Ekopat of

The World Bank

FOR OMCIAL USE ONLY

Repwt No. P-6405-E

MEMORANM AND RE NION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOr, RECONSTRUCTION AND DEVELOPMN

TO THE

ECUTIVE DIRECTORS

ON A

PROPOSED LOAN

IN TEE AMOUNT EQUIVALENT TO US$265 MILLION

TO

NACIONAL FINANCIERA, S.N.C.

WITH THE GUARANTEE OF

THE UNITED MEXICAN STATES

FOR A

TECHNICAL EDUCATION AND TRAINING MODERNIZATION PROJECT

OCTOBRM 5, 1994

MICROGRAPHICS

1bis document bas a restricted distribution anad teir frcial dies. its conts may not otlv Report No: P- 6405 ME

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CURRENCY EQUIVALENTS

Cunrency Unit = New Peso (N$)US$1.00 = 3.38 New Pes (August 1994)

FISCAL YEAR

January D- December 31

ACADEMIIC YEAR

September 1 - June 30

ACRONYMS AND ABBREVIATIONS

CEAs Accredited Testing Centers (Cenro de Eauacidn Acretado)CECATI Training Center for Industria Skills (Centm de CapaiacOin pam el Trabajo

Indwstial)CErl Center for Industral Technical Education (Centro de Eensefla Tnica hndtial)

CETIS Center for Technical Studies in Industry and Servces (Cewi de Estudos Tecnoldgicosdwusriales y de Servcdos)

CIMO Multiple Support Service Program to MSMEs (Programa de Calidad Integral yModenaci6n)

CONALEP National System for Vocational and Technical Education (Colegio Nacional deEduad6n Tdcnica Profesional)

Counci Council for Normalition and Certification of Competency Standards (Consejo deNonmaizain y Cerqwal6n de Competencias Lab7orales)

ICB Inteaional Competitive BiddingLCB Local Competitive Bidding

MSMFs Micro, Small, and Medium-sized EnuprisesNAFrA North Ameican Free Trade AgreementNAFIN National Finacing Company (Nacional Frnanciera, S.N.C.)

NVQ National Vocational QualificationsOCs Certification Agencies (Organsmo de Cerdyicacifn)PAU Project Administration Unit

IPROBECAT Labor Retaining Program (Progrnma de Becas de Capacitaci6n para Wqjadors)SEP Secreiat of Education (Secretarla de Aducadn Pdbwco)

SHCP Secetariat of Finance and Public Credit (Secretara de Hacienda y C o Publio)SMES Small and Medium-sized Enterprises

SNC National System of Competency Standards (Sistema Nomaizado de CopwencasLaborales)

SNET National System of Technical Education (Sistema Nadonal de Educacidn Tecnoldgica)STPS Secretari of Labor and Social Welfare (Secretarfa del Trabajo y Preivsn Socia)

FOR OFFICIAL USE ONLY

MEYICO

TE AINICL EDUCATION AND TRAING MODERNIZATION PROJECT

WAN AND PROJECT SUMRY

Blorro~wer Nacional Faclera, S.N.C. (NAFIN)

Guaanntor United Mexcan States

Executing Agencies Seeriat of Educain (SEP), Se iat of Labor and Socia -Weimre (STPS), and the Council for Normalization andCatfication of Competency Standards ("Council")

aWorkers seeldng tining and/or certfication of their skills;employers seeldng qualified employes

Amount US$265 million equivalent

Term Repayment in 15 years, including 5 years of grace at thestandard variable interest rate

g PlanLocal Foreig Total

-- Ss$ million-

overment of Mexico 118.3 0.0 118.3IRD 155.8 109.2 265.0Beneficiaries 28.7 0.0 28.7

TOTAL 1.2

Povety Catory Not applicable.

Program Objective The establishment of the compeency standards and certficationCategory system and modularization of tng courses wil have a

potntally positive impact on the poor, first by making theirparticipaion in the training easier through shorter and lesscosdy courses, ard second by providing them with means ofvalidating their skills acquired outside of the taininginsttions. Similarly, fte gender-blind naure of thecompetency standards and certfication sysem will alleviatebiases aganst women in selected technical occupatons

Economic Rate of Return Not Applcable

Staff Apprail Report Report No. 13416-ME; dated October 5, 1994

. document has a srcd distin-in and may bo se by recipient cly in hO a; of dirlofWdudebl Wtsontets may oto Weedicsed withot Word! -itodtih I>o

MEMORANDUM AND RECOMMENDATION OF THE PRES)ENT OF THE IERDITHEXEUTIVE DIRECTORS ON A PROPOSED LOAN

TO NACIONAL FINANC1ERA. S.N.CWITH THE GUARANTEE OF THE UNITED MEXICAN STATES

FOR -A TICNCAL EDUCATION AM TRAINING MODERNIZATION PROJECI

1. I submit for your approval tbe following memrnum and recmme aon n apposed loan to Nacional flmaciera, S.NC. (NAFIN) with the garante of the UnitedMexican Stas for the equivalet of US$265 milion to help finance a Technial Educationand Training Modenizan Project. The loan would be at the Bans ndrd wariableinterewt rate, with a mtuity of 15 years, inrluding five yearsof ge. NAFMIN would bethe Boor and the Sectats of Public Education (SEP) and Libo- and Social Were(SIPS) and the Council for Norzation and Certificaton of Competency Standards('Council) would be the ecting agecies.

2. Bwckgiomd. Mexico's success in stabiizing, ibealzing and privazing fteeconomy has set the stage for long-term econonic development. With the tatcation ofNAFTA, Meco will face accelatd cianges in the industry profiles and in the technololvels reqired to be i tionally competitive. To sustain private sector-led growth,Maico wil need an educated and slilled labor force that can resod to the rapidlychaging needs of the labor market. During the last decade, Mexico has made Subtantialadvances in the expansion of education and taining opportnities, epecially in the field oftechnical and vocational training. Achievements in this area include txpansion of the SNErsysm (Natioa System of Techil Education), the estblshment of CONALEP (NationSystem for Vocational and Technical Education) for mid-leve tminal skll traing, and theongoing PROBECAT progam (Labor Rtrining Program). The SNET system, whichincludes the publc t insstitutons such as CECATls and CETnS, trains some 500,000youths annually for mid-level, pre-service technical taining. CONALEP trais over 170,000new mid-levlc technicins and upgrdes the skills of over 60,000 workes annually. ThePROBEAT program has been reaining approximately 50,000 unemployed workrannually in the last five years. In addition, SI supports in-plant training of workersrough CIMO, a multiple upport service program to micro, smal and medium sized

enterrises, which has provided training for over 14,000 enterprises annually over the lastthree years.

3. Despite the progress made in recent years, however, technical traiing in Meco stilldoes not meet the inmediate and future needs of the rapidly changing productive sector. Thereasom e twofold. First, the poor quality of basic education is an impediment to theproductivity ices of the Medcan labor force. The Government's stategy is to increaseinvestments and recurrent budget resources in basic education to imprv its quaity,espeially in poor sates with u ioy educational indicators. To support theGovernment's effort i improving the quality of rimary educafion, the Bank has apovedtwo lons (First and Second Primary Education Projects, Ln. 3407-ME, 1991 and Ln. 3722-ME, 1994, respectively). Second, the technical education and trin system in Mxicosuffers from three man wakns: (a) Supply-Driven Programs. Most of the tiningoffered follows a rigid, academic model, rather than flexible, work-oriented curricla.Long, rigid courses limit access to skll upgrading for the majority of those alreadyemployed. Theoretcl subjects and skills prtie are generally not integed, reducing thereeance of the training courses. The suply-d n structureof fte progras does notrespond flexibly and rapidly to the changing needs of the labor market; (b) Uneven Quality.

-2-

There is very little stndardiztion of outputs of tranin institutions. The quality of trainingis known to vary greatly across insdtutions, but there is no objective, reliable measur withwhich to gauge the quality and effectivness of taining programs. Thus, a diploma orceicate provided by a training institution does not convey much usef infomation toemployers about an individual's skiUs. Nor do individuals have clear information about thequality of the raning received and its useuness in the labor market; and (c) InadequaePivate Sectr Much of the technical eductio and training, particulalypre-svice training, is conidered as an integral prt of the public educadon system, and thusis divorced from the wodd of work Policy measures md stategic incentives have beeninsufficient to induce m¢e acte partcipation of empl in worke tining, md heavily"subsdized public trainimg insdtutions ave crowded out private eor alternatives. As aconsequence, training progamsm are less relevant to the pivate sector acdvities, and financingof sklfls fmation is perceived as tlh7esponsibility of,individuals and the Go enmment ad.not as a responsibility of employers.

