial reviews conducted by the MEF’s Department of State-Owned Enterprises and Privatization. The MEF appoints State comptrollers and paymasters responsible for the reviews provided for in Law No. 69-00 on State Financial Review of State-Owned Enterprises and Other Entities. While some progress has been made in improving AREFs’ existing fiduciary management capacity during the past years, some weaknesses remain and require further strengthening. 109. A mid-term external technical audit of the PUEN highlighted weaknesses in program accounting and administrative procedures, as well as in internal control and the procurement of works and schooling equipment. These internal control deficiencies could negatively impact program delivery and weaken program accountability. As a response to the audit findings and recommendations, the MEN prepared an action plan to improve the reliability of financial and accounting data and further strengthen the capacity of regional staff in
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procurement and financial management. For each action, a responsible party has been identified. The main actions include: (i) preparing an operations manual for each unit including job descriptions, (ii) establishing an internal audit unit in each AREF (an action supported by this DPL), (iii) setting up an accounting information system, (iv) enhancing the archiving system, and (v) improving staff knowledge of procurement procedures. Moreover, the MEN has published a list of 44 companies which could be excluded from the PUEN due to their non-compliance with their contracts terms. 110. The Government and TFP have agreed that a second audit of the PUEN will be carried out after its completion. The purpose of this audit will be to ensure that the expenses made by the centralized and decentralized services are compliant with public financial management procedures and guarantee quality in the works and equipment provided. The audit will also follow up on the action plan prepared after the mid-term audit and the actions implemented to satisfy the recommendations highlighted. VI.E.3. Foreign exchange 111. Although the IMF has not conducted a safeguard assessment of the BAM, the latter is audited on a yearly basis with the audit report being disclosed publicly. The World Bank has received the 2009, 2010 and 2011 audits, which were unqualified, but, despite a formal request sent to the BAM Governor on March 5, 2012 with respect to DPL operations, the World Bank has not had access to the associated management letters and has therefore limited information on the foreign exchange control environment. Therefore, as with recently negotiated DPLs, a dedicated account will be used. VI.E.4. Disbursement and audit 112. With reference to the flow of funds, the proposed loan will follow the World Bank’s disbursement procedures for development policy lending. Once the loan becomes effective, the proceeds of the loan will be disbursed in a single installment. Specifically, disbursements will be made, provided that the World Bank is satisfied with the program being carried out by the Borrower, and with the appropriateness of the Borrower's macroeconomic policy framework. The account into which the loan proceeds will be deposited forms part of the country's official foreign exchange reserves. Flow of funds (including foreign currency exchange) is subject to standard public financial management processes. The government budget is comprehensive, unified and subject to centralized treasury account. 113. The loan proceeds will be deposited by the International Bank of Reconstruction and Development (IBRD) in a dedicated account opened for this DPL by the Borrower and acceptable to the World Bank at the BAM, upon submission of a signed withdrawal application. 114. The Borrower should ensure that upon the deposit of loan proceeds into said account, an equivalent amount, in the local currency, is credited to the treasury current account at the central Treasury Department. The Borrower will report to the Bank within thirty days of disbursement on the amounts deposited in the dedicated account and credited to the budget management system providing the exchange rate applied and the date of the transfer. If the proceeds of the loan are used for ineligible purposes as defined in the Loan Agreement, IBRD will require the Borrower to promptly upon notice refund an amount equal to the amount of
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said payment to IBRD. Amounts refunded to the Bank upon such request shall be cancelled. The loan proceeds will be administered by the MEF. 115. IBRD reserves the right to ask for a transaction audit of the dedicated account. This audit, when asked for, will cover the accuracy of the transactions (credits and debits) of the dedicated account, including accuracy of exchange rate conversions, confirming that the dedicated account was used only for the purposes of the operation where no other amounts have been deposited into the account. Also the auditor would have to obtain confirmation from corresponding bank(s) involved in the funds flow regarding the transaction. The time period for submission of the audit report to the World Bank would be four months from the date a request for such audit is issued. VI.E.5. Procurement
116. The Public Procurement Decree (PPD), approved by the Cabinet on December 28, 2012 and due to become effective on September 1, 2013, addresses many of the weaknesses of the Moroccan procurement system that had been identified in recent assessments conducted by the Bank. These assessments of the Moroccan procurement system (Use of Country Procurement Systems in Bank-Supported Operations [UCS] in 2010 and Country Procurement Assessment Review [CPAR] in 2008), showed that the procedures, regulations and standards are broadly satisfactory despite the shortcomings in the systems that handle complaints, fraud and corruption. The PPD applies to public administration, local governments, State-owned enterprises and public corporations of administrative nature, including AREFs, was before its approval the subject of extensive consultation. In addition, a draft Procurement Board Decree was published on April 8, 2013 public consultation and comments. With this second decree, the Procurement Board, which has in its mandate the handling of complaints, would be renamed the National Commission for Public Procurement, its independence and decision-making power would be increased, and its management capacities would be strengthened with a view to it becoming more functional and efficient, and having the appropriate tools and skills to fulfill its mandate. Besides these reform initiatives, an in-depth dialogue is under way between the Bank and the Government on procurement reform. With the new decree becoming effective soon, there will be a need for its dissemination among AREFs and, more generally, capacity building efforts towards improving the performance of AREFs in procurement. VI.F. Risks and risk mitigation
117. Two major risks may endanger medium-term macroeconomic stability. The first risk, which is exogenous, is linked to a deterioration of the economic situations its main trading partners in Europe. Continuous sluggish external demand and higher prices of basic food and oil would add more stress to both the balance of payments and public finance. The second, endogenous, would emerge in case the government fails to implement its critical reform agenda starting in 2013 to consolidate public finance and enhance export potential, including tourism. Critical to maintaining macroeconomic stability are the subsidy, fiscal and pension reforms, along with improving business environment and competition to boost the level and efficiency of domestic and foreign investment and enhance economic productivity and diversification, all prerequisites to generate higher growth and more quality jobs.
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118. Implementation of key and sensitive reforms may not be continued under the PAMT
2013-2016. The proposed operation is clearly aligned with the Government’s priorities, so it is expected that the reforms it supports will be implemented as planned. That said, the transition has already resulted in a slowing down in pre-school education. The Bank team will continue to engage the Government in a close dialogue on these reforms, and to support decision making through technical assistance when important technical issues arise.
119. The reform program faces resistance from unions, including teacher resistance to the
efficiency measures and the move toward greater accountability. The Government will continue to engage in a broad dialogue with teacher unions and teachers, with a view to creating a buy-in to the reform program through participation and decision-making.
