Document of The World Bank · 1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved) The original program development objective was to create conditions

Document of The World Bank

Report No: ICR00001579

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-45880)

ON A

CREDIT

IN THE AMOUNT OF SDR 66.9 MILLION (US$ 100.0 MILLION EQUIVALENT)

TO THE

ISLAMIC REPUBLIC OF PAKISTAN

FOR A

HIGHER EDUCATION SUPPORT PROGRAM

June 14, 2010

Human Development Department South Asia Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2009)

Currency Unit = Pakistan Rupees (PKR)

PKR1.00 = US$ 0.0118 US$ 1.00 = PKR 84.24

FISCAL YEAR July 1 – June 30

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy CMS Campus Management Solutions DPC Development Policy Credit GoP Government of Pakistan HE Higher Education HEC Higher Education Commission HEI Higher Education Institution HEMIS Higher Education Management Information System HEPN Higher Education Policy Note HESP Higher Education Support Program IDP Internally Displaced Persons MoF Ministry of Finance MTDF-HE Medium Term Development Framework for Higher Education MTFF Medium Term Financing Framework NCRC National Curriculum Revision Committees PRESO Poverty Reduction and Economic Support Operation

Vice President: Isabel Guerrero

Country Director: Rachid Benmessaoud

Sector Manager: Amit Dar

Task Team Leader: Naveed Hassan Naqvi

ICR Team Leader: Naveed Hassan Naqvi

ICR Primary Author: Shahid Kardar

PAKISTAN

HIGHER EDUCATION SUPPORT PROGRAM

TABLE OF CONTENTS

1. Program Context, Development Objectives and Design ..................................... 1 2. Key Factors Affecting Implementation and Outcomes ....................................... 4 3. Assessment of Outcomes ................................................................................... 12 4. Assessment of Risk to Development Outcome .................................................. 16 5. Assessment of Bank and Borrower Performance .............................................. 16 6. Lessons Learned ................................................................................................. 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .... 20 Annex 1 Bank Lending and Implementation Support/Supervision Processes ....... 21 Annex 2. Beneficiary Survey Results ..................................................................... 21 Annex 3. Stakeholder Workshop Report and Results ............................................. 23 Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR ............... 24 Annex 5. Comments of Co-financiers and Other Partners/Stakeholders ................ 34 Annex 6. List of Supporting Documents ................................................................ 35

MAP .......................................................................................................................... 36

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A. Basic Information

Country: Pakistan Program Name: Higher Education Support Program

Program ID: P102607 L/C/TF Number(s): IDA-45880

ICR Date: 06/24/2010 ICR Type: Core ICR

Lending Instrument: DPL Borrower: GOVERNMENT OF PAKISTAN

Original Total Commitment:

XDR 66.9M Disbursed Amount: XDR 66.9M

Revised Amount: XDR 66.9M

Implementing Agencies: Higher Education Commission

Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 01/29/2008 Effectiveness: 09/18/2009 09/18/2009

Appraisal: 04/20/2009 Restructuring(s):

Approval: 09/10/2009 Mid-term Review:

Closing: 12/31/2009 12/31/2009 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Substantial

Bank Performance: Satisfactory

Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies:

Highly Satisfactory

Overall Bank Performance:

Satisfactory Overall Borrower Performance:

Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments

(if any) Rating:

Potential Problem No Quality at Entry None

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Program at any time (Yes/No):

(QEA):

Problem Program at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Tertiary education 100 100

Theme Code (as % of total Bank financing)

Education for the knowledge economy 80 80

Public expenditure, financial management and procurement

20 20

E. Bank Staff

Positions At ICR At Approval

Vice President: Isabel M. Guerrero Isabel M. Guerrero

Country Director: John W. Wall Yusupha B. Crookes

Sector Manager: Amit Dar Amit Dar

Program Team Leader: Naveed Hassan Naqvi Naveed Hassan Naqvi

ICR Team Leader: Naveed Hassan Naqvi

ICR Primary Author: Shahid Kardar F. Results Framework Analysis

Program Development Objectives (from Project Appraisal Document) Create the conditions to enhance the stock of skilled Pakistanis able to contribute to an economy increasingly based on knowledge and technology, through an overhaul of the university sector. Revised Program Development Objectives (if any, as approved by original approving authority)

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(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : At least one third of increase in enrollments in university sector between 2007 /08 and 2008/09 is attributable to students enrolled in science and engineering

Value (quantitative or Qualitative)

Total enrolment in universities:316,278 (of which enrolment in Science and Engineering 170,920)

So the share of science/engineering in total enrolment increase should be >33%

Total enrolment in Universities: 333,966 (of which enrolment in Science and Engineering 177,488). So the share of science/engineering in total enrolment increase is 6588/17688=37%

Date achieved 06/01/2008 10/09/2009 10/11/2009 Comments (incl. % achievement)

Indicator 2 : Number of PhD graduates produced by Pakistani universities increases to at least 550 by 2008/09


420 produced in 2007-8550 produced in 2008-9

613 produced in 2008-9


Indicator 3 : Number of International Journal Publications from Pakistani scholars increases to at least 3500 by 2008/09 from 2500 in 2007/08


2474 3500 3639


(b) Intermediate Outcome Indicator(s)

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Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : The full budgeted allocation for Recurrent and Development Expenditures for HEC, been released to HEC by Ministry of Finance.


The full budgeted amount: Recurrent Budget = PKR 15.7 billion, Development Budget = PKR 16.1 billion

Actual Releases for FY 2008-09: Recurrent Budget = PKR Actual Releases: 15.7 billion, Development Budget = PKR 16.1 billion for FY 2008-09

Date achieved 06/24/2008 09/24/2009 Comments (incl. % achievement)

G. Ratings of Program Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 03/11/2010 Satisfactory Satisfactory 105.99 H. Restructuring (if any) Not Applicable

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1. Program Context, Development Objectives and Design 1.1 Context at Appraisal

From the turn of the century to 2006/07, Pakistan's economic growth proceeded at a healthy pace. However, the sharp rise in the international prices of oil, commodities and other food products in 2007/08 and the Government of Pakistan's failure to pass on the related impacts rapidly weakened the fiscal and external accounts. The current account deficit widened and Pakistan's foreign exchange reserves declined sharply. Reduced net capital inflows and an inadequate adjustment of the exchange rate exacerbated the problem. While the Government borrowed directly from the State Bank of Pakistan to finance the budget deficit GDP growth declined from 6.8% in 2006/07 to 5.8% in 2007/08. The situation was worsened by political uncertainty. As a result, Pakistan's international risk rating deteriorated, forcing the Government to embark on a program to correct the growing macroeconomic imbalances. The stabilization package subsequently developed by the Government, and backed up by the IMF, aimed to reduce macroeconomic imbalances. The fiscal deficit was to be reduced by curtailing expenditures and increasing revenues. The Bank's Poverty Reduction and Economic Support Operation (PRESO) was also instituted to support Government policies intended to ensure greater macroeconomic stability. It was at this time that the Higher Education Support Program (HESP) was conceived. Pakistan’s education sector in general and the higher education in particular were beset with a host of problems, with access and quality being the most significant challenges. Participation rates in higher education were low, without any aid instruments and systems to cope with the number of students who wished to pursue a post-secondary degree, leading to an inequitable and inaccessible higher education system. The higher education sector had been continuously neglected, and in particular, was starved of resources prior to 2002. This reflected in poor quality teaching and learning outcomes. No meaningful effort had been undertaken to institutionalize quality assurance and improvement mechanisms, nor had incentive structures or accountability mechanisms been put in place to both enhance and monitor the qualifications of existing faculty. At the same time, markers of competency and excellence such as value-added research outputs remained minimal and of poor quality. The higher education sector also suffered from pervasive governance issues, including limited academic and administrative autonomy, that constrained the smooth functioning and management of universities. The Higher Education Commission's Medium-Term Development Framework (MTDF-HE) developed a comprehensive set of reforms to address these issues, marked by clarity of direction and purpose for the 2005-2010 time period. These were also raised in a comprehensive Higher Education Policy Note (HEPN) , prepared by the World Bank in 2006 (upon the request of the Ministry of Finance), in which the Bank supported the reform program enunciated by the HEC. The Bank designed the Higher Education Support Program (HESP) as a Development Policy Credit (DPC) in support of the

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objectives of the MTDF-HE, and consistent with the macro-MTDF prepared by the Government of Pakistan (GoP). The HESP was embedded in the FY06-09 Country Assistance Strategy (CAS), which identified sustainable growth as an essential prerequisite for long-term poverty reduction in Pakistan. By supporting Pakistan's drive to enhance access to higher education and to improve the quality and relevance of teaching and research in a competitive global environment, thereby enlarging the pool of the skilled workforce that could spearhead the country's growth, the HESP was consistent with the objectives of the CAS. The Bank's program enabled the HEC to sustain the momentum of its core reforms, spelt out in the MTDF-HE, through the difficulties that Pakistan faced at the start of 2009. A primary objective of the HESP was to ensure that the initial reforms undertaken by the HEC – to increase equitable participation, make an impact on the quality and relevance of teaching in higher education institutions and improve the governance structure of the higher education sector – would not suffer on account of the Government's fiscal stress. The Bank’s support for the higher education sector was predicated upon the GoP’s decision to locate the associated initiatives in a medium-term budgetary/financing framework to ensure the predictability of adequate resource flows for sustainably financing the extensive reform agenda developed by the HEC. To this end the assistance was linked to prior actions and performance indicators that would demonstrate the commitment of both the HEC and the GoP to the achievement of the envisaged objectives.