4. Goverment Stregy. In addition to the prionty that the Government places uponthe quality improvement of basic educaton, especwialy in poor states with low educatonalindicators, its sat for the productivity growth of its labor foe has been to expand theaccss to technial educaXton and training and, even more importantly, to increase the qualityof training progrms. The Government is placing increased emphasis on in-plant tainingand skils upading of the existing labor force, which would continue throughout woke'careers. The proposed proect reflects the Government's strong commitment to the quality

nmprovement of technical education and trauning through private sector participaton in thedesign and implementation of training programs, thus making the courses more relevant,responsive, flexible, and effecive. Following this strategy, the SEP, responsible forimplementing education policies in geeral and pre-sevice technical training in parcular,and the STPS, responsible for implementing policies related to employment, labor ma-eregulations, in-service training, retraining, and working conditions, have jointly prWosed thecurrent projecL

S. Prqlect Objectiv. The objective of the proposed project is to improve the quality ofthe technical education and truning in Mexico so that it meets the critical needs of theproductve sector in a flexible manner. More specifically, this objective will be achieved by:(a) providing a univesal measure (a new system of competency standards and certicatin)with which effectivees and quality of different training programs can be evaluated; (b)increasing the flxbiity and relevancy of the training system by redein g trainingprograms into modular courses based on the new standards; (c) promoting private sectorinitiative and ptcipation in training design and implementation, through the provision ofincen to entewpises and individuals for their participation in the pwposed tainingreform; and (d) establishing the necessary information systems and undertaing a program ofstudies to improve implementation of new training orientation.6. Project Desaiption. The project will consist of four components. The NationalSystem of Competency Stadards, Skldls Testing and Certification component(Component AN) (US$33.1 million, 8.0% of total costs including contingencies) willestablish national competency sandards defined by workers and employers for apprimately20 key occupational clust. Based on these new competency standards, a system of killstesting and cerfication will be established to serve as an objectve evaluation tool of bothworker kills and taing progams. The Council will be created through a tnust agreementto implement this component (para. 9). The Mion of Traning Pgamscomponent (rComponent B") (US$152.8 million, 37.1%) will help slected taiinng

3-

institutis, both public and prvae, redesig their training courses into modular courbased on the new competency standards, by providing for teaching materials development,intuctor rerining, and equipment updating during the mrst phase of the project(approximately 18 months), and by expading the support for development of tainingmaterials dung the second phase. The Stimulatuon of Dmad for Competency-BasedTrhand C tion compofent ("Componet C') (US$208.0 million, 50.5%) willpromote the benefits of the new system of competency standards and cetification to potentalusr of the system, and will povide financial incentives to argeted individuals and firms toparticpate in competen-based training. The component will also provide assistance forequipment purchase and insc traiing to ainng institutions through a cometiveprocess at the ational level during the second phase. The lnf atior Sytem, Studisand Project Administon component ("Component DI") (US$18.1 million, 4.4%) willsupor establishment of rtries of data peraining to the new taining and cerication-.system for monitring, evaluation, and as input into the mainsramig second phase of theproect. The component wi include a program of tdies to guide project design andevaluation. Proect administrion through a Steering Committee and a prodectAdministration Unit (PAM) wii SEP will also be suorted.

7. Prect Cost and Thaudng. The total project cost, including physical and pricecontigencies and taxes (esdmated at US$31.9 million and US$32.8 million, repectively), isesimated at US$412.0 milion equivalent, of which about US$109.2 million would be freignexchange. The proposed loan of US$265 million would finance 69.8 pecnt of total pr¢ectcosts excluding btxes. The loan would finance 100 percent of foreig exchange expendituresand 58.8 percent of local expenditures, net of taxes. Counterpart financing by theGovnment is expected to be tJS$118.3 miion and beneficiaries of the proect wouldcontribute with US$28.7 million. Retoactive finang of up to US$10 million equivalent(3.8% of the loan) would be provided to helo cover elgible start-up expenditures fortechnical assistnce, equipment, and acquisition of taining matials made on or after June28, 1994. A breakdown of costs and financing plan are shown in Schedule A. Amounts andmethods of procurement and disbursement and the disbursement schedule are shown inSchedule B. A timetable of key project prossing events and the status of Bank Groupopeatons in Mexico are given in Schedules C and D, respectively. Terms of referce forkey studies to be undertaken are attached as Annex 1, and a Suprvision Plan and details ofthe proect midu-term review are attached as Annex 2. The Staff Appraisa Report No.13416-ME, dated October 5, 1994 is also attached.

8. Project lio The proect wil be implemented jointly by the Counci,SEP, and STPS. Overall decision-making, coordination, and supevision of project activitieswil be carried out by the Steering Committee, which will be composed of high-rnkngrepesentives of SEP, STPS, SHCP (Secretariat of Finance and Public Credit), NAFIN,and the Council. The Council wiU implement Component A; SEP will be responsible forComponent B through the PAU; and STPS wil be responsible for Component C.Component D wivl be implemented by various actors in fte Counci;, SEP, and STPS. Otherinsttions and progams already active in the taining sector and under Bank-financedproects, ie., CONALEP, CEIIS, CECATI, CIMO, and PROBECAT, will also beresonible for implemenng prts of the project.

9. The Councfl will be cate in the form of afidcomiso, which is a trust fundestLabished by geement between a gantor (the Gavernment, trgh SHCP in this case)and a trustee (NAFIN). The arrangement ivolves the rnsferring of funds or goods by thegrntor to the trust and the adminion by the trustee of such funds or goods through a

-4-

Comltd Tdcco (th Councis Goveming Board) for the puro and in the manner specifiedin the trw agreement. T signing of the us agreemt, satisory to the Bank, eatingthe Council is a condition of loan effectiveness (pa. 14).

1O. The project is desged to draw in acdve participation of the private sector (bothemployers and employees) through: (a) membehip in the Council which estabLishes policy;(b) desig, teting, and implemenig of competey standards through industry g;p; and(c) opeaon of Certfication Agenci (Orgazsmo de CeI=facin, OCs) ad aedited

stg instiuons (Cemm de Ekihsaddn Acreitados, CEAs). Opinons on the system ofcoetncy s and prposed training programs have been sought from- associns ofemploys and chmbe of commerce and industry trughout prect prpaation, which -have formally eed their strong interest and commitment to parcipate in t pwosedrefom.

1i. The project wiMl be imented in two phases. During the first phase (approximiately18 months), compeency standards fo eight occupationa clusters will be developed. Thec ia Of selection fOr at sctr inClUde, lir ala, the size of the labor fore in the secwand readins of industy groups to participate in the modniaion. During tbis ft phase,approxity 60 modular couses will be desgnd, drawing upon existng competncystandards sch as the British Nationa Vocational Qualifications (VQ) system, and offeredon a pilot basis in CONALEP, CETIS, and CECATI. The start of the second phase(January 1997) will coincide with: (a) the compledon of competency standards for eightocuational cluster; (b) condusion of the pilot aining mon progams; (c)prelimiry results of a number of studies as wel as the final resuls of the C4MO andPROBECAT evaaions under the Labor Market and Productivity Enhance proect (La3542-M); and (d) an early mid-term review, conducted jointly with the Bank, to assess thedemand for the new standards and certification/training system and adjust, if necessary,project deign The prqect will then pass to the mainseaming phase, including: (a) fiurherdvelopment of competency standards; (b) insalaton of OCs and CEAs; (c) implemntatof the competency sndards database and cerifcation applicants regstry; (d) wide-dvelopment and funding of competency-based modular taining progrms; and (e) provisionof tanig and skills test incentives to targeted groups on a declining basis.

12. Lessons from Previous Bank Operations. The expence gained from the threeproects in tchnical and vocatonal taiing in Mexco (CONALEP I and II and ManpowerTining I, Las. 2043-ME, 2559-ME, and 2876-ME) completed in 1984, 1991 and 1992resectivey, the adanced stage of implemenation of CONA P Il (La. 3358-ME), and theprogress in implementing the Labor Market project have provided valuable lessons whichhave been inco d in the desig of the proposed project F1rst, taining progams havebeen effective when they are wel taigeted, e.g., to those wnth prior work expeienc andactvely seeking employment in the case of the unemployed. This project will prvidetaining and certification incentivcs to selected beneficiaries meeti strict criteia developedand tested under pror Bank-financed projects. Second, trining progams must beevaluated, with an adequat control group. Ihis project provides for a carefuly stuctredprgram of evaluations. hird, taning i Mexico suffers from a lack of standards bywhich to me the pedagogic outcomes, a problem directly addressed by te creation ofcompete standards, skils tesng and certification. Fourth, the positive expience inCONALEP and PROBECAT in prog vely ceasing the involvement of the privatesector in the deign and implem on o taining courses wil be expanded under tiproject And fifth, the trend towards more flexible in-service training under a modular

system, away from lengthy ngid and outdated pre-semvice programs (observable underCONALEP) will be gready facilitated by the reforms to be introduced under this proect.

13. lole for bank ivement. The proposed project is fully consistent with theBank's couny massistance strategy pesnted to the Board on June 9, 1994, which emphasizespety alle on, human resources development, and prive sector-led growth. Bysupporting the Govenment's effort to improve the quality and acesblt of teiaeducadon and training, and tD encourage private sector parcipation in taning, the proectwill contibute to the human reource deveopment and prodctivity increase of the Mexicatlabor fce, and cnequently to the cntinuation of the private sector-led growth. Theinvlvent of te Bank in the prposed project is also a logical follow-up to its prus

volvemnt in human reowurces development in Mexico. As a result of favorable epenceikth prvo Bank-finaced tecni tanng projects, the Mxcan Govmnt is

increasigy enging the Bank m its polcy and program development m the humanreources secto. Currently, the Bank supports Mexico's human reurces development fromseal diffet cets through CONALEP m, the First and Second Prmary Education andthe Initial Educato proect, and the Labr Market and Productivity Enhancement proect.In lght of the expience and knowledge gained in the sector through these proects, theBank has a sbng comparative advantage in supporting the Govenment's effort to make itstenical educato and tining system more flexible and responive to market needs throughthe proposed project There are no other major enal aid agencies involved in technicaleduction and training, except for the Inter-Amercan Development Banles support forenginering and science progams at the higher education leveL

14. Issues and Acos. Darf negoons, agreement was reached: (a) that theproposal for the oniat structure of the OCs will be provided to the Bank forcomment no later than June 30, 1995; (b) an the timetable and exet outpu of vaiousinformatin systm and studies; (c) on the terms of referece of the Stg Commitee andPAU; (d) that adequate budget allocations wil be made, including for 1995; (e) on thepiqject implentation plan, schedue, and monitoing indicators; and (f) on annual and mid-term reviews. As condos of loan effeciveness: (a) the trust agreement, sactoy tothe Bank, creating the Council will have been sned; and (b) the Steeing Committee willhave been esablished. As a condition of disbrsement for Counc enditures,

sati y key staff of the Couicil will have been appointed, and sifaictory rules andprocedures of the Council wil have been issued. As a condition of disbus t forcertain SEP expeni es, the PAU will have been established and the PAU Director andthree Coordina will have been appointed.

