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Document of The World Bank

Report No: ICR0000560

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-43780)

ON A

LOAN

IN THE AMOUNT OF US$21.5 MILLION

TO THE

REPUBLIC OF INDONESIA

FOR AN

EARLY CHILDHOOD DEVELOPMENT (ECD) PROJECT

July 30, 2007

Human Development Sector Unit

East Asia and Pacific Region

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CURRENCY EQUIVALENTS

Exchange Rate Effective April 2007

Currency Unit = Rupiah (IDR) IDR 1.00 = US$ 0.0001102 US$ 1.00 = IDR 9,074.41

FISCAL YEAR

April 1 – March 31 (at appraisal)

ABBREVIATIONS AND ACRONYMS

APBD Local (district) budget APBN National budget Bappeda Regional development planning board Bappenas National development planning agency BKB Bina Keluarga Balita or Parent-Child Program CBO Community Based Organizations CPMU Central Project Management Unit DBL School block grants for quality enhancement DBO Block grants to schools issued under the crisis DPMIU District Project Management and Implementation Unit Dikdas Directorate for primary education, MONE

Diklusepora Directorate-General for out-of-school youth education, youth and sports

Dikdasmen Directorate-General for Primary and Secondary Education, MONE

Dikmenum Directorate for Secondary Education, MONE Dikmas Directorate of Community Education Dinas I Provincial level offices of local government Dinas II District level offices of local government Dinas P&K Local government office for MONE Direktorat PAUD Directorate of Early Child Education ECED Early Childhood Education and Development ICR Implementation Completion and Results Report LKMD Village Development Council MOH Ministry of Health MONE Ministry of National Education MOHA Ministry of Home Affairs MORA Ministry of Religious Affairs PAUD Pendidikan Anak Usia Dini – or Early Child Education Posyandu Integrated Health Service Delivery Post (center) SD Primary school, grades 1-6 SLTP Junior secondary school, grades 7-9 TK Taman Kanak-Kanak or Kindergarten

Vice President: James W. Adams

Country Director: Joachim von Amsberg Sector Manager: Christopher J. Thomas

Project Team Leader: Susiana Iskandar ICR Team Leader: Rosfita Roesli

INDONESIA Early Childhood Development (ECD) Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design............................................... 12. Key Factors Affecting Implementation and Outcomes .............................................. 53. Assessment of Outcomes .......................................................................................... 104. Assessment of Risk to Development Outcome......................................................... 165. Assessment of Bank and Borrower Performance ..................................................... 166. Lessons Learned ....................................................................................................... 197. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 21Annex 1. Project Costs and Financing.......................................................................... 22Annex 2. Outputs by Component ................................................................................. 23Annex 3. Economic and Financial Analysis................................................................. 27Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 31Annex 5. Beneficiary Survey Results ........................................................................... 34Annex 6. Stakeholder Workshop Report and Results................................................... 35Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 36Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 45Annex 9. List of Supporting Documents ...................................................................... 47

MAP

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A. Basic Information Country: Indonesia Project Name:

ID-EARLY CHILD DEVELOPMENT

Project ID: P036049 L/C/TF Number(s): IBRD-43780 ICR Date: 08/03/2007 ICR Type: Core ICR Lending Instrument: SIL Borrower: GOI Original Total Commitment:

USD 21.5M Disbursed Amount: USD 10.8M

Environmental Category: C Implementing Agencies: Directorate General of Nonformal Education, Ministry of National Education Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 11/20/1997 Effectiveness: 10/16/1998 10/16/1998 Appraisal: 05/12/1998 Restructuring(s): Approval: 07/28/1998 Mid-term Review: 04/10/2002 Closing: 03/31/2005 12/31/2006 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

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

Quality at Entry: Moderately Satisfactory Government: Not Applicable

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Not Applicable

Overall Bank Performance: Moderately Satisfactory Overall Borrower

Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

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Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 6 7 Health 48 Pre-primary education 27 80 Primary education 13 5 Sub-national government administration 6 8

Theme Code (Primary/Secondary) Child health Primary Primary Education for all Secondary Primary Rural services and infrastructure Secondary Secondary Vulnerability assessment and monitoring Secondary Secondary E. Bank Staff

Positions At ICR At Approval Vice President: James W. Adams Jean-Michel Severino Country Director: Joachim von Amsberg Dennis N. de Tray Sector Manager: Christopher J. Thomas Alan Ruby Project Team Leader: Susiana Iskandar Susiana Iskandar ICR Team Leader: Rosfita Roesli ICR Primary Author: Robert L. McGough F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The development objectives of the project are to support the short and long-term early child development needs of poor children between the ages 0-6 in IDT villages in selected provinces. The immediate short-term objective is the provision of emergency complementary food to infants between 6 and 24 months. The longer term objectives are to increase access, quality and utilization of ECD programs targeted to these poor children.

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Revised Project Development Objectives (as approved by original approving authority) (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 : By the end of the Project at least 80% of the ECD facilities in project villages are utilized.

Value quantitative or Qualitative)

N/A

At least 80% of the functioning ECD facilities were utilized.

The project has built and/or rehabilitated 681 ECD facilities. All of them (100%) were utilized by the potential users.

Date achieved 01/01/1999 12/31/2006 12/31/2006 Comments (incl. % achievement)

Exceeded.

Indicator 2 : By the end of the Project, scores on tests to measure readiness to enter grade one will be higher than those of children not served by the project.


Average scores:Group 19-28ms:ECD locations,5.05; non ECD 4.83; Group 49-56ms: ECD locations 36.55 non ECD 27.62

Scores on tests to measure readiness to enter grade one will be higher than those of children not served by the project

Younger children in proj. scored 0.24 std dev(SD) better in social ability than the non project children. Older c hildren in project scored 0.22 SD better in reading than the non proj. childr


Achieved. Indicator was too general and broken down by team into: social ability/ thinking, cognitive, language, psycho-motor and academic development for young children and reading, writing, counting for older children.

Indicator 3 : 75% of target number of TK teachers support clusters are meeting on a regular basis


N/A 75% met at least four times a year

100% of the clusters met at least four times a year


Exceeded.

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Indicator 4 : Participation rate of parents and children in BKB/posyandu meetings by the end of the year improved by 60% above baseline.


W. Java=16.6%; Bali =30.9%; S.Sulawesi=11.2%

W. Java: 26.56%; Bali: 49.44%; S. Sul: 17.92%

W. Java=31.1% (6722 of 21,615 children) Bali =90.7% (5329 out of 5876) S.Sulawesi=35.2% (7614 of 21,631). The rate in Bali is higher due to association with local culture practise


Exceeded

Indicator 5 : By the end of project, satisfactory level of community participation is signified by the signing of at least 70% of target annual contracts with LKMD, a community-based organization within local village administration structure.


N/A

70% of MoAs (W.Java 244, Bali 196, S. Sulawesi 241) signed by LKMD (was the official mandated representatiev to sign MoA)

W. Java=100% of 244 MoA; Bali=100% of 196 MoA; S. Sulawesi=100% of 241 MoA.


Exceeded. ‘Contract’ is signed by the District and LKMD, stating agreement by LKMD to execute the block grant for facility construction according to guidelines.

Indicator 6 : 85% of fellowships awarded and completed under the project.


0

Total fellowship awarded: 326 D2TK, 3 D3 Nutrition, 34 Masters, and 6 PhD programs. Target of completion rate: 85% of the total

100% of the fellowships were awarded and 95% of the fellows completed their programs. This included: 100% of t he D2 TK and D3 Nutrition; 67.6% of Masters (23) and none of PhD progam

Date achieved 01/01/1999 12/31/2005 12/31/2006 Comments (incl. % Exceeded

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achievement) Indicator 7 : 85% of ECD work plans are fully implemented under the project.


Not yet established

At least 85% of ECD work plans are fully implemented by the end of the project.

Achieved. 100% of the work plans have been implemented under the project. and loan proceed is fully disbursed


Exceeded.

(b) Intermediate Outcome 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 : Completion and adoption of curriculum for BKB/Posyandu training in each of the provinces b. 80% of annual targeted cadres trained

Value (quantitative or Qualitative)

Not yet established

W. Java 80% (2345) Bali 80% (3200) S.Sul 80% (3800)

1.a. Revised curriculum has been adopted and implemented. 1.b. Cadres training was partially achieved: W. Java=63% of 3,000; Bali=79% of 3,800; S. Sulawesi=75% of 4,050.


Partially achieved.

Indicator 2 : 100% of locally recruited kindergarten teachers trained at an accredited IKIP by the end of the project.


Not yet established

100% of locally recruited kindergarten teachers trained at an accredited IKIP by the end of the project

Achieved. 100% completed the teachers completed D2TK course at accredited IKIP.


Achieved

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Indicator 3 : 100% of ECD facilities (kindergartens and BKB/posyandu facilities) fully equipped with necessary books, educational toys and other materials before facilities open.


Not yet established

100% of ECD facilities (kindergartens and BKB/posyandu facilities) fully equipped with necessary books, educational toys and other materials before facilities open.

Achieved. 100% of the 187 ECD centers were fully equipped with furniture, educational toys, books. 100% of the rehabilitate d TKs also received books and the BKB/ Posyandu received educational toys


Achieved

Indicator 4 : 100% production and dissemination of IEC materials completed under the project.


Not yet established

The proposed IEC materials have been produced and disseminated at the end of project implementation

Achieved. The project produced 129,090 copies of IEC materials and the materials, which were designed by an IEC consultant, have been distributed to the intended recipients.


Achieved

Indicator 5 : The BKB/posyandu sessions would be conducted on a regular basis per month in the 243 facilities constructed under the project.


Not yet established

BKB/Posyandu sessions were regularly carried out in the 243 facilities (i.e. 187 ECD Centers and 56 BKB/Posyandu built separately)

Achieved. BKB/Posyandu sessions were regularly carried out in the 187 integrated ECD centers and in the 56 BKB/Posyandu built separately

Date achieved 01/01/1999 12/31/2005 12/31/2006 Comments (incl. %

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achievement)

Indicator 6 :

100% of ECD centers have regular contact with health workers. (ECD Centers are facilities which implements both education and BKB/Posyandu activities)


Not yet established

The 187 ECD center under the projects have regular contact with health workers (midwives from local govt. health center) N ote: the 187 ECD centers was kindergarten. The BKB/Posyandu, part of the ECD

Achieved. 100%of the 187 integrated ECD centers under the projects have regular contact with health workers (midwives from local government. health center)


Achieved

Indicator 7 : Completion of Impact Evaluation.


Not yet established The impact evaluation study is completed

Achieved. Revised data for final Impact Report was completed on Dec 2004 & qualitative report in Sept2005


Achieved. The ICR found the Impact Evaluation Unsatisfactory as originally implemented, but Moderately Satisfactory as recovered through the efforts of the Project team

Indicator 8 : All studies should be completed and submitted to the Bank


Not yet established

All studies should be completed and submitted to the Bank

Achieved: All studies have been compltd incl:(a) impact evaltn;(b)daycare&playgroups(c)dev.of degree teacher training p rog by UNJ,(d) dev. instrmnt for early detection of chldrn w spec needs

Date achieved 01/01/1999 12/31/2005 12/31/2006 Comments Achieved

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(incl. % achievement) Indicator 9 : Establish MIS/GIS monitoring and evaluation system


Not yet established M&E system has been established

Achieved. The M&E system has been established. The M&E reports derived from the system have been verified.

Date achieved 01/01/1999 12/31/2005 12/31/2006

Comments (incl. % achievement)

The full data set collected through the project MIS/ GIS was handed over to the MoNE monitoring and evaluation team after project completion. However, there is no evidence that the M&E and GIS systems were institutionalized beyond the project life.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 01/27/1999 Satisfactory 1.10 2 01/28/1999 Satisfactory Satisfactory 1.10 3 07/01/1999 1.10 4 12/21/1999 Satisfactory Satisfactory 1.10 5 05/22/2000 Satisfactory Satisfactory 1.17 6 06/22/2000 Satisfactory Satisfactory 1.31 7 12/14/2000 Satisfactory Satisfactory 1.47 8 06/22/2001 Satisfactory Satisfactory 2.31 9 12/12/2001 Satisfactory Satisfactory 3.16

10 12/13/2001 Satisfactory Unsatisfactory 3.27 11 06/23/2002 Satisfactory Unsatisfactory 3.76 12 09/11/2002 Satisfactory Satisfactory 4.40 13 06/25/2003 Satisfactory Satisfactory 6.96 14 12/23/2003 Satisfactory Satisfactory 7.46 15 05/19/2004 Satisfactory Satisfactory 8.33 16 06/22/2004 Satisfactory Satisfactory 8.33 17 12/20/2004 Satisfactory Satisfactory 8.88 18 06/16/2005 Satisfactory Satisfactory 9.18 19 06/06/2006 Satisfactory Moderately Satisfactory 10.02 20 06/27/2006 Satisfactory Satisfactory 10.08 21 07/07/2007 Moderately Satisfactory Satisfactory 10.85

H. Restructuring (if any) Not Applicable

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal During the 1990’s, it became apparent that most Early Childhood Development (ECD) programs in Indonesia were considered less than effective. This was particularly evident in communities with predominantly low-incomes families. In an effort to address these shortcomings, the GOI accepted the need for policy reforms and a framework that would integrate the policies for child survival (health and nutrition) and cognitive and psycho-social development (early childhood education) into a more holistic and effective approach. This resulted in the Bank’s agreement to finance a loan to support the implementation of the ECD project on August 14, 1998. At Appraisal, the ECD policies of the Government of Indonesia (GOI) were fragmented. This resulted in inequities and poor quality services in many regions of the country. Three major policy-related concerns were identified. Each of these became part of the investment rationale for the ECD project. The first was the recognition that pre-school children in these communities had decreasing access to school readiness skills development. The second was the recognition that these children also had decreasing access to health and nutrition programs. It was also noted that the affected communities had a significant lack of family access to information concerning the nurturing and quality care of pre-school children. This project was clearly designed to support the sector-related goal of the Country Assistance Strategy (CAS), CAS 16691-IND (last discussion before appraisal – July 10, 1997). This CAS goal was: to enhance human resource development through investment projects aimed at developing a national ECD program for Indonesia.