120. Attainment of the ambitious objectives of the Government’s program may be
constrained unless sufficient resources are made available. Education has been a national priority for successive government and this level of political commitment is expected to continue.
121. Implementation of the governmental program may be constrained by the capacity of
decentralized agencies. The MEN is making considerable efforts to strengthen the capacity of its management systems.
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ANNEX 1: LETTER OF DEVELOPMENT POLICY
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Note de Politique Sectorielle de !'Education 2013-2016 :
• Deuxieme Pret de politique de developpement de !'education (PPDE2-BM)
• Basic Education Sector Support Project (BESSP-JICA)
Mesure PPDE2.5 : Elaboration d'un dispositif d'optimisation des ressources humaines
pour l'enseignement scolaire qui traite du redeploiement, de Ia mobilite et de Ia stabilite;
Mesure PPDE2.6 : Transfert aux AREF les actes de gestion des ressources humaines non
soumis au controle de regula rite effectue par le ministere de l'economie et des finances;
Mesure PPDE2.7: Evaluation quantitative et qualitative de Ia mise en ceuvre du dispositif
de projet d'etablissement et de son f inancement;
• Mesure PPDE2.8 : Mise en place des cellules d'audit interne au niveau des 16 AREF
fonctionnant sur Ia base de leurs programmes d'intervention .
I
Le Ministre de !'Education Natiyle
MPtiii~~UAFA
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(Unofficial translation of French original.)
Kingdom of Morocco
Ministry of Education
Education Sector Policy Note 2013-2016
• Second Education Development Policy Loan (EDLP2-WB) • Basic Education Sector Support Project (BESSP-JICA)
Rabat, April 5, 2013
1. General Context The Emergency Education Program (PUEN), at its mid-term and after its completion, was evaluated with the aim of consolidating positive impacts and determining the priority actions that require improvement. In this regard, in addition to the periodic evaluations conducted in the context of joint missions of the donors and the Office of the Auditor-General, mention should be made of two
important evaluations that have now been completed: (i) the mid-term technical audit of the PUEN, responsibility for which was assigned to an external firm with the final report being submitted to the technical and financial partners at end-August 2012; and (ii) the evaluation done by the Office of the Inspector-General of the Ministry of Education, the findings of which were presented at the June-July 2012 AREF Board meeting and to the education commission of the Moroccan Parliament on Tuesday, July 24, 2012. Main Conclusions of These Different Evaluations
� Progress: � Clear progress with the level of coverage largely in terms of: (i) developing educational services for the three grade levels—primary, lower secondary, and upper secondary. More than 800 schools (all grade levels) were established between 2007 and 2008 and 2011 and 2012 with (i) the implementation of the new concept of community-based schools in rural areas ; (ii) the upgrading of existing schools (rehabilitation, repair of equipment, and connection to potable water/electricity networks); and (iii) the establishment of a global and integrated support structure program built around four components (the “one million schoolbags” royal initiative, the direct financial assistance program, school cafeterias, boarding facilities, and school transport), which have made it possible to provide comprehensive services to students from rural areas and disadvantaged urban and semi-rural zones. � A steady improvement in education and grade completion indicators, and the first ever reduction in school dropout rates, particularly at the primary level, which is now on track to achieving universal status. Steady progress with these indicators for the lower secondary and upper secondary levels, both in global terms and for girls from rural areas, despite the fact that the situation with respect to these two levels and in this category remains unsatisfactory, notwithstanding all the work done in the PUEN context.
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� Qualitative improvements in the basic training system. A series of legal and organizational measures have been adopted and have facilitated the establishment, beginning in the 2012-2013 school year, of regional education and training centers for teachers. This initiative was supported by a new system for providing basic training to teachers for the pre-school level and the primary, lower secondary, and upper secondary levels. � The institutional and financial areas of the governance system have also improved, as evidenced by (i) the application of the project-based approach to PUEN implementation and capacity building of central, regional, and provincial teams; (ii) the resumption of regular meetings of AREF Boards ; (iii) the negotiation and allocation of budgetary resources to AREFs using a results-based approach, via medium-term regional and provincial action plans; (iv) the establishment of internal audit units within the AREFs; and (v) the start of the process of establishing a general accounting system and budget information system in AREFs. � Gaining a full understanding of the school mapping planning process, as well as making projections, based on an integrated approach involving the planning entities, human resources, social support, construction, and information systems. The progress made in optimizing the school mapping cycle and human resource mobility should be emphasized. This has resulted in a clear improvement in optimization ratios and the equitable deployment of human resources in AREFs and provincial education offices. � Challenges still to be addressed: Despite this progress, difficulties persist and
considerable work must be done during the 2013-2016 period. � Significant challenges in achieving universal education and resolving retention and dropout issues (i) in the case of a small group of children at the primary level (it is difficult to serve them effectively and efficiently owing to their specific situation); (ii) school-age children between the ages of 12 and 17 and in particular girls in rural areas where sociocultural issues have proven too complex and difficult to tackle by the Ministry of Education only. � Pre-school education, despite the achievements of the PUEN, in particular in the area of integrated classrooms in public primary schools, is facing a number of problems linked to the policy to be adopted for its development and application. � Difficulties focusing efforts and resources on pedagogical priorities, the expected benefits of which are largely in the area of better quality instruction for students, notwithstanding the importance of building and upgrading new facilities and providing social support. � Difficulties in the pedagogical sphere related to (i) improving the effectiveness and efficiency of continuing education with a focus on quality; and (ii) grade repetition and establishment of an effective mechanism for monitoring individual students and synchronizing this mechanism with the pedagogical support mechanism for students. � Need for ongoing improvement of the capacity and skills of pedagogical, administrative, and management staff. � Need to complete the contracting process with the AREFs and the provincial bodies in a coherent framework based on the advanced regionalization approach being adopted. Using this approach to evaluation, the Ministry recently drafted and validated its Education
Action Plan 2013-2016 (PAMT). Against this backdrop, this sector policy note seeks to set forth the general outline of this plan. From a methodological standpoint, three guiding principles have been used in its
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preparation based on PUEN experience and lessons learned during its 2009-2012 implementation period: � Continuity, by building on the gains of the Emergency Program and drawing on lessons learned, problems encountered, and challenges that are still to be addressed. Continuity also with the project-approach adopted, relations among the teams responsible for implementing the different PUEN projects, and development of the skills and experience of senior staff and managers in the Ministry of Education at the central, regional, and provincial levels. � Prioritization aimed at focusing the efforts of the Ministry and budget and human resources on the priorities identified, based on tangible and verifiable facts and observations. In view of the complexity of the problems, the sheer size of the education system, and the diverse mix of internal and external actors and their expectations, some of the lessons learned from the PUEN are that it is best not to work on too many projects at the same time and that it is truly beneficial, in the medium and long term, for the Ministry to prioritize objectives and focus key priorities on a policy plan. These priorities are linked to the needs of and shortages in schools, the monitoring and improvement of learning outcomes, and continuing and basic training for teachers using an effective and efficient approach that tangibly enhances the quality of instruction. Consistency, by fostering greater convergence between implemented activities and targeted impacts in terms of schools and vis-à-vis local actors. Improved coordination and convergence between the central and regional levels with local entities and schools is the main problem that needs to be successfully tackled. The mechanisms for involvement and dialogue with local actors and the benefits derived from the budgetary resources allocated to them require review and optimization.