15. E romental Aspects. The project will have no adv enmental impact,and is classifed under Category C.

16. Program Objective Categories. The establishment of the SNC and certficationsystem and modularization of training courses will have a positive impact on the poor, firsby making their paricipation in the training eaier through shorter and less costly courses,and second by providing them with means of valdang teir skills acquired outside of thetrainig system. SimiLaly, while the project does not expicitly address the gender balanceof tranees, fte gender-blind natue of the competency standards and cetcation system wilalleviate bias aginst women in some of the technical occupations.

17. Project Beneft. Th, the quality and relean of training programs Will imprvbecue they will reldect the actual needs of compe detrmined by industries.Diparities between skils taught and skdlls needed will diminish, reducing the waste in

- 6-

human resource invemnt by the Govenment, industries, and workers themselves. About130 different waining modules are expected to be financed directdy through the project, whichwill be used in about 8,400 public and private training courses. Second, more flexible,-modular training progrms will increase the accessibilit;' of sll formation and upgrading to.a wide rage of people. This will benefit both employers and workers, enabling them to-afford more training, and thus increasing worker productivity. About 200,000 workes areexpectd to benefit from modular, inml tunig programs over the five-year lihf of theproect. Third, sks testng and certification will provide cleia signang and being ofworker skills. Both workers and employers will beneft from this, since job search andhirn processes become more efficient. Workers will also benefit from having better todlsfor their career planig, and emplayers benefit fiom having clearer measur with which toplan training of employees. Furthermore, a certcation system which does not depend ontaining insttion enrolment will proidde opportuities for skill validation for those whogained skldls through on-the-Job learnng, thus posibly leading to better jobs and higherincome (ap ly 160,000 people will receive support for their skills testing).Certification also faciliates mobiity of labor across different industries and geogrphicalareas, increasing the compeitiveness of the Mexican economy.

18. Project Risks. J1t, the prqect suffers from potential complexity, ivlving anumber of eecuting agencies. To mitigate this risk, the project provides for a high-levelStering Committee which will help resolve coordination problems. The project is alsodesigned with suffcidnly independent project components that can be implemented separyby the Council, SEP, and SPS, to avoid unnecessary coordination requirements. Second,the prvate sector may not demonstate sufficient interest, participation, and ownership of theproposed taining reform during the implementation despite their cunrent enthusiam. Thisrisk will be mitied through (a) establishing the Council as a mostly independent, priatesector-led ion, and (b) a promotion campaign and pilot training programs whichwould demonstate the effectiveness of competency-based training to employers andemployees alike. Furthermore, inputs from the industial sectors, unions, and trainingproviders have been and will be actvely sought to encourage their involvement in theprect Third, there may be poor understanding of the project by the intended benfciiesresting in initial restance to the project. Hower, the participaton of industry laboruions in estlishing competency standards would help create the right conditions forSuccessful project implemenion.

19. Rcmeation. I am stisfied that the proposed loan would comply with theArticles of Agreement of the Bank, and recommend that the Executive Directors approve it.

Lewis T. PrestonPresident

Washingfton, D.C.Octber 5, 1994

Attachments

-7- Sch- APage of 1

MEXICOTECHNICAL EDUCATION AND TRARNNG MODERNIZATON PROJECT

(uSS Million)

A. Natiol System of C Standar4SkMs Taft ad Certllcatlzo -

1. National System of Compet Stmdards . -10.3 0.3 10.6.2. Sm of Slls fg and Crficadon 20.5 0.0 20.5

B. Pr io M ofTraIhg hu}. Pilot Tlng Maimimtion Pwgams 70.6 41.1 111.72. loT!Nvm!9! of a'nix Materls 6.0 24.0 30.0

C Stmulation of Deamd for CoMNpetency-BasedTrang d Certialladon

1. Promoto Of SNC 5.9 0.5 6.42.PilotTest of£SNCinEnterprises 22.8 4.1 26.93. Twag and Cerification ncentves 98.9 12.5 111.4

m.uiDt and Insctr T 31.9 13.4 45.3

D. systems, Shmo& PoJect Au nt

1. i=wmadon Systems 1.5 1.6 3.12. Studies 6.3 2.2 8.53. Project Admioa. .5.7 0.0 5.7

TOTAL Base_m C4sts 280.4 99.7 380.1Physical Contingences 4.4 3.5 7.9Prce Continge 18.0 6.0 24.0

FINANCING PLAN

Lwa Foreip Total-~US$ miion-

Govenment of Melico 118.3 0.0 118.3IBRI) 155.8 109.2 265.0Beneficiaries ; 28.7- 0.0 28.7

TOrAL 302.8 109.2 412.0

- - ~- 8- .Schedule 8Page 1 of 3

MEXOCOT-ECHNCAL EDUCATION AND TRAINING MODERNIZATION PROJECV

PROCUP.MEIt METODS DY CATEGORY(USS million)

-y ~'l C- I Other TNOII.&D[ |TuTL

Goods ad Eqpmen 64.2 31.8 10.6' 0.3"" 106.9. . ...... (57.2) (28.6) (9.5) (95.3)

Traing Materials 10.9" - 34.33 - 45.2(S.3) (16.7) (22.0)

Pdnting and Reptoduction of Tainin 2.1 14.4 4.14 - 20.6Matals (1.3) (9.0) (2.6) (12.9)Consultans, Studies and Tedhmical - - 79.7& - 79.7AssIsace (59.8) (59.8)Scholarshi,Stipends and Inceives - - 118.9' - 118.9

(54.2) (54.2)Incremental Staff - - 25.24' - 25.2

(14.5) (14.5)rme Opeatng Cos .- - 1S. 5S

(6.3) (6.3)

TOTAL 77.3 46.6 289.4 0.3 412.0(63.8) (37.6) (163.6) (0.0) (6M5.0)

-- e in paunth ane tbe eedio amounts finaced by the Bankv Loa shpping - US$10.6 milon.a' For use of a Cusoms AgenLa Dhic Con _t - US$23.4 million, of which US$11.4 million finacd by thO Bank.v Diret Coacting.sr Consukantselvices.s' Does not Invwve pi arent.a' LIB US$10.9 mlion, of which USS5.3 million financed by the BDan' OCm = USS1.3 million, of which US$1.3 millin financed by the Dank

w OC -US$3.9 million. of which US$3.6 million financed by the Dank.

9'- Schdu gPa 2of3

MEXICOTECHNICAL EDUCATION AND TRAINNG MODERNIZATION PROJECT

WllEDRAWAIS OF TE PROCEEDS OF THE LOAN

:ategory" Em6 MhiaLeen A * of EApdu To Be mmedUS$ so"ih

1. Good and Bquip=s (othe than 95%tho ereoad under CdWateor

2,4,74 and 11-13. below)a. PartA 0.2

-= P -b t at 60.0I1. Paut C 28.5

2. T' iniag Maril, P.. tin. ..d 25.4 50%ReprductOn f Materask for

hMu A and 3 (other tha thoewcroerd by Cateormies 4.79, and11-13 be.ow)

3. Consulta Swrvice (other doan 100those wcavrd under Cateogri7,8 and 10 below)a.PutA andD. 1 3.5b. Pat Dand D. 34.5a. Pat C and D23 1.0

4. lMonmda Opratg CogsSa. Pat A 7.1 75% up to US3.7 nion; 50% up toUSS6.1 million

and 25% thdrlafterb. Part 8 and DA4 5.0 7S% up to UMS. nMilon; 50% up to US$4.0 mnlflon

and 25% thereafteC. Pust C 4.8 75% up to USS.4 miion;S 0% up toUS$4.0snliion

and 25% dthebreftS. Stipend 15.4 50% up to US$9.0 million; 25% tdeeafter6. Cesification Suppost (other han 9.0 90% upto US$3.8 mlon; 70% upto US$8.6 mllin;

tha aoerd und0 Ctegory 13) 50% thereat7. Tnng and Db.h1al Anme 155 60%

under Put C.28. Thining of 7M.M wutm ad 4.4 70%

Tbobawcal Assistance to thderBsunder hait C.3 with Less than 15auployces

9. TSnSing of MSMu wor.mG to 5.5 3S%boSMer under Put C.3 with wonethan 16 auployce

10. T1ch a Asianc Jt MSMBs 2.S 60%unde Paht C3 with moms than 16

anpbyees

I1. Thining under Part CA(a) 11.9 100%12. Pblc Acvities under Pan C. 6.2 100%13. Thiring of nstcto under Pat 7.2 100%

C.6) and cerification suppostfor 1nstrctors

14. .Uaatd 17.4 .1 . _ _ _ _ _ _ _

TOWal 265.01

Pam confspnd to the Project Pht descbd in Schdule 2 of t Lan AsreemeL

-10- Scbedule BPage 3 of 3

MEXICOTECHNICAL EDUCATION AND TRAINING MODERNIZATION PROJECT

E TE D ABE

=- . . 0 19RS~i 1' }96 19l9g7 1I t 2m Amal 22.Si 51.3 62.7 53.0 50.9 24.6Cumwv - -- -22.5 73.8 136.5 189.5 240.4 265.0

lMiuds initiu A Spoci Acowu-depoat US$12.0 mUigln. Reati 8 m einof qp to USSI.0 mio . wwu bopemied for eigible _pndbus %ud ine Ae 28, 1994.