1.2 Original Project Development Objectives (PDO) and Key Indicators The original project development objective (see Loan Agreement, Schedule 2) is to assist the Borrower in: (i) protecting children between the ages of six months and two years against the effects of malnutrition and enhancing such children’s growth and development (termed PDO1 for purposes of ICR); and (ii) improving the access to and the quality and utilization of the Borrower’s Early Childhood Development programs in the Borrower’s provinces of Bali, South Sulawesi and West Java (termed PDO2 for purposes of the ICR). The original key project performance indicators (PPIs) are listed as follows (see Loan Agreement, Schedule 6): A. Early Childhood Development Program Support 1. By the end of the project, scores in standardized achievement tests of studies in project TKs

and BKBs have increased significantly; 2. By the end of the project, there is at least an 80% utilization of functioning ECD facilities in

project villages; 3. By the end of the fourth year of project implementation, at least 75% of the target numbers of

TK teacher supported clusters are meeting on a regular basis; 4. By the end of the fourth year of project implementation, there is at least a 60% improvement

from the baseline in participation rate at BKB/Posyandu meetings;

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5. By the end of Fiscal Year 2001/2002, 80% of children receiving complementary feeding under the project have improved their weight for their age as indicated on the growth measuring chart (Kartu Menuju Sehat/KMS); and

6. By the end of the third year of project implementation, a satisfactory level of community participation has been reached as evidenced by the signing of at least 70% of the targeted annual contracts with LKMD for the construction of ECD facilities in districts included in the first phase, and at least 70% by the end of the fourth year of project implementation in districts in the second phase.

B. Early Childhood Development Management Capacity Building 1. By the end of the third year of project implementation, at least 85% of fellowships have been

granted; and 2. By the end of project implementation, at least 85% of ECD work plans (as measured in terms

of agreed targets and budgeted expenditures) have been implemented.

1.3 Revised PDO and Key Indicators, and reasons/justification The PDOs and Key PPIs were not revised by the original approving authority. However, both were operationally elaborated to provide more detail. The increased detail allowed the PDO to be broken down into intermediate/short-term and long-term objectives which could then be more closely aligned with the key indicators as stated below. This improved the project’s documentation and provided a more logical structure that could be supported by the monitoring and evaluation (M&E) process established for the project. The elaborated PDO of the project is to support the short and long-term early childhood development needs of poor children between the ages of 0-6 years of age in IDT villages in selected provinces. The immediate short-term PDO is the provision of emergency complementary food to infants between 6 and 24 months of age. The long-term PDO is to increase access, quality and utilization of ECD programs to these poor children. The original PPIs for this project were modified during the implementation to reflect the rapidly changing economic situation and GOI funding priorities and decisions. Associated with the above, the Borrower’s decision to cancel the nutrition component (Section 1.7) required a significant adjustment in the key performance indicators to reflect the reduced output that would be expected from the project. The final, PPIs are as follows: Short Term - Intermediate Indicators 1 a. There is completion and adoption of curriculum for BKB/Posyandu training in each of the

provinces; b. 80% of annual targeted cadres are trained;

2. 100% of locally recruited kindergarten teachers are trained at an accredited IKIP by the end of the project;

3. 100% of ECD facilities (integrated ECD centers and BKB/Posyandu facilities) are fully equipped with necessary books, educational toys and other materials before facilities open;

4. 100% of the production and dissemination of IEC materials is completed under the project; 5. BKB/Posyandu sessions are conducted on a regular basis per month in all of the ECD

facilities constructed under the project; 6. By the end of the project, 100% of ECD centers have regular contact with health workers.

(ECD Centers are project-supported facilities that implement both education and BKB/Posyandu activities);

7. By the date agreed, there is completion of the Impact Evaluation; 8. By the date agreed, all studies have been completed and submitted to the Bank; and

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9. By the date agreed, the MIS/GIS monitoring and evaluation system is established. Long-term Indicators 1. By the end of the project, there is at least 80% utilization of functioning ECD facilities in

project villages; 2. By the end of the project, standardized achievement test scores have increased significantly

amongst students of the project’s ECD center; 3. By the end of project, 75% of target number of TK Teacher Support Clusters is meeting on a

regular basis; 4. By the end of project, there is a 60% improvement, above baseline, in participation rate of

parents and children in BKB/Posyandu meetings; 5. By the end of project, satisfactory level of community participation is signified by the signing

of at least 70% of target annual contracts with LKMD, a community-based organization within local village administration structure;

6. By the end of project, 85% of fellowships awarded and completed under the project; and 7. By the end of project, 85% of ECD work plans are fully implemented under the project.

1.4 Main Beneficiaries, The principal beneficiaries are the pre-school, primary and secondary school-age population currently in school or entering school in the near future. Important stakeholders include teachers, community and parent organizations and other agencies and providers of education.

1.5 Original Components Component A - Early Child Development Program Support Subcomponent A.1 - Strengthening the Borrower’s policy framework for ECD programs through the review and revision of ECD policies in light of experience, including the provision of consultant’s services; Subcomponent A.2 - Improving the quality of the Borrower’s ECD programs through: (a) the review and simplification of the BKB modules of program activities, and testing of the proposed changes; (b) the design and implementation of an integrated training program for Posyandu and BKB volunteers; (c) the development and implementation of in-service training programs for TK teachers; (d) the review and evaluation of the TK curriculum; and (e) the design and evaluation of assessment tests; Subcomponent A.3 - Increasing the demand for ECD programs through (a) the development of an information, education and communication (IEC) program including IEC strategies, plans and messages; (b) the production and distribution of IEC materials and prototypes for local adaptation; and (c) the implementation, monitoring and evaluation of IEC campaigns and activities; Subcomponent A.4 - Expanding access to ECD programs through: (a) the construction of: (i) about 340 ECD centers for Posyandu and BKB; and (ii) about 230 TKs adapted to rural or urban contexts; (b) the rehabilitation of: (i) about 50 existing ECD facilities; and (ii) about 110 existing TKs; (c) the provision of educational materials, toys, and equipment; (d) the carrying out of a program of employment of about 460 contract teachers for TKs; and (e) the provision of training to volunteers and teachers, including the upgrading of skills of about 1255 TK teachers to the D-II level; and

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Subcomponent A.5 - Implementation of a program of emergency food assistance to enhance the growth and development of children between the ages of six months and two years by providing complementary food to prevent malnutrition. Component B – Early Childhood Management and Capacity Building Subcomponent B.1 - Strengthening ECD management at the Provincial and District levels through: (a) the assessment and strengthening of the capacity at the Central, Provincial and District levels to implement the project, including: (i) the provision of fellowships and training to key project staff in identified skill needs, including development psychology, early child education, education planning, statistics, community health, nutrition and project management; and (ii) the provision of consultants’ services; (b) the conduct of annual planning and budget workshops involving the District offices of the Ministry of Education and Culture (now known as the Ministry of National Education), The Ministry of Home Affairs, The Ministry of Religious Affairs, and BKKBN under the coordination of BAPPEDA Tk. I and BAPPEDA Tk. II, including the provision of consultants’ services; (c) the carrying out of an impact evaluation study of TK education and of Posyandu and BKB interventions; (d) the carrying out of studies of program initiatives to address ECD needs; and (e) the provision of office equipment and materials to BKKBN, DINAS P dan K, KANDEP Dikbud, DINAS Kesehatan, KANDEP Agama and Kantor PMD at the District level; Subcomponent B.2 - Strengthening the capacity for project management through: (a) the preparation and carrying out of a program for periodic reporting, monitoring and evaluation of the six-year and annual technical and budgetary plans; (b) the carrying out of technical audits; and (c) the provision of office equipment, furniture, and materials to Project Coordination Committees (PCC), and Management and Implementation Units (MIU).

1.6 Revised Components No component was revised although the nutrition subcomponent of PDO1 was cancelled (Section 1.7).

1.7 Other significant changes The nutrition sub-component of the project (operational title - Emergency Food Assistance) was cancelled during project implementation. This amounted to about 50% of the total project loan. This cancellation resulted from an investigation of the project’s procurement of blended baby food by the Ministry of Health. This investigation found that the proposed winner of the procurement contract had supplied false information about its capacity to produce and deliver the contract requirements. The Bank concluded that due diligence had not been exercised throughout the bidding process. The Borrower agreed with the Bank’s advice and requested that US$10.60 million be canceled on September 3, 2001. An additional US$51,484 was cancelled on October 29, 2001. In September-October 2001, the Bank and Borrower reviewed and reallocated the project budgets and then scaled down project outputs as required. The primary result was the dropping of the nutrition sub-component from the project. This scaling down may be seen in the revised project performance indicators (Section 1.3). The project completion date was also extended from the original date, 3/31/2005 to 12/31/2006. This was due primarily to delays in procurement, construction, and delays in the government budget (DIP/DIPA) process.

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2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry The project used a single integrated approach that addressed health, nutrition and education issues in ECD. When the project was conceived, the use of such approaches in the fields of health, nutrition and education was relatively new in Indonesia. For this reason, special care was taken to understand and adopt lessons learned from prior projects implemented in Indonesia and other countries. These lessons were drawn from more than 15 projects (PCD, 11/03/1997) worldwide. Of particular importance were the following four learned lessons: 1. Physical growth of children is affected by the interplay between various psycho-social

interventions (that respond to the social and psychological needs of children ) and nutritional interventions (McGuire and Austin, 1987; Werner 1979; and Pollitt, 1987);

2. The poor and disadvantaged are the main beneficiaries of interventions in ECD (Chaturvedi, et al, 1987);

3. ECD is most effective when complemented with parental education and support programs (Zuloaga and Winkler, 1982); and

4. ECD is most effective when supported by professional and para-professional staff with adequate training (Myers, 1992).

A review of the project design shows that these important lessons were recognized and included in the project design. A JGF grant was utilized to support initial project preparation activities. Some grant funds were used during early project implementation to finish project preparation activities (such as the establishment of nutrition baseline and the completion of the GIS activity). Later the grant was extended to support the cost of consultants in the area of project management and ECD psychology, and some research activities (periodic community survey by universities to monitor nutrition subcomponent). Project Identification. Initial project identification was generally well conceived and implemented. Project objectives were identified and formulated in a satisfactory manner. There is documentation that demonstrates that extensive discussions were held during project identification with the Government, donor community, NGOs and civil society at national, provincial and community levels. Early project identification and documentation was found to be Satisfactory. Project Design. The project design was comprehensive and based on data and specific lessons learned from in-country and international experience. The design was fully discussed with the Borrower and Bank management, and it reflected a realistic understanding of the country’s ECD needs at national, provincial and community levels. As mentioned above, the project featured the use of health, nutrition and education components within a single project. The project also featured significant policy discussion and reform. In the project design, community participation and the decentralization of management and resources were emphasized. Efforts were also made to design and implement appropriate research-based activities (i.e., impact evaluation, situational analysis of daycare and playgroup programs; review and development of degree (ECD) teacher training programs, and the development of instruments for early detection of children with special needs) to provide guidance for future decision-making in ECD development. The project design also recognized a need to strengthen the capacity of the management teams associated with the project.