While the HESP was initially conceived as a programmatic series of development policy credits, however, following the sharp deterioration in the country's macroeconomic indicators, the operation was redesigned in the form of a single tranche credit, focusing on certain policy actions that the Bank deemed most important for laying the foundation for improvements in Pakistan's higher education sector indicators. 1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved) The original program development objective was to create conditions that enhanced the stock of skilled Pakistanis able to contribute to an economy that would be increasingly based on knowledge and technology. This was to be achieved through a comprehensive overhaul of the universities in Pakistan. The purpose of the overarching objective was to support the four basic pillars of the HEC's MDTF-HE: i) enhancing the access and equity of higher education; ii) improvement in the quality and relevance of academic and research programs to produce an adaptable and skilled labor force; iii) enhancing the efficiency and effectiveness of government spending on the sector; and iv) improving the governance and management of higher education.

The key indicators for the HESP in its first year were as follows:

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1. At least 1/3 of the increase in enrollments in the university sector between 2007/08 and 2008/09 should be students enrolled in Science and Engineering 2. The number of PhD graduates produced by Pakistani universities was to increase to at least 550 by 2008/09. 3. The number of publications in journals of international repute by Pakistani scholars was to increase to at least 3500 by 2008/09 from 2500 in 2007/08. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification There were no revised program development objectives, nor was there any revision in the key outcome indicators to the program as approved by the Board of the World Bank. 1.4 Original Policy Areas Supported by the Program (as approved) The main policy areas supported by the program were as follows:

a) Access and equity. To address this policy area the aim was to introduce a variety of interventions to increase equitable access to higher education and simultaneously incentivize the participation of the private sector in higher education.

b) Quality and relevance of teaching and research. This objective was to be realized by increasing the number of skilled faculty, improving the quality of academic courses and programs, bringing teaching and research outputs in line with overall development objectives, and finally improving the quality, synergy and relevance of research undertaken in HEIs to address the needs of Pakistan as a developing country.

c) Fiscal sustainability and streamlining expenditure. To tackle this objective the program aimed to ensure availability of adequate Government funding for higher education within a sustainable financial framework, diversification of the sources of funds for higher educational institutions (HEIs) and appropriate resource allocation formulas and mechanisms for the HEC's financing of HEIs.

d) Governance and management. To deal with the issues of governance and management in higher education the HESP focused on: i) mechanisms to strengthen initiatives and institutional arrangements geared to the quality assessment of academic programs; ii) enhancing the capacity of the HEC to undertake the ambitious reform program; iii) widening the use of a Higher Education Management Information System (HEMIS); iv) streamlining the overall financial planning and management of higher education; and v) improving the procedures and transparency of procurement in public sector HEIs.

To address these policy areas, the Bank identified seven prior actions and made financial assistance conditional on their implementation. These actions, as outlined in the Program Document, were as follows:

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a) To improve the quality and relevance of teaching and research:

▪ The Finance Division issuing and the HEC notifying model Tenure Track statutes for faculty staff in public HEIs

b) To expand access and increase equity in higher education:

▪ Planning Commission notifying the approval of policy that allowed high quality private sector HEIs to qualify for up to 50% funding for development projects, subject to them meeting “need-blind” access requirements

▪ The HEC notifying the approval of, and implementing, revised criteria for establishment of private HEIs

c) To strengthen the governance and management of higher education:

▪ Public HEIs establishing Quality Enhancement Cells (QECs) as per agreed criteria

▪ the HEC preparing a comprehensive Draft Procurement Handbook for goods, works and services and forwarding them to PPRA for its comments

d) To improve financial sustainability and streamline expenditure in higher education:

▪ The MOF approving the Medium-Term Financing Framework (MTFF) for HEC for FY2009/10-FY2011/12

▪ The MOF releasing quarterly recurrent and development grants to HEC as per FY2008/09 allocations for the third and fourth quarters

1.5 Revised Policy Areas (if applicable) The policy areas were not revised during the course of the program. 1.6 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) There were no major changes in the HESP once the program was approved by the Board. While there was initial discussion of a three year program, the HESP was appraised and taken to Board as a single tranche operation that would help maintain momentum of key reforms and lay the foundation for a longer-term future support.

It is noteworthy that in the HEC has continued to implement the variety of interventions outlined in its MTDF-HE, steadfast in its resolve to pursue the reform program through political change, even without the Bank's financial support in the first four years of the MTDF-HE’s period. 2. Key Factors Affecting Implementation and Outcomes 2.1 Program Performance

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The HESP was successful in ensuring that the executing agency – the HEC – implemented the prior actions, as set out in the program document. As a result of its successful and timely implementation of these prior actions, the program appeared to be well on its way to achieving the long-term goals that had been set out in the HEC's MTDF. The complete set of program development objectives could understandably not have been achieved within one year. However, the HEC's remarkable progress in implementing its reform agenda through the initiatives agreed under the three year program, even without the Bank's continued financial and technical support, has laid an excellent foundation on which a sound, sturdy, equitable and high-quality higher education sector can be built to support Pakistan's development objectives.

The prior actions selected by the World Bank had a key role to play in this. A steady commitment of financial resources was obtained through the prior actions identified under 1.4 (d) to facilitate the financial viability of the reform program.

The tenure-track system helped public sector universities attract and retain a number of qualified teachers. Representatives of universities interviewed for the preparation of this ICR were of the opinion that this facility had enabled the public sector to maintain the quality of instruction at a time where it seemed that teaching resources would be lost to the private universities that were offering more competitive remuneration packages.

However, some prior actions and desired outcomes of the program did not appear to have any immediate and direct linkage with the stated objectives. An example of this was the prioritization of measures to encourage the participation of the private sector (1.4 (b)) over and above other measures to directly increase access to education – such as improvements and expansion in distance-learning facilities. Prioritizing the expansion of distance-learning facilities might have more directly impacted both the goals of access and equity. While promotion of the private sector through approvals that would enable already established and planned private universities to qualify for financial assistance would help achieve the objective of access, with longer-term payoffs, the equity objective would only have been served tangentially through this route since just a small percentage of students enrolled in such institutions would be able to get financial assistance on need basis and the payoffs would come in the long-term. Selecting actions on the basis of long-term payoffs was a recognition of the fact that the program's objectives could not be accomplished over the course of a single year; the prior actions simply being an integral part of the complete set of initiatives set out in the HESP. These actions were also selected based on the implementation capacity of both the HEC and the GoP and on what could meaningfully be achieved within this time period.

The HEC, as the executing agency, ensured that all 3 key outcome indicators were met within the first year of the program. The indicators included an increase in enrollments, an increase in the number of PhDs produced by domestic universities, and an increase in the number of publications in international refereed journals by faculty in Pakistani universities. The actual outcomes at the end of the first year were: a) more than one-third (37%) of the increase in total enrollment was attributable to students enrolled in science and engineering; b) the number of PhDs produced by Pakistani universities exceeded the

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target of 550 (reaching a total of 613); and c) Pakistani publications in journals of international repute easily met the required target of 3500 publications (a total of 3639). Assessing the program's performance pillar by pillar:

i) Improving the quality and relevance of teaching and research. To ensure the quality and relevance of teaching and research and incentivize a stable, secure and continuous improvement in the quality of human capital at the higher education level, the HEC developed a) a scholarship/PhD program to augment the size of the pool of skilled and qualified faculty, including the foreign training of all PhD candidates; b) a performance-based tenure track system and support linkages for faculty; and c) programs and systems to support linkages with industry through the financing of research of commercial value.