- 11- Schedue C

MEXICOTECINICAL EDUCATION AND TRANiING MODERNIZ1ATION PROJECT

IMABI F KEO Y N tOJECT PROCESSING EVENTS

(a) lme taben to prepare : Nine months

(b) Prpared by : Secrtat of Educon (SEP)Secretria of Labor and Social Wfare (ST)

(c) Fi Bk mison : October 1993

(d) Appil mission departe June 1994

(e) Negoions Septmber 1994

(f) Pied date of effecetveness : March 1995

(g) list of relevant PCRs : Manpower Taining (Loan 2876-MB, Nov. 1993and PPARs CONALEP I (Lan 2042-ME), March 1988

CONALEP H (Loan 2559-ME), Dec. 1991

-12- Scbed'D -Page 1 of 3

MUICOTECHNICAL EDUCATION AND TRAIING MODERNIZAON !PROJ

STATUS OF BANK GROUP OPERATIONS IN MEXICOAs of August 30, 1994

Plecal ~~~~~~~~~~~Amoun in US$ million OQm esnefatlmOcemL. No. Yarew - Mn 'a UndAumd

109 bma di#dizatof which 3Ae "MA Ik3ruzLm , aa tga8uppoz

JLa 1929-MU 19 B"IIOnS Ra IV 149.88I 2331-MB 1983I DANCOM tM D _cpaa 34933

. 2882-M 198m ENCOMIC TUas Ndioy Laaa 500.00l. 2918-1 1988 NAIN iu ISeorWLO 300.00L. 3159-M 1990 BANCO IMW b t Suppoan 1,260.00La. 3W-M 1990 BANOBUAS ldTrnotn&TOm. 380.00La. 30374hM 1989 NAMAI bidw_ISeatorPdicy 497J1IL. 2745413 1987 BANCOM;e Ted. y Loan I 498.63ILa 3066 1989 NAPIN Publc Eutaep Refom 499.39LA. 27774M 1987 EANCOBT ExpWt Delope ll 246.37LA. 29194ME 1988 NAPI Feulir Sewr 240.20La. 3309-MB 1991 DANCOMEcr Ep Secwr 2S.0OIL. 33574M 1991 NAEN Aticsuha Seto Adj. U 400.00

Subtotal 534.31La. 2684MI 1986 NAVEN Ag_Deukal Dav. Prodet1 88.30 33.25La. 26694MB 1986 BANOBMAS Solid We2.00 1.97

La. 2824-ME 1987 BANO 1' Udan T_port 90.98 24.34Ia. 28S8-M 1987 NAPIN _letyv 100.00 4.06IA. 287SE t98? 11AllAS' H;s WM135.00 2.78L. 2916-M 1988 KAN Sel Se euRucu 321.01 54.76IA. 29464MB 198 MKOAS Purl R*uMtion 47.66 1.82La 3047-MB 1989 NAPE blussRenuaitn 250.00 29.04La. 3083-MB 1989 NAPEQlS HEleotaio kvmedalnm 460.00 85.10LI. 3085-MP49 1989 NANOCOMEtr Finrncia Sector Ahustmdeo 487.14 0.73AL 311S5I11 1990 MAVqN FrEkset Darelapama 45-30 29.49

La.3140-MI 1990 &4ANORAS Low4mnamouingUl 350.00 25.07La. 31414ME 1990 NAPIN ASdcufaltMd1Wartebg U 100.00 0.47La. 3189-MB I990 MAVEN Taunaisdn & DiXbau&mdo 450.00 104.80ILa 32043-W 1990 RANOBRAS TlecomoatL Tcbhald uitans . 22.00 2.OSLa. 32714MD 199Al BODAS Wur Supply a& siitatios 300.00 7.86La. 3272ME 1991 NAFIN BDas Rea Cu 180.00 77.811La 33104MB 1991 NAPE DeceaHizt & 'ilond DvEo* 350.00 52.86La. 3358m 1991 NAPIN T leal T ng m 1520 8S.50IA. 3359-MB 1991 NUAIN ming Sedo ReWatuuiug 200.00 107.63La. 34074MB 1992 NAPIE PMinry Educaton 2SO.00 121.04ILa 34194MB 1992 NAPEI Ilato A Damin Scor 400.00 227.02LI. 3461-0B 19M RANODRA h alNatuaReou. 50.00 37.4LA. 3465MB 992 NAPIN Aiubad Techoloa 150.00 131.3La 347S-ME 1992 NAFIN Scikoc&Tchoynffrasftuct 189.00 IS7SSL& 3497-MB 1992 EANOS Euting Met Dvlpmm 450.00 188.02La. 3518-MB 1993 NAPE l:la diucato 80.00 70.64Lu. 3S4241M 199 N law Madmet d. A Bd N 174.00 127.U4La 3543OM 1993 NAPEN Tompon Air "Amudoc Corwl 220.00 200.07La. 3SS9-M 1993 ANOMA Mdum Ciis ahnot 200. 188.01IL 3628MB 1993 DANO W HimmyRelh,; TraffictSay 480.00 390.9SLA. 370-Ma> 1994 NAPE On-Faum &M rIrioo Netnak 200.00 200.00La 3722-M &> 1994 NAFIN Prmay ducaio 412.00 412.A0La. 3750-M a> 1994 EANOBRAS N. BoEe Invirotet 368.00 368.001L. 37514B a> 1994 RAANOBRAS WauelanitdoN 3s0.00 350.a1L.3752-Ba> 1994 BANORAS Solid VW&f U 200.00 200.00La. 3773-M 1994 ANOBAS Raind Ams Deveopmet 85.0 79.0S

Teed 22,220.69 4,191.86Of Whiasbenpsid 6,713.54ToJ uw lbib lto * -ea 15,S07.15AmueoMu : 9234Ofvhichhs beinpid : 92.34

SAIL, SRCAL. ar Prorm Lo undew hwflmanaton

-13- SchoduleDPage 2 of 3

NMEICOTECEICAL EDUCATION AMD TRAINING MODERNIZATION PROJET

STATUS OF IFC NVETAENT IN ZMECOAs of June 30, 1994

Pai" Obiggw Type of Bealmes MU______________ Duby MUeidy bmsedyou WC LOs ]PC Iatii- TOWa IF PI*t OWLa

Equty Pamt 4ai psi.)1958/9 hJadmide leafe Cit! SA la ledustalal Equipmnt 0.80 -0.80 -

1958 Utlsaol d Mexico IA IsAlwaf N&agia Ovushmu 0.51 0.52 -1961 A4cereSotlSAAla T. i i - - ,0.8 0.28 - - -

19215/618 FaM OMMm /a. Sto 230 21.44 23-74 - -1963 TIPoed Ampe, w 6CoA(um) la ainleas Ste 0.71 0 0.19 1.00 - -i963 'ulisd eS 's - cdl uIp;lat '* 0 - O.68 0.75 _

19W4/66 d del t Ic - 1.96 - 1.96 - - -I97 MI Nams laok re MiZn 0.75 0.7S 10 - -1971 C exicasA la Tex"ile. 8.00 4.00 12.00 - -1972 ftoalr Ptped Poldo SACV Is P & Pap h - 0.03 - 0.3 - - -

1973/79 caheais VoausA /a Cane 11.35 - 4.S0 S.8S - - -1974/81 CamunAdda Hol Ah Tattle 1.00 0.30 - 1.30 - -1975/8 MexnSA ai Stain Steel 12.00 3.18 - 15.8 -

1978181/84 PaP_I F SA la P & Paper 6.16 5.00 4.50 15.66 - - -as7s 2esltcsmozcmooeski. Fntocohics 19.00 - - 19.00 - -

t979181/87 Hatl Camil Real bat, 8A Tawism - 420 - 4.20 4.201979/84 Bn.usTo a $A la Claot 30.00 .9S 138.00 175.9 - -

1979 Co*mdvlMoMMo_,fy SA 1 ciW .V £ Cable 8.41 - 13.00 21.41 2.131980 RduotrRoeisl, SAI/ Pbia!. Bond 8.00 - 17.00 25.00 - - -1980 vlddo He de ai M o 8/ laGas 15.00 - 99.90 114.90 -

1980 MinaA Real de Anls 8k/a wMin 30.00 - 80.00 110.00 - - -1981/X CeluElea. Cenan &A(Gifa) la NIp & SpO 1550 - 44.00 9.S0 - -

1981 Coap Agrind a, SA(Univa*)la Aglu _ire 6.30 3.00 5.00 14.30 - - -1984 Capild Goods }fat Is Capitl Goo Finani 34.00 - 66.00 100.00 - - -

1984/894 Meta, S Auo Chasusi 33.40 - 3S.00 68.40 25M 35.00 59.01985 Prteisa, 8A de CV la Agmbuas 2.00 0.77 - 2.77 -I98S P brom. Jadulemqxadem,SA 8oohlc 32.00 - 4.40 36.40 14.80 -

1986/88 CddmY Pape doD l o, SA CV PuPp & Par 10.00 3.07 - 13.07 5.00 -987 AM (AIA) Is Veg. & Fkt Pmcesing 1.S 0.50 - 2.0 - - -

1989 Cls.Coar. G s. necla Couat araee Falt 20.00 - - 20.00 - - -1987 hldus Sul*mx, SA DE CV a/ Cankcla & Petroae 2.00 0.50 - 2.- -1m S"ldwe de. Medco utoAsAboby 9.00 - - 9.00 1.501g88 CrmmeseMia Agpegalos Vaaucommatoels 73.00 - - 73.00 46.821988 Apw SA de CV Cmmt & Conas atresh 46.00 - 46.00 17.20 - -

991/92193 Apsa Ado CV le Cema&COcA.D MaIs 49.91 - 94.91 10.00 - -1994 Apac, SA de CV Jo CemaS Coad. MLaeb 10.00 40.10 50.00 1o.00 40.00I988 Sigtst Albuentos, SA 4. CV 0m) Food & Woo Proesing 20.96 2.00 - 22.96 3. SO