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The project did require an extension to the project’s closing date. The reasons for the extension do not seem to include shortcomings in the initial project design, but, instead, were more driven by changing project circumstances and implementation problems (Section 2.2). Project preparation. Project preparation was well planned and implemented. Strong teams were used by the Bank and the Borrower. From Bank’s side: the team was supported by an experienced task manager, an ECD specialist, an education economist, and from the field office, procurement, M&E, financial management (FM) and facilities specialists. From the Government’s side, the team included specialists in education, parenting education, and a child development psychologist from the University of Indonesia The PAD and working papers reveal a comprehensive understanding of the issues and a serious study of similar projects planned and implemented in other countries. During project preparation, an emphasis was placed on Financial Management (FM) and Monitoring and Evaluation (M&E). The project team prepared a clear, well structured set of performance indicators to support M&E. These indicators were changed during the implementation of the project to reflect the changing economic situation and needs of the Borrower. These needs included the reduction of project scope after the cancellation of the nutrition subcomponent (Section 1.7). Risks and Mitigation. The project did prepare a risks and mitigation matrix. The ICR found that the critical risks (PAD, page 16) and the more detailed list (page 20) were for the most part, stated in terms that were too general, and for that reason were not as useful as they should have been. They did not adequately identify and discuss many of the more obvious risks and mitigation strategies associated with: (a) delays in land acquisition; (b) poor construction practices; (c) inadequate staffing and training; (d) poor distribution of goods to remote sites; (e) implementation delays and governance issues associated with procurement; (f) inconsistent access to counterpart funding; (g) untimely transfer and replacement of key staff; (h) and the potential for inadequate national, provincial and local project management in the emerging Government policy environment of decentralization. During final project preparation and early implementation, the project team did demonstrate its concern about some of these risks by including a project management sub-component designed to enhance the capacity of project management teams. The team also encouraged the Government to support a work plan agreement for all candidates which enabled them to pursue Masters and PhD programs while remaining employed. The project also had loan conditionality that was designed to address some of these issues. The rather weak analysis and discussion of risks and mitigation strategies must be seen as a shortcoming in the project’s preparation and quality at entry. Many of the problems that arose during project implementation were predictable as other Bank projects in Indonesia have had similar problems and have found effective ways to address those problems. Effective risk identification and mitigation strategies would have been important as a tool to improve project implementation of this particular project. For this reason, the ICR rates Project Preparation, Design and Quality at Entry as only Moderately Satisfactory.

2.2 Implementation Early years. Project activities related to PDO1 (mainly the procurement of the Blended Food) was undertaken by the Ministry of Health (Depkes), whereas the rest of the project activities related to PDO2 were undertaken by the Ministry of National Education, through the Implementing Unit under the Directorate General for Out of School Education. The earlier Implementation Unit was Dikmas (Directorate for Community Education) and in 2001 the

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responsibility was shifted to the newly established Direktorat PAUD (Directorate for Early Child Education). Project implementation started slowly and was problematic during the first two years of project implementation. Very little of the project was implemented during the first year (Aide Memoire, 5/17/99). The loan became effective in October 1998, but Dikmas the main implementing agency for Education did not request the DIP (budget) during the previous year. Depkes, the other main implementing agency for health and nutrition obtained its DIP, but did not implement due to the previously stated problems with infant food procurement. In the early years, most of the problems came from concerns about procurement, construction design, local consultants, etc. However, as the management and implementation units became more fully established and involved with the project, the Bank team was able to provide additional inputs to project implementation. Although implementation of activities associated with PDO1 remained unsatisfactory, project implementation for the PDO2 subcomponents gradually improved during each year of the project’s implementation and in the last years of the project, the implementation of the project was the most satisfactory. In September-October 2001, the procurement of Emergency Food Assistance Program was discontinued due to the reasons stated in Section 1.7 above. With this discontinuance, the nutrition sub-component (also known as Emergency Food Assistance) was cancelled and the project no longer had any direct nutrition intervention. Seeking to provide some service in this area, the project then took up a facilitating role by raising awareness among various stakeholders on the importance of nutrition for child development. Simultaneously, the government took proactive measures to support the nutrition program. This is evidenced by the launching of ECD as a National Program by the President (2003) which facilitated cross sectoral intervention in ECD. These actions also complemented the pre-existing government nutrition programs, including the Vitamin A supplement, Nutrition Counseling, Education and Referral Program (Posyandu, Puskesmas and local hospital), self-financed nutrition programs (Posyandu and ECD centers) as well as Iodine Fortification. As the consequence of the cancellation of the Nutrition sub-component, the project no longer had in place the system and associated resources to monitor the impact of the non-project nutrition initiatives. Therefore, data is not available on the impact of these programs on the weight-gain of the children. The corresponding PDO1 in the Loan Agreement was not formally revised to reflect this change, as the ICR team feels it should have been. The revision appears to have “fallen between the cracks” with the reassignment of this project to a new and relatively less operationally experienced TTL and less than clear guidance form management on the question of formal restructuring. Later Years. During the later years of the project, the Bank and project management units were able to develop an excellent, collaborative relationship. As a result, project implementation picked up to a point where all project objectives and most of the performance indicators detailed in Schedule 6 of the Loan Agreement were met or exceeded. The Mid-Term Review. The Mid-Term Review (April 10, 2002) revealed a number of implementation concerns that were addressed effectively. There was a concern that (a) project implementation was falling behind the original appraisal schedule. Delays in procurement were noted and several adjustments were also made to the school construction program. The project’s budget and performance indicators were revised to reflect these changes. It should be noted that the informally revised performance indicators met or exceeded the expected outcomes of the original project.

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Project Extension. Due to delays in procurement, construction, and the government budgeting (DIP/DIPA) process, the project was extended from a closing date of March 31, 2005 to December 31, 2006. To support the extension, it was also agreed to reallocate some of the loan funds and add a number of additional outcomes to the project. Notwithstanding the previously stated concerns regarding the nutrition subcomponent, the Bank project team, management and implementation teams and MoNE should be commended for their willingness to be flexible during the implementation of this project. As mentioned above this project was prepared and implemented during difficult times (financial instability and a major move toward decentralization in education and health services) and the project was the first in the associated sectors to use an integrated approach to meet ECD needs. During project implementation, this project witnessed significant changes. This led to significant policy and institutional changes that improved the national system to support ECD. As issues came up, frequent consultation was held between all parties and adjustments were agreed upon and carried out to improve the performance of the project. For these reasons, the implementation of this project is rated as Moderately Satisfactory.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization The M&E design was well conceived. Outcomes were clearly established and performance indicators were developed. Where feasible, performance indicators were drawn from established data sets that provided for the establishment of baseline comparisons. With these elements in place the M&E design utilized the Bank’s standard approach to monitor the progress of the project (ISRs, audits, and mid-term reviews). All of these activities were carried out as planned. As project funding was reduced, performance indicators in the project were modified as required during project implementation to maximize the project’s impact within the limitations of its available funding. M&E was rated as Satisfactory. Impact Evaluation. A major feature of the M&E scheme was the impact study. The baseline study was conducted in 2002 and the report of the evaluation was submitted on October 2003. The follow-up, second impact evaluation was conducted on December 2004 and the report was available in 2005 (Studi Dampak Pendidikan Anak Usia Dini). Subsequent Bank team review of the methodology and outcomes of the study found that the study was methodologically flawed. It was noted among other things that the differences observed between groups could be due to ‘selection effects’, rather than resulting from the services provided by the early childhood development centers. For this reason, the Bank team conducted a second, separate analysis of the original data. The analysis was based on data collected through two surveys conducted in December 2002 and December 2004 in villages where the ECD activities were implemented. In 2002, the project was in its early phases of implementation. At this time, children aged 19-24 months, and children aged 49 to 56 months were tested. For both age groups, two groups were interviewed: those that did participate in ECD activities, and those who did not. The sample size was around 450 children for each age group. In December 2004 the same children were tested again. Based on names and ID codes, 326 children from the young age group and 383 children from the older age group could be matched across the two surveys. A summary of the results (table 1 and 2) shows that for the younger group of children, participating in ECD activities was associated with increases in the scores on social ability (a difference of 0.24 standard deviations). For this age group, no impacts were found for the indicators measuring social, cognitive, language, psychomotor, or academic skills development. For older children, significant impacts are found for reading scores and overall school readiness,

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also in the order of 0.2 standard deviations. No significant impacts were found for older children’s writing and counting skills. The estimates are based on children for whom data are available from the 2002 and 2004 surveys. The results (outcome variables) are obtained from scores from 2004, and the estimates correct for the scores in 2002, parental education and consumption, and age of the child (independent variables). Table 1: Impact of ECD for young children

Social ability

Social thinking

Cognitive development Language

Pyscho-motor development Academic

Impact of ECD 0.237 0.068 -0.012 -0.027 0.031 -0.118 (2.21)* (0.66) (0.11) (0.26) (0.29) (1.10)

Note: Impact in terms of standard deviations of test scores. T statistics in parenthesis. Estimates correct for baseline test score, age, parental education and consumption. Treatment group are children that participated in ECD activities in 2002. Table 2: Impact of ECD for older children

Reading Writing CountingSchool readiness

Impact of ECD 0.214 0.097 0.116 0.174 (2.29)* (1.02) (1.11) (1.92)**

Note: Impact in terms of standard deviations of test scores. T statistics in parenthesis. Estimates correct for baseline test scores, age at baseline, parental education and consumption. Treatment group are children that participated in ECD activities in 2002. The impact estimates above provide the best possible estimate of the impact of the PAUD project with the available data. There is, however, room for improvement in the design and analysis, providing lessons for the evaluation of the next ECD project. First, it would have been desirable to have one firm collect both rounds of the survey. Because more than one firm was involved, testing instruments are not comparable across the two years, and many children could not be traced in the data. Also careful pre-testing of the measures used would have helped prevent obvious errors, such as not collecting age for older children in the second round. Last, it would have been preferable to draw the control group from different areas than the treatment group. Although this approach was better than the earlier analysis, it is still hard to distinguish between selection effects (more advantaged children enrolling in ECD activities) and intervention effects (impact of ECD services) if the control and treatment group are from the same villages. Based on the above, the ICR found the Impact Evaluation Unsatisfactory as originally implemented, but Moderately Satisfactory as recovered through the efforts of the Project team.

2.4 Safeguard and Fiduciary Compliance There were no special or specific safeguard policies identified in the PAD or the Loan Agreement. The Environmental Assessment rating was rated as ‘C’, reflecting a determination that the project should have no significant environmental impact. At completion, the Project was in full compliance with the Bank’s standard safeguard policies and guidelines. Because no special safeguard policies had been identified, the Safeguard Compliance was Not Rated The project was prepared with significant inputs from a financial management specialist. Financial management records were maintained on the project, reviewed during missions, and at

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project completion. All audits were conducted as agreed and opinions and comments were followed up by the Government. Although the auditors found no significant irregularities, there were delays in following up on other findings although eventually these issues were addressed in a satisfactory manner. At present there are no outstanding audit issues relating to the project. It should also be noted that throughout the project implementation period, there were delays in the government budgeting process which negatively affected the efficiency of project implementation.

The Fiduciary Compliance was rated as Moderately Satisfactory.

2.5 Post-completion Operation/Next Phase There is evidence of sustainability and replication of the ECD program at the district, sub-district and community levels. ECD programs have now been well institutionalized. This is reflected in the handing-over of the ECD facilities supported by the project from the national government to district governments with an MoU signed by bupati (regent) and head of DPRD (local parliament). The district governments have agreed to continue financing and maintaining the ECD programs in their respective districts. In all of the participating districts, the district governments pay the teachers’ salaries and the community contributes to other operational costs. An exception is in one of the project district (Kota Denpasar-Bali), where the communities were able to cover both teacher salaries and operational costs. These findings indicate that the program is well sustained.

There are reasons to be optimistic about the potential for sustainability of ECD programs at the central level. Many project models are now adopted as national policy for central funded activities. The project’s more cost-effective facility designs have also been adopted by MoNE as models for future development of ECD programs. In addition, the new instructional materials and trained teachers combine to provide a much stronger pedagogical model and potential for improved quality of ECD programs. It is also noted that the budgets necessary for ongoing support of these new and upgraded ECD programs have been fully integrated into the planned budgets of the MoNE. Taking lessons learned from the ECD project, in collaboration with the Bank and the Netherlands, the Government has recently (2007) established a new project, Early Childhood Education and Development (ECED). The development objective of the project is to improve poor children's overall development and readiness for further education within a sustainable quality ECED system. To achieve this objective, the project will: (a) increase the capacity of poor communities to engage in participatory planning that will result in new or improved ECED services for their children and families; (b) prepare the foundation for a sustainable ECED system through budgetary commitments from participating districts, establishment of a national quality assurance and professional development system, and district capacity building; and (c) ensure continuous improvement of service delivery and system building through establishing effective project management, and monitoring and evaluation. The project will target an estimated 738,000 children ages 0 to 6 and their parents/caretakers living in approximately 6,000 poor communities located in 3,000 villages within 50 poor districts throughout Indonesia meeting specified criteria (i.e., an average of 123 children per community). Particular attention will be given to children ages 2 to 4 as some children may enroll in formal TK at the age of 5. The project is expected to have a demonstration effect that the Government can use as a rationale for the expansion of ECD coverage of services for poor children in Indonesia.

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3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation As mentioned in Section 1.1, this project was clearly designed to support the sector-related goal of the Country Assistance Strategy (CAS), CAS 16691-IND (last discussion before appraisal – July 10, 1997). As stated in the CAS, this goal was: to enhance human resource development through investment projects aimed at developing a national ECD program for Indonesia. The project also supported specific sector-related goals of the Bank and the Government of Indonesia (GOI). These were clearly identified and documented during project identification. As this project funding was reduced (cancellation of the nutrition sub-component), the scope of services provided by the project was necessarily adjusted to reflect the lower levels of funding. Unfortunately, with the elimination of the nutrition sub-component, PDO1 was effectively eliminated as an objective in the project.