To increase the supply of skilled faculty in HEIs, the HEC satisfied the prior condition for ensuring tenure track positions for faculty. The tenure track statutes were revised and finalized, with 31 public sector universities implementing them by mid-2009, hiring over 500 teachers under the tenure track system. As mentioned above, this was one of the outstanding achievements of the HESP, enabling public sector universities to remain competitive. The other actions and performance indicators outlined in the HESP under this objective were also met. These included the expansion of the overseas and indigenous scholarship programs (2,138 such scholarships were granted in 2008 alone) and the increase in grants for the indigenous PhD program (613 Pakistani PhD graduates were produced in early 2008/09). A review of the “Professional Competency Enhancement Program for Teachers” was undertaken and a Teaching and Learning Resource Material was developed by the HEC, through which the baseline targets of 2008/09 were satisfied.

The second policy goal under this pillar was improving the quality of courses and programs taught in HEIs. While none of the actions listed in the HESP or the HEC's MDTF were labelled as prior actions, significant progress was made on many of them, yet another demonstration of the HEC's commitment to reform. A uniform framework was developed for a 4-year Bachelor's program in the Basic and Social Sciences, as well as in Engineering. A standardized format for courses in all these disciplines was circulated after 44 National Curriculum Revision Committees had convened. By 2008/09, 22 new curricula were ready to be sent to universities for implementation. In addition to Universities, twenty-six provincial colleges have been selected by the Government of Punjab to make the shift to a 4-year undergraduate program. This new academic structure was to become operational from the academic year 2008/09. Guidelines for new assessment techniques – a necessary adaptation to changes in the structure of the academic program – were prepared and shared with all public sector universities for feedback. Eleven awareness workshops were conducted and 401 faculty members were trained in implementing the semester examination system. Again, all outcome indicators tied to these actions were met. Thirty-two post-graduate programs were also reviewed on the basis of criteria developed by the HEC in consultation with all relevant stakeholders.

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Finally, to deal with the problem of outreach of distance education, Directorates of Distance Education were established at 6 public sector universities.

The third policy goal under this pillar was to bring teaching and research outputs in line with development objectives. For this purpose, the National Curriculum Revision Committees included 15% representation from industry, related professions and relevant stakeholders. To further facilitate this, a University-Industry Technology Support Program was designed by the HEC, which provided research grants up to Rs. 6 million for a period of two years for particular projects. Simultaneously, a process of rigorous peer review has been implemented for any research proposals to receive funding. PERN-II was launched in accordance with the targets laid out in the HESP, 1 GB internet connectivity has been provided to 17 public and private HEIs, and access to an online library with over 45,000 books and 23,000 journals has been made available to 42 HEIs. 24 linkage programs with international universities were also put in place to improve research quality – these offered joint split PhD programs, joint research programs, and joint faculty visits. To maintain the quality of research, the HEC decided to earmark particular journals that qualified for publications; 129 such research journals were being recognized by HEC by 2008/09. At the same time, the HEC approved a policy that allowed faculty from private sector universities to receive 100% research funding through the HEC's Research Support Program.

ii) Expanding access and increasing equity in higher education. To enhance access and equity objectives through inclusion and opportunities for all, the HEC supported the establishment of universities in underserved areas, expansion of physical and associated infrastructural capacities and services in existing institutions of higher learning, extension of facilities and scope of disciplines on offer by institutions offering distance-learning opportunities and needs-based scholarships to ease the financial burden of talented children from less affluent households to enable them to pursue tertiary education in both public and private universities. In total, 803,507 students were enrolled in HEIs in Pakistan in 2008/09, as opposed to 738,373 students in 2007/08. Given the focus on expansion of enrollments and universities in increasing access, concerns have been expressed about the short-term tradeoffs between expansion and quality. The HEC has been mindful of this and has addressed these issues through a variety of interventions: the tenure track statutes for faculty members, improved research grants, Faculty/Professional Development Programs to improve pedagogical skills, critical non-salary inputs such as technology, improved laboratory facilities and qualified support staff and by launching its consolidation phase in 2008/09 under which there would be no new construction activity and all resources would be devoted to the completion of the already-approved development schemes. The first action taken to enhance equitable access to higher education has been to increase enrollments in AIOU and VU; to further the same objective, funding was allocated to 5 new distance-learning institutes. Financial aid offices were established in 32 public institutions and 8 private institutions, and an agreement was signed with USAID to help establish and strengthen 25 more by assisting in fund-raising, and provide initial support in setting up a Student Loan program. Through this the target of 750

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needs-based scholarships for the 2008/09 year was easily met. Moreover, the HEC's efforts to enhance access through the establishment of universities in underserved areas and improving opportunities for distance-learning were particularly successful in increasing the enrollment of females in higher level education. To promote private sector participation in the sector, identified as an important resource for complementing Government efforts to expand access and equity in higher education, both the actions outlined in the HEC's MTDF-HE were selected as prior actions for the HESP. The first action was the approval of the policy of transfer of public funds to high-quality private sector universities, as long as they met “need-blind” admission requirements. The policy was approved, and at the end of the first year, 18 private sector universities met the requirements set out by this policy, and hence qualified for public funding. The second action, the HEC's approval and implementation of specific criteria for the establishment of private HEIs, was put into immediate effect. In addition, the HEC began to recommend particular institutions (5 so far) to the Federal and Provincial Governments for the grant of a charter under the new criteria.

iii) Strengthening the governance and management of higher education. Within this policy area, the assigned prior action was adequately completed; 20 HEIs were equipped with functional Quality Enhancement Cells (QECs) by the end of the program. Some of Pakistan's premier institutions, having greater capacity to implement quality assurance measures, had made appropriate headway on this front. However, since traditional mindsets in several HEIs are not familiar with ways of assessing quality enhancement and HEC presently also lacks the capacity to play a much more active hand-holding and mentoring role this pillar will continue to pose a challenge in the foreseeable future. This appears to be an area where the Bank can play a major role by providing technical assistance. With respect to the rest of the actions outlined under the governance aspect of higher education, a Draft Framework for Institutional Performance Review was prepared, and a “Quality Assurance Manual for Higher Education in Pakistan” to streamline assessment of quality enhancement cells was issued. The existing Quality Assurance Agency under the HEC was strengthened and made responsible for formalizing agreements with existing councils in Pakistan and for forming 4 new accreditation councils, dealing with information technology education, business education, agricultural education, and teachers' education; this was in addition to HEC’s role in overseeing the QECs.

Not much progress has been realized in bolstering the capacity of the HEC with respect to enhancing the capability of its human capital and its ability to develop a robust communication strategy with stakeholders. Moreover, only the software module relating to Campus Management Higher Education Management Information System (HEMIS) was successfully launched in 8 universities. To address the issue of financial planning and management, the Ministry of Finance made certain that recurring and development grants were released to the HEC in accordance with budgetary allocations. At the same time, the HEC ensured that an integrated budget and expenditure reporting system was in place at the level of HEC; through which, financial statements were made available within 4 months of the end of each financial year. There is a need to make similar

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arrangements in HEIs, and to expand the scope of the HEMIS beyond the Campus Management module so that it eventually becomes a comprehensive, sectoral management system. The Bank is ready to assist in this effort.

Finally, a major component of the goal pertaining to management reform related to procurement of goods and services; for this, a draft HEC Procurement Manual was prepared in consultation with the PPRA. This was one of the prior actions necessary for the development credit and was successfully fulfilled. Currently, procurement notices and notices of awards are posted on the HEC website.

iv) Improving financial sustainability and streamlining expenditure in higher education. The final pillar of the HESP encompassed three goals. The first was to ensure funding for the higher education sector within a sustainable framework; these were prior actions and were met. Ensuring that the higher education sector received a commitment for its full share of funding at a time when fiscal resources were strained was a major achievement of the HEC’s and Bank’s lobbying efforts with the GoP under the HESP. A Medium-Term Financing Framework was approved by the MOF for FY2009-10 and FY2011-2012, guaranteeing funding for these years. The MOF released the recurrent and development grants to the HEC in accordance with the commitment for FY2008-09.

To address the goal of resource diversification for HEIs, the HEC organized international conferences on mobilizing resources for higher education, funded the travel abroad of relevant individuals in the higher education sector to attend training workshops and brought together Vice-Chancellors and Rectors of universities around the country for consultation on these topics. Here, the Bank maintained its engagement and presence by assisting the organization of these conferences and by providing related support.