2. Priority Actions / PAMT 2013-2016 These actions were guided, first and foremost, by the royal directives of His Majesty King Mohamed VI that were outlined in his speech of August 20, 2012 delivered on the occasion of the anniversary of the Revolution of the King and the People. The Ministry’s priority actions also draw on the policies set forth in the Government’s 2012-2016 program, which has made education and training the predominant sector by according it a central role in the country’s development. For this reason, it is a top priority in the Government’s social program, which has an education component that is based on a guiding principle, which seeks to restore confidence in public schools, and on three strategic
areas: � Area No. 1: Positioning of schools as an integral component of the focus on the education system by granting them effective decision-making authority and managerial autonomy, while equipping them with the resources and appropriate skills needed to fulfill their roles and responsibilities in the field of education. This will allow teaching and administrative staff to be engaged, mobilized, and accountable for outcomes; � Area No. 2: Governance of the education sector by mobilizing and optimizing human and physical resources, and by adopting a system of governance based on the principle of planning and precise programming, while implementing clear objectives and timelines for achievements, creating an evaluation-based culture, and introducing monitoring and management tools; � Area No. 3: Development of the roles and responsibilities of the nation’s schools by reviewing the quality of the curricula and learning approaches, teaching practices, and the
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ways in which schools are organized and operated, and by adopting a comprehensive approach based on a series of learner-focused activities. The Ministry’s priority actions, which are based on the King’s royal directives and the policies set forth in the Government’s 2012-2016 Plan, are as follows: � Action No. 1: Supporting enrollment efforts by according priority to equity and equal opportunity through the adoption of an approach aimed at reducing disparities, taking the specificities and expectations of the local populations into account, by paying particular attention to rural girls and special needs children, by targeting landlocked and remote areas, and by mitigating the effects of socioeconomic and geographical factors. � Action No. 2: Enhancing the quality of instruction by focusing on basic and continuing teacher training, the pedagogical approach to teaching and the student learning assessment system, and individual student monitoring in line with the pedagogical support provided to students. � Action No. 3: Developing governance of the education system, by enhancing the capacities, effectiveness, and efficiency of the system with respect to institutional, administrative, and financial management, as part of the effort to implement the advanced regionalization process. Special priority will be given to schools, specifically to developing their managerial autonomy, building their capacities, and boosting their levels of achievement (student outcomes/allocated resources). � Action No. 4: Ensuring the efficient management and optimization of human resources through the smooth execution of the process to transfer human resource management to the AREFs, as part of the effort to implement the advanced regionalization process, and through an effective skills and capacity-building policy for staff and managers. 3. Pillars of intervention/PAMT 2013-2016 In order to present the four priority actions, five pillars were established for the preparation of the Ministry’s PAMT for 2013-2016: Pillar No. 1: Access to education This pillar seeks to expand universal access to preschool education for the 4-5 year old cohort and to primary and lower secondary education for the 6-15 year old cohort on one hand, and broaden the upper secondary education base, on the other. Pillar No. 2: Quality of education This pillar aims to improve education quality, by implementing teaching approaches, revamping syllabi and education curricula, conducting assessments, establishing policies, and strengthening language teaching. Pillar No. 3: Schools A specific pillar has been assigned to schools, given their central role in the targeted development of the education system, as indicated in the Government’s program. This pillar seeks to tailor priority measures to regional, provincial, and local needs and specificities, expedite management procedures for schools, and define their responsibilities, with a view to resolving current problems facing the system at the local level and giving real flexibility to schools to address educational, administrative, financial, and social issues.
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Pillar No. 4: Governance This pillar is aimed at improving governance in the Ministry with a view to enhanced performance and efficiency in the optimization of financial resources and mastery of the institutional management mechanisms for the central government, regional academies, and provincial offices, as part of the process to implement advanced regionalization, as adopted by the new constitution. Pillar No. 5: Human resources Implementation of the reform is tied specifically to the effectiveness of human resources; to their performance, commitment, and buy-in to the education mission. This pillar seeks to implement a series of operational measures: � Development and implementation of a comprehensive human resource management strategy at the central, regional, provincial, and local levels, which will include, in particular, the methods for transferring human resource management to the AREFs; and � Completion of the introduction of the human resource management information system. 4. Context of support measures: World Bank - EDPL2/ JICA - BESSP/PAMT 2013-
2016
The Ministry’s policy regarding the implementation of partnership agreements with donors (TFPs) is clear. While confirming the importance that the Kingdom of Morocco attaches to international cooperation relations, it seeks to align all the support measures and initiatives with the Ministry’s strategy and the education sector’s priorities. Our immediate priority is to ensure that the mechanism for selecting support measures and monitoring and evaluating their implementation and progress in conjunction with the TFPs is implemented in a coherent and collective framework, using a single platform of monitoring indicators. Pending the launch and completion of the DUE-funded study being spearheaded by the Ministry’s departments, this study will facilitate assessment of all components of the technical and financial partners’ monitoring and evaluation mechanism and make appropriate recommendations. As the PUEN period has ended, the Ministry is currently participating in a series of ongoing discussions with the TFPs, with a view to hearing their opinions on ways to improve this mechanism and preparing subsequent platforms for sector support measures. In this regard, the Ministry’s departments completed the initial task of formulating support measures for the education sector with the World Bank and JICA between November 26 and 29, 2012. Discussions continued until December 14, 2012 in an effort to also finalize the “investment” component of the JICA support plan. The World Bank’s support plan, the EDPL2, includes eight measures to be financed in the form of budgetary support, while JICA’s plan, the Basic Education Sector Support Project,
has four measures to be financed in the form of budgetary assistance and the investment program, with the understanding that JICA has also committed to tracking the progress of the World Bank’s eight measures. It is important to point out that the content of the two support plans developed from the EDPL2 and the BESSP is truly in line with the approach adopted in the PAMT for 2013-