3.2 Achievement of Project Development Objectives PDO1 - Protecting children between the ages of six months and two years against the effects of malnutrition and enhancing such children’s growth and development – Even though PDO1 was never formally removed from the project, it ceased to be a viable objective when the large nutrition subcomponent (Schedule 2, Part A, Sub-component 5) was cancelled (see more detailed discussions in Section 1.7 and 2.2). Although the Borrower did provide resources to these targeted children outside the project, results data was not available to the project. The project’s performance indicator below was not met. Therefore, the ICR rated the achievement of this PDO as Unsatisfactory. Associated PPI

By the end of 2001/2002, 80% of children receiving food supplement gain weight. – not measured. As described on section 1.7 and 2.2, no measurement system was in place to measure this indicator as the project shifted its strategy from providing direct nutrition intervention into a coordinating and facilitating role.

PDO2 – Improving the access to and the quality and utilization of the Borrower’s Early Childhood Development programs in the Borrower’s provinces of Bali, South Sulawesi and West Java - This PDO was fully monitored and evaluated throughout the project implementation period and the progress of project performance indicators indicated that PDO2 was full achieved and in some cases exceeded. The ICR rated the achievement of this PDO as Satisfactory based on the following project performance indicators: Associated PPIs

Higher scores on tests to measure readiness to enter grade one (as compared to children not served by the project) – Achieved. The overall trend was positive, with the nature of this impact varying according to children’s ages and the aspects of development that were assessed. Analysis of the data collected for the project impact study indicate that the younger children (aged 19-28 months at the baseline in 2002) achieved significantly higher scores on a “social ability” test two years later. For this age group, no significant impacts were found for “social thinking,” cognitive development, language, psycho-motor development, or academic scores. For older children (aged 49-56 months at the baseline in 2002) significant impacts were found for reading and school readiness scores. No significant impacts were found for writing and counting scores.

80% utilization of functioning ECD facilities in project villages – Exceeded. (i) The project built 430 new facilities (Integrated ECD Centers and BKB/ Posyandu) and renovated

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251 existing facilities. Project monitoring revealed that the utilization rate for the ECD facilities was 100% as measured by the utilization of building facilities, learning materials, furniture, teacher, cadre, organizer, learners, and parents.

The project team indicates that facilities available at the ECD centers can be utilized as one proxy to measure the extent to which the centers are well-functioning. These educational-supported facilities include kindergarten teacher, learning materials, and regular contact with or support from health worker. The project data shows that the project has (i) successfully: (i) trained 326 Diploma 2 kindergarten teachers (100 percent of the project target). Local governments in the participating districts also contributed to the provision of 48 additional scholarships for Diploma 2 kindergarten teachers so that the total number of D2 kindergarten teachers available for the project was 374. This, in turn, enabled the project to allocate two kindergarten teachers for each kindergarten-supported project (integrated ECD center). (ii) The project has also successfully provided books, furniture, and educational toys to the targeted ECD centers’ supported project.; and (iii) With regard to the presence of health workers who were supposed to make regular contact with the kindergarten’s supported project (in the integrated ECD centers), the data shows that all of the kindergartens were regularly visited by health workers from local health center (Puskesmas).

These findings also suggest that the ECD centers are now fully functioning. Since their establishment, the total number of children received integrated services in the 297 integrated ECD centers was on average 8,672 children, and the attendance of the BKB/Posyandu was 19,665 children. By end of year 4, 75% of TK teacher support clusters meet regularly – Exceeded. The project encouraged the teachers of the 187 integrated ECD centers (TK) to establish teacher support clusters. In 2004 on the average, 50% of the targeted schools held meetings of these teacher support clusters. In 2006, 75% of the teachers’ attended cluster meetings and thus, the target was achieved. In addition to these cluster meetings, the teachers also joined TK teachers meeting organized by the IGTKI (TK teachers association) in respective sub-district/ districts. By end of year 4, 60% improvement from baseline in the participation rate at BKB/ Posyandu meetings – Exceeded. The project PAD established an improvement of participation rate of parents and children in BKB/Posyandu meetings at 60% above the baseline data which was estimated at 16.6%, 30.9%, and 11.2% for West Java, Bali, and South Sulawesi respectively.

When a comparison of participation/attendance rate was made over the baseline value, it was found that the increased rate was almost double in West Java (31.1%), more than twice in South Sulawesi (35.2%) and even three times higher in Bali. It is likely that the latter achievement in Bali was so high because the BKB/Posyandu activities were held in Banjar (center of community social and cultural activities). Consequently, the Balinese regarded the BKB/Posyandu as a part of their compulsory social activities, for which they traditionally apply a social sanction for non attendance. This was not the case for BKB/Posyandu in other regions where the attendance at BKB/Posyandu was regarded as a voluntary activity.

Increase in community participation – 70% annual contracts with Community Organization - Exceeded. The ECD project adopted participatory approaches in order to build community ownership and sustainability. Different from the community participation

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approach being used in a subsequent ECD project, this project identified LKMD – local community development councils – as an official representative of the local community. . By the end of project, satisfactory level of community participation is signified by the signing of at least 70% of target annual contracts with LKMD. The contract is an agreement signed by the District Project Manager and the head of LKMD, stating the amount of grant received and agreement in the part of the LKMD that they will execute the grant according to the agreed guidelines, concerning specification of construction, hiring and supervising of labor and procurement of materials. The project data shows that the number of contracts with LKMD and the community representative forums were 100%, exceeding the targeted rate of 70%.

• By the end of the third year of the project, at least 85% of fellowships have been awarded - Achieved – overall 95% fellowships awarded.. The awarding of fellowships to pursue the diploma program was successful – all of the 326 fellows for the two-year diploma (D2) for kindergarten teachers and 3 fellows of the diploma (D3) in nutrition completed their studies in a timely way. There was, however, an issue with the fellowships for post-graduate degree programs: 11 out of 34 master’s degree program fellows were not able to finish their degree, and none of the 6 PhD candidates were able to complete their degrees, having completed course work but not the dissertation. The evaluation of this fellowship program revealed that province-based staff was more successful than the Jakarta staff. One factor contributing to the better achievement of the province-based staff was that they were released from their routine activities and allowed to do a full-time study; this was not the case for the Jakarta-based staff, whose academic work had to compete with their routine jobs, which included intensive travel to various provinces. The Director General of Out of School Education took the initiative of discussing the matters with both the fellows and the National University of Jakarta (UNJ), but the problem remained unresolved because the Jakarta office was never able to release the fellows from their work, and the opportunity cost for the fellows was high. An action plan has been undertaken to address this problem. It was agreed that the fellows to continue their study and to cover their own expenses after the project expires and they will be released from their tasks to be able to focus on the completion of the study. Although in general the failure of the Jakarta-based staff to complete their degree studies does not substantially affect the outcomes, this case strongly indicates that the award of the fellowships was not based on an appropriate staff development plan or a sound institutional need assessment. This lesson has been incorporated to the design of the new ECD project. By the end of each year of Project Implementation, at least 85% of ECD work plans (as measured in terms of agreed targets and budgeted expenditures) have been implemented. Achieved. The project shows that about 100% of the ECD work plans have been implemented under the project. This achievement is indicated by the disbursed payments of 100% as of April 30, 2007.

3.3 Efficiency The efficiency of the project is reflected by both the high benefit-cost ratio and the cost-effectiveness of investing in ECD (Annex 3). The most significant and measurable benefit of investing in ECD is the improved education attainment in the medium term and thus improved labor earnings in the long term. It is estimated that in Indonesia, the average benefit-cost ratio of providing ECD services to a group of disadvantaged children is 7.26, close to if not higher than those in some comparable developing countries.

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The investment in ECD is also cost-effective compared with alternative public investment aimed at helping the most disadvantaged child achieve primary education completion. As the impact evaluation results show, a child going through an ECD program would better develop cognitive and social skills, and readiness for formal primary education. Alternatively, without going through an ECD program, this child may need special attention and assistance to complete the primary education cycle, which would require additional public resources. For example, the unit cost of primary education is estimated at about US$230 per year in Indonesia. In comparison, the current special education in Indonesia has a much higher unit cost of US$920 per year. Therefore, to bring a disadvantaged child to primary education completion, the special education (without ECD) approach would cost 2.65 times as much as the ECD approach, as the ECD program can prepare the child well enough to go through regular primary education. In addition, the project has adopted the cost-effective measures in several key investment areas, including using the extension of existing buildings to expand Posyandu/BKB services and adopting double-story structure for kindergartens construction.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory PDO1 was not fully achieved. Due to reasons discussed above (Section 1.7), the funding for PDO1 was cancelled and the associated activities were dropped from the project. It is the judgment of the ICR that the expected outcomes of this PDO were important and the dropping of the associated activities from the project was unfortunate. Although it is understood that the Government took over many of these important activities associated with this PDO, the removal of the nutrition component from the project negated the potential for project monitoring and evaluation of this objective, so there is no clear evidence that the intended outcomes of the project were met by other means. Since PDO1 was never formally removed as an objective of the project, the ICR must rate the outcome of PDO 1 as Unsatisfactory PDO2 was fully achieved and in some cases exceeded. The only exception was the finding that about 17 graduate fellows had not completed their program of study by the end of the project. However, it is understood that some, if not most of these fellows will finish using other sources of funding. When all outcomes for PDO2 were considered, it is evident that significant change has taken place in ECD as a result of this project. The activities associated with this PDO were strongly relevant to the needs of ECD and the outputs from those activities demonstrated an approach that significantly improved the quality of ECD in the project focused communities. The lessons learned from this project have been clearly understood by the Borrower and as a result, there is evidence of significant policy reform that will serve the needs of ECD nation-wide. The ICR rated the achievement level of PDO2 as Satisfactory Rationale for overall outcome rating. When one looks at the many issues associated with the implementation of the project and the poor performance of PDO1 as compared to the original objectives of the project, it is difficult to rate this project as fully satisfactory. Throughout the duration of the project, the PDOs and project components were not formally modified. Therefore, the original objectives and components, as specified in the LA, must be used to rate the achievement of the project objectives and associated activities. When this is done, it is evident the project did not fully achieve the original objectives. The project witnessed: (a) the cancellation of the nutrition subcomponent which constituted about 50% of the project funding (through to the results of a misprocurement case); (b) many project implementation delays in the first two years

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of the project implementation; (c) delays in budget process (DIPA) due to the changes in the Government financial management regulations that affected the implementation schedule of the project in 2005; (d) audit issues that were slow to be resolved; and (e) documented cases where financial management was less than satisfactory On the more positive side, PDO2 has had significant achievements and it generally met, and in some cases, exceeded all its planned operational objectives as measured by the PPIs. The impact of PDO2 is expected to be substantial in the development of ECD and the next project has profited from the many lessons learned from this project. On balance, the project is not fully satisfactory, but it can be argued that the project deserves to be considered Moderately Satisfactory based on the previously discussed criteria.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development The institutional changes noted below resulted in an equal opportunity for both boys and girls in poor, rural areas to enroll in the target ECD programs/schools. The Government is currently preparing a campaign to improve access and gender balance in ECD programs. Recognizing that over time, improved school access and quality have a direct impact on poverty in rural areas, the project has focused much of its resources on the selection of ECD program/school sites that are located in such areas. The policy reforms also sought to support decentralization of decision-making down to the community level. These changes influenced the design of the new ECED project (Cr.4205-IND). To contribute to the Government’s objective of reducing poverty by making service delivery responsive to the needs of the poor, it targets children and their parents/caretakers living in poor village communities in selected poor districts throughout Indonesia meeting specified criteria. The village communities will be empowered to establish a forum with balanced representation by women, youth, and the poorest to voice their needs and to share responsibilities. (b) Institutional Change/Strengthening ECD is a comparatively a new agenda of the Ministry of National Education. When the project was started in 1998, the Ministry of National Education covered only pre-school education, i.e., for children of 4-6 years old. The project has inspired the Ministry to establish the Directorate of Early Childhood Education (PAUD - Pendidikan Anak Usia Dini) within the Ministry of National Education (MONE) structure in 2001. The institutionalization of the ECD program is also marked with the establishment of ECD sections – or, at least inclusion of ECD into the mandate of community education section -- at the participating districts as well as the establishment of ECD Forum at national, provincial and district levels. In addition, the mainstreaming of ECD was reflected in the law of national education system. The flourishing ECD emphasis in Indonesia has also strengthened partnerships among national as well as international agencies to support ECD-related activities. An example of this may be found in the establishment of ECD program in women’s organizations (PKK, Aisyiah Muhammadiyah, and Muslimat NU, etc.). The MoNE and the MOH have also recognized the importance of integrated ECD programs which provide both education and health services to support ECD. Government policies have been adopted during this project to further this approach. The project has witnessed MoNE reassess its commitment to ECD. It has also begun to formalize ECD as an important aspect of education, giving more staff, facilities and resources to the effort.

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(c) Other Unintended Outcomes and Impacts (positive or negative) None noted.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops No Beneficiary Survey and/or Stakeholder Workshops were conducted during the implementation.