1989/92 PoUme (AMS), SA do CV _h - 19.10 - 19.10 11.02 - -1989 GapoFn CoGoods 80.00 27.60 - 107.60 69.59 -1989 B&aa SerBn DevelapsamaFhmace 6000 - - 60.00 S4.00 - -1989 C_aa oMeOxicao CeMent CoAt Ne 60.00 - 8.00 68.00 14.29

1990191 Coasumx, SA do CV l 35.00 9.54 18.00 62.54 28.44 12.60 -1990 bhdlpr A d CV 31.00 - 3.00 34.00 29.42 I18 -1990 sao Naclona do Mwco D_PwAonFbrnaco 60.00 - - 60.00 4223 6.25 2.401990 ainomer Creditn isu/ DovelopmetFmance 20.00 - - 20.00 - -1991 Maxioo and /a Momy & CApi ma - - 6.57 657 -1991 Petrocl, 8A ClImnicals A Feeroobea 32.00 - - 32.00 30.00 - -1991 vitro Flocado 8k de CV Glas Reited 25.00 - 101.00 126.00 24.69 75.751991 Vto, SA a Relaed - 10.17 8.04 18.21 10.17 - -1992 COhb rdeTe*oc ia,MAdoCV T IS.00 1.00 37.00 53.00 16.00 36.73 3.731992 ampo. drSltDubo, SA do CV Bakey 25.00 75.00 100.00 25.00 75.00 -1992 A dsent Loa 8 do CV Baue Manive 10.00 7.03 - 17.03 10.00

1992193 po FSed" 8A deCV Tousm 20.00 - 37.22 57.22 20.00 33.501992 Gmupo Pleao Prbuu SA do CV Delpent nac - 7.50 - 7.50 7.501992 Daao. Maroanl delNe,SN.C DSPlm 20.00 - - 20.00 20.O0 - 7.301992 Meaco City Tolu Tol Roe dt &a S 13.7S - - 13.7S 9.73 -1993 MaStak SA do CV FM 12.00 - 28.0 40.00 12.00 25.93 -1993 Cllol y Dewhados $A do CV 1 26.00 37.00 11.0 24.07

-14 - ScheduIDPage 3 of 3

_ ~ ~ ~ ~ ~ ~ 3* ,, - . L)1993/94 GmpsOpenda,ds 1 ~ ~ ~ ~ ~ ~ ~ ~~4&dmuImdhe

Fma C%w HO by MU IYof IPCG FC POI TO NC ut

- MaMma SA (GOT) Ja*i 8mvle 4. 2.00 6.00 12 6.0 2.21994 0-dm < 15.00 6.0 42 S0 23.0 42 4.001994 Anuni Hi - o9 - - o0 0O95A1994 ezlm I_ la" 21.00 - 17MS 30 21.0 1750

25.00 - 35.00 6000 25.00 - 2S.00TOw_ bIS cbmmumwk Am 1133.40 127.81 106.01 2W67.32

I: > e - 1| * St~~~~~~~~52.48 76.3 5.3 1,179.17Not -WetC_ NM no of 610.011 51.439 426 1088.1S 661. 426.702 145Ali

s "&cvm Cbemkok -droebani" - 6.00 6.00DopagFm= - 9.85 - 9.US

-BouiwtMgL Dwd- oprmtFial- 0;15 -- 0.15CTAP linbu= S.0 2. - 7.001"MexE Cleiealaa&ftw.huhmoolol 20.00 * 20.00aim <_a"ib h m0u- 30.0 X0. 60.0_tg FoWm 20.00 S.00 Is.00 40.00

Tat CslC_lSlMU and IP II g Co_mbm 685.011 65.439 477.702 1231.1S! !9 Ul "bdmsod Co,ts 7S.764 0 70.00 145.666

' veetmaAeMh be been lil amle1, wadmbd, Au_n-cff. acd. _tdlm. or _PeL! ~1deiomt ootS3 0.0 _ muilo Apo). 520.0dmub (Vto),eml19.8 .11 (C_nmm2/r Ceosikle oafpproved and elpsedpqsi Oalukqa*udn but s ecig mp tamto L. _ar 8afi US6.S milo, lapo 56.0 alIk,

:I N.Mom itai ocl of ditburd and wakse leimeg.

--15- :ANNEX 1

TERMS OF REFERENCE FOR THE NFORMATION SYSTEMS AND STUDIES

L INRMATION SYSTEMS

A. NatodlO aiCatalog

1. Backgrouuzd aid O fdbjectiew- Th National Cataog of Ocpations (NCO) iscurently the only tecbnical instrment that descrbes th sucture of theountywh ext nsive geoaphic and scta coverage. he NCO is periodalUy updatd

to compile the informaton an ts of jobs, coditions in which they are prfmed,and the cognitive, syomt and o a s expectedof the worker peformingthe occupation.

2. The inlbration contained in the NCO can be used in the folowing five area ofwacvity: (i) diagnoses and plamning of training pgms for workers, as weRl as schematicresetations of work skills; (i) orientation and placement of workers; (iii) labor demanduveq and educational planning; (iv) complementay use with census data and statstcs on

ocations; and (v) studies relatd to the labor market, production technology, and laborproductvy.

3. Within the famework of the work anticipated for the creation of the National Systemof Competency Standards (SNC) n m oMe , the NCO is an important source of informationfor the identification of the, occupational fnctions for which competency standards will beesalished:

(a) for the identfication f the basic skil, the NCO will pvide validoccpational informafin for the definiton of the core behaviors to besurveyed and eenualy standardized;

(b) for the definition of skill competencies by area of economic acdvity using themethodology of the NVQ, the NCO will serve as a refrence for types ofoccupatonal and ftionl sucture found in the work place; and

(c) for the inrmation and diseminat purposes, the NCO wil be a vehidclewith wbich the competency standards established by the SNC can be promoted,systematicy linkig the competency standards to the present and futueoccupationa stcr reqred by the Mexican labor markt There alreadyexts a mechanisn to register educational and training progmams offered foroccupations listed m the NCO. This inormation can be revised to include thetraining progams appropriae for the acqusition of each competency andcertification for the registeed owcupational and functonal skils.

4. The objective of this exrcise is, thus, to adapt and update the NCO refeting thedeveopment of SNC, with the goal of makdng it an fomal by-product thatcomwpleents the impletation of the prject, particulatly the Component C.

-16- .NE 1

5. Methodology. During 1994, the NCWOs eof occ ional classif dqualficatin definitons was changed to conform to a more integted occonal proBased on this foundation, the NCO will need to incorporate into its methodology, the criteriaand guidelines established by the SNC for the integation of the basic transferble sleLls andcompetencies for specific occupatonal/functional areas. The worling team on NCO willwork closely with the Council and industi Cometency Committees ().

6. l lo During the fir yea of the project (1995), NCO will pvie theInformaonl ¢tsupo required by Basic Slflls Study; provide the most relevant ccanalinformion into th work of the CNs; and integrt into its data base te nesay technicalciteria fo the registy of skills and compeencie following steps will be requred: 1)tining of the perod in cre of intWgating the NCO in the basic methodology of thework of SNC; ii) definition of the procedures for colecting and integrating the inirmation inNCO; and iii) adaptaton of the desip of the NCO data bass io thenow system ofcompetencies.-

7. During the second year (1996), the basic tansferble sdlls identified tough theBasic Skill study using the ACr metodology (Study A (1) below,) will be intgated intoNCO, and disseminated among its potential users. Moreover, o onal information willbe to the CNs dedicated to the task of idenifyin occupational/functionalcomptency standards, using the British NVQ methodology, among othes.

8. During the three reanining years, the NCO will offer its pemanent support to theCommittees (CNs) established for the definition of sectoral skdlls. It will also integate intoits data base the validated standards, and disemnate them among its clients.

B. Other nfoatio Sym

9. The dmetable for other iormation ytems under the project is as follows:

IInforaion System | TORs Due By | Final Design By By

SNC Registry - Competency Standards Apri 1995 December 1995 March 1996SNCRstry - OCs and CEAs April 1995 Setember 1995 Janay 1996SNC Registry - Ceriification Applicants & April 1995 September 1995 July 1996Certed WorkersCBT Supply - Iasitons & Courses NA March 1995 Sepmber 1995CBT Enrollment N/A March 1995 S br 1995CIMO Participants under CRT N/A June 1996 Sept 1996PROBECAT Beneficiaries under CBT NIA June 1996 Sptembe 1996

-17- ANNEX 1

IL STUDIES

A. Bade Skis Study and Before-After C a

10. Tere are two part to the study: (a) Basic Skills Study and a Catalog, compiled bycompetncy standards; and (b) a mpriof basic skills be and after theimplementaton lof competec-based tng.

(1), Be*as klls Study

11. Objetive ne Basic Skils Study aims to idenify the basc, transferable skibs mostnfrequently observed o o ions of the Meican labor market and establish a frameOf refrnce for the analysis of these slaLs The study will:

(a) develop and valdate a national catalogue of baic skdlls according to the jobanaysis methodology developed in the NIAS (National Job Analysis Study) ofthe U.S.; and

(b) devel and test the leve ofperfonceof a representative sample ofMeic workers in relation tD the competency s developed. lhepurpose of the test is to ascetain the sus of the labor force in tms thosebasic, transerable sill considered critical for the adequate performance Oftheir tak.