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2016, as the measures and program in both plans are geared toward the sector’s priorities and the current pressing challenges. The investment program proposed in JICA’s BESSP plan involves the financing and management of the construction of a group of rural lower secondary schools with boarding facilities. This program is a golden opportunity for the Kingdom of Morocco to expedite access to lower secondary schools in rural areas and make up for ground lost over the past two decades with respect to universal access to education for the 12-14 year old age group, despite significant progress made under the PUEN, and recognizing as well that Morocco is on track to achieve universal access to education for the 6-11 year old age group. It bears noting that the approach adopted by these lower secondary schools is based on a set of criteria aimed at ensuring that lower secondary schools will be established in rural communes that have critically low enrollment, dropout, and completion rates. JICA’s four budgetary support measures aim to support basic education in the area of quality of classroom instruction. Accordingly, the substance and spirit of these measures focus on the factors that assess this quality, while clarifying that this component is one of the challenges that remain following completion of the PUEN. The objectives of the measures are as follows: � JICA Measure No. 1: Strengthening and improvement of the individual student monitoring mechanisms and mastery of the system that synchronizes these mechanisms with efficient pedagogical support procedures. � JICA Measure No. 2: Effective implementation of the new “development plan” strategy and the new criteria grid for the approval, programming, execution, and monitoring and evaluation of development plans. Supporting this important process that is part of the Moroccan School Management Support Program (PAGESM) in partnership with the Canadian International Development Agency, is the training plan for the principals of the schools in the context of the development plans, which is also included in the indicators to be monitored. � JICA Measure No. 3: Development and formalization of organizational, pedagogical, and technical procedures for the operational establishment of Regional Teacher Training Centers (CRMEFs). The establishment of these centers is the culmination of the reform of basic training under the PUEN, a key component of the PAMT 2013-2016, which accords priority to improving student learning, in addition to the benefits that will be derived from these new regional centers in the context of the new mechanism for managing continuing education for teachers. � JICA Measure No. 4: Motivation of parents/community members to enroll and keep their children in school at the basic education level (primary and secondary). This measure is intended to boost the approach and activities in order to rally local actors around the issue of inclusive student enrollment at the primary level, and in particular at the lower secondary level, recognizing that the challenges are more formidable in rural and semi-rural communities living in a harsh socioeconomic environment. The World Bank’s eight budgetary support measures provide financial and technical support for the achievement and realization of the objectives of the five pillars of the Ministry’s new PAMT 2013-2016. These five pillars are (i) access to education: this will be ensured through the two measures relating to the effective and optimal location of schools (EDPL2.1) and management of the implementation of the social support program (EDPL2.2); (ii) the quality of education through two measures: management of the evaluation activities (EDPL2.3) and the implementation of the new reference guide for basic training (EDPL2.4);
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(iii) schools, through the measure relating to the evaluation of the development plan mechanism (analyses/lessons learned and methods for improvements) (EDPL2.7); (iv) governance through the measure to establish internal audit units within the AREFs, with rigorous monitoring with respect to regulation of adopted profiles, work schedules, and monitoring of their responsibilities (EDPL2.8); (v) human resources through two measures: the development of the mechanism for optimizing the mobility and development of human resources (EDPL2.5) and gradual implementation of the decentralization policy by initiating the transfer of human resource management to the AREFs (EDPL2.6). The objectives of the eight measures are as follows: � EDPL2.1: Introduction of new criteria for the establishment of primary and lower secondary schools, according priority to rural and semi-rural areas. � EDPL2.2: Implementation of a comprehensive action plan that provides for the consolidation and integration of social support programs – the “one million schoolbags” royal initiative, boarding facilities/cafeteria, school transport, and cash transfers conditional on regular school attendance. � EDPL2.3: Execution of student learning assessments at the regional level, in collaboration with the AREFs. � EDPL2.4: Implementation of the basic training reference guide for teachers (preschool/primary, lower secondary, upper secondary). � EDPL2.5: Development of a mechanism for optimizing the redeployment, mobility, and stability of educational human resources. � EDPL2.6: Transfer to the AREFs of human resource management functions not subject to regular oversight by the Ministry of Economy and Finance. � EDPL2.7: Quantitative and qualitative assessment of the implementation of the development plan mechanism and its financing. � EDPL2.8: Establishment of internal audit units, together with their work schedules, in the 16 AREFs.
[SIGNED] Minister of Education Mohammed LOUAFA
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ANNEX 2: SECOND EDUCATION DEVELOPMENT POLICY LOAN POLICY MATRIX
Objective EDPL1 Action
(for reference only) EDPL2 Action Result Indicator
48 Result Values
POLICY AREA 1: ACHIEVE UNIVERSAL BASIC EDUCATION
Rationalize expansion of primary and lower secondary education supply [E1.P2]49
EDPL2.1: The MEN has developed new criteria for locating primary schools and colleges, with priority given to rural and semi-urban areas, and has instructed each AREF to adopt and apply these criteria.
Ratio of new rural schools to new urban schools planned in the previous year
Baseline (2010/11):50 Rural 2 (2 schools and no colleges) / Urban 101 (78 schools and 23 colleges) Target (2013/14): Rural 65 (25 community schools and 40 colleges) / Urban 0
Ensure equitable access to primary and lower secondary education [E1.P4]
EDPL1.1: MEN increases boarding scholarship to 1,260 MAD per student per quarter and extends the duration of the scholarship to cover the full school year.
EDPL2.2: The MEN has developed and adopted on November 26, 2012, a social support action plan for 2012/2013 consolidating and integrating social programs including school supplies, canteen/hostels, transport and conditional cash transfer program.
Number of new social support methodologies developed (cumulative)
Baseline (2010/11): 0 Target (2013/14): Two (2)
48 The result indicators refer to the proposed EDPL2 operation’s prior actions only. 49 Reference to MEN’s PUEN project code. 50 The baseline value refers to the number of new schools opened in the 2010/11 school year.
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Objective EDPL1 Action
(for reference only) EDPL2 Action Result Indicator Result Values
Strengthen national learning assessment [E1.P11]
EDPL1.2: CSE publishes on its website its analysis of results of first national student learning assessment survey,51 organized jointly by CSE and MEN under the National Learning Assessment Program.