List conditions from Legal Agreement/ Program Document Status Finance Division issues, and HEC notifies model Tenure Track statutes for faculty staff in public HEIs

Met

The Planning Commission notifies approval of policy allowing high quality private sector HEIs to qualify for up to 50% funding for development projects, subject to meeting “need-blind” access requirements

Met

HEC notifies approval of, and implements, revised criteria for establishment of private HEIs

Met

Public HEIs establish Quality Enhancement Cells (QECs) as per agreed criteria

Met

HEC prepares a comprehensive Draft Procurement Handbook for goods, works and services and forward to PPRA for comments

Met

MOF approves the Medium-Term Financing Framework (MTFF) for HEC for FY2009/10-FY2011/12

Met

MOF releases quarterly recurrent and development grants to HEC as per FY2008/09 allocations for the third and fourth quarters

Met

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2.2 Major Factors Affecting Implementation: The implementation of the HESP was completed successfully. Some of the major factors that enabled this are discussed below: The operation had been designed to support the HEC's medium-term development framework, and therefore had the full commitment and ownership of the implementing agency. Not only did this facilitate significant progress on all the actions outlined in the MTDF but also ensured continuity in the implementation of the reform agenda even after Bank support was discontinued.

The prior actions selected were all within the capacity of the HEC, and were managed, performed, and monitored successfully by the HEC itself, to the satisfaction of the Bank. All proposed actions were clear, straightforward, and realistic, building towards the achievement of the PDOs over a period of time. This meant that the program was efficiently implemented, without unnecessary delays in sorting out overtly complex program requirements. It was also a testament to the commitment displayed by the HEC and the GoP in the concerted attention paid to higher education over a number of years.

The HEC's earnestness, flexibility and resolve in taking timely corrective measures, adjusting its interventions, benchmarks, criteria for funding allocations, norms and standards relating to workload of universities, academic operations (with respect to awards of degrees), quality, accreditation and monitoring and mechanisms and processes of interaction between students and teachers, as and when required to achieve the underlying objectives, were critical in ensuring the successful implementation of the program. Just one example of this was the shift in favor of quality assurance instead of enrollment expansion, when a debate started on the tradeoffs between an accelerated growth in enrollment and the quality of education imparted. To address this, the HEC is now preferring the completion of ongoing schemes to expand facilities to accommodate increased enrollment, rather than starting new ones. The focus is clearly on completion of approved development schemes, consolidation, development of human resources, strengthening quality assurance mechanisms and associated management tools.

As already explained above, the 3-year HESP could not be implemented. This was not owing to any slippages on account of the executing agency, the HEC, in fulfilling the obligations within its control. It performed admirably and not only met the program's prior actions but has continued to faithfully implement its own reform agenda. The risks of an uncertain macroeconomic situation had been identified earlier in the program document, although given a moderate ranking on the assumption that such a risk would be mitigated by an IMF Stand-by arrangement, the Bank's PRESO and the Fiscal Responsibility and Debt Limitation Act of the GoP. The rapid turn of events that followed could not have been predicted. A combination of external factors, weak economic management during the tenure of the interim government in the transition to democracy, mounting militancy trends and resulting political instability added to these

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anxieties, making the stabilization of the macroeconomic environment a difficult endeavour. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: The monitoring and evaluation of the implementation of the reforms outlined in the HESP was undertaken by the HEC itself. However, the Bank continued to maintain contact with the HEC to keep itself abreast of developments and to provide technical support through sustained dialogue, with the intention of developing another program building on the strong foundations of the HESP. The Monitoring and Evaluation department of the HEC, in conjunction with the HEC's regional centers, was responsible for making sure that the reforms proceeded as planned; each department gathered data that allowed the HEC to assess whether outcome indicators had been met. Both the HEC and HEIs put forward some baseline data to ensure that a proper comparison would be possible by the time the HESP's reforms came to fruition. By instituting conditions such as peer reviews the academic community as a whole was made responsible for making certain that quality improvement reforms made an impact. Reforms related to financial sustainability and the streamlining expenditures were managed by the HEC and the Expenditure Unit of the Ministry of Finance; this cooperation was critical in ensuring that program funding was not disrupted. To monitor the new tenure track system the HEC’s Quality Assurance Division carried out periodic assessments. In addition, on-site visits conducted by the HEC to collect information that would facilitate an objective ranking of universities in Pakistan enabled it to assess the implementation of the tenure track system. Similarly, concerns about the quality of indigenous PhD graduates were addressed by introducing an external examiner for the final PhD dissertation, an automatic monitor for ensuring quality in local PhD programs. While the above initiatives ensured that the reforms were being implemented as planned, some monitoring and evaluation measures were built into the HESP itself. These included steps dealing with the strengthening of the governance and management systems in higher education. A comprehensive Higher Education Management Information System (HEMIS) has been set up under the program, reaching out to 8 universities in its early stages. This was not prioritized in the key reforms selected by the Bank, but was carried forward by the HEC, aiding in speedy and reliable data collection and analysis. It also facilitated the HEC in its efforts to plan the sector’s future strategy, allowing for easy monitoring and a rigorous follow-up mechanism. There is, as mentioned earlier, a need to extend the entire HEMIS to HEIs, going beyond the installation of the Campus Management module alone. This should incorporate budgeting and expenditure reporting systems. The aim should be to make this a national HEMIS, contributing to better monitoring of the higher education sector.

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2.4 Expected Next Phase/Follow-up Operation (if any): The Bank is in the process of designing a follow-up operation for the HESP. Instead of an instrument based on budgetary support, rendered doubtful by the sensitively poised macroeconomic situation, the Bank is considering a project that would be in the form of a results-based programmatic Investment Loan with Disbursement Linked Indicators (DLI).Preparatory meetings for such an engagement are underway. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) Relevance of objectives: The objectives of the HESP – intended to create a large skilled workforce in Pakistan that could contribute to the country's rapid economic growth – are fully consistent with the FY06-09 Country Assistance Strategy (CAS) and the mutually reinforcing Poverty Reduction Strategy Paper (PRSP). The HESP's objectives clearly endeavour to accomplish the CAS's goals of sustainable growth and improved competitiveness, along with improved public service delivery in the realm of higher education. Finally, the larger and more general goal of improving lives and protecting the vulnerable will be served by the HESP's aim to support Pakistan's economic growth by creating a skilled workforce.

Design: The success of the program depended to a large extent in the HEC's commitment to its own MDTF, which formed the basis of the reforms proposed by the Bank in the HESP. The overarching design of the project, spread as it was over a three year period, was relevant. The goals outlined (for example, increasing the supply of skilled faculty and improving quality and relevance of research in HEIs, to name only a couple) were integral parts of a project designed to revamp the state of the higher education sector in Pakistan. The actions set out under each policy goal were realistic and achievable, aspiring to contribute to the PDOs over a period of time.

Implementation: The program was successfully implemented; all prior actions were met and significant progress was made on most of the other actions identified for the subsequent years of the program. The HEC, in conjunction with the World Bank, managed to not only meet but also exceed most of the outcome indicators chalked out for the year 2008/09 under the HESP. The overall PDOs were not met, but this could not be attributed to implementation failure; this was simply owing to the fact that the HESP was scaled down from a 3-year programmatic series to a 1-year development policy credit.

Most importantly, from the point of view of implementation, the HEC continuously undertook policy adjustments and revisions if the outcomes of a particular action did not meet the required objectives. To ensure that the outcome indicators indicated in the project design to increase the supply of skilled faculty addressed the goal of improving the quality of teaching – instead of simply being an increase in numbers, as some departmental Deans and Vice-Chancellors in public universities interviewed for this ICR had suggested – HEC was determined to standardize the level of skill attained by PhD

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graduates in Pakistani universities. This was done by introducing external examiners for PhD programs. Similarly, recognizing that the initial scholarship program discriminated against students studying social sciences, the HEC has introduced a quota for social science students in all new scholarship awards, which is now being strictly adhered to. The quota for students studying natural and applied sciences having been exhausted, all remaining scholarships are now being availed by those studying social sciences. Correctional measures of this nature meant that implementation of all actions was inextricably linked to outcomes and objectives, making sure that all measures taken were always consistent with the aims of the program. 3.2 Achievement of Program Development Objectives (including brief discussion of causal linkages between policy actions supported by operations and outcomes) As mentioned earlier, the HESP was originally meant to be a 3-year programmatic series; this was shortened to a single credit because of macroeconomic imbalances. As a result, it would not be fair to assess the PDOs in terms of their completion or incompletion; the HESP can only be assessed by reviewing the achievements of the objectives laid out for FY2008/09, and whether these objectives and the actions taken to achieve them would lead to the fulfillment of the PDOs if progress continues as planned. In our view, all the actions taken by the HEC have been necessary steps towards the achievement of the HESP's goal to create an adaptable and skilled labor force by significantly enhancing the quality and reach of higher education in Pakistan. Most importantly, the HEC's commitment to the PDOs has continued even after the Bank's financial assistance – through the HESP – was terminated. This is evidenced by the progress made by the HEC on all aspects of its reform program, ensuring that the Bank, in any follow-up engagement with the HEC, will not be starting from a benchmark based on the actions prescribed for the first year of the HESP, but rather from the significant achievements made by the HEC even after Bank support was discontinued. The HEC has laid solid and strong foundations on which the edifice of a vibrant higher education sector can be built. Detailed progress on each outcome indicator is given below:

Key Outcome Indicator 1: One-third of the increase in enrollments in HEIs between 2007/08 and 2008/09 should be attributable to students studying science and engineering. This target was an illustration of the HESP’s aim to create a skilled workforce to meet the country’s needs, focusing to a large extent on developing graduates with the requisite scientific expertise to contribute to industry and technical research in Pakistan. Between the years 2007/08 and 2008/09, there was a 6% increase in student enrollments (an increase of 17688 students). Of these, 6,568 students enrolled in scientific disciplines– a 37% increase, exceeding the target of 33%.