12. Elements of ProposaL The proposal would include

(a) A detaid medtodolo to be used in the poaratn of the catoge, whichwould include: (1) scope and objectives of the study; (ii) methodology to beused for the dvelopment of the caogue and the questionnires to be used,based on the MAS's list of Basic Sklls; (iii) appropriat sampling shme forvalidation of the catogue, with sectoa and regional representation (Thecountry will be divided into 10 regions). The sample shoud also cover skiswhich are considend basic for at least 70% to 80% of the workforce in theindustry and rvice secws of the economy; and (rv) methodology for thedevelpment and implementation of the test, including detailed test items

0) Thaetable, including descrption of contents of major interim reports (eahthree monfts);

(c) Detd cost breakdown;

(d) Detailed desciption of the outputs to be delivered. These oututs shouldinclude (i) the caaogue of basic skills, (ii) complete, detiled technical reportwith the sampling methods and deign, and (id) the computer prwgams andsystems necesay to update and -use the methodology for job analysis andteng. Furthermore, in additional to the complete technical report, outptsshoud also iclude at least three diffvent fished reports to be used for thedisseminationof results to different audiences in Mexico, namely workes,employers and policy makers and other opini leders;

(e) Description of arragements with a local partner institution with which theproponent will work m Mexico, and their reswecve res ibiities;

-- -18-.ANNEXI

(O) Explicit actions to ensure that the researcbers at the local part instittionwil be thoroughly tained to masw the methodologies mvolved in the study,-icung job aalyss, prepaai of questonais, sampling techniqes, dataanalysis, admiaton of survey, test item development and validation,adinistrion andyss of test, and elaboation of repos;

(g) The nomination of a quaiied individual responsible for all aspt of theproect, as wel as of a localrSentative in Mico forpurposes of prtectsuperVISIo;

(h) Evidence of ;faiarity with the Job Anaysis concept developed in the NJAS(National Job Analysis Study) in the U.S. and mastery of the methodesinvolved;

(i) Curriculum Vitae of the major resarchers to be involved, and their respecive

9) Transfer of copyrights and any other arangemts necessay to ensure therights of the local partn institution to contiue using and developng temateials asodated with the study and the test; and

(k) Conditions of payment

(2) Before-Aftr Comparison of Basic Sklfls

13. Objeltve. In 1999, the same survey of basic sills aminister n 1996 will beadminisd (second survey), in order to determine how these baic skills have dveoped mthe labor force, after tee yeas of implementation of the SNC. A procdure similar to thatof the rt survey will be used in ore to generat comparable resuits

14. The purpose of the survey is to asctain the effect of some innovatie aspet of thecompetnc-based stem of ucation and worer taining on the development of basic skll}sin the labor foe. In parcular, although the comperte-based training sym do notemphasize the acquwtion of basic sdills, the contribution in this area of the new worketaining sstems will be evaluated.

15. Implementation of the s survey also has the objective of establishing concreteguidelines that can later lead to the development of tests for the certification of basic sklls.

16. Fmally, together with the knowledge obtained from the implementin ofampeency-based taining, the results of this survey will serve as te basis for thedevelopment of training progms tat improve the basic skdlls of Mexican workers.

17. of ProsaL The proposal would include:

(a) Design of the second survey which wil conespond to the methodology used inthe fit survey;

(b) Sampl selection fiamework, ening the of the results to thereaults from the fis survey;

-19- ANNEX 1

(c) Detailed List and description of the products aepected to be obtained from thestudy, including the computer pgrams required;

(d) Demonstration of the full undersanding of -the methods and pocedures for thedevelopment of each step;

(e) The curricuium vitae of each participating researcher, and the ara Ofresponsibility of each person; and

(t) The total cost of the dy ad of each individual activity.

B. Sucess Factos for Cmtftation

18. Objectve. The study should estlish the relationship between basic skdlls, deiedby the occpational analysis study (StUdy A (1) above), and the peformance of workers inthe skill tests and eifcaton fr specific oupationallfunctional competency. Starting withthe results of the occupational analysis, the study should establish the basic sis, or acombination of them, that contribute to success in obtaining the certification of differentcompetencies. The study should also identify the mmum lvel of masty required forthese basc skils for the obtainment of competencies certification. The study will alsottemt to identify education levels that would provide the necessary mastery of the releant

basic skils. Finaly, the study should evaluate the educational methods and procedures thatare most ly to lead to the acquisition of basic skills.

19. The study must answer the following questions:

(a) Of the basic skills defined in the occupational analysis study, wbich ones arerequired for the scessful perfnmance of each skdlls established by thesystem of competency standards?

(b) lb what ectent is the development of a set of basic slls required for successin erif ication tests obr particular competencies? For eacmple, readingcomprehension and document wrting can be a set of basic skills necassay forcertain competencies;

(c) In relafion to the previous questions, what is the necessary levl of mastery ofbaic kils for the peformnce of different competencies? For eample,reading comprehension and problem solving, both basic sklls, are requred atdifferent levels of mastery depending on the skill level required for the job;and

(d) Fialy, what are the principal aspects of worker taining programs that lead tothe highest development of basic skills?

20. Elmencts of Proposal The proposal would include:

(a) A detailed presentation of the methodology to be used;

(b) Descipton of data to be used;

(c) The detailed descripton of concrete results that will be obtained thrugh thestudy;

-20- ANNEX 1

(d) Cost esmates for each of the activities;

(e) TImetable for the execution of the study;

(t) Evidence of knowledge of methods to evalte individuals' skills ad abilities;

(g) Evidence of knowledge of teaining systems; and

(h) Curriculum Vitae of the per or persons who will conduct the stdy.

C. Comparison of traditional versu Competency-Based Trainin-g

21. Objectiv This study- aims to eauate the results of competen-based taining(T), comparing CB Mi other fims of training and evaluating various CR modalities,with respect to the following variables:

(a) Success of the tainees on cerdfication tests;

0b) Tme spent by tainees in finding work;

(c) Match between training and employment;

(d) Initial salary at time of hiring and after six months; and

(e) Employers' perceptions with regards to additional training needs when thehire gaduates of different training systems.

22. Type I Compaio CIBT is distnct from other modes of training, mainly becausethe labor skills and the way of evaluating them are predetermin by the productive sector.T-he differences between CBT and taditiona training lead to the question of which turns outto be more effective in terms of the vables indicted in the objectve of e sud (type comparisonu).

23. The modtion of the training programs under Component B of the project allowstype I comp to be made from an early'stage to unil the end of the project In 1995,CECATI, CETIS and CONALEP will begin to give competency-based courses in addition totradionai ones for the same subjects. In this way, in order to make "type I compasons",reesentative samples of people tat te competency-based courses and other traditionalones will have to be chosen.

24. The ft comparisons that could be made will correspond to the CECAr. courses,since these are of the shortest duraon. In 1995, for the programs of Tourism (ood andDrinks) and Automotive Mecbanics, CECATI will start CBT in ten of its traningestblishments while continuing with traditional courses in other establishments. Therefire,by the end of 1995, the acking of graduates can begin, and the first results wil be ready in1996. The study could be repeated in 1997/1998, after additional experience has beengatered in the conduct of CBT.

25. Whie CEllS will also begin to give cBT in 32 training centers in 1995, its coursesare longer. Under the project, it will be possible to make the ype I comprsons for theBasic Tchnical courses (duration of one year) and the Electrical Mechanics progam(duratin of three years). Consequendy, the tracking of Basic Technical graduates will begin

--21 ANNEX I

in 1996 and the frt reuts will be ready in 1997. In the ceof Eltical Mechanics, thetracldng of graduates could begin in 1998, to be finished in 1999, Just as with CECATI,CHEIS will retain, at least temporarily, the traditional courses in the trning centers otherthan the 32 that it will recovert initially.

26. CONALEP would follow a shategy of short, modular courses, at the same te that itoffers three-year programs. With regard to the modula courses, it will not be possible tomake type I comparisons, because CONALEP has deemed it aprriate to reconvert fromthe b g aU of its modula offerings to the CBT system. For this reason, it will bepossible to make -type I corisons o r the the-y couses. CONALEP wl geflexbility to its taning centers so that they can choose which progrms they wish to conVertto CBr, within the range of cometencies included in the pelminary plan of Component B.-For this reason, the identification of the progms for which tpe I comparison could bemade will occur in 1996. In any case, the tracldng of graduates could begin in 1997 andconclude the folowing year.

27. The following table presents a synthesis of type I compariss and the proected datesof the relevant reports:

- ston Beei Tacng Fish Trackin _ Subjets Rqxzt DueG mduaft Ofaduatws__

CECATI 1995 1996 Tourism & Mach 19971997 1998 Automobile December 1998

MecbanicsCHrIS 1996 (1) 1997 (1) Basic Technical & March 1998

1998 (2) 1999 (2) Electrica September 1999________________ ________________M ec hanics _ _ _ _ _ _ _ _

CONALEP 1997 1998 To be detemned Sember 1998_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~(1996) _ _ _ _ _

28. Type II Comparisons. It is also usdul t compane different ways of imparting CRT,because one its advatages is that for any given set of competencies, there can be differentways of ttafing, in terms of didactic guides, supplies, kinds of insuctors, or any oherinput Therefore it would be useful to find out, for populations of a given education base,for both socioeconomic analysis and for purposes of comparison, what would be the mosteffective ways of impardng CBT in relation to the variables indicated in the objective of thesudy (type II comparisons).

29. It is import nt to note that type I1 comparisons, by definition, must start with commoncompetencies. This is wbat the Council, thrugh the SNC, must tasmit. As indicated inComponent A, the Councfl will not approve the first guidelines until 1996 and therefore,both public and prvate training institutions would have to be given a year from June 1996 tostart CDT in accordance with the first SNC guidelines.

30. Ifdependently of how the supply of training in public and private insttions respondsto the SNC and CRT gidelines, it is cerin tat at least CONALEP and CECATIS will beoffering short, modular courses, with different inputs that allow type II compaisos. At theend of 1997, a tracldng study of graduates including CECATIS and CONALEP could bestarted, as well as oher institudtons tat teach the competencies defined under the SNC. The

-22- ANNEX I

corresponding study would be ready in 1998 and would ptovide a base for disminating themost successful cases in 1999.