EDPL2.3: Each of five AREFs has established its Regional Assessment and Testing Center, and carried out its regional student learning assessment activities.
[1] Number of Regional Assessment and Testing Centers established [2] Proportion of Regional Assessment and Testing Centers producing an annual report during the previous year on its assessment and testing activities
51 Assessment of students in Grades 4 and 6 in Arabic, French, mathematics and sciences, and of students in Grades 8 and 9 in Arabic, French, mathematics and sciences and physics/chemistry.
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Objective EDPL1 Action
(for reference only) EDPL2 Action Result Indicator Result Values
POLICY AREA 2: IMPROVE SYSTEM PERFORMANCE (TEACHING, MANAGEMENT AND STEWARDSHIP)
Modernize teachers’ pre-service training [E3.P1]
EDPL1.3: MEN receives authorization, pursuant to Royal Decree No. 1.09.100 dated June 29, 2009, to transfer teacher training colleges to universities, with a view to creating new university programs in pre-service teacher education.
EDPL2.4: The MEN, in compliance with the provisions of Decree No. 2.11.672 dated December 23, 2011, signed by the Prime Minister and published in the Official Gazette of February 2, 2012, has established fifteen (15) Regional Teacher Training Centers covering the sixteen (16) regions of the Borrower, and has developed and adopted competency guidelines for pre-service teacher education (pre-school/primary, lower secondary, and upper secondary education).
[1] Number of students enrolled in Regional Teacher Training Centers [2] Number of Regional Teacher Training Center graduates assigned to teaching positions
(for reference only) EDPL2 Action Result Indicator Result Values
Modernize human resource management [E3.P3]
EDPL1.4: MEN adopts strategic human resource management action plan 2009-2012.
EDPL2.5: The MEN has developed and adopted a mechanism for rationalizing human resource allocation in the schools sector (covering teacher redeployment, mobility and retention).
[1] Ratio of the urban female-male teacher ratio to the rural female-male teacher ratio (primary & lower secondary) [2] Ratio of the urban student-teacher ratio to the rural student-teacher ratio (primary & lower secondary)
EDPL2.6: The Minister of Education has issued Orders (Arrêtés) No. 113.13 and 114.13 dated January 2, 2013 transferring to AREFs the responsibility for human resource management decisions not subject to the MEF’s prior review.
Proportion of human resource management decisions taken by AREFs
Baseline (2010/11): 0% Target (2013/14): 50%
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Objective EDPL1 Action
(for reference only) EDPL2 Action Result Indicator Result Values
Strengthen results-based management [E3.P4]
EDPL1.5: Each AREF develops and adopts a program-contract with MEN for period 2009-2012. EDPL1.6: Government, through AREFs, provides for a discretionary budget for primary schools’ and colleges’ non-staff-related recurrent costs for school year 2009/10.
EDPL2.7: The MEN has evaluated the results of, and has drawn lessons from, the first years of implementation of school charters and their funding, on the basis of a representative sample of schools.
Revised guidelines for school charter development and funding use, based on recommendations of the evaluation of school charter implementation, sent to all schools
Baseline (2010/11): No Target (2013/14): Yes
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Objective EDPL1 Action
(for reference only) EDPL2 Action Result Indicator Result Values
POLICY AREA 3: MOBILIZE AND UTILIZE RESOURCES
Rationalize sustainable financial resources, through increased budget transparency [E4.P1]
EDPL1.7: MEN develops Medium-Term Expenditure Framework (MTEF) for schools sector for period 2010-2012. EDPL1.8: Each AREF Board adopts its 2010 budget before January 31, 2010.
EDPL2.8: Each AREF has established its internal audit unit in compliance with Letter No. 12-663 dated May 31, 2012, from the Minister of Education, and has approved the audit unit’s work plan for 2013 in compliance with Letter No. 2-5405 dated December 27, 2012, from the Minister of Education.
Proportion of regional internal audit units producing an annual report during the previous year
Baseline (2010/11): 0% Target (2013/14): 100%
Mobilize and engage full range of school partners through targeted partnership agreements [E4.P2]
EDPL1.9: MEN issues ministerial decision No. 134 dated September 23, 2009, setting out charter on relations between schools and their parents association EDPL1.0: MEN publishes on its website its Education Emergency Program 2009-2012 for the reform of the education and training sector
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ANNEX 3: GOVERNMENT’S EDUCATION EMERGENCY PROGRAM (PUEN) PROGRESS INDICATORS
Scores TIMSS (2007 & 2011) & PIRLS (2006 & 2011) (2006/2007) (2011) Math Grade 4: % reaching intermediate52 benchmark 9% 9% Science Grade 4: % reaching intermediate53 benchmark 9% 6% Reading Grade 4: % reaching intermediate54 benchmark 9% 7% Net enrollment rate (all) 90.5% 93.9% 96.4% 96.6% 98.2% Net enrollment rate: female-male ratio 96.8% 97.5% 97.9% 98.6% 99.4% Net enrollment rate: rural-urban ratio (male+female) 100.1% 99.1% 96.5% 96.7% 96.9% Net enrollment rate: rural-urban ratio (male) 102.7% 100.4% 97.0% 96.5% 95.8% Net enrollment rate: rural-urban ratio (female) 97.4% 97.7% 95.8% 97.0% 98.2% Net enrollment rate (male urban) 90.8% 94.9% 98.8% 98.9% 100.5% Net enrollment rate (male rural) 93.2% 95.2% 95.8% 95.5% 96.4% Net enrollment rate (male urban+rural) 92.0% 95.1% 97.4% 97.3% 98.6% Net enrollment rate (female urban) 90.2% 93.7% 97.3% 97.3% 98.8% Net enrollment rate (female rural) 87.9% 91.5% 93.2% 94.4% 97.0% Net enrollment rate (female urban+rural) 89.1% 92.7% 95.4% 96.0% 98.0% Net enrollment rate (male+female urban) 90.5% 94.3% 98.0% 98.1% 99.6% Net enrollment rate (male+female rural) 90.6% 93.4% 94.6% 94.9% 96.6% Net enrollment rate (all) 90.5% 93.9% 96.4% 96.6% 98.2%
52 Students can apply [grade-relevant] basic mathematical knowledge in straightforward situations: demonstrate an understanding of whole numbers, extend simple numeric and geometric patterns, read and interpret different interpretations of the same data, show familiarity with a range of two-dimensional shapes. 53 Students can apply [grade-relevant] basic knowledge and understanding to practical situations in the sciences. 54 Students can (in literary texts) understand plots at a literal level and make some inferences and connections across the text; students can (in informational texts) use text organizers, e.g. headings, illustrations, to find information beyond the initial parts of the texts and provide two pieces of information in answering a question.