Key Outcome Indicator 2: The number of PhD graduates produced by Pakistani universities was to increase to 550 by the year 2008/09.

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This target was a reflection of a number of policy goals delineated by the HEC: an increase in the pool of skilled faculty available to universities, an improvement in the capacity of Pakistani HEIs, and the development of an indigenous and self-sufficient faculty development mechanism – allowing the HEC to move away from the expensive foreign scholarship scheme over a period of time. This performance indicator was in fact exceeded, with 613 PhD graduates produced by Pakistani universities by 2008/09, reflecting progress in all the policy areas sketched out above. Various adjustments undertaken by the HEC during the course of the reform program – such as the introduction of external examiners for PhD dissertations – ensured that this indicator truly reflected an increase in the quality of graduates and potential teachers in Pakistan.

Key Outcome Indicator 3: The number of publications put forward by Pakistani scholars in journals of international repute was to increase to at least 3,500 by 2008/09 from 2,500 in 2007/08. This target was linked to the objectives of increasing quality research outputs from Pakistani universities through revised curricula and a peer review process for funding research, expanding the capacity of qualified faculty, and acting as an indicator of the research capabilities and skills of Pakistani scholars. This target was again exceeded. By the end of the HESP, 3,639 articles were published in 2008 in major international journals, as opposed to the 2,474 publications of 2007. 3.3 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs) Rating: Satisfactory There has been remarkable progress on most of the key indicators of the HESP, and almost all of the intermediate targets charted in the HEC's MTDF have been met. In many cases, the required targets have been exceeded, showing exemplary advancement on all fronts. These substantial achievements have meant that there have been noticeable improvements in the quality of, and access to, higher education in Pakistan. The well-structured design made certain that all actions supported the achievement of the PDOs, and by allowing room for readjustments and corrections as the program progressed, ensured that the PDOs remained relevant and that the reforms continued to facilitate the achievement of the declared objectives. 3.4 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development The aim of the HESP was to create a skilled workforce that could substantively contribute to Pakistan's economic growth. This required fracturing the monopoly of the elite over higher education and ensuring equitable access to HEIs; by doing this, the program aimed not only to reduce poverty by allowing more individuals to attain higher levels of education and therefore have access to more job opportunities, but also to contribute to social development by neutralizing the role of some social biases that

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discriminate in favor of the educated elite. The continuation of the international and domestic scholarship schemes put in place by the HEC were significantly bolstered by the HESP; by ensuring that funds committed by the MoF were transferred to the HEC, the program managed to meet all the targets relating to scholarships to be handed out in FY2008/09, thereby making the desired impact on poverty reduction.

The program did not specifically operate under a gender-specific approach in increasing equitable access to higher education – rather, it was cast solely in terms of those who were not economically privileged to have access to HEIs, and those who were. However, by expanding the pool of individuals who were able to enroll in HEIs, the HESP was expected to have a positive impact on the number of women who graduated from university in Pakistan. Although between 2007/08 and 2008/09, the number of women enrolled in university in Pakistan increased by a mere 0.1%, their enrollment had risen dramatically in previous years, their share in the student population having risen from just under 37% in 2001/02 to 46.4% in 2006/07 as a result of the expansion of universities in underserved areas and in the provision of distance learning opportunities. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) Much of the focus of the HESP was on institutional development; this was especially true of the policy areas of the project that focused on governance, management and fiscal sustainability. Significant progress was made in the following ways: I. Instituting the Campus Management module of the HEMIS was a major step to ensure that the use of a Management Information System becomes widespread in HEIs across Pakistan over time. This system will make available, to the HEC, information on indicators and statistics relevant to higher education, thereby improving efficiency in management and strategic future planning. II. Procurement reforms were ensured through the prior actions selected by the Bank. III. Some progress was made towards fiscal sustainability by ensuring that the MOF granted the HEC funds to continue with many of its expensive reform policies (such as the scholarship program). (c) Other Unintended Outcomes and Impacts (positive or negative, if any) Nothing of significance. There was enough flexibility in the interventions and the reform program that enabled necessary corrections to be made in a timely manner. 3.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes) No such surveys or workshops were conducted. However, the team visited a number of public and private HEIs around the country, holding discussions with faculty members and members of the administration in several universities as part of an attempt to gauge the relative merits and demerits of the reform program. (See Annex 2 for details).

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4. Assessment of Risk to Development Outcome Rating: Substantial A number of risks that might have threatened the outcome of the program were identified at the outset. These were: (i) the turbulent political situation; (ii) the shaky macroeconomic situation; (iii) a concern about inter- and intra-sectoral trade-offs that might not favor the higher education sector; (iv) internal resistance from faculty, administrators, and even students; (v) capacity constraints at the level of both the HEC and the individual administration of HEIs; and (vi) finally, fiduciary issues that create concerns related to weak financial management and procurement. It was felt that these would be mitigated by the wide-spread and unanimous support within Pakistan for higher education despite frequent political changes; coordinated action taken by the Bank, the IMF and other donors to help the GoP to ensure that stabilization measures proceeded as planned; by engaging all stakeholders in continuous dialogue to reduce these risks; addressing capacity constraints through a gradual implementation of reforms and by ensuring that the HEC remained an autonomous body; and finally, through improved accounting practices under the PIFRA regime, combined with the enhancement of the financial management capacity in the HEC and through the revamping of the procurement rules and regulations.

However, as already noted above, one of the outlined risks – the uncertain macroeconomic situation – affected the continuation of original design of the HESP as a programmatic credit series over a period of 3 years. It was transformed into a single tranche program.

5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory The Bank performed satisfactorily in meeting all its commitments under the HESP. Upon the successful completion of all prior actions, the Bank transferred the development policy credit immediately. The assurance of financial support, contingent upon the HEC continuing to implement its MTDF-HE, allowed the Bank to play a positive role, by influencing the dialogue between HEC and the MOF on the availability of funding for the recurrent expenditures and development programs of the higher education sector within the constraints imposed by the fiscal consolidation efforts of the GoP’s. During the program the Bank coordinated with the HEC regularly, maintaining a strong process of

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dialogue through both formal and informal meetings, as well as assisting the HEC in organizing conferences, workshops and introducing other key measures that strengthened the HEC's ability to implement the program. The PDOs formulated by the Bank remained relevant throughout the program and the design of the project – including the prior actions selected – made sure that all development objectives could be met through the steps taken under the HESP. (b) Quality of Supervision (including M&E arrangements) Rating: Satisfactory The Bank staff made regular visits to the HEC to oversee progress on prior actions, but allowed all other monitoring and evaluation measures to be undertaken by the HEC itself. The Bank's task team, composed of its Team Leaders, Procurement Specialists, Financial Management Specialists, Senior Economists and consultants, was adequately equipped for the work assigned to it. Even after the closure of the HESP, the Bank maintained its dialogue with the HEC with the specific aim of supporting the development of the higher education sector through a different financing instrument. Presently, preparatory meetings for a follow-up operation are underway (the last such mission was completed in May, 2010), allowing the Bank to keep itself abreast of current developments and to assess the HEC's continued commitment to pursuing its reform agenda. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The Bank continued to engage with the GoP, in particular the MOF, and the HEC in providing technical support and ensuring the continued flow of resources to the HEC through the commitments made under the letter of intent signed by the GoP. Furthermore, the Bank is in the process of developing a new instrument to provide technical and financial support to the HEC and the GoP, with appropriate performance indicators and Disbursement Linked Indicators (DLI). 5.2 Borrower Performance NOTE: When the government and implementing agency are indistinguishable, provide rating and justification only for Overall Borrower Performance. (a) Government Performance Rating: Satisfactory In terms of complying with the terms set out in the HESP, the Government was responsive; the MOF released recurrent and development funds as committed for the first year of the program in its letter of intent, despite the budget cuts that were being made in other areas. However, in view of the overall resource crunch, the availability of funding for development spending in subsequent years is now being affected, although the sector

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has not been discriminated against in the allocations for the Federal PSDP, i.e. it is no more worse off than any of the other sectors. The budgetary support that was indicated in the letter of intent of the Government of Pakistan was as follows:

While the GoP met its commitments on allocations for the recurrent budget, the amount eventually released for the development program for FY 2009/10 was only Rs. 11 billion compared with the program pledge of Rs. 22.5 billion – a sharp cut in proportional terms compared with the budgetary allocations and releases during the first seven years of the investment program.