4. Assessment of Risk to Development Outcome Rating: Negligible The development outcomes of this project are clearly within the mainstream of MoNE, MOH and donor priorities. As such, there is little reason to assume that the outcomes would be at risk in the foreseeable future. The only outcome that might be more carefully considered is the Government’s commitment to support improvements in nutrition within ECD programs. It seems possible that this effort could be held back by one or more the following possibilities: (a) lack of acceptance by the civil society; (b) inability of MOH to fully sustain the introduction of nutrition programs in rural ECD programs/schools; (c) the selection of an inappropriate approach to support the effort; (d) prohibitive long-term cost to fully implement the nutrition program; and (e) lack of long-term sources of supply of suitable food and nutrition supplements. Not withstanding the above factors, it is the opinion of the ICR that the Government has placed a high priority on ECD as an objective to support future education development. With the Government improving its capacity to fund such programs, it seems unlikely that MoNE will fail to continue upgrading and improving ECD programs nation-wide.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory The project was not assessed at entry by QAG.

The ICR found that the identification, preparation, pre-appraisal, and appraisal missions were adequately staffed. These activities used the services of five specialists in ECD areas, one architect, one economist, and one program management specialist as well as support from the regional office in the areas of M&E, procurement and financial management (FM). Project negotiations were also well planned, managed and implemented. Evidence of this effectiveness may be seen in the Bank teams' ability to work through a new, innovative, integrated approach wherein both MoNE and MOH would participate in the project. The project was also identified and prepared in less than one year, a rather short period of time for such projects in an unstable economic environment. The identification and preparation missions were able to assist the Government to produce a thorough and comprehensive project design that did not change much during the subsequent stages of project preparation and implementation. To support quality improvement of ECD, the preparation missions paid special attention to the holistic integration of equipment, facilities, pedagogy, curricula and staff development in the project design, and the need for the project to be flexible in a time of political or economic change. (b) Quality of Supervision Rating: Moderately Satisfactory The supervision teams were generally well staffed and their aide memoires (prepared in collaboration with the Government team) were generally well prepared. Besides the Bank team, a

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number of other consultants were asked to provide substantive input to ECED (two consultants funded through the Danish Trust Fund and one consultant funded through the Dutch TF) during the early stage of the new ECED project preparation). The supervision missions also used the ongoing support of an architect and a construction specialist as well as those of a CDD/program management specialist. Under agreement with the TTL, the CPMIU also hired other ECD experts to support the supervision process. These included one consultant (from University of Florida) who introduced the BCCT approach in children learning and another specialist in parenting education. The ICR also found that the supervision teams consistently monitored the safeguards and fiduciary aspects of the project as required by Bank guidelines. The Project Performance Indicators were reviewed and updated during each supervision mission. The project was consciously linked with the previous Bank project and with other education projects with commonly defined objectives. It is noted that the supervision of the project steadily improved through the duration of the project and during the last two years, in particular, became efficient and effective.

It is noted that throughout the duration of the project the Task Team Leaders (TTLs) for the project (there were a total of three) effectively utilized regional personnel and consultants that, in the end, saved considerable cost in the supervision for this project.

A review of the PSRs/ISRs and their associated aide memoires revealed that there have been many other problems that were effectively addressed by the supervision teams through close collaboration with the Government. In particular, procurement of goods and construction has been problems throughout the implementation of the project. The supervision team has carefully monitored the implementation of these activities and when necessary, acted quickly to effectively protect the interests of both the Government and the Bank. In all cases, specific actions were agreed upon with the Government to bring the project back in line with the implementation plan. Relations with the Borrower have been strongly collaborative and productive. On the downside, associated with the supervision process, the project team failed to recognize the importance of formally revising the project to reflect the 50% cancellation of loan proceeds and the dropping of the Health sub-component (PDO1). This shortcoming resulted in a downgrading of the overall performance of the project. It is primarily for this reason that the ICR rated supervision as only moderately satisfactory.. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory As mentioned above, this project has been challenging for the Bank to support. The project design team did not adequately identify and address the potential risks to the project and many of these risks proved to be real issues during project implementation. This shortcoming must be considered less than satisfactory since many of the undeclared risks were identified and addressed in meaningful ways in previous Indonesia projects. There were also many project management and other implementation issues which were, in part, brought about by the effects of political and financial situation in Indonesia. There is evidence that Bank management and project teams made substantial efforts to address the changing needs that were brought on by this situation. Project documentation clearly reveals that the project team stayed focused on the Project Performance Indicators and effectively used M&E and the Project Performance Indicators to measure project success as required by Bank guidelines. This was particularly true after the restructuring of the Project Performance Indicators during the Mid-term Review. The project team also exhibited a willingness to be flexible, while at the same time maintaining the required rigor of project implementation.

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PDO1 was not fully achieved due to the reasons discussed above (Section 1.7). The ICR did find that the project team should have moved to formally revise the loan agreement to reflect the cancellation of about half of the loan proceeds and the elimination of the Health sub-component. Regarding PDO2, most of the project issues were addressed in ways that allowed for its successful completion as measured by the revised PDO Indicators. This resulted in raised targets and final outcomes that went beyond the original project design for that PDO. There is also significant evidence that many of the policy reforms recommended in the project were accepted by the MoNE. An example of policy reform may be found in the Government’s decision to channel grants to the communities and to support the apprenticeship program for ECD teachers. Furthermore, there is reason to assume that most of the programs and reforms developed and witnessed during the project will be sustained in the future.

5.2 Borrower Performance (a) Government Performance Rating: N/A (b) Implementing Agency or Agencies Performance Rating: N/A (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory Project Identification and Preparation. As a response to the specific need to provide emergency food assistance to pre-school youth, the Bank and the Borrower agreed to quickly prepare and process this project. Both the Borrower and the Bank were able to effectively mobilize the necessary resources, and to select and field strong teams to identify and prepare the project. The Borrower's counterpart team participated actively in the preparation of the project and was particularly effective in the Bank/Borrower's consideration of options and the collection, organization and analysis of the data required to develop the project design. As preparation activities were initiated, the counterpart team made many significant contributions to the quality and scope of the project design. As the Bank team must take some responsibility for the failure to identify the major risks to the project, as part of the overall project design team, the Borrower’s team must also take some responsibility. This judgment is partially based on the fact that many of the unidentified risks were apparent from previous projects. Project Implementation. Project Implementation was effectively stalled during the first year. Initially the project’s Management and Implementation Unit (CPMU) experienced some difficulty with project implementation when the initial community-based approach did not function well. As adjustments were made and local teachers were recruited and trained, implementation of the project became more effective in the rural communities served by the ECD facilities. This allowed the CPMU to initiate many of the other activities that were required by the project. It is noted that, in some project years, the MONE and its provincial and district agencies were slow to approve and coordinate the adequate provision of counterpart funding and needed staff at the district level. Once this took place, the local implementation of the project was strengthened. The CPMU worked closely with the Bank’s task team. As the project experienced problems with procurement, disbursement, etc., this close collaboration enabled quick agreement on necessary changes to bring the project back on schedule. As project implementation proceeded, the increased experience and knowledge of the CPMU become increasingly evident. For this reason, during the later years of the project the CPMU demonstrated a much stronger management approach that resulted in the high achievements previously noted for PDO2.

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The ICR found that the Borrower’s implementation performance was unsatisfactory during the early years of the project and satisfactory during the later years. The overall rating must be considered Moderately Satisfactory.

6. Lessons Learned • A strong community pre-conditioning program is required to ensure ownership and

sustainability of the project’s activities. Initially, a community-based approach was taken to implement the project; however, from the beginning, the approach did not go well. This was due to inadequate pre-conditioning measures that were taken prior to the program initiation. However, as time passed, the community resistance disappeared. It was also seen that community resistance began to disappear after the teachers took their positions in the respective communities. With their coming and interaction with the community, the program was gradually understood and became well accepted. This lesson was incorporated to the new ECED project, which supports a more intensive program to socialize the communities during the preparation and early implementation stages.

• Locally recruited teachers improve potential for sustainability. Qualified ECD

teachers/educators are important factors in the success of ECD programs. Unfortunately, the recruitment and continued employment of teachers in poor-rural settings is almost always a challenge. Instead of “importing” qualified staff from cities, the project decided to empower local youth within these communities by employing and training them as ECD teachers. Each of the district villages was required to nominate qualified teacher candidates. The selected candidates were then enrolled and trained as kindergarten teachers in a two year D2 program. The three teacher training institutes were located at UPI Bandung, UNM Makassar and UNESA Surabaya. Graduates were then contracted for two years by the project. At the end of this period, the teachers’ employments were continued by the district government. Not only were the communities empowered, the program has also proven to be sustainable.

• ECD interventions that are targeted for the poorest children show the highest benefits.

In line with international experience, the impact study of this project found that the interventions were more beneficial to the disadvantaged children in the project than they were for more advantaged children. Results from the impact evaluation of the ECED programs in Indonesia have already brought promising results. The evaluation of the pilot project followed the development of nearly 500 children participating in ECED programs. Test scores of ECED children were compared with an equal number of children randomly selected from the same villages. The findings suggest that children participating in the Early Childhood Development pilot project for 2 years had higher scores for school readiness at age 6, after taking into account potential confounders and using a propensity score approach to counter potential selection bias. ECED appeared to have greater effect on most disadvantaged children, who live in poorer districts or whose parents have lower education

• The integration of education, nutrition and health, and parental education is more

effectively achieved at the village/program level (than at the district, provincial or national levels). Within the scope of the project, several government ministries were involved in the welfare of young children, and each was responsible for a specific area of development: health and nutrition, social protection, and education. While the integration of these services was important, it was often challenging and difficult to accomplish at the national or provincial level. The project found that such integration was much more easily accomplished at the community level. In most communities, it was not difficult to get the

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ECD teachers, women volunteers (Kader BKB) and the village health workers collaborate in the provision of services for the young children.

• The use of block grants at the community level requires “preconditioning” within those

communities to maximize the impact of the grants. The project was designed to support the provision of community-based ECD services. Under this scheme, the communities were given responsibilities to manage and use block grants, and to eventually manage their own program. In reality, the project only communicated with the LKMD (an official body representing the community at village level and no longer in existence). The “grant agreement” was made between the PIU and the LKMDs. The LKMDs were responsible for the selection of the location for the ECD facilities and the management of the block grant for the construction. To support this process, the PIU provided each district with a construction management consultant. After the ECD facilities were successfully established and the teachers were trained and placed in their positions, it became apparent that schools and programs were under-enrolled. After a review was conducted, it was found that the parents of young children were not properly prepared (conditioned) to understand or participate in the ECD program within their respective communities. In the end, the teachers proved to be the key to solving this dilemma. Upon their completion of the D2TK program and their arrival back in their communities, they worked very hard, knocking on the doors of parents with young children to introduce the service and invite the parents to send their young children to the facilities. This approach proved to be quite successful. Parent understanding and commitment increased and the enrollment within the ECD schools and programs increased to a full level. This lesson was considered by the new ECED project (effective in Nov 2006) which is designed to provide extensive “preconditioning” for communities to ensure better participation in the program.

• A unified management approach is likely to lead to a better result in the

implementation of ECD programs. During the project preparation, the Bank and the Bappenas agreed that major emphasis of this project was to empower community. Accordingly, although the main activity was to introduce/ expand access of poor children to pre-school/kindergarten education, it was agreed that the project to be managed by the Directorate of Community Education (under the Directorate General of Non Formal Education - DGNFE). However, throughout the nation, the Directorate of Kindergarten and Primary Schools (under the Directorate General of Primary and Secondary Education -- DGPSE) had line authority for such programs. Eventually issues of management responsibility were addressed, but the lesson for the long term is that ECD program responsibility and management may best be accomplished through a single, primary Government agency, or alternatively through an inter-agency steering committee.

• Projects should allocate sufficient time within all fellowship programs to allow for full

completion of degree programs. Associated with this issue is the need to understand that working government staff may need significantly more time to complete a degree since they often continue to work as well as participate in their program of study. There is also a need to ensure that their work schedule/study schedule is mutually agreed between the candidate and their supervisors at their work place. Taking the lesson from this program, for the fellowship program under the new ECED project, the PIU will develop a set of criteria acceptable to the Bank; among others, they will require the managers to release their staff to do full-time study and the participants to fully commit on the program.

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• Delays in the provision of counterpart funds directly affect the overall quality of project implementation. Project implementation took place during the difficult transition period when the Government was converting its entire management structure from a centralized to decentralized approach. This heavily affected the budgeting process, not only of this project, but others nation-wide. Almost every year the budget was delayed by three to four months. The worst situation was seen in 2005, when the budget (DIPA) was released in October, leaving the PIUs only 2 months to complete the activities. This was one of the reasons that the project was extended to December 2006.

• Poor families need easier access to ECD services. Although the project’s goal was to

locate the newly-built ECD centers in poor communities, the centers were often less accessible than was intended. Cost was one barrier, and another was location. The distance from there the poorest families lived and the ECD center often made it impossible for parents to get their child to the center. These issues have been taken into account in the design of the new ECD project.