31. .b pleuulon SEP, trough the PAU, will be esponsible for stting andcaryig out the study. The PAU will be supported by a commission formed by CErS,CECATIS, CONALEP and COSNBr. The latter wil woodinate the work of thecommission. During the second phase of execution of Component B, the PAU will reviewthe scope of work of ts commission, so that graduates of other kinds of training institutionscan be added to the study.

32. For both type I and type l comparisons, two ques will be formiilated, onefor employes and the other for CBT graduates, with the goal of obtainng the pimarynoraion that he study requs. -In all cases, pilot tests of the quesonnaires and

operatioal manuals should be consdered. The opaeaiona manuals will be directed to thesveyors and their -trners. These manuals wiUl be the necessary guide to guaantee amiimum of quality and unfrmity in the adtration of the surveys. Once theiormation has been identified, it will be gathered and prcessed according to a designpcific to the cresponding systems.

33. Co la Support. Local consultants will be contated to design the evaluationmodel, desig the graduate samples, measure control variables, formulate the questand manuals, prepare the reports, design the systems of information gathering andprocessing, and prepare the work schedule which should be rady by June, 1995.

D. CBT-Dren Changes in MSM%s Participating in CIMO

34. Objeces. The study seek to analyze changes in opganization, employeepeom ance, and employment conditions brought about by the adoption of competency-basedtaiing (CiB), concentrang on a few occupational clusters and in selected areas of activity.The study will work closely with the CIMO program, which prGvides direct support to smalland medium-sized firms in the organizaton and delivery of training programs.

35. Infoon Needs. The first groups of coety standards are expected to beready in 1997, at which time they can start to be applied in in-service CTr of acdvewoers. The study's analytical framework will be those businesses which carry out CBT,grouped either by specific areas of acdvity or occupational clusters and in which it would bepossible to measure changes in ional plans and work performane.

36. While it is not possible to determine at this fime which businesses will implementCBr and thus be included in the study, the study should cov at least (a) two sets ofcompetencies defined by specific areas of activity and (b) two sets of competencies definedby occupafional clusters, in such a way that between 3 and 5 percent of businesses/workerscarying out CBT under CDkO would be vered.

37. The survey of selected businesses will be carried out dunng the third quater of 1998,based on the assution that -changes in the workplace, if any, will have sted in tie eaulypart of 1998 as a result of CBT carred out earlier. The information will be procesed and adatae set up during the last quarter of 1998.

-23- ANNE 1

38. fon ce . The study will be based on the recorded chang in workorgization in the areas of the busine where the competency-based traned workers havebeen placed uing a quesinnaie which will attempt to drve specic ifomation aboutchages in worke' m t gh colleon of qualhtative data, which will allow theidentiication impvments in work owganizadon, and of quantitative infmaton, whichwm aow Of ients worker producdvity. At the mm time, dataabout changes in worng conditions and worWce environment will be sogt. Tequestionnaire wiU allow for diffeentiation between work units and idividual workems tomeasure separately the effec on both levels. The n ation to be obtained and thenicator to be generated wil be defined by area of activity and/or occupainal dust,

keeping in mind the chnges desired as a result of te SNC.

39. Survqs will be carried out for ea selected Of c though peciically.desged questonnaire. Al interviews for each set o cof petencies wil be caried out atthe same tme, during the third qaer of 1998. During the last quater of 1998, a databaseof infomaion obtained fm fte surveq wi be set up, and the geneatin of indicators,an i of dat, and wftng of the eport wil be done during the frst three months of 1999.By April 15, 1999 a prlminary document will be presented to the Baik to obtain feedback,and on lun 30, 1999 the final report will be presented.

40. C_nt Suppw. The study will be conducted by the Dihcddn de Esos yPoffdcas de Fhpteo de la Dim &n Genera de Fipeo of STPS, vwth the assance ofemral consulats in the met gil desi of the research, formulation of thequestionnaires, superviion of the survey, processing of data, staiical analysis, andpreparation of the report. The sunrey will be implemented by additional personnlcontrted to pport the Traing Promotion Units.

41. Costs. The study's costs are expected to be as foUows:

Princpal consdtant (21 months) $ 63,300Auxa consultant (15 months) 34,600Programmer (6 months) 11,800interviewers 28,500Per diem 14,400

Total $ 152,600

E e of Competen-Based Trann for IPROBECAT

42. Object The olbtiecve of t sudy is to ascertain the impact of CBT on theemployment conditions of the taiees.

43. Ioon Nee The Program of Taining Scholarships fr Unmployed Wrkls(PROBECAT) wm be uing competency-based guidei in 19. In tat ye t aim isto prvie CBT through PROBECAT to around 20,000 people. From this rt group ofpeople a 3% sample will be take to make up a pilot group, for whom the impact of aiingon emlyent ditions will be analyzed.

-24 - ANNEX 1

44. The people selected in the sample group will be interviewed twel months after teend of the taining courses. The intw will inquire about the job search, number andtpe of jobs performed, the certification condition of the courses taken, as well a th.econditions of enployment held previous to training, where appLhcable. The sample gropwill be andomly made up, with natonal reesentaton by areas of tran receved.

45. It will be necessry to form a control group among the regular PROBECATscholarip holders, the size of which will be similar to the pilot group. People in thecotrol group will be interview with a quevery milar to the one used by Xtpilot group, and it will administered in the same periods, in such a way ta the inormationobtained is compable, both conceptually and temporally. The bis derived from thesasonal nature of the labor market will thus be avoided.

46. The surveys will be administered during the third trimester of 1998, and theprocessing of the surveys and creation of the data base wiU ocur in the fourth trimester ofthat year.

47. Performace As . e infmnnation obtained from the surveys of the pilot andcontrol groups will serve as the base to analyze the impact of the CBT courses in relation tothe regular PROBECAT courses.

48. The occupational situation of the people will be analyzed for the twelve months afterreceiving the trn, with respect to occupaional conditions preceding the courses. Theanalysis wil be done within the pilot group as within the control group. Then thepfomance of both groups will be compared, diferentiating results for the duraion of thejob search, condions of employment, rem ons, loans and type of business, amongother elements.

49. Given that the smrvey data bare wil be available in the fourth trimester of 1998,anlysis of the ifomation will be done during the first trimester of 1999 ad a rt reportof the study will be sent to the World Bank on April 15, 1999, and the final report wil befinished on June 30 of that year.

50. Conlt Support. The study will be done by the Directorate of EmploymentStudies and Policy of the General Directorate of Employment of the STPS, which can besupported by etnal consultants for the methodological design of the reserch, theformulation of questionnaires, the statistical analysis and the editing of the report.

51. The surveys will be administerd by the National Instie of Statistics, Geographyand Computer Science (WNEI), which will be in charge of processing and setting up the database. The General D irco of Employment can contnbute to and supevise all stages ofthe surveys.

52. Prora. The resarch will be designed in the first rimes of 1998, thequestionnaires will be drafted and tested during the second trimester of that year, the fieldwork will be done in the third timester and the rveys will be processed in the fourthtrimestr of that year. -Finally, during the first semester of 1999 the inrmation will beanalyzed and the report will be edited. These will be done by June 30th of that year at the

-25 - ANNEX 1

latst, once the prelimiy report presented an the 15th of April of that yea has beendiscussed with the Bank.

53. Budget A principal consultant will be hired to be in chae of the research, fromthe design to the editg of the fin document, which will cover a period of 18 months. 7Temonthly fee will be N$ 8,500 and the total cost will be N$ 153,000 plus N$ 15,300 forvalue added tax. Finally, a budget of N$ 16,600 must be considered for the per diemallowac (N$ 277 daily) of one person for four days, for 15 trips to differe cities in thecountry to administer a pilot test and supervis the d6finitive survey and coordinatonactvities with IEGN L Te quantity of N$ 16,900 will also be. necsary, to cover the tIcs(N$ 1,124.20 tnit-price) for these tips.

54. The oost of the two surveys is estimated at N$ 300,000, asuming that a total of1,200 people will be interviewed in both surveys. The calculation is based on the cost perquestionnaire of the curent survey of PROBECAT scholarship holders.

F. Other Studies

55. The timetable for other stdes under the project not listed above is as follows:

Study TORs Due By St| Date Final Rep_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~~~~~ ~~~~Due By

F _ancial Solvency of te Council and OCs/CEAs March 1996 July 1996 Junm 1999Erollment Treds - Demand & Student Populaon December 1994 Januy 1995 Dcember 1999*CBT-Drivea Changes in Taining Ins ons September 1996 January 1997 June 1999CDr Impact i Pilt Tr g Modernzton Cases Septmber 1995 Januay 1996 Septmber 1999*Evaluation of Certification & Inoendves Proguam July 1997 October 1997 Apri 1998* ten repor to be submitted periodically.

56. A summary of studes under the project and respective classiflcations and puwposes ispresented in the table on the next page.

INFORMATION SYSTEMS AND STUDIES

Component ~Infornamat for Nomatlon information for Monitoing IStieCompnent A 1.1 Restryof appsed 2.1 Samas1.1, 1.2,1.3 y 1.4 3.1 F__ncasolvncyof JdNation Sydem of competecy standards Council and OCsICMasComp_ety 1.2 Registry of OCs, CEAs, and 3.2 Bsic sil and befo_deeStndards, Sls accredited evaluators compaisonTesting and 1.3 Regstry of the following 3.3 Suocess factors for ctficatonCeification persons (academic and labor

mwket chrterist):(a) Crtficaton Appicats

_______ _______(b)_C ertfed W oikers _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Component B 2.3 Registry of moduar courses in 3:4 Ezirolhnt tnds - demand forModenization of raining institutions cousesTtaining Programs 2.4 Registry of modula courses 3.5 Enollmnt trends - sbtde

based on competeny standards Poa2.5 Registy of enrolled stdents 3.6 Compaison of taditonal vs.

and graduaes in compete- COTbased training courses 3.7 CR-driven chwges in tring

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~in stitutio ns

Component C 1.4 Updatng of National 2.6 Regiy of fims under CIMO 3.8 Evaluation of CST.drivenStimulation of Oocupadonal Catalogue program changes in MSME in CIMODemand for 1.5 Documentation of pilot taining 2.7 Registry of tring progrm.Competeacy-Based modn cases for scholship recipient under 3.9 Evaluaton of CBTTraing promotion PROBECAT progam effecdveness for PROBEAT

2.8 Monitoring of the Eqpment P .Purche Fud 3.10 Ted of

2.9 Monitoring of the Isltuctor pilot traing modRai Pud Programs.

3.11 Evaluaoo fcicatio._______________ __________ process duwing 1997.

'- . ~I!

-27- ANNEX2

SUPERVISION PLAN

A. SupervMion Requments

1. Due to Mexc's unfamiliarity with a system of naional competeny standards and thecomprehenve, multi-instutional and cros-sectorad nature of the project, tensive andlespevi by theBank will be requied dung the inia sages of project

implementation. The suevio team would be c y planned and will be a combintion-of Bank staff and consultnts with specialties in education, tining,d lab and ex inprocuremnt and Bank procedures. This estimate takes into account the fmite awdnomo ofNAFIN and other procement arrangements grding review of standard part of biddingdocuments and consultants' invitafions.

2. Supervision r e are epeted to be intsive in the initial stages of theproject, and Bank missions should plan to obtain asstance from a facilitator in the fiddoffice in Mexico. The proposed supeision plan and esdmates appear below:

eld Superviion Schedue

FM95 FY96 F-M Fy----Anua Re November95 MMTerm RewNewNmbe 96Task manager 2 SW Tak Mae 3 SW

NIA Edu11o 3 SW Educator 3 SWTraining Speia 3 SW Taining Specais 3SW To bePocurement Specialst 2 SW LAb Economist 3SW detemindEconomist 2 SW Euduatio Spocisais 3 SW as per

curmet Specialt 3 SW id -Term______________________ Finansa Speciaist 3SW eviow

Ptojec Launch Apsril 95 Supevlu ihalonm April96Task Maager 1 SW Tasc Mnager 2 SW To be determinedTraining Speciist 2 SW Training Specialist 3 SW as per Mid-Term ReviewLawyer 1 SW Educator 3 SWLabor Economist 1 SW ProcurementSpeciaist 2SWEducator 1 SW Economist 2 SWroument speialit I SWDisbursen ciai 1W W . .

8SW 248 W 21 TBD

3. In addio to the above yeady estiates, the Bank would dedicate approximaty 3-4suaffwees to suwort implementation from headquartes for procesin prior reviewdocumentatin and other related mats.

D. Poject lunch Workshop

4. A project launch workshop will be orgaized as soon as possible after loaneffectveness to assist the staff of the Council1 SEP, STPS and the PAU in developing acommn detag of the prjecs objectv, opeqtoa prcedur, oordnaioneeds, potent implementation constrants, and other requiremens of Bank-finaced

-28- ANNEX2

Focus To confirm the implementaion plans for each component; to identand plan coordinaton needs among the PAU, the Council, theaeecutg ageies in SEP ad SIPS, and NAFIN, to review projectmanagement, monitoring and evaluation requrement and prcwumt,disbursement, and auditing procedures in accodance wi Bankguidelines; and rviw the acton plan for hiring technical stceand consutants.

Durati days

Par&c &s - Task Manage - Trgning SpeaWist- Educa,to- lab Economist-Laswyer- Procurement Specialist- Disbursement Specialist

5. All fxecuting agencies and the PAU will en ample attendance to the proJectlaunch workshop of all chcal and ation staff involved in the projet, NAMIN and ofother agencies, as deemed necessary. The workshop wil include Bank input to fmiliarseleted PAU/Coun;ilISEPISTPS staff with the Bank's procedures and guidelines firpr eme, disbursement, and auditing. This task will be done in coordination withNAFIN.

C. Annual and Md-Term Revews

6. The Bank will conduct at least two supervision missions during each calendar yea,one in April and a more omveprehensive iplementation w in Novmber, trting in1995. Ihe Md-Tlrm Review will occur in November 1996, replacing that year's amualimplementaion review, cept for the Component B. 1 for which the Mid-Term Review wiloccr in May 1997.

7. The annual Implmeti Re will be ornizd by the PAU and will takePlace in November of each year, start in 1995. The meedngs will be atuded byCouncil, SEP, and STPS senior staff, members of the Steermg Committec the PAUDirector, the repesentatives of each executing agency, NAFIN, SHCP, and Bank staff. Thepupose of the annual implemetaon review meetings would be to evaluate projectperfrmance against implementation plans and ageed targets; provide management withfedback on project achievements, and issues and areas needing mprovemet. Specificproject areas to be addressed are descrbed below. The reviews and planning process willprovide a tool for on-going refinements in project srtegies and plans, conistent with theoverall objectives of the project

8. The main are to be addressed during the irpeemenion rviews, where applicable,are as follows:

(a) Ntolonal System of Competen Standards. The review wll examine theprgrs made in the development of competency standards, including: (i) thefunctoning of the Council and its related organiztons (i.e., Govening Board,

-29 ANNEX

Executive Secretariat, CNs, etc.); (H) pogs made in th tining Of Counilmembers and other sta; (Iii) the occupadonal coage and quality of thestandards being develped or prposed to be developed; (iv) results of thestudies on basic sills, success ctors for cetification; (v) progress made inthe mpetnystandar database; and (vi) eextent to which thex privasector has been involved and is a partcipat and contributor to the newsystem, parculy within the Council and its ratednizaon

b) Skile 1ftg and fiaon systm Te review would focus on: i) thefunctioning of QCs and CEAs, th¢ procedures for supion o£ theiractivites; results of the study on the financ solvey of the Council andOCs; (Iii) the pcs of solicitaton, review, and ap l of OC proposal forcertifc nand-fnding; (iv) sctor and geographic coverage of the testingand cefication system; (v) progress in the development and integatn of theOCs' databases of cerdfied workers, and the accesibility of such infmationthrou enployment agencies; and (vi) ceified wos' eff gains inent.eing the labor market.

(c) T Mon Pograms. Tne review will focus on: (i) results ofthe pilot trining moeration programs and how these experiences bavebeen or wi be t ; (ii) the funding mechanisms for taining materials(managed by SEP) and for equipment and sructor tining (manged bySTPS); (iin) the mtch between newly developed competency staards andtrning progrms; (iv) the coopmeon between SEP and STPS as dualexecuting agencies for this subcomponent; (v) results of the studies onenolment trends, trinee age, follow-up evaluation of graduates, andadaptability of publc trning institutions; (vi) encouraging th pariciato ofthe prate sector; and (vii) future prospects for financing and susinabilit.

(d) Trang and ertifi aionnentves. Te review wil examine: (1) theusage and effecdveness of incen for the seprate categories ofbeneficiares; (ii) the effectiveness of incentives for institutions to develmodular, comqtency-based taining programs based on funding of equipmentand instructor traiing; and (iii) results of studies on asisted CIMO frms andPROBECAT parcipants and on pilot testng of SNC in enterprse and of anevaluation of certification actvities for the purpose of fine-tuning theincentives progams.

(e) nfoatin Systems and Studies. The review will focus on the timeyimplementation of infomation systems and studies, including satisficorytem of refeence, timetables, interim and final reports, and the use of datand research in td of project activities.

(f) Piect Adation The view will exmine: (1) the functioning of theSteering Committee and cooperton between the project's executing bodies;(ii) the effectiveness of taining programs for policy make and programmanagers; (iii) administrative, procurement, disbursement, and other funcions,with special emphasis on locating and resolving bottlenecks; (iv) functioning ofthe two Special Accounts; (v) propss under the project as mured throughagreed implemenion ndicators and monitoring/eWaluation advities; and (vi)sector statgies, actxi plans, and detiled proposed budgets for the comingyear.

30- ANNE3Q

9. ITe Mid-Tm Review will take place in November 1996, in place of the reglarannual i menta view, and will examine the same elements, but under a morecomrehensie sector-wide approach. Te Mid-Tem Review has bew dmed to genealycoincide with the fllouing events, which mark the end- of the fist phase of projectactivities: (a) the completion of a Ar set of competency standards; (b) conclusion of thepilot training modemniio programs; (c) final results of the CIMO and PROBECATevaluation under the Labor Market project; (d) deign and preliminary installation of severainformatn stems; and (e) prelminay results of sral studies for the vaous -components. For the Component B.t the Mid-Term Review wil k place in May 1997, toallow enough dme for the pilot taining prgams to be completed and relevant dataonlidated for the eview. The Mid-Term Review will assess both the demand and thesuply for the new stndards and cetificationltraining system and make prvisions for anajustment, if so required, of prject design, pacin plans, implementation tarets, andspavision s .tate. The Mid-Term Reviw will help prepare for the project'smains-rIing phase, incluing: (a) further development of competency standards; (b)instla of OCs and CEAs; (c) implementtion of the competency standards databas andotber infmtion systems; (d) natonwide development of CBT progrms based on the resultsof the pllot tanig modiation progam through funding of taining materias, equiPment,and instuctor taining; and (e) provision of training and certification incentives to tagetedgroups on a declining basis.

IBRD 34

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