Scores TIMSS (200756 & 2011) (2007) (2011) Math Grade 8: % reaching intermediate57 benchmark 13% 12% Science Grade 8: % reaching intermediate58 benchmark 18% 13% Net enrollment rate (all) 42.7% 48.0% 51.0% 53.9% 56.4% Net enrollment rate: female-male ratio 98.7% 97.2% 96.9% 96.6% 96.3% Net enrollment rate: rural-urban ratio (male+female) 31.8% 32.6% 33.6% 35.6% 37.5% Net enrollment rate: rural -urban ratio (male) 37.4% 38.4% 39.1% 41.1% 43.3% Net enrollment rate: rural -urban ratio (female) 26.3% 26.8% 28.0% 30.0% 31.9% Net enrollment rate (male urban) 62.1% 69.4% 73.2% 76.1% 78.9% Net enrollment rate (male rural) 23.2% 36.7% 28.6% 31.1% 34.0% Net enrollment rate (male urban+rural) 43.0% 48.0% 51.8% 54.8% 57.8% Net enrollment rate (female urban) 65.9% 72.7% 76.2% 78.7% 81.3% Net enrollment rate (female rural) 17.3% 19.5% 21.3% 23.6% 25.9% Net enrollment rate (female urban+rural) 42.4% 47.3% 50.2% 52.9% 55.6% Net enrollment rate (male+female urban) 64.0% 71.1% 74.7% 77.4% 80.1% Net enrollment rate (male+female rural) 20.3% 23.2% 25.1% 27.5% 30.0% Net enrollment rate (all) 42.7% 48.0% 51.0% 53.9% 56.7%
56 In TIMSS 2007, at the Grade 8 level, Morocco did not satisfy guidelines for sample participation rates. 57 Students can apply [grade-relevant] basic mathematical knowledge in straightforward situations: add and multiply to solve one-step word problems involving whole numbers and decimals, work with familiar fractions, understand simple algebraic relationships, read and interpret graphs and tables, recognize basic notions of likelihood. 58 Students can recognize and communicate [grade-relevant] basic scientific knowledge across a range of topics.
and poverty reduction. These favorable developments have helped Morocco cushion the impact
of the international crisis and respond to pressing social needs. In the context of political
transitions in many countries in the region and high social demands, a new constitution was
adopted in July 2011 in order to pave the way for broad-ranging political changes and reforms,
including strengthened roles for the head of government and Parliament. Morocco’s positive
record helped it qualify last August for a 24-month arrangement under the Precautionary and
Liquidity Line (PLL), which aims to provide insurance against external shocks. More recently,
this performance has been challenged by a deteriorating external environment and, in 2012,
poor rainfall. Growth is expected to slow in 2012 to 3.2 percent, largely due to a lower-than-
average cereal crop, but nonagricultural GDP growth is projected to remain robust at around 4.5
percent. Headline inflation has remained subdued at 1.6 percent (year-on-year) in November
2012, despite significant increases in the prices of several subsidized energy products in June,
as part of the government’s effort to contain the fiscal cost of subsidies. Core inflation (excluding
food and transport) was close to zero due to the large negative contribution of lower
60 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.
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communication tariffs. Despite relatively strong growth, unemployment has remained around 9
percent since 2010.
The fiscal deficit should decline to about 6 percent of GDP in 2012, thanks to a combination of
measures notably the increase in some energy-administered prices in June and the control
of nonessential spending. Delays in the adoption of the 2012 budget and in disbursement of
external grants resulted in lower-than-projected investment. This, in turn, helped offset the
subsidy bill that reached about 6.2 percent of GDP. The 2013 budget envisions a further
reduction of the deficit by 1.4 percent point of GDP to 4.7 percent of GDP. For the medium term,
the authorities aim at a deficit below 3 percent of GDP.
The current account deficit is expected to increase to 8.8 percent of GDP in 2012 as import
growth, pushed by energy-related imports, outpaced slow export growth. Tourism receipts and
remittances are projected to fall slightly relative to 2011, reflecting the deterioration in the
European economy. While gross international reserves (GIR) fell steadily in 2011 and most of
2012, they stabilized at around four months of imports in the last quarter. The issuance of a
US$1.5 billion sovereign bond at favorable terms in late 2012 provided additional support in this
regard.
Monetary conditions have remained broadly supportive. Lower international reserves had a
substantial restrictive impact on bank liquidity, contributing to slowing credit growth to 7 percent
in 2012. To help fill the liquidity shortage, the central bank stepped up its liquidity injection,
including by extending eligible collateral for its repo. The policy interest rate was cut by
0.25 percentage point to 3 percent in March 2012 and has remained unchanged since then. In
September 2012, it also cut its reserve requirements for banks by 2 percentage points to 4
percent.
Morocco’s social indicators have improved over the past decade. Higher economic growth,
lower unemployment, better health and educational outcomes, better access to basic
infrastructure, and a marked reduction in poverty rates are tangible evidence of the progress
made in fostering inclusive growth. However, unemployment remains high particularly among
the youth. The authorities’ reform agenda includes measures to boost potential growth, tackle
inequalities in the distribution of income and access to health care, particularly across regions
as well as reduce unemployment.
Executive Board Assessment
Executive Directors commended the authorities for their overall sound macroeconomic policies,
which, over the past decade, have helped deliver solid growth, low inflation, and poverty
reduction despite continued high youth unemployment. This strong performance has been
challenged recently by external and domestic shocks in a context of pressing social demands.
Directors agreed that the authorities’ program of fiscal consolidation, prudent monetary and
financial policies, and structural reforms to boost competitiveness and inclusive growth and
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rebuild shock buffers is appropriate to deal with these challenges. They emphasized that the
outlook hinges on the timely and sustained implementation of the reform agenda.
Directors welcomed the fiscal consolidation envisioned in the 2013 budget and beyond to help
maintain external and fiscal sustainability, while emphasizing that consolidation should be as
growth-friendly as possible. They welcomed the steps being taken toward reforming the subsidy
system, and called on the authorities to move ahead resolutely in this area to aid medium-term
fiscal adjustment and better assist the most vulnerable groups of the population. Directors also
stressed the importance of moving ahead with pension reform to ensure the system’s viability.