• There is a need to provide a structured program of orientation to new task team leaders who

take over projects that are under implementation. As evidenced in this project, poor transition practices often result in miscommunication with the Borrower and the inability of the new task team leader to understand the nuances of project implementation as well as tasks that remain undone; and

• Experience counts for much in large scale project management. New task team leaders

should have access to advice and mentoring from experienced task team leaders when they take over full responsibility for large scale project management. As evidenced in this project, the lack of experience can lead to decision making that negatively affects project outcomes and the confidence and credibility of the Bank with its clients.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies None (b) Cofinanciers None (c) Other partners and stakeholders None

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

ECD PROGRAM SUPPORT 22.00 11.35 52% ECD MANAGEMENT CAPACITY BUILDING 2.5 2.5 100%

Total Baseline Cost 24.5 13.85 57%

Physical Contingencies 0.00

0.00

Price Contingencies 1.00

1.00

Total Project Costs 25.5 14.85 58.2% Project Preparation Fund 0.00 0.00 Front-end fee IBRD 0.00 0.00

Total Financing Required 25.5 14.85 58.2%

(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 4.00 4.00 100% International Bank for Reconstruction and Development 21.5 10.85 50.5%

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Annex 2. Outputs by Component Component A – ECD Program Support Subcomponent A.1 - Policy Framework – Review and revise policies based on project experience for Repelita VIII. Throughout the duration of the project, the Bank team has provided policy suggestions, working papers and other types of technical assistance to the Government as policies were reviewed and reforms were sought. Significant policy reform has taken place in MoNE regarding ECD. The experience and lessons learned from the project were repeatedly used to support the rationale for these reforms. Subcomponent A.2 - Improving quality of ECD programs through: 1. Reviewing, simplifying and testing BKB module – The Project reviewed, and supported the Government’s adoption of a revised curriculum for the training of BKB/Posyandu cadres. 2. Designing and implementing integrated training for Posyandu and BKB cadres – Using the revised curriculum, the project planned to train 80 percent of the BKB/Posyandu cadres by project completion. It was planned that 3000, 3800, and 4050 cadres would be trained for West Java, Bali, and South Sulawesi respectively. Project data reveals that the target of achievement was not fully achieved. The actual percentage of cadres (planned verses actual) trained was 63%, 79%, and 75% for West Java, Bali, and South Sulawesi respectively. The shortfall was primarly due to changes of government financial structure and system in 2005 that significantly delayed the DIPA processes. 3. Developing and implementing In-service training for TK teachers. The Project provided in-service training program for total 901 teachers of the ECD centers (including the TK) in the 12 participating districts. 187 of them were sent to apprentice program to learn from the best practices in Jakarta and Surabaya. In addition, since 2002 TKs have been transformed into ECD centers providing integrated services for young children. These services consist of TK for 4-6 years old children, play group for 2-4 years old and BKB/Posyandu services for 0-6 years old children and their parents. Accordingly, the Project also provided an orientation for 561 teachers and 600 local leaders on the integrated concept and management of ECD Centers. For quality assurance purposes, the Project also trained the supervisors of the TK and Non Formal Education/Community Education. 4. Reviewing and evaluating TK curriculum – A study was conducted (2001) and project teams were able to provide ongoing support to review and evaluate existing TK curricula with a view toward making improvements that articulated with the focus of the ECD programs and the identification of instructional materials that were needed to effectively support the respective ECD programs. Based on these findings, the project provided books, furniture, and educational toys to 187 newly build ECD Centers and 110 rehabilitated ECD centers. Books and educational toys were also provided to 384 BKB/Posyandu. 5. Designing and evaluating child assessment instrument – A child assessment instrument was developed and tested by consultants as a part of the more inclusive Impact Evaluation Study, (Studi Dampak Pendidikan Anak Usia Dini) (Section 2.3). Subcomponent A.3 - Increasing demand for ECD programs, through 1. Developing IEC program (Information, Education and Communication) – Early in the project, the project team was able to develop a viable IEC program. This program was then authorized for piloting within the project institutions by MoNE. 2. Producing and disseminating IEC - Based on the above program design, IEC materials were designed by an IEC consultant. A total number of 129,000 copies of the IEC materials have been produced and distributed to the intended recipients. These included: (a) 11,700 booklets; (b) 3,900 posters; (c) 78,000 leaflets; and (d) 390 manuscripts.

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3. Monitoring and evaluating IEC – The implemented IEC program was monitored and evaluated by the projects M&E system. Findings suggest that the implemented program was effective and an important factor in the establishment and sustainability of ECD programs in the project institutions. The MoNE has reviewed the findings and moved to establish similar IEC programs in other non-project provinces and districts. Subcomponent A.4 - Expand access, through: 1. Construction of ECD centers (including Posyandu and BKB) - The project built a total of 430 new facilities with 297 of these facilities being Integrated ECD Centers. Project monitoring data suggests that the current utilization rate for the new ECD facilities is about 100%. Since their establishment, about 8,672 children received services in the 297 Integrated ECD centers. Total attendance in the project’s BKB/Posyandu programs was about 19,665 children. 2. Rehabilitation of ECD centers and TK - The project has renovated 251 existing ECD and TK facilities. Project monitoring revealed that the utilization rate for the renovated facilities is about 100%. 3. Education materials – A total of 681 (100% of expected project target) project supported ECD facilities were provided with a full complement of furniture and educational toys required to support their respective programs. A total of 571 (100% of expected planned target) project supported ECD facilities were provided with appropriate sets of books. 4. Contract teachers – The project successfully contracted 374 TK teachers at the 187 ECD centers. In addition, along with the establishment of the play group program in 2003 and 2004, the project also hired 187 play group teachers. Starting FY 2006, their hiring and professional support were handed over to the respective local governments. 5. Teacher upgrading (D2) for TK teachers - The employment of sufficient numbers of qualified staff for assignment in poor-rural areas was a big challenge for the project. The project chose a cost-effective approach that empowered local youth by employing and training them as TK teachers. Each of the district villages nominated qualified teachers candidates who were then sent to one of three teacher training institutes (UPI Bandung, UNM Makassar and UNESA Surabaya) to study for a two-year kindergarten teacher diploma (D2). Upon completion of their study, they were contracted for two years by the project and then had their employment continued by the district government. Not only were the communities empowered, the program also proved to be sustainable The project has successfully: (i) trained 326 Diploma 2 kindergarten teachers (100 percent of project target). Local governments have also provided 48 additional scholarships for D2 kindergarten teachers, thus the total number of D2 kindergarten teachers trained through the project is 374. This number enables the project to allocate two kindergarten teachers for each kindergarten-supported project (integrated ECD center. Subcomponent A.5 - Emergency Food Assistance – The subcomponent was cancelled (for a more in-depth discussion regarding the cancellation see Section 1.7). With this cancellation, the project no longer had any direct nutrition intervention. Instead, the project took up a facilitating role, including (i) awareness raising among various stakeholders (including parents and community members) on the importance of nutrition for child development and (ii) the launching of ECD as a National Program by the President (2003) that facilitates inter-sectoral supports for the development of ECD program. These actions also complemented the pre-existing government regular nutrition programs as well as community-based program on child nutrition, including food complementary programs, Vitamin A supplement, Iodine Fortification; Nutrition Counseling, Education and Referral Program (at Posyandu, Puskesmas and local hospital); and self-financed supplementary food program managed by Posyandu cadres. It is also understood,

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but not confirmed, that, in the absence of the subcomponent, other government agencies may be playing a role in the mitigation of the child malnutrition effects in the nation. As the consequence of the cancellation of the subcomponent, the project no longer has a system and resources to monitor the impact of the non-project nutrition initiatives. Therefore, no data is available on the impact of these programs on the weight-gain of the children. The corresponding Development Objective in the Loan Agreement was not formally revised to reflect this change. Component B - ECD Management and Capacity Building Subcomponent B.2 - Capacity Building: 1. Fellowship and training to key project staff and TA - Although awarding of fellowships to pursue the diploma program diploma (D2) for kindergarten teacher and D3 (3 fellows) in nutrition was successful (see Subcomponent A.4.5), the achievement of the program for post graduate degrees was below target. This is particularly the case for the fellowship program provided to Jakarta-based staff. In that group, only 3 out of the 10 master degree program fellows were able to complete their study, and none of the 5 Jakarta-based PhD fellows completed their study. They were able to complete the course work, but were unable to complete the dissertation. In contrast, the situation was better for the province-based staff: 12 out of the 13 master’s degree fellows in South Sulawesi and 9 out of 11 fellows in West Java have been graduated. The following table provides a summary of all fellowship training with an overall completion rate of about 95% Project Outcomes – Fellowship Training Type of Program Project

Target Number Graduated

Percentage of Target

Masters Degree 34 23 68% Doctors Degree 6 0 0% Diploma Degree (D3) Nutrition 3 3 100% Diploma Degree (D2) TK 326 326 100%

Total 369 351 95% 2. Annual planning and budget workshop – During each of the project years, annual planning and budget workshops were conducted. This process enabled the project team to accurately predict the real needs of the ECD programs which faced changing requirements as new students were enrolled and the economic situation improved. 3. Impact evaluation of TK education and Posyandu and BKB intervention - Impact evaluation of the project intervention on child growth and cognitive development was contracted out to a consultant company. The baseline study for the program impact was carried out in 2002 while the follow up study conducted in 2004. The Bank team found that the original approach used flawed methodology and that the results were questionable. As a result the team reanalyzed the data collected from the two studies using more rigorous assumptions and analytic tools, and has issued a new set of findings. For a more detailed discussion of the impact evaluation see Section 2.3. 4. Studies – The following studies were completed by the project: (a) Baseline survey (2002) and follow up study (2004) for impact evaluation (Section 2.3); and (b) Study of curriculum development for kindergarten has been completed (2001). 5. Office equipment for all project institutions– As needs were identified by the PMU, all project supported ECD and TK facilities were provided with necessary office equipment.

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Subcomponent B3 - Strengthen Project Management 1. Reporting - A functional monitoring and evaluation system (M&E) and reporting system were designed and developed for the project at district, province and central levels. At the central, level, M&E consultant(s) were hired to establish related systems for field-based data collection, organization and analysis to support M&E. Information on the progress of project implementation was gathered twice annually. At the province and district levels, M&E functions were performed by government staff. Data collection was first initiated at district level, and then the information submitted to the project monitoring staff at the province level for review and further submission to the central project M&E consultant for final analysis and reporting. The recruitment of local education staffs to conduct the monitoring tasks was intended to ensure the sustainability of future program monitoring once the project reached completion. Associated with this effort, the project also developed an MIS/GIS for ECD program monitoring purposes, but the MIS/GIS has not become fully functional because it still needs to be further refined. MONE plans to further develop the MIS/GIS as part of its Education MIS located at Directorate of PAUD (under the Directorate of Non-Formal Education) to support ECD activities through out the country. 2. Technical audit – Technical audits were conducted as a part of the M&E process by consultants employed to review the progress of each project supported ECD program and TK. Additional audit activities were conducted by CPMU staff and by Bank Supervision teams as they visited project sites. Reports of these findings, with recommendations for improvement, were regularly included in project documentation as required. 3. Office equipment for project offices. All project offices were provided with the necessary office equipment including desks, chairs, computers and printers.

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Annex 3. Economic and Financial Analysis As discussed in Section 3.3, a cost benefit analysis was conducted during the preparation of this project. The findings for this analysis may be found in Annex 4 of the PAD, A second cost benefit study was conducted as part of the preparation for the upcoming (second) ECD project. This study was based primarily on 2003 data. While this does not address the specific returns to the project that is the subject of this ICR, it does provide assurances that investments in ECD in Indonesia yield a high return. A summary of this economic analysis is therefore presented below. I. Benefit-cost Analysis The cost-benefit analysis uses the concept developed by Van der Gaag and Tan (1999), looking at the ratio of added net present value of an ECD project vis-à-vis its total costs. Benefit: The ECD programs can have benefit in the short-term, medium-term, and longer-term. The short-term and direct benefits include improved health and nutrition, prevention of abuse and neglect, and benefits to other family members including parents and siblings. The medium-term benefits include lower grade repetition and drop-out and higher education attainment. The longer term benefits include higher wages as well as reduction in crime. The most measurable benefit is the education benefit in the medium term and improved labor earnings in the longer term. Schooling shows significant returns on the Indonesian labor market. Table 1 is a summary of the estimates of returns by education level, based on 2003 SUSENAS data. Primary education has the highest returns of nearly 30 percent. Table 1: Returns to education Level of education Returns (%) Primary 29.8 Junior Secondary 11.2 Senior secondary 12.6 Higher 13.8 Source: Peter Moock, based on SUSENAS 2003. Cost: The total cost of schooling not only include the direct costs paid by parents and the government (Table 2), but also should include the opportunity cost of schooling in the form of forgone labor income (Table 3). Table 2: Direct cost of Schooling, per year School level Household

cost per pupil per year (Rp)

Public cost (2000/01) (Rp)

Total % household

% public total

Primary (starting at age 7) 159,158 1,864,000 2,023,158 7.9% 92.1% 100%

Lower secondary 396,164 2,722,000 3,118,164 12.7% 87.3% 100% Upper secondary 697,596 3,612,000 4,309,596 16.2% 83.8% 100% higher 179,4265 4,644,500 6,438,765 27.9% 72.1% 100% Source: SUSNAS 2003; GoI budget (2000/01), World Bank estimates.