As drawn up in the HESP, the GoP's support was only meant to be financial. It must be noted, however, that the Government played a strategic role in granting the HEC considerable financial and administrative autonomy; this was a critical component of the institutional arrangement designed to enable the HEC to successfully implement its ambitious reform agenda.

The Bank decided it was no longer possible for it to support the HEC and the GoP through a new budgetary support instrument because continued fiscal weaknesses and shortfalls in external financing impeded sustainable macroeconomic stability. Spending on security related issues, the resettlement of Internally Displaced Persons (IDP) placed a huge additional burden on the Government's already stretched resources. However, in view of the HEC's success in implementing all the strategic reform initiatives within its control, the Bank is now planning to support the higher education sector in Pakistan through a different financing instrument. (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory The performance of the implementing agency, the HEC in this case, was exemplary. The HESP was based on the HEC's MDTF-HE to such a degree that the HEC had complete ownership of the reforms outlined under the HESP; because of this, not only did the HEC implement the prior actions the Bank had selected but also made significant progress in meeting the other targets marked out in the policy framework. The HEC also ensured the efficient and effective monitoring of activities conducted under the program, updating information that it shared regularly with stakeholders. Significant gains have been made in the higher education sector even after the Bank's financial support was withdrawn, auguring well for continued Bank engagement with the HEC.

Years Recurring (Billion Rs.) Development (Billion Rs.)

FY 2009/10 21.5 22.5

FY 2010/11 28 30

FY 2011/12 38 40

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(c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The Borrower largely complied with the terms and conditions set out in the HESP; other than the GoP's inability to fulfill its commitment on financing in the years following the HESP, Borrower performance – and specifically that of the implementing agency, the HEC – was satisfactory.

6. Lessons Learned (both operation-specific and of wide general application) Complete ownership by the Borrower is essential for the momentum of reforms to be sustained. The Bank's financing was tied only to the achievement of the prior actions in the HESP. Had the HEC not fully owned the program and not been committed to its own MTDF, substantial progress could not have attained in implementing other components of the reform program.

Committed leadership and political will is extremely important in spearheading reforms. Without the professional and competent leadership of the HEC, and the commitment of the GoP to continue to support higher education, the reform agenda of the HEC could not have been pursued in this manner.

Flexibility in project design is critical. A large measure of the successful performance of the HEC stemmed from its commitment to monitor progress and institute corrective measures when it felt that the outcomes of its policies were not consistent with, or hampering, the achievement of the overall objectives of the program. While all key players in the higher education sector were going up a learning curve, the flexibility with, and the timely manner in, which, actions were carried out have been critical to this success. In an environment in which resource availability is uncertain or constrained the financial sustainability aspects need to be factored early into the program design. These considerations should influence the nature and scope of the proposed interventions, instruments and mechanisms to achieve the desired goals without unduly compromising the objectives of access and equity.

Sustained support by the Bank, outside the realm of assured funding, is necessary. There were a number of areas in this program where – while progress was made – the provision of technical assistance could have made it easier for all principle stakeholders to implement the reforms speedily, efficiently, and in a cost-effective manner. An example of this is the establishment of Quality Enhancement Cells in universities; with extended guidance and external support, HEIs in Pakistan would have found the institution of self-assessment systems a simpler exercise than their experience to date.

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7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing agencies No major issues were raised.

(b) Co-Financiers Not applicable. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

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Annex 1 Bank Lending and Implementation Support/Supervision Processes (a) Task Team members

Names Title Unit Responsibility/

Specialty Lending Naveed Hassan Naqvi Senior Education Economist SASED TTL Benoit Millot SASHD CO-TTL Yoko Nagashima Education Specialist SASED Education Saeeda Sabah Rashid Financial Management Specialist SARFM FM Asif Ali Senior Procurement Specialist SARPS Procurement Javaid Afzal Senior Environmental Specialist SASDI Environment Shahzad Sharjeel Senior Communications Officer AFREX Communication Mohammed Allak Consultant Education

Norman LaRocque Consultant Private-Public Partnerships

Kai-Ming Cheng Consultant Endowment Funds

Supervision Naveed Hassan Naqvi Senior Education Economist SASED TTL Benoit Millot Consultant SASHD Education Saeeda Sabah Rashid Financial Management Specialist SARFM FM Asif Ali Senior Procurement Specialist SARPS Procurement

(b) Staff Time and Cost

Stage Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY07 19.26 256.87 FY08 32.72 258.98

FY09 25.30 95.92 Total: 611.77

Supervision/ICR FY10 7.57 42.70

Total: 77.28 42.70

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Annex 2. Beneficiary Survey Results (if any) While no Beneficiary Survey was held, the ICR team visited several universities across Pakistan to discuss the progress and outcomes of the higher education reform program with the Vice Chancellors and Deans and gather their views on the achievement and shortcomings of the ongoing interventions in the sector, and identify the way forward. These universities are listed below: 1. Lahore University of Management Sciences, Lahore (LUMS) 2. Government College University, Lahore (GCU) 3. University of Engineering and Technology, Lahore (UET) 4. University of Sindh, Jamshoro 5. Quaid-e-Azam University, Islamabad

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Annex 3. Stakeholder Workshop Report and Results Nil

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Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR Summary of the HEC’s ICR The Higher Education Support Program (HESP) of the World Bank was instrumental in ensuring that the implementation of all projects and programs of reform and development of the higher education sector in Pakistan continued uninterrupted; allowing it to meet or exceed the targets of the outcome indicators identified in the HESP Policy Framework. Universities are complex enterprises and any support program envisioning their development must address numerous inter-dependent aspects of university operation, while also ensuring sustainability of the initiatives once the program has been completed. The ambitious plan of action developed under the HESP, therefore, addressed issues including undergraduate programs, postgraduate education and research, promotion of research, faculty development, aligning university outputs with industry requirements, enhancement of equitable access to university education and implementation of a comprehensive program of program and institutional accreditation and quality assurance. The plan also outlined important fiscal sustainability, governance and management initiatives that were required for enhanced effectiveness of the interventions. Quality remained at the heart of all activities of the Higher Education Commission as a matter of policy. Tremendous demand exists in Pakistan for higher education, especially in the professional disciplines of engineering, medicine, pharmacy, etc. It was therefore important to institutionalize quality assurance systems that would place an effective check in quantitative increases in student numbers at that expense of quality. The HEC managed to effectively balance the push-pull forces of quantity and quality, increasing enrollment in science and engineering disciplines with 37% of new enrollments attributable to these subjects. Similarly the strong growth in PhD student output was in conjunction with an equally impressive growth in International Journal publications from Pakistan. While funding of indigenous PhD scholars ensured that an enhanced number of students were facilitated to pursue advanced degrees, strong quality requirements of entrance examinations, structured postgraduate curriculum, vetting of dissertation by international referees and the requirement of international journal publication for award of PhD ensured that quality objectives were also met. Similarly the availability of an international research opportunity for PhD students created a strong demand for it but the requirement that the students get placement at a top ranked university of the world ensured that participation in this activity led to improvement in quality of the PhD work. It was heartening indeed to see that more than 50% of the students on the 6 month scholarship obtained other funding to stay another 6 months and that each award resulted in at least a journal publication in a leading international journal. The scholarship program of the HEC was designed with the primary objective of producing PhD qualified future faculty members and it was therefore important to ensure that the maximum number of institutions adopted the Tenure Track System of appointment allowing young fresh PhD scholars to be absorbed in universities as Assistant Professors. A significant majority of all public sector higher education