They encouraged a careful approach to fiscal decentralization so as not to increase fiscal risks.
They welcomed plans to lower the ratio of the government wage bill to GDP and accelerate tax
reforms. Directors concurred that clear communications and high-quality social dialogue will be
key to successful implementation of the fiscal reform agenda.
Directors considered the current monetary policy stance to be appropriate. They encouraged
the authorities to move toward greater exchange rate flexibility to enhance external
competitiveness and the economy’s ability to absorb shocks, in coordination with other
macroeconomic and structural policies.
Directors called for stepped-up efforts to foster higher and more inclusive growth, including by
boosting youth employment and reducing inequalities in income and in access to health care
and education. They underscored the importance of structural reforms to enhance external
competitiveness and diversify the export base. They welcomed planned reforms to improve the
business climate and promote small and medium-sized enterprises, both crucial to accelerate
private-sector-led growth.
Directors noted that the financial sector remains sound overall. They commended the
authorities’ efforts to further strengthen financial regulation and supervision, particularly in light
of increasing international exposure of Moroccan banks. In this regard, they welcomed the
authorities’ interest in an Financial Sector Assessment Program update. Directors encouraged
the authorities to strengthen legislation against money laundering and terrorism financing, and
to intensify reforms to promote financial development and deepening.
Directors agreed that Morocco continues to meet the qualification criteria for a Precautionary
and Liquidity Line (PLL) arrangement. They noted that the arrangement provides useful
insurance against exogenous shocks and that the program supported by the PLL is on track.
Directors welcomed the authorities’ intention to continue to treat the PLL as precautionary.
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
Sources: Moroccan authorities; and IMF staff estimates.
1/ Includes changes in the balance of other special treasury accounts.
2/ Includes credit to public enterprises.
3/ Most recent data for 2012.
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ANNEX 5.1: MACROECONOMIC DEVELOPMENTS OVER THE LAST DECADE
61 Budget figures do not include privatization receipts.
Morocco made significant economic headways during the last decade. Growth pattern shifted to a higher level, averaging 4.9 percent over 2001-2011, much higher than the average rate of the 1990s (2.8 percent). Inflation was subdued, recording less than 2 percent on average over the period. The growth and inflation performance allowed gross domestic product (GDP) per capita to almost double over the last decade to reach the equivalent of US$3,100 in 2011. The unemployment rate declined from 12.3 percent in 2000 to 8.9 percent in 2011. Absolute poverty decreased from 15.3 percent to roughly 9 percent between 2001 and 2007. Based on these achievements, Morocco gained “investment grade” rating in 2007, which was confirmed over 2009-2011 despite ongoing world economic turmoil. These achievements were in part the result of sound macroeconomic policies. The steady consolidation of public finance turned fiscal deficits61 into surpluses in 2007 and 2008 (averaging 0.3 percent of GDP). The fiscal deficits widened to 2.2 percent of GDP in 2009 and 4.7 percent of GDP in 2010 but remained manageable. The Treasury total debt steadily declined from 68 percent of GDP in 2000 to 50.3 percent of GDP in 2010. Monetary policy sought to keep inflation under check while managing both liquidity and the exchange rate in an effective manner. In addition to timely adjustments of its money policy rate and reserve requirement rate, the Central Bank (BAM) implemented an adequate mix of its other instruments, including foreign exchange swaps, issuance or buyback of debt securities, and the purchase or sale of securities in the secondary market.
Morocco’s economic improvement was also due to the implementation of ambitious structural reforms. During the last decade, Morocco liberalized a number of sectors, including transport, energy, and telecommunications. The financial sector was strengthened in support of the new dynamism of the nonagricultural sector. Ambitious sector-specific strategies were implemented to increase investment and employment opportunities. Gross investment, which used to hover around 25 percent of GDP on average in the 1990s, picked up in the 2000s to reach 38 percent of GDP in 2008 (Figure 1). Morocco also sought to deepen its integration into the world economy through the signing of many free-trade agreements culminating with the “Advanced Status” awarded by the EU in 2008. FDI inflows increased to reach an average of 4.4 percent of GDP over 2006-11, thus contributing to the expansion of the country’s stock of capital.
Notwithstanding those economic achievements, Morocco remains confronted with important human and social challenges. Morocco’s social and human development outcomes are still below expectations. Economic vulnerability (poor and vulnerable) remains widespread, meaning that a quarter of the population–around 8 million people–is either in absolute poverty or under constant threat of falling back into poverty. The partial closure of the rural-urban income gap has not cancelled disparities: 70 percent of poverty in Morocco is still rural and in 2007 the urban poverty rate was 4.8 percent compared to 14.5 percent in rural areas. Income of the poor has been growing at a slower rate than the average income. There has been a remarkable increase in access to education, but overall illiteracy rates and gender disparity in access to secondary education remain high. Both education quality and learning outcomes lag behind those of other countries with similar income levels. Even with progress in increasing overall life expectancy and reducing average infant mortality rate, levels of infant and maternal mortality remain high, and lag MDG targets.