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Table 3: Opportunity Cost of Schooling, per year, in Rupiah Level of Education Opportunity Cost of

Education primary 1,083,823

secondary 1,652,426 Upper secondary 2,411,490

higher 3,870,930 Source: SUSNAS 2003, World Bank estimates. Combining the total benefit and cost of education, the age-earnings profile in Indonesia is illustrated in the figure below. Although higher level of educational attainment will require longer and higher investment in the short term, the long-term total returns on the labor market will largely surpass the initial investment. Figure: Age-Earnings Profile in Indonesia (2003)

-10000

-5000

0

5000

10000

15000

20000

7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58

age

Rup

iah

('000

)

No edu prim junior senior higher

Source: SUSENAS 2003. Benefit-cost ratio: Table 4 summarizes the targeting indicators. We divide the most disadvantaged children into three groups according to the indicators. Group 1 has the lowest performance measured by these indicators. We further use national average of these indicators as target to estimate total project benefit.

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Table 4: Indicators of the Target Districts, with and without the ECD project Without ECD project Group 1 Group 2 Group 3

With ECD project (targeting national average)

Primary enrollment rate

0.55 0.65 0.85 0.97

Lower secondary enrollment rate

0.28 0.40 0.55 0.70

Upper secondary enrollment rate

0.18 0.25 0.35 0.40

Higher education enrollment rate

0.00 0.01 0.03 0.05

Using 5 percent annual discount rate, Table 5 presents the benefit-cost ratios for the three groups of children. The most disadvantaged children benefit the most, and have the highest benefit ratio. The average benefit ratio is 7.26 among all the children. Table 5: Summary of Benefit-Cost Ratios

Benefit-cost ratio

Group 1: 8.87

Group 2: 6.63

Group 3: 3.67

Total : 7.26

The sensitivity of the benefit-cost ratio to the change of discount rate is also tested (Table 6). Although the benefit-cost ratio is sensitive to the assumption of discount rate, 9 percent discount rate can still ensure a benefit-cost ratio of above one in value. Table 6: Sensitivity to Discount Rate Benefit-cost ratio R=0.05 R=0.07 R=0.09 Group 1: 8.87 4.16 1.55 Group 2: 6.63 3.14 1.21 Group 3: 3.67 1.87 0.78 Total 7.26 3.43 1.31 II. Cost-Effectiveness Analysis. The cost-benefit analysis considers whether all of the benefits of the program were greater than its costs. Cost-effectiveness analysis considers whether the benefits of a particular program are greater than those alternative programs aimed at improving child outcomes. One strong argument is that equalizing initial endowments in wealth, ability, or opportunities is much cost-effective than remedial measures to compensate the differences in the final outcomes. The ECD program is cost-effective compared with alternative public investment aimed at helping the most disadvantaged child achieve primary education completion. Assume that a child going through a high quality ECD program would better develop cognitive and social skills, and readiness for formal primary education. S/he does not need additional public programs during the primary education cycle. Alternatively, without going through an ECD program, this child would

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need special attention and assistance to complete the primary education cycle, which would require additional public resources. The unit cost of primary education is estimated at about US$230 per year in Indonesia (Analisis Biaya Pendidikan Dasar Dan Menengah, Oleh: Abbas Ghezali,dkk, MoNE, 2004). The unit cost ratio of special education to regular education is 1.90 in the US on average (US Department of Education: SEEP Report 2: How Does Spending on Special Education Students Vary Across Districts? An Analysis of Spending by Urbanicity, District Size, Median Family Income, and Student Poverty Levels in 1999-2000). The current special education in Indonesia has even higher unit cost. Pupil-teacher ratio at special education is 5:1, and most teachers have 2 years higher qualification thus higher salaries. Table 7 shows that given the high cost of providing special primary education, investment of public resources in ECD programs seems to be a more cost-effective way of helping disadvantaged children complete primary education. Table 7: Cost-Effectiveness of ECD Program

Cost (US$)

ECD and regular primary education

Special primary education:

additional cost per year





Unit cost ratio of special-regular education

1.5 (break even)

1.9 (U.S.)

4 (Indonesia estimates)

Age 0-6 100 0 0 0

Age 7-12 230 345 437 920

Total $2,080 $2,070 $2,622 $5,520 Multiplier of ECD cost 1.00 1.00 1.26 2.65

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Names Title Unit Responsibility/ Specialty

Lending (from Task Team in PAD Data Sheet)

Alfonso F. de Guzman Senior Education Specialist EASHD Education

Rozany Deen Senior Project Economist EASHD Task Team Leader

Husein Abdul Hamid Statistician HDNED Data Collection and Analysis

Samuel Lieberman Country Sector Leader EACIF Advisor and Coordinator of Project Preparation Plan

Jaqueline Baptist Economist EASHD Economist

Basilus Bengoteku Operation Officer EACIF Project Implementation

Bridie Champion Project Disbursement Officer

EACIF Project Disbursement

Parivash Mehrdadi Program Assistant EASHD Headquarters Project Support

Karin Nordlander Lead Counsel LEGEA International Law, Grant Agreement, Negotiations

Nigel Wakeham Consultant, School Facilities Design and Construction

EASHD Facilities Planning and Construction

Kin Bing Wu Senior Education Economist EASHD Education Economics

Supervision (from Task Team Members in all archived ISRs)

Rozany Deen Sr. Project Economist EASHD Task Team Leader

Alfonso de Guzman Sr. Education Specialist EASHD Task Team Leader

Susiana Iskandar Sr. Education Specialist EASHD Task Team Leader

Titie Hadiyati Consultant, CDD specialist Consultant

Project Implementation

Rizal H. Rivai Sr. Procurement Specialist EACIF Procurement

Menno Pradhan M&E Specialist EACIF M&E

Djoko Hartono Consultant, M&E Consultant M&E

Novira Kusdarti Asra Financial Management Specilist

EACIF Financial Management

Indratmo Consultant, Construction Specialist

Consultant Project Implementation

32

Hernawan Consultant, Construction Specialist

Consultant Project Implementation

Paulus Bagus Tjahjanto Procurement Specialist EACIF Procurement

Moesijanti Soekatri Nutrition Specialist Consultant Nutrition

Mae Chu Chang Lead Education Specialist EASHD Education Cluster Leader

Robert McGough Consultant, Project Evaluation and Reporting

EASHD ICR preparation

Rosfita Roesli Operation Officer EASHD ICR Preparation, Task Team Leader

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs)Lending

FY95 51.41 FY96 68.52 FY97 66.50 FY98 190.56 FY99 5.48 FY00 0.35 FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00

Total: 382.82

Supervision/ICR FY95 0.00 FY96 0.00 FY97 0.00 FY98 0.00 FY99 63.99 FY00 33 77.37 FY01 3 33.84 FY02 16 66.38 FY03 7 28.30 FY04 11 61.77 FY05 13 28.52

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FY06 12 42.94 FY07 5 12.28

Total: 100 415.39

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Annex 5. Beneficiary Survey Results Not applicable

35

Annex 6. Stakeholder Workshop Report and Results Not applicable.

36

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Note: Except for changes in format, font and line spacing to enable inclusion into the ICR, the following comments have not been modified or edited as per World Bank guidelines.

MINISTRY OF NATIONAL EDUCATION

DIRECTORATE GENERAL OF OUT OF SCHOOL EDUCATION

DIRECTORATE OF EARLY CHILD EDUCATION CENTRAL EARLY CHILD DEVELOPMENT (PAUD) PROJECT - JAKARTA

May 2007 IMPLEMENTATION COMPLETION REPORT 2006 - CPMU

EXECUTIVE SUMMARY

1. Period of Loan from the World Bank

The Early Childhood Development (PAUD) Project financed by IBRD Loan 4378-IND has been implemented since FY1999/2000 and ended in FY2006. The original period of the loan from 14 August 1998 to the closing date 31 March 2005, has been extended to 31 December 2006 as approved by the World Bank on 10 March 2005.

2. Implementation Completion Report (ICR)

This PAUD Project Implementation Completion Report (ICR) is prepared in a report format approved by the World Bank through several workshops, i.e.: CHAPTER I Project Data

1.1. Background 1.2. PAUD Program Description 1.3. PAUD Program 1.4. ICR Writing Systematics

CHAPTER II Performance Evaluation Items 2.1. Measurement of PAUD Project Performance 2.2. PAUD Project Performance Evaluation Results

CHAPTER III Evaluation of Development Objectives and Design 3.1. Original Development Project Objectives 3.2. Revised Development Project Objectives 3.3. Original Design 3.4. Revised Design 3.5. Original Project Components 3.6. Revised Project Components

CHAPTER IV Achievement of Outcome and Output 4.1. Achievement of Development Project Outcome 4.2. Output by Component 4.3. Net Present Value (NPV)/ Economic Rate of Return (ERR) 4.4. Financial Rate of Return (FRR)

37

4.5. Institutional Development Impacts CHAPTER V Main Factors Affecting Implementation and Outcome

5.1. Factors beyond Control by the Government or Implementation Unit (CPMU/PPMIU/DPMIU)

5.2. Factors on the Government’s side CHAPTER VI PAUD Program Sustainability

6.1. Government Commitment 6.2. Institutional Empowerment 6.3. PAUD Centers 6.4. Public Participation

CHAPTER VII Performance of the Bank and Borrower 7.1. Bank Performance 7.2. Borrower Performance

CHAPTER VIII Lessons Learned 8.1. Lessons from Policies and Design 8.2. Lessons from Project Implementation and Operation

CHAPTER IX Stakeholders’ Comments 9.1. Borrower, Related Agencies and Implementation Unit 9.2. Public

CHAPTER X Further Information Annexes Annex 1. Project Data Annex 2. Key Performance Indicators Annex 3. Project Cost and Finance Annex 4. Economic Cost and Benefit Annex 5. Bank’s Input Annex 6. Evaluation of components’ outcome Annex 7. Evaluation of Bank’s and Borrower’s Performance Annex 8. List and Supporting Documents 1). Final Implementation Mission Aide Memoire 2). Borrower’s Project Evaluation Report

3. ICR Main Materials

The preparation of this ICR is based on all annual reports from the first year of implementation to the last year of the PAUD project at Kabupaten (DPMIU), Provincial (PPMIU) and Central (CPMU) levels, and monitoring and evaluation reports and impact study reports. The data from those reports is summarized and arranged in a report format specified in item 2 above and consists of: i. Project Data ii. Project Objectives (Original and Revised) and pre-project condition iii. Output iv. Outcome v. Project Cost by Component vi. Project Financing vii. Project Cost by Source of Funds viii. Disbursement by Source of Funds ix. Main Factor Affecting the Project Implementation x. Support to Program Sustainability xi. Bank Performance xii. Borrower Performance xiii. Lessons Learned

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xiv. Stakeholder comments 4. ICR Preparation

To measure the PAUD project performance, there will be a calculation of percentages between the actuals and plan in DIP/PO (standing for Project Proposal/Operational Instruction) of the Fiscal Year 1999/2000 to FY2004) or DIPA/RKAKL (standing for Budget Implementation Proposal/Work Schedule of Ministry and Institution Budget (from FY2005 to FY2006) for Output and a calculation of percentages between the actuals and plan in the Project Appraisal Document (PAD) for Outcome. 4.1. Measurement of PAUD Project Performance

1). Output and Outcome i. Highly satisfactory, if assumed that the actuals are 80-100%

ii. Satisfactory, if assumed that the actuals are 60-80% iii. Unsatisfactory, if assumed that the actuals are 30-60% iv. Highly unsatisfactory, if assumed that the actuals are less than 30%

2). Support to Program Sustainability i. Highly likely, if indicated that the support is 80-100%

ii. Likely, if indicated that the support is 60%-80% iii. Unlikely, if indicated that the support is 30%-60% iv. Highly unlikely, if indicated that the support to program sustainability is less

than 30% 3). Measurement of Development Project Objectives

As set out in the PAD (Project Appraisal Document) 4). Qualitative Measurement

If quantitative measurements (in %) of output, outcome and support to program sustainability after PAUD project closing date cannot be taken, assessments will be carried out in qualitative measurements.

4.2. PAUD Project Performance Evaluation Results 1). Evaluation of Performance against Project Activities

See annex on ICR format 020 2). Evaluation of Performance against output

See annex on ICR format 040 3). Evaluation of Performance against Outcome

See annex on ICR format 050 4). Evaluation of Performance against PAUD Program Sustainability

See annex on ICR format 060 5). Evaluation of Performance against Institutional Development Impacts

See annex on ICR format 070 6). Evaluation of Performance against Development Project Objectives

See annex on ICR format 080 5. Evaluation of Development Objectives and Design

5.1. Development Project Objectives (Original) This Early Childhood Development Project has two objectives: First, to formulate and implement a Policy Framework of Early Childhood Development in an integrated way, Second, to improve access to, quality and utilization of the Early Childhood Development Project, particularly for the poor in underdeveloped villages in the Provinces of Bali, South Sulawesi, and West Java and protect children at age 6

39

month and 2 years from poor nutrition effects and improve their growth and development.

5.2. Revised Development Project Objectives The original objectives remain unchanged, but without provision of emergency supplementary food for children at age 6 months to 2 years following an economic crisis in Asia, including Indonesia, since 1997 due to misprocurement, the objectives of this development project are modified.

5.3. Original Design This PAUD project also designs the development project objectives to strengthen the institutional capacity of Provincial Governments, City/Kabupaten Governments and Central Governments and empower non-governmental organizations under PAUD coverage.

5.4. Revised Design There is no revision to the design.

5.5. Original Project Components Component A: PAUD Project Support: (1) Strengthen the Policy Framework of the Government of the Republic of

Indonesia for this PAUD Project through reviewing and improving policies because of some experience including experience in providing PAUD Consultant services.

(2) Improve the quality of this PAUD Project through: a) Reviewing and simplifying the Under-five Family Development

(BKB) program module and activities, and testing the proposed changes.

b) Planning and implementing an integrated training program for Posyandu and BKB volunteers (cadres).

c) Developing and implementing a kindergarten teacher training program. d) Reviewing and evaluating the kindergarten curriculum, and e) Planning and evaluating assessment tests

(3) Improve the needs for this PAUD Project through: a) Developing information, education and communication programs

(IEC) including strategies, plans and messages from the IEC b) Producing and distributing IEC materials and prototype for local

adaptation. c) Implementing, monitoring and evaluating and campaigning for IEC

activities. (4) Expand access to this PAUD project through:

a) Constructing some 340 new buildings of PAUD Centers for Posyandu and BKB, and some 230 kindergarten buildings.

b) Rehabilitating some 50 existing PAUD facilities and 110 existing kindergarten buildings.

c) Providing educative toys (APE) and study materials and furniture for kindergartens/RA and BKB/ Posyandu.

d) Contracting some 460 kindergarten temporary seconded teachers (GBS).

e) Providing training for volunteers (cadres) and teachers, including improving the skills of some 1255 kindergarten teachers to D2-degree Teacher Training Education.

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(5) Implementing a supplementary food program to improve the growth and development of children at age 6-24 months.

Component B: Project Management Capacity Building (1) Strengthen the capacity of PAUD management at National, Provincial, and

Kabupaten/City to implement the PAUD project. (2) Strengthen the capacity of the project management particularly in routine

reporting, monitoring and evaluation for the six years of the period of IBRD Loan No. 4378-IND and annual technical and cost plans, and prepare a technical audit.

5.6. Revised Project Components

There is no revision to the components

6. Achievement of Outcome and Output 6.1. Achievement of Development Project Outcome

The overall achievement of the project outcome is satisfactory. This level is achieved from the implementation of the whole PAUD Project during the project implementation period from 1999 to 2006. During the project period, the PAUD project implementation has been well planned and actualized as expected in the development project objectives. See annex on ICR format 050 and ICR format 080

6.2. Output by Component The overall achievement of components is satisfactory. This level is achieved from the implementation of the whole PAUD Project during the project implementation period from 1999 to 2006 During the project period, the implementation of the PAUD project components has been well planned and actualized as expected in the Project Output.

Component A: PAUD Project Support. The overall achievement of component-A output is satisfactory

Component B: Project Management Capacity Building The overall achievement of component-B output is satisfactory 7. PAUD Project Funding

7.1. PAUD Project Funding

This Early Childhood Development (PAUD) Project is financed by the World Bank and the Government of Indonesia under Loan Agreement IBRD No. 4378-IND dated 14 August 1998 effectively commencing on 28 October 1998 and originally ending on 31 March 2005 but this closing date has been extended to 31 December 2006.

The funds provided in the Loan Agreement are as follows:

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7.2. Financing Plan (in millions of US$):

Fund Source Local Foreign Total

GoI 3.9 0.1 4.0

IBRD 19.3 2.2 21.5

Total 23.2 2.3 25.5

And the amount of loan is US$ 21,5 million with periods:

1. Grace Period : 3 years

2. Length of loan : 15 years

3. Commitment fee : 0.75%

4. Service charge : 0%

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7.3. Actual Financing per Category:

Fund

Source Category

Description

Cost in Rp

Cost in

Equivalent

US$

IBRD

1 (a) Kindergarten (TK)/RA

Civil Works

15,974,540,190

1,685,809.89

1 (b) BKB/Posyandu Civil

Works

29,748,915,693

3,105,314.32

2 Procurement of Goods

14,002,197,129

1,524,851.70

3 Mother’s milk

replacement food 490,619,084 66,000.28

4 Fellowship/Training

18,042,222,423

1,968,242.90

5 Teacher/Temporary

Teacher Contract

3,309,632,000

373,484.33

6 Project Management

8,271,558,734

929,947.34

7 Consultant and services

11,940,871,564

1,297,935.35

Total

101,780,556,817

10,951,586.11

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8. Main Factors Affecting PAUD Project Implementation and Outcome 8.1. Factors beyond Control by the Government or Implementation Unit

(CPMU/PPMIU/DPMIU) The following factors generally inhibit the PAUD project implementation and thus affect the outcome.. 1). Asian Economic Crisis

At the outset of the project implementation in 1999, Indonesia faced the Asia’s economic crisis since 1997 but Indonesia’s economic condition since that time and until now has not been recovered. This, of course, significantly affects the effectiveness of the PAUD project implementation. The exchange rate of Rupiah against US Dollar surged from Rp. 6,000,- per US Dollar to Rp16,000,- per US Dollar (in 2001) leading to skyrocketing prices including prices of civil works, and thus the civil works were in abeyance until 2000/2001. This eventually affected the D2-Kindergarten Fellowship Program for TK/RA teachers and procurement of educative toys, study materials and furniture for PAUD Centers.

2). Secondary RK and RM Budget in DIP/DIPA beyond Control by Implementation Unit

From the beginning of implementation with the 1999/2000 budget to the completion of the PAUD Project 31 December 2006 (closing date) various activities have been carried out to achieve the development objectives. However, the implementation was often postponed due to late disbursements because the House of People’s Representatives (DPR) did not approve the budget yet thus leading to late budget discussions in the Ministry of Finance.

3). Change in the amount of loan from the World Bank beyond control by the Government

A blended food program in category 3 was cancelled for misprocurement, through the World Bank’s Letter to the Minister of Health No. No. M-318/ECD/VII/2000 dated 21 July 2000. Change in the amount of fund in Loan Agreement No. Original loan

agreement (US$)

Reduction in loan (US$) Amended loan I

(US$)

1 21,500,000 10,651,484 10,848,516

8.2. Factors on the Government’s Side

The factors on the Government’s side particularly concern Government economic/monetary policies that involve: 1). Changes in the exchange of Rupiah against foreign currencies The exchange rate of Rupiah tends to weaken against US$ affecting PAUD project financing. Changes in Exchange Rate of Rupiah against US Dollar

Exchange Rate for 1 US$ Year Lowest Highest 1999 Rp. 6,638 (15 July) Rp. 8,911 (8 September) 2000 Rp. 7,171 (11 January) Rp. 9,549 (22 December) 2001 Rp. 8,382(7 August) Rp.16,686 (23 November)

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2002 Rp. 8,547 (20 June) Rp. 10,402 (24 January) 2003 Rp. 8,125 ( 2 July) Rp. 8,980 (19 March) 2004 Rp. 8,281 (12 January) Rp. 9,415 (30 June ) 2005 Rp. 9,433 (30 December) Rp. 9,880 (19 December) 2006 Rp. 8,691 (8 May ) Rp. 9,472 (12 June) 2007 Rp. 8,970 (9 January) Rp. 9,064 (11 January)

Source: Processed from SPM RK, SP2D RK and RKBI 2). Government Budget Policy

The basis for fiscal year has been changed since 2000 on the calendar year (1 January to 31 December), formerly on the fiscal year of 1 April to 31 March of the following year. So, FY2000 starts from 1 April 2000 to 31 December 2000 while FY1999/2000 starts from 1 April 1999 to 31 March 2000.

9. Performance of the Bank and Borrower

The Bank Performance and the Borrower Performance as a whole can be considered satisfactory.

10. PAUD Program Sustainability An analysis of PAUD program sustainability is intended to find out how far support can be given to the PAUD program sustainability after termination of financing by the World Bank through loan IBRD 4378-IND since the closing date of 31 December 2006. 10.1. Government Commitment

The commitment of the Government, in this case Central Government and Regional Governments in support of the PAUD Program Sustainability emphasizes studies: Funding Aspect and Institutional Aspect. As a whole, the Government Commitment is considered having likely performance..

10.2. Institutional Empowerment Kabupaten/City Governments will empower institutions for continuity and sustainability of the PAUD program in their regions, involving among others: 1). Institutional Organizations 2). Human Resources 3). Agency main duties (Tupoksi) The institutional empowerment is considered having likely performance.

10.3. PAUD Centers The sustainability of PAUD Centers is the main focus because the existence of PAUD Centers in terms of physical presence as well as programs is a valuable asset jointly owned by Central Government, Kabupaten/City Government and local communities.

The sustainability of PAUD Centers is considered having likely performance.

10.4. Public participation The participation of children’s parents is essential particularly in taking their children at early age of 2-6 years to PAUD Centers for access to early child development services.

The sustainability of public participation is considered having likely performance.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders West Java Province

1) The ECD program has a potentially bright future in both its formal and informal forms because it provides a strategic means to procure human resources. To ensure this, the Education department of the West Java local government will make a conscientious effort to design programs that will accelerate services conforming to the National or local government objectives. (Team Leader of Family Welfare Movement and Head of Education Department , West Java)

2) The implementation of Program PAUD has not received adequate professional attention especially in comparison with the attention paid to other education programs. However, more attention is being paid now than was paid in the early years when the ECD program was first rolled out. (Project Leader/ P2K West Java)

3) At least the current ECD program stimulates ECD Centers to empower local human resources by providing Non degree Kindergarten Teacher Training scholarships to guarantee qualified educators who will provide adequate education to young children. (Head of ECD section, Education Office, Indramayu District)

4) The reach of ECD centers to children aged 0-6 years must be expanded. Increasing the number of ECD centers and having one in every village would ensure that no young child is left behind. (Project Office, Lebak District)

South Sulawesi Province

5) Discussions during the Bali meeting confirmed that ECD centers are effective in supporting the government and the public. Moreover, ECD centers help expand the public’s access to services and support ECD management at the district level. (Commission E, DPRD Kab. Gowa)

6) We expect total integration between the players that will facilitate the effective fulfillment of their main function. A budget must be drawn up for the Health department which is suitable for the ECD centers. Teamwork is essential as are training and internships at ECD centers or the ECD program. (Health Department and National Familiy Planning Board, Gowa District)

7) The ECD center is very supportive of child development and according to ECD the golden period for child development is 0 – 6 years. Therefore, the ECD center should develop good ECD program and budget to ensure optimum utilization of this time period.(Head of the Education department, Gowa District)

8) Kindergartens managed at ECD centers are able to compete with other kindergartens at the local level. Educators at the ECD centers have an upper hand compared with their non-ECD center counterparts due to their experiences and internships in Jakarta. (Project Manager, Gowa District)

9) In fact, ECD centers at the local level have a positive impact and have given maximum results to stakeholders in the form of building our facilities and also adding to the skills of the educators. However, it is expected that the local and central government will provide continuous and follow-up training. (Pimbagpro/ Manager, Gowa District)

10) There are some clear impacts that I see coming out from the project: expansion of service available to parents, young children and community – as well as improved knowledge and awareness among parents about education and parenting. (Drs. Baharuddin, National Family Planning Board, Gowa District)

11) A harmonious approach between the lending agencies, expansion of access and quality. (Megawati Baso, Bachelor of Public Health, District Health Office, Gowa District)

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12) Through the ECD project I gained a lot of knowledge concerning child development – a key skill for a Child Development Worker at the Village. (Drs A. Thahir Taba, Trainer of Child Development Worker, Bone District)

13) I am really motivated to continue with my study in Nutrition Science because nutrition and education are two integral parts in Child Development. (Paulina Pumpung – District Health Office, Bone District)

14) The ECD project has made a significant impact in the Bone District and if possible (the project) should be continued. The project has i) constructed 14 kindergarten with good facility and located at the village level, ii) established 28 BKB/ Posyandu centres – all located at the village, iii) rehabilitated 15 existing kindergarten, most of them in the rural areas, iv) provided employment to 42 teachers and 14 janitors; v) provided ECD service to more children aged 0 – 6 and vi) motivated communities to establish kindergarten. (Drs. Karim Pananrangi – Head of Teacher Union, Bone District)

15) The ECD center is still understood as only Kindergarten instead of an integrated program. The ECD program is one that should be supported and developed in every village. It is the most complete service available to young children. Also, imperative to the implementation of the program is the fact that the public considers the ECD program a free service (community member, Gowa District)

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Annex 9. List of Supporting Documents

Project Concept Note Project Appraisal Document Memorandum of the President Minutes of Negotiations Project Status Reports (PSR) Mid-term Review Report and Agreements Implementation Status Reports (ISR) Mission Aide Memoires Back-to-Office Reports (BTOR) Project Financial Reports Project Correspondence Impact Documentation and Evaluation Report