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institutions adopted TTS, hiring over 835 tenure track faculty and consequently the target of increasing PhD qualified faculty by 300 was met. A considerable effort was required for the introduction of a new system of appointment of faculty members of universities and this system has already fundamentally altered the faculty landscape of universities. Becoming a university faculty member is an employment of choice in Pakistan. The introduction of the four-year integrated Bachelor (Hons) degree provided myriad new opportunities to school leavers to pursue the discipline of their choice in a university environment in Pakistan. The curriculum for 4 – Year programs have been developed in 2008-09 and 22 in 2009-10 in a systematic manner in consultation with industry to ensure their relevance. The first two years of these programs were specifically structured to allow delivery at affiliated colleges offering 14-year traditional Bachelor degree programs. Thus the HEC has been able to ensure that the new system undergraduate education introduced in the universities is not at variance with system at the affiliated colleges in the country. The Provinces were brought on board using the platform of the Steering Committee of higher education, which has secretary level representation from all the Provinces, regarding the transition to the new four-year Bachelor (Hons) program, and various mechanisms for their gradual introduction in leading affiliated colleges were discussed. As a consequence 26 colleges in Punjab are going to pilot the four-year program starting Fall 2010. Traditional methods of provision of higher education in Pakistan include the regular on-campus university and college programs as well as the distance education programs offered via the Allama Iqbal Open University and the Virtual University. Yet another mechanism is that of “private” admissions whereby a student only enrolls for taking final examinations of the University. Recognizing that the method of “private” admissions may lead to compromise in quality of higher education, a program was launched for the establishment of Directorates of Distance Learning for providing full distance learning program support to “private” students. The BZ University, Multan is now functional and the enrollment of external students is now being made in distance mode of education in five disciplines. The development of an environment conducive to research in universities that is relevant to the socio-economic development needs of the country has been a core strategic objective of programs launched by the Commission. To support high speed audio/video/data communication between the institutions (Intranet) and to the world (Internet) an exclusive IP based network (PERN II) having a 10GB backbone and providing exclusive linkage between the higher education institutions was strengthened to provide 1GB link to each institution. Work was also completed for the establishment of video-conference rooms at each public sector university which allowed more than 70 universities and degree awarding institutions in the country to simultaneously interact using video conferencing. This computer network also facilitated the bilateral funded programs for linkage of Pakistani researchers with their counterparts in the UK and USA respectively. Additional interaction opportunities were provided through the Travel Grants program for presentation of research at local and international conferences as well as the organization of local events. The HEC Digital Library Program ensured that more than 70% of the world’s published academic and scientific journals were made available

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to every institution, laying the foundation of an environment where access to information was free and unfettered across all Institutions. With research thriving in the country it was necessary to take steps to develop the innovation support mechanisms to provide close linkage to existing industry requirements, as well as the launch of new companies. For this purpose an exercise to understand the innovation “Eco-System” was launched in collaboration with the Competitive Support Fund (CSF). Leading innovators, industrialists, academicians, legal experts and specialists are being consulted for the Innovation Strategy report currently under preparation. CSF also partnered with HEC for the development of a Technology Incubator at the Agricultural University of Faisalabad to help transition of research from that institution to commercial world. Institutions of higher learning, whether public or private, must be involved in research and for this purpose HEC research support initiatives were made accessible to 16 private sector universities and degree awarding institutions operating on not-for-profit basis. These private sector institutions also had full access to the peer evaluated research grants provided by the HEC to support original research work. These multitudinous efforts to promote research in Pakistan resulted in publications in impact factor journals rising to beyond 4,000 for the first time in the history of the country. Enhancement of equitable access to higher education has remained a key objective of the program for transformation and reform of the higher education system of Pakistan. It is clear that the Government alone does not have the resources to provide solutions to all the higher education needs of the country; therefore the private sector has to be facilitated to support the efforts of the Government. A comprehensive policy to support private sector higher education institutions, truly operating on a not-for-profit basis, was approved and implemented allowing the Government to provide financial resources to the private sector institutions primarily for supporting research activities and the launch of programs in areas having direct relevance to the socio-economic development of the country such as engineering and applied science and technology. The two premier distance education providers in the country, AIOU and Virtual University, were also encouraged and facilitated to enhance program offerings as well as to outreach the under-served areas of the country- 13 sub-campuses of Virtual University are functional in various parts of the country, mostly in remote and far flung areas. As a consequence both enrollment and program offerings increased substantially, exceeding targets specified for this purpose. To address issues of equity the number of scholarships available under the needs-based scholarship program was also increased along with hostel facilities for meritorious students from remote areas of the country. HEC has added residential facilities to accommodate more than 10,000 students in all public HEIs during last 7 years. The availability of hostel facilities along with transportation for students living far away from campus also had a positive impact on female enrollment in the country, which continued to increase, thus narrowing the gender gap. An illustrative example is that of the University of Gujrat, located in rural Punjab and enrolling more than 6,000 students of which 53% are female students. Presently, 4 universities for women are operational in the country and plans are under way to establish four more women universities in Multan, Suikkur, AJK, and Faisalabad. Substantial headway was also made towards the

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development of a student loan scheme facility to be provided through the commercial banks with first-loss support from the Government as well as donor agencies. The mission of the Higher Education Commission identified it to be an organization facilitating higher education institutions, helping build their capacity to serve as engines of growth. Improvement in the governance and management of the HEIs was therefore an important issue to be addressed to ensure long term fiscal and administrative sustainability of reforms. Ownership of “Quality of Academic and Research Programs” was considered to be the most important issue here since once a self-correcting system of quality assurance and quality audit is in place, progress towards meeting the core objectives of the higher education institutions is assured. The quality assurance agency (QAA) of the HEC has the responsibility for the implementation of quality assurance policies developed by the quality assurance department (QAD). At the institutional level quality assurance cells play the role of “institutional owners” of quality and information repositories that not only interface with all university departments and administrative units but also liaise with external quality assurance bodies such as the accreditation councils. A program for the establishment of these quality enhancement cells (QEC) at 61 institutions was implemented along with training of QEC staff and development of a scorecard of Institutional QEC performance. The Quality Assurance Manual containing a complete overview of procedure to be followed for internal quality assurance along with standardized forms for data collection was developed and launched to support the work of the QECs. The QECs helped launch a system of “internal” quality review of academic and research programs, while the accreditation councils provide an “external” review mechanism. Four new accreditation councils in Teacher Education, Computer Science and IT, Agriculture, and Business Studies were launched to enhance quality of these important undergraduate study programs having very large enrollments. For external review of MS and PhD level programs, regional committees were constituted by the HEC to visit each institution and assess degree of implementation of HEC quality policies. Programs of 45 public and private sector institutions have been reviewed by the Committee and recommendations have been placed before the Commission. Finally, to enhance the performance at the Institutional level, a framework for institutional performance assessment covering all aspects of operation of an institution of higher learning was developed and launched. Thus the core framework placing quality at the center of operation of HEIs was put in place. The HEC is the central organization coordinating the efforts for improvement of higher education in the country and it is clear that the capacity of HEC impacts its ability to implement the ambitious programs for the development of higher education in the country. For this purpose a two-pronged approach was adopted, focusing on hiring talented young university graduates as well providing extensive training to the new hires as well as existing employees. A program in collaboration with the Leadership Foundation of the UK was launched to also provide exposure to HEC personnel to best practices in the UK in their respective domains of operation. Good governance and management also requires access to timely and accurate data for which the capacity of the HEC statistics section was enhanced along with provision of a comprehensive campus management solution to 8 pilot universities allowing for streamlining of university

28

business processes, maintenance of accurate student data and provision of efficient services to the university community. This program has been extremely successful and remaining modules of HEMIS which includes HR and Financial Management System are planned to be implemented in Phase-II. Additionally, every effort is being made to implement HEMIS for all the other institutions as well in a phased manner. After two years (by 2011-12) about 60% public HEIs will have HEMIS. The implementation of the SAP software based financial management system in the Higher Education Commission ensured that an integrated budget and expenditure reporting mechanism was in place providing expedited processing as well as complete visibility into all financial matters. This system must now be implemented at the institutional level as well so that the entire financial system of higher education institutions in the country operates as one unit. An area of concern for the HEC, first highlighted in the 2006 policy note of the World Bank is that of communication of HEC to the stakeholders. To address this deficiency, a comprehensive report on the first six years of achievements of the higher education development program was documented and a special effort was launched to develop a support base for work of the HEC. This included extensive meetings with legislators, compilation of sectoral reports on HEC support to the Agriculture, IT, Engineering and other sectors, focused meetings with education sector newspaper reporters. These initiatives are integral to the communication strategy under preparation. Macro-economic imbalances and the resulting fiscal stress means that public financial support to the higher education sector would be impacted. It is clear that a major challenge being faced by the higher education sector today pertains to funding in the short and medium term.

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Higher Education Commission’s Comments on the Bank ICR:

Goal / Action ICR Findings HEC Comments

Pillar 2: Expanding Access and Enhance Equity in higher education Goal 2: Promote participation of private sector Action: Approve policy allowing high quality private sector HEIs to qualify for up to 50% funding for development projects, subject to meeting ‘need-blind’ access requirements

Some prior actions and desired outcomes of the program did not appear to have any immediate and direct linkage with the stated objectives. An example of this was the prioritization of measures to encourage the participation of the private sector. Prioritizing the expansion of distance-learning facilities might have more directly impacted both the goals of access and equity.