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Morocco’s ongoing human and social challenges reflect the slow structural transformation of the economy. To be sure, Morocco’s production structure has gradually shifted toward services with both primary and secondary sectors’ shares in GDP declining over time. However, while the increased service orientation of the economy is emulating trends observed throughout the world, the weak performance of the manufacturing sector stems from the relatively slow modernization of the industrial sector, which also explains the performance of Moroccan exports. The latter continue to be concentrated around relatively undiversified, low knowledge, low value-added, traditional products. As a result, Morocco has not fully reaped the benefits from the market access opportunities and trade dynamics of its trading partners. Exports have been kept below potential and their contribution to growth and employment has yet to be unleashed. Morocco’s slow structural transformation seems to be less due to the lack of investment than the low return on investment. Investment in Morocco appears to be less productive than in other emerging economies. Public investments are concentrated in relatively low-productivity projects or in projects that need time to fully mature. Indeed, a large share of public investments made in recent years has been directed to the tourism sector, phosphate related industries, energy, and infrastructure projects (highways, ports, airports, small dams, free trade zones, etc.). Investments in those sectors require time to be operational at full capacity and thus profitable. The government has launched analytical efforts to investigate the issue and propose remedies. Figure A. Rising investment, in percent of GDP
Of which contribution from real interest rate 1.0 -0.3 1.7 2.0 2.2 1.7 1.2 1.1 1.0 0.9 1.0 0.9 Of which contribution from real GDP growth -1.5 -2.7 -2.1 -1.6 -2.4 -1.4 -2.5 -2.6 -2.7 -3.0 -2.9 -2.9
in billions of U.S. dollars 12.2 14.0 18.4 23.3 22.0 19.1 18.5 18.5 18.1 18.5 19.1 19.1 Key Macroeconomic and Fiscal Assumptions Real GDP growth (in percent) 2.7 5.6 4.8 3.6 5.0 2.7 4.5 4.7 5.0 5.5 5.7 5.9 Average nominal interest rate on public debt (in percent) 6/ 5.8 5.5 5.3 5.1 4.7 4.6 4.6 4.4 4.3 4.1 4.0 3.8 Average real interest rate (nominal rate minus change in GDP deflator, in percent) 1.9 -0.3 3.8 4.4 4.7 3.4 2.2 2.1 2.0 1.8 2.0 1.9 Nominal appreciation (increase in US dollar value of local currency, in percent) 9.6 -4.8 3.0 -5.9 -2.6 -5.9 -2.3 -0.4 -0.3 -0.2 -0.2 -0.2 Inflation rate (GDP deflator, in percent) 3.9 5.9 1.5 0.6 0.1 1.2 2.4 2.4 2.3 2.3 2.0 2.0 Growth of real primary spending (deflated by GDP deflator, in percent) 3.9 16.7 0.8 12.2 15.7 5.2 -1.8 2.6 3.0 3.5 5.4 5.9 Primary deficit -3.3 -3.1 -0.2 2.4 4.6 5.2 3.0 2.1 1.5 0.9 0.9 0.9
II. Stress Tests for Public Debt Ratio A. Alternative Scenarios A1. Key variables are at their historical averages in 2012-2019 7/ 58.8 57.5 56.2 55.0 53.9 52.9 52.4 A2. No policy change (constant primary balance) in 2012-2019 58.8 61.7 63.6 65.4 66.7 68.1 69.8
B. Bound Tests B1. Real interest rate is at baseline plus one standard deviations 58.8 59.9 60.0 59.3 57.7 56.2 55.1 B2. Real GDP growth is at baseline minus one-half standard deviation 58.8 60.1 60.5 60.4 59.6 59.0 59.1 B3. Primary balance is at baseline minus one-half standard deviation 58.8 60.6 61.4 61.4 60.5 59.6 59.2 B4. Combination of B1-B3 using one-quarter standard deviation shocks 58.8 60.5 61.1 61.0 59.9 58.9 58.3 B5. One time 30 percent real depreciation in 2013 9/ 58.8 65.5 65.0 63.6 61.4 59.3 57.7 B6. 10 percent of GDP increase in other debt-creating flows in 2013 58.8 59.4 59.0 57.8 55.8 53.9 52.5
Source: Government of Morocco and staff calculation and estimate 1/ Indicate coverage of public sector, e.g., general government or nonfinancial public sector. Also whether net or gross debt is used. 2/ Derived as [(r - p(1+g) - g + ae(1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar). 3/ The real interest rate contribution is derived from the denominator in footnote 2/ as r - π (1+g) and the real growth contribution as -g. 4/ The exchange rate contribution is derived from the numerator in footnote 2/ as ae(1+r). 5/ Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period. 6/ Derived as nominal interest expenditure divided by previous period debt stock. 7/ The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP. 8/ The implied change in other key variables under this scenario is discussed in the text. 9/ Real depreciation is defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator). 10/ Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
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Table B: Morocco: External Financing requirements (in percent of GDP)
2012 2013 2014 2015 2016 2017
Financing Requirements 8.7 10.3 10.5 9.4 9.1 9.6
Current account deficit 9.6 8.4 7.1 6.0 5.6 5.2 Long term amortizations 2.5 2.4 2.4 2.3 2.4 2.9 Reserves Changes of Monetary Auth. -3.4 -0.4 1.1 1.1 1.2 1.4 Financing sources 8.7 10.3 10.5 9.4 9.1 9.6
Official capital grants 0.2 1.3 1.3 1.2 1.1 1.0 Private investment, (FDI+Portfolio) (net) 2.2 2.5 3.4 3.4 3.4 3.5 Long term Disbursements 6.6 6.6 5.9 5.0 4.6 5.1 Other capital flows -0.4 -0.1 -0.1 -0.1 -0.1 -0.1
79
ANNEX 5.3: COUNTRY AT A GLANCE
Morocco at a glance 3/14/13
M . East Lower
Key D evelo pment Indicato rs & North middle
M orocco Africa income
(2011)
Population, mid-year (millions) 32.3 331 2,519
Surface area (thousand sq. km) 447 8,775 23,579
Population growth (%) 1.1 1.7 1.5
Urban population (% of to tal population) 57 58 39
GNI (Atlas method, US$ billions) 95.8 1,283 4,078
GNI per capita (Atlas method, US$) 2,970 3,874 1,619
GNI per capita (PPP, international $) 4,600 8,068 3,632
GDP growth (%) 5.0 4.3 6.9
GDP per capita growth (%) 3.8 2.5 5.3
(mo st recent est imate , 2005–2011)
Poverty headcount ratio at $1.25 a day (PPP, %) 3 3 ..
Poverty headcount ratio at $2.00 a day (PPP, %) 14 14 ..
Life expectancy at birth (years) 73 72 65
Infant mortality (per 1,000 live births) 32 27 50
Child malnutrition (% o f children under 5) .. 8 25
Adult literacy, male (% o f ages 15 and o lder) 69 82 80
Adult literacy, female (% o f ages 15 and o lder) 44 66 62
Gross primary enro llment, male (% of age group) .. 106 110
Gross primary enro llment, female (% of age group) .. 98 104
Access to an improved water source (% of population) 96 89 87
Access to improved sanitation facilities (% of population) 51 88 47
N et A id F lo ws 1980 1990 2000 2011 a
(US$ millions)
Net ODA and o fficial aid 1,161 1,241 434 994
Top 3 donors (in 2010):
France 135 217 155 254
European Union Institutions 12 29 117 223
Japan 4 111 103 121
Aid (% o f GNI) 5.7 4.4 1.2 1.1
A id per capita (US$) 60 51 15 31
Lo ng-T erm Eco no mic T rends
Consumer prices (annual % change) 9.4 7.0 1.9 0.9
GDP implicit deflato r (annual % change) 15.2 7.8 -0.6 0.1
Exchange rate (annual average, local per US$) 3.9 8.2 10.6 8.1
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