It is clear that the Government alone does not have the resources to provide all solution to the higher education needs of the country and the private sector, therefore, has to be facilitated to support the efforts of the Government. The policy has direct impact on the objectives to promote quality higher education in Pakistan. It can be gauged from the fact that enrollment in private sector universities has increased side by side the enrollment in private HEIs. The quality initiatives of HEC are being implemented in private HEIs. Additionally, HEC has paid significant importance to expand distance learning facilities in the country and enhance enrollment in distance learning universities. 13 additional campuses of Virtual University are functional in various parts of the country, mostly in remote and far flung areas of the country. To promote distance education HEC also provide funds for establishment of TV channels, Radio Stations and e-lectures facilities. The enrollment of VU and

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AIOU has increased manifold from 89,749 in 2002 to 339,704 in 2009.

Goal 2: Enhanced quality of courses and programs Action: Hold consultations for aligning undergraduate programs at affiliated colleges with universities.

In addition to Universities, twenty-six provincial colleges have been selected by the Government of Punjab to make the shift to a 4-year undergraduate program. This new academic structure was to become operational from the academic year 2008/09

26 colleges in Punjab are going to pilot the four-year program starting Fall 2010.

Pillar I: Improving quality and relevance of teaching and research Goal 3: Alignment of teaching and research outputs with development objectives

Simultaneously, a process of rigorous peer review has been implemented for any research proposals to receive funding.

Research funding remained concentrated in scientific and technological fields as evident from following from 2002-2008 as under: Basic Sciences

31% Biological Sciences

28% Agricultural/Food

Sciences16% Medical Sciences

11% Engineering

9% Social Sciences

11% By introducing peer review process, HEC is aligning Pakistani research with mechanisms used in advanced countries, and is departing from earlier practices funded on ad hoc decisions and/or alliances of interests.

Pillar I: Improving quality and relevance of teaching and research Goal 4: Improved quality and relevance of research

PERN-II was launched in accordance with the targets laid out in the HESP, 1 GB internet connectivity has been provided to 17 public and private HEIs

To support high speed audio/video/data communication between the institutions (Intranet) and to the world (Internet) and exclusive IP based

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undertaken in HEIs Action :Introduce initiatives to strengthen research quality (inter/intra university IT structures – digital resources – linkage programs – publications)

Access to an online library with over 45,000 books and 23,000 journals has been made available to 42 HEIs

network (PERN II) having a 10GB backbone and providing exclusive linkage between the higher education institutions was strengthened to provide 1GB link to each institution. Work was also completed for the establishment of video-conference rooms at each public sector university which allowed more than 70 universities and degree awarding institutions in the country to simultaneously interact using video conferencing. The HEC Digital Library Program ensured that more than 70% of the world’s published academic and scientific journals were made available to every institution, laying the foundation of an environment where access to information was free and unfettered across all Institutions Plagiarism software availability to 61 HEIs

Pillar I: Improving quality and relevance of teaching and research Goal 4: Improved quality and relevance of research undertaken in HEIs Action :Introduce initiatives to strengthen research quality (inter/intra university IT structures – digital resources – linkage

24 linkage programs with international universities were also put in place to improve research quality

More than 500 Teachers granted Travel Grant to participate in International Conferences. Moreover, 31 linkage programs with international universities are in place. Criteria for HEC

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programs – publications)

recognized journals developed and implemented, so far 129 research journals have been recognized by HEC.

Pillar II: Expanding access and enhancing equity in higher education

Goal 1: Increased equitable access to higher education

Given the focus on expansion of enrollments and universities in increasing access, concerns have been expressed about the short-term tradeoffs between expansion and quality.

The issue raised in ICR has already been addressed in the self -assessment report of HESP, prepared by ED.

Goal 1: Increased equitable access to higher education Action: Promote distance learning through increasing Virtual University and AIOU enrollments

to increase enrollments in AIOU and VU; funding was allocated to 5 new distance-learning institutes

5 Development projects included in PSDP 2009-10 mentioned in ICR instead of 5 new distance learning institutes.

Needs also to incorporate establishment of 13 VU campuses mostly in remote and far flung areas which is already mentioned in status report sent for preparation of ICR.

Goal 1: Strengthen QA mechanisms for academic programs Establish Quality Enhancement Cells (QECs) at 30 public HEIs

traditional mindsets in several HEIs are not familiar with ways of assessing quality enhancement and HEC presently also lacks the capacity to play a much more active hand-holding and mentoring role this pillar will continue to pose a challenge in the foreseeable future

HEC has strong capacity for quality assurance in HEIs, as demonstrated with various concrete programs and achievements in this respect. The issue has been well addressed in self-assessment report of HESP prepared by HEC.

2.3 Monitoring and Evaluation (M&E) Design,

HEC QA Division is working to implement and monitor Tenure Track

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Implementation and Utilization:

To monitor the new tenure track system the HEC’s Quality Assurance Division carried out periodic assessments. In addition, on-site visits conducted by the HEC to collect information that would facilitate an objective ranking of universities in Pakistan enabled it to assess the implementation of the tenure track system.

System in letter and spirit.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:

Concerns about the quality of indigenous PhD graduates were addressed by introducing an external examiner for the final PhD dissertation, an automatic monitor for ensuring quality in local PhD programs.

Only one initiative has been highlighted in this ICR. There are array of programs / steps taken by HEC to assure quality of PhD output, as highlighted in self-assessment report of HESP prepared by HEC.

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Annex 5. Comments of Co-financiers and Other Partners/Stakeholders

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Annex 6. List of Supporting Documents

1. Project Document: Higher Education Support Program, 2009 2. ISR for HESP from March 2010 3. Aide Memoires from the following missions in 2008 and 2009

a. March 10 – 20, 2008 b. October 27 – 31, 2008 c. January 26 – February 3, 2009 d. April 15 – 21, 2009

4. Higher Education Policy Note, 2006 5. Pakistan Country Assistance Strategy, 2006-2009.

AFGHANISTAN

CHINA

To Mandi

30°N

25°N

65°E 70°E 75°E

K2(Mt. Godwin-(Mt. Godwin-

Austen) (8,611 m)

FED. CAPITAL TERRITORY

ISLAMABAD

KarakoramRange

Tha

rD

e s e r t

Hindu

Kush

Central Makran Range

Indu

s

Ravi

Sutlej

Chenab

Jhelum

Zhob

Ind us

Mas

hkai

Indus

B A L O C H I S T A N

S I N D H

P U N J A B

NORTHERNAREAS

Quetta

Lahore

Peshawar

Muzaffarabad

ISLAMABAD

SrinagarKargil

Hyderabad

Faisalabad

Rawalpindi

Saidu

Chitral

D.I. Khan

GujratGujrat

Kahat

Bannu

GujranwalaGujranwala

D.G. Khan MultanMultan

Sahlwal

BahawalpurNok Kundi

ChamanChaman

Surab

Zhob

BadinThatta

Panjgur

Ranipur

Turbat

MoroMoro

Bela

Gwadar

ApproximateApproximateLine of ControlN . WN . W. F. F. P. P..

JammuJammuand Kashmirand Kashmir

B A L O C H I S T A N

S I N D H

P U N J A B

N . W. F. P.

FED. CAPITAL TERRITORY

ISLAMABAD

SrinagarKargil

Hyderabad

Faisalabad

Rawalpindi

Saidu

Chitral

D.I. Khan

Gujrat

Kahat

Bannu

Gujranwala

D.G. Khan Multan

Sahlwal

BahawalpurNok Kundi

Chaman

Surab

Zhob

BadinThatta

Panjgur

Ranipur

Turbat

Pasni

Moro

Bela

Gwadar

ApproximateLine of Control

Karachi

Quetta

Lahore

Peshawar

Muzaffarabad

ISLAMABAD

AFGHANISTAN

INDIAISLAMICREPUBLIC

OFIRAN

CHINATAJIKISTAN

Jammuand Kashmir

Indu

s

Ravi

Sutlej

Chenab

Jhelum

Zhob

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Mas

hkai

Indus

A r a b i a n S e aRann of Kutch

To Kandahar

To Kerman

To Kerman

To Khash

To Jodhpur

To Mandi

To Kabul

To LudhianaTo

Bhatinda

KarakoramRange

Tha

rD

e s e r t

Hindu

Kush

Central Makran Range

K2(Mt. Godwin-

Austen) (8,611 m)

35°N

30°N

25°N

30°N

25°N

65°E 70°E 75°E

65°E 70°E 75°E

PAKISTAN

0 50 100 150

0 50 100 150 Miles

200 Kilometers

IBRD 33460

JANUARY 2005

PAKISTANSELECTED CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

RIVERS

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endorsemen t or a c c e p t a n c e o f s u c h boundaries.